Welcome to the Liquidity Services Inc. third quarter of fiscal year 2023 financials results conference call. My name is Felicia Crabtree, and I will be your operator for today's call. Please note that this conference call is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. On the call today are Bill Angrick, Liquidity Services Chairman and Chief Executive Officer, and Jorge Celaya, its Executive Vice President and Chief Financial Officer. They will be available for questions after their prepared remarks. The following discussion and responses to your questions reflect Liquidity Services management's view as of today, August 3rd, 2023, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact the financial results is included in today's press release and in filings with the SEC, including the most recent annual report on Form 10-K. As you listen to today's call, please have the press release in front of you, which includes Liquidity Services financial results, as well as metrics and commentary on the quarter. During this call, Liquidity Services management will discuss certain non-GAAP financial measures. In its press release and filings with the SEC, each of which is posted on its website, you will find additional disclosures regarding these non-GAAP measures, including the reconciliations of these measures with the comparable GAAP measures as available. Liquidity Services management also uses certain supplemental operating data as a measure of certain components of operating performance, which they also believe is useful for management and investors. This supplemental operating data includes Gross Merchandise Volume and should not be considered as a substitute for or superior to GAAP results. At this time, I will turn the presentation over to Liquidity Services Chairman and CEO, Bill Angrick. Good morning and welcome to our Q3 earnings call. I'll review our Q3 performance and the progress of our business segments, and next, Jorge will provide more details on the quarter. We achieved record GMV during the quarter, driven by strong execution for our clients and market share gains from our investments in sales and marketing. Our outstanding participation from our 5.1 million registered buyers and flexible service offerings continued to attract more sellers and drive better seller recovery, which in turn powers our growth. Together, this allowed us to deliver financial results above our guidance range on both the top and bottom line. Notably, our adjusted earnings per share grew at an impressive 33% year-over-year. Despite some persistent headwinds in our Bid4Assets real estate vertical, our resilient business model continues to deliver strong free cash flow. We have continued to repurchase shares as we see opportunity in our long-term prospects. Let's take a closer look at our individual segments. Our retail segment GMV grew 20% organically to $72.7 million, driven by our flexible offerings, reliability and high level of service to customers, which has allowed us to expand our market share. Direct profit grew 12% year-over-year as we continue to drive innovation in our retail segment to deliver value and convenience to our customers. In particular, we continued to expand our AllSurplus Deals channel, giving consumers access to exciting online auctions of unique or hard-to-find retail products at compelling values that can be picked up by the winning bidder from selected distribution center locations. We plan to continue to expand this channel to unlock a $100 million GMV growth opportunity over the next few years. Our GovDeals segment GMV decreased 4% year-over-year to $213 million, reflecting lower results in our acquired Bid4Assets real estate marketplace versus the prior year period due to a delay in the rollout of new contracts and lower mortgage and tax foreclosure sales, which are at a multi-year low. Excluding Bid4Assets, our GovDeals GMV grew 5% organically. We continue to see long-term upside in the secular growth of online real estate sales in the government market as they increase participation, deliver superior value to communities, and are easier to administer versus in-person courthouse sales. We are currently piloting new government real estate programs in a number of regions, including Oklahoma, Louisiana, Pennsylvania, and Florida, which will drive long-term growth in our real estate vertical. Direct profit in our core GovDeals marketplace grew at a higher 9% rate organically over the prior year period, as we continued to drive economies of scale in our core GovDeals marketplace, which has delivered strong results for our sellers in a broad range of asset categories, helping us grow the number of new accounts and assets listed by double-digit percentages organically during Q3. Recent notable wins include Baltimore County, Maryland, fleet, Minneapolis, Minnesota, fleet, and San Luis Obispo County, California. Near-term priorities in our GovDeals business include the release of our next-generation marketplace, which will enhance the buyer experience with improved search, navigation, and bidding, which in turn, in turn will improve recovery rates realized by our sellers. We will also continue to expand and improve our fleet business with the addition of value-added services to improve the quality of asset listings and management of client logistics needs. Our CAG segment, GMV, grew 14% organically to $48.2 million, and direct profit grew by 27% organically year over year in the quarter, as we successfully executed numerous high-value transactions for our clients across the globe. We remain the most trusted market maker for industrial capital assets and have a strong pipeline in our biopharma, energy, consumer packaged goods, semiconductor, and aerospace manufacturing verticals. Our CAG heavy equipment fleet category grew GMV more than 30% organically during the quarter and continues to make progress growing signed contracts, new sellers, transacted opportunities, and net new revenue. Recent wins include several national accounts with strong upside potential. Finally, our Machinio segment continues to grow its revenue and direct profit in the mid-teens organically, with enhanced lead traffic and more equipment categories, continued growth of our storefront product and financing services with third parties. We continue to invest in the expansion of our Machinio business and believe our Machinio platform offers customers cost savings and convenience that are superior to other solutions. In conclusion, we are focused on executing multiple drivers to create value for our shareholders over time. We continue to make multi-year investments in growing our market share, enhancing our tech platform, and expanding our brand awareness to drive long-term growth. Our results will benefit from the continued normalization of supply chains and our leverage of the fixed investments we've made in operational capacity. Our capital-efficient business, with strong operating cash flow, approximately $106 million in cash with zero financial debt, provide us with ample financial flexibility to execute our plans. In closing, we thank our team members across Liquidity Services for their dedication to our mission to power the circular economy to benefit sellers, buyers, and the planet. I'll turn it over to Jorge for more details on the quarter. Good morning. For the fiscal third quarter, GMV set a new record of $334 million, and revenue grew 16% year-over-year, with our retail segment sustaining strong volume following its traditional fiscal second quarter seasonal peak. Our flexible service offerings continue to drive additional access to recurring flows of merchandise through new and expanded seller programs. In addition, our GovDeals segment's traditional fiscal third quarter seasonal peak included record participant activity on our GovDeals.com marketplace and improved availability of vehicles for sale, while low U.S. real estate foreclosure levels and delayed initiation of real estate government auctions partly offset our core GovDeals gains. Our consolidated results included GAAP EPS of $0.21, non-GAAP Adjusted EPS of $0.28, and non-GAAP Adjusted EBITDA of $13.3 million, tying our highest quarter results in nine years. Our ratios of revenue to GMV and Adjusted EBITDA to the total of our segment's direct profits were 24% and 56%, respectively, as indicated in our prior guidance. Our Adjusted EBITDA grew faster than our total direct profit as we achieved 40% for our Rule of 40 this third quarter, reflective of the potential of our business model. We generated $10 million in cash flows from operations during the quarter and used $4.2 million to repurchase 325,000 shares. We ended the quarter with $105.9 million in cash, cash equivalents, and short-term investments. We have zero debt and $25 million of available borrowing capacity under our credit facility. Comparing segments results from this third quarter to the same quarter last year.... Our retail RSCG segment was up 20% on GMV, up 20% on revenue, and up 12% on segment direct profit, reflecting an increase in recurring product flows from new and expanding client programs and improving recovery rates due to reduced availability of excess inventory in the broader market that had accumulated from retailer supply chain challenges last year. An increased mix of purchase model transactions drove a lower year-over-year segment direct profit margin as a% of revenue, despite improved recovery rates sequentially. Our CAG segment was up 14% on GMV, 15% on revenue, and 27% on segment direct profit, led by its industrial and heavy equipment categories, and strong recovery on purchase transactions. Machinio revenue was up 14%, and its segment direct profit was also up 14%, reflecting continued increase in subscriptions. Despite the record marketplace activity for personal property across our legacy GovDeals business and GovDeals.com marketplace, including improved availability of vehicles, our GovDeals segment was down 4%, reflecting a lower volume of real estate properties made available for auction, with longer time to in converting prospects to online auctions and the new prospects releasing property volumes for auction. Revenue and direct profit for the GovDeals segment were each up 4% as the volumes increased in key categories, combined with pricing improvements. As a reminder, Bid4Assets real estate transactions are lower take rate than traditional GovDeals due to the large GMV per transaction and has the resulting effect of a lower revenue to GMV ratio, yet similar direct profit margin on revenue. GAAP net income for the third quarter was $6.5 million, resulting in the diluted GAAP earnings per share of $0.21, and compared to $0.50 per share last year, which reflected the $0.35 gain from the Bid4Assets earn-out fair value adjustment last year. Non-GAAP Adjusted EPS for the third quarter was $0.28, up from $0.21 in the same quarter last year. Non-GAAP Adjusted EBITDA of $13.3 million this quarter was up from $11.9 million in the same quarter last year, reflecting our growth initiatives, partially offset by year-over-year increases in sales, marketing, technology, and operations expenses to support market share expansion, diversification, and marketplace enhancements. Our fiscal fourth quarter 2023 guidance range is expected to be above last year for GMV and Adjusted EPS, and consistent with last year for Adjusted EBITDA. Our fiscal 4th quarter outlook for GMV follows our seasonal high fiscal 3rd quarter for GovDeals and the strong retail 3rd quarter. We currently anticipate our 4th quarter consolidated revenue as a% of GMV to continue in the mid-20% range, reflecting our mix of business and expected products sold, with our segment's direct profits in total as a% of revenue in a range similar to our recent direct margin% and slightly up over the same quarter last year. We anticipate continuing to invest in our sales and technology initiatives in support of our marketplace enhancements and long-term growth. Based on our current 4th quarter guidance, our total year fiscal 2023 is expected to achieve a record annual GMV and the highest annual Adjusted EBITDA in nine years. Management guidance for the fourth quarter of fiscal year 2023 is as follows: We expect GMV to range from $290 million-$315 million. GAAP net income is expected in the range of $4 million-$6.5 million, with a corresponding GAAP diluted earnings per share ranging from $0.13-$0.20 per share. We estimate non-GAAP adjusted EBITDA to range from $10 million-$13 million. Non-GAAP adjusted diluted earnings per share is estimated in the range of $0.19-$0.27 per share. The GAAP and non-GAAP EPS guidance assumes that we have 32 million fully diluted weighted average shares outstanding for the fourth quarter of fiscal year 2023. Thank you, and we will now take your questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one, one. If you wish to be removed from the queue, please press star one, one again. Note, if you are using a speakerphone, you may need to pick up the headset first before pressing the numbers. One moment while we compile the Q&A roster. Your first question comes from the line of Gary Prestopino from Barrington Research. Gary, please go ahead. Hey, good morning, Bill and Jorge. Jorge, did you mention, I didn't see this in the press release, but what were consignment sales as a% of GMV in the quarter? ... Oh, my. I think they may have been 87%, but it will be in our, in our investor deck. I don't have- Okay, I'll, I'll check that out. Yeah. Usually you put that-- Yeah, usually you put that in there, but it wasn't in there this time. Yeah, probably. Just curious. No, no, so that's okay. Bill, couple of things here. With what you're doing with these centers where you can, bid on something and go pick, pick it up, I think, what do you have? One in, one in Phoenix and one in Pittsburgh, is that right? Or you have two, two nationwide? We, we have, we have Phoenix, Cincinnati, and we will be, as we've discussed in past quarters, be rolling out the capability at our other US distribution centers over time. Can you give us some idea of, of, you know, your wish list that by the end of fiscal 2024, how many of these you, you may want-? Yeah. to have in place? I, I would say four to six. Okay this really maps to consumer behavior, where- Mm-hmm A higher percentage of consumers are continuing to buy high-value items for the kitchen, for the home, the backyard, things such as lawn and garden equipment, building tools, smart appliances, home theater and electronics. Many of these items are bulkier, and we don't want to transport them more than necessary. We've leveraged our fulfillment center locations with clients such that consumers can bring them back regionally to these centers, and then we prepare them for resale direct to consumer, which reduces transport costs, handling costs, and increases recovery. We're still using the same online auction platform and methodology. We've created a competitive landscape for purchasing these items, and it's really a win-win. Win for sellers, win for buyers, and we certainly reduce carbon footprint and costs for the retail supply chain. Okay. I mean, it looks like your, your sales and marketing as a% of revenues kind of jumped up sequentially, and it was up strongly year-over-year. Is some of that attributable to what you're doing with these, these new sites, or, or what exactly are you spending? No, I would say that's less about the sites and more about our push to continue to expand market share. Okay. We're feeding, we're feeding some really interesting businesses, Gary. You know, our heavy equipment fleet business, which is growing over 30% organically, just calls for investment. You know, people like our service offering. We're, we're expanding into larger accounts. We like that very much. You know, retail growing 20% organically is a direct consequence of our ability to identify, acquire, and manage, you know, large enterprise accounts in a variety of ways. You know, self-directed listings on our marketplaces, fully managed offerings, which include, you know, things like our multi-channel sales through AllSurplus Deals. We just see interest, and so we want to be out, telling our story. You know, the marketing investment includes, you know, demand generation programs, thought leadership pieces. Most of that's digital, but we still see a presence at industry conferences. You know, conferences have come back, as you know. People do like to, you know, get out and see each other and, and, and have these fireside, you know, chats and industry thought leadership panels, and we're very present in those channels as well. We have made that investment. There is an increase you can see in the P&L, but it's paying off for us, and we like the, uh, the longer-term growth that, that will be derived from that investment. Okay, lastly, you talked about piloting new government real estate programs. Are these just new business that you've signed up, or are there new asset categories that you're starting to sell in terms of real estate for government agencies? Yeah, these, these are efforts that relate to our patiently and persistently working with in this instance, government real estate sheriff associations and policymakers, to get laws passed to pilot these new online sales programs. The jurisdictions that I mentioned, places like Oklahoma and Louisiana, we have changed laws, and we're kicking off new virtual sales programs initially with, you know, an early adopter that could be one county. Then with that evidence, it, just like GovDeals, you know, begins to radiate outward. This is a long-term effort, and if you reflect on our GovDeals business model, you know, we've been at this, you know, for over 15, 16 years, you know, influencing policy decisions, and we like the businesses that can, you know, ignite transformation and digital adoption, and the law of compounding begins to hold. You know, one local sponsor tries it, you know, has good results, then adjacent municipalities buy into it, then you can continue to grow the buyer base. Just as a reflection of that, you know, over about 16 years, we've grown the GMV and our GovDeals marketplace by a factor of 15 times. 15 times. We know that there is a lot of efficiency and transparency that comes from moving things online, and we believe the real estate category does lend itself to those same attributes by moving it online. Okay, thank you very much. Please hold for your next question. The next question comes from the line of George Sutton from Craig-Hallum. George, please go ahead. Thank you. First, guys, I was in Pittsburgh last weekend. They would not take kindly to being compared with Cincinnati or confused for Cincinnati. Nice results. Congratulations. Bill, I wondered if you could give us a little bit more detail on the next gen marketplace. What sort of things will buyers and sellers notice in terms of the difference? What kind of impact do you think it can have? This is a, an extension, a lot of, of the investment that we've made in our AllSurplus aggregated marketplace to GovDeals, which has many loyal customers, George, over many years. It was time for an upgrade, both from the tech stack perspective and from the user interface perspective. There are so many automation tools and features in AllSurplus that we have, you know, great anticipation to extend to the GovDeals marketplace, such as, you know, machine-driven recommendation engines. When a buyer comes in or a prospective bidder comes in, we will begin to track, you know, clickstream. We will certainly tap into any data we have from your registration profile on everything you've viewed in the past, everything you've bid on in the past, certainly everything you've bought in the past, and that will prioritize what you're seeing and then make it much more effortless for you as the user. You know, that's one feature. Another feature is just more user-friendly search, type-ahead features. Really, this is bringing GovDeals to, you know, parity with other marketplaces that we operate, and that, again, reduces the path to purchase. In, in total, these changes will improve bidder participation, which we think lends to higher GMV, just through improved engagement. You know, there are lots of other features, you know, very clean, a mobile-responsive design, the, the category, the landing pages that can be more customized. You know, we open up opportunities to do, you know, multimedia, item, description information, you know, that's just easier to manage, easier to see. Ultimately, buyers can spend more time on the most relevant assets, and ultimately, we unlock higher recovery rate and higher GMV for our sellers. Perfect. Just wanted to make sure I fully understood on CAG. You mentioned you have a strong pipeline and new projects across a number of verticals. I wondered if you could be more specific as to where you're seeing that strength. Sure. Well, we know that there is sort of generational focus on the semicon industry. Lots of manufacturers, sunsetting factories in certain markets and opening factories in other markets. We have a good legacy of client relationships there that's driving some growth. Energy has been good to us. You know, multiyear focus on supporting energy supply chain clients and, you know, there's a lot of innovation happening, a lot of decision-making about, you know, rotating portfolios from carbon-heavy to, you know, EV, and other alternative energy types. That, that's a market that requires, you know, access to liquidity to help them effect that transition over time. Consumer packaged goods, you know, global business, constant focus on the right products at the best, you know, cost per unit. Lots of activity around, you know, plant assets, vehicle fleet assets. I think we had a record number, actually, of vehicle assets sold out of the CAS-CAG business, which is tied to CAG clients, in many cases, you know, upgrading fleets to, you know, cleaner burning fleets, natural gas fleets, you know, trying to introduce fleet mobility tracking equipment, devices. We help the clients exit, you know, legacy assets as they make those investments. Over time, you know, continue to find that waterfall technology drive future GMV. The interesting thing about CAG is we touch really every industry vertical. It's sort of a constant cyclical marketplace. We're always catching, you know, these assets, in any industry that's undergoing transformation and change. Those are some of the highlights driving the CAG pipeline. Perfect. Just one other question, and thinking about this in a marketplace modality. Your registered buyers and your auction participants were both up 5% year over year. Your number of transactions were flat. As you're thinking of investing in the business, does that move you to try to really focus on the supply side? Is that how you think of building out the marketplace? You, you hit the nail on the head. It is a two-sided marketplace, and you need both. We have, as it relates to our marketing and sales investment certainly lead to increasing brand awareness for our services, bundling not only the financial value proposition, but the, you know, environmental impact value proposition, taking a lot of complexity off the hands of our customers, allowing it to be more measurable and manageable in terms of tracking assets throughout the, you know, upper funnel before it hits our marketplace, letting clients redeploy those assets where needed, and then selling them in an orderly fashion when they're surplus to their needs. Providing things like our AssetZone software to industrial manufacturing companies around the world has been very well received. You know, giving them metrics that they can report up to their board and shareholders on how they're being a, a better steward of asset disposal, reducing waste, reducing scrapping of equipment and material. You know, we also partner with our government clients to raise awareness about, you know, reducing their footprint and being a leader in smart asset management and disposition. Using a digital channel helps remove a lot of physical in-person events, which require storage, require people to drive to, you know, these, these in-person events. We've been a leader in helping them, you know, manage higher volume, higher value asset sales with a, a smaller footprint, and they like that very much. Yes, those are things that help us drive thought leadership and which ultimately attracts supply. Of course, you know, we, we always continue to focus on asset promotion with our buyers and, you know, innovation, with, you know, marketplace enhancements, which I just talked about with GovDeals. You know, we're doing more, I think, in social channels to engage with buyers. Our AllSurplus Deals channel is an interesting channel. It sort of crosses from, you know, digital to in-person. We have tremendous, word of mouth when people can find great deals in their local marketplace. We, we do a lot of social proof of the, of the physical... At the point of physical pickup, we, we interview our customers, and, and they express, you know, the satisfaction of, of finding valuable items at a great price, and, you know, in an inflationary environment, that's well received. Then we share that out digitally, you get a viral bump when you, when you talk to people, and you can share that out. We're working on both sides, but I would tell you, enterprise sales is probably the majority of the, the increase in sales, and we're, we're using that in all segments. CAG, retail, and GovDeals are all benefiting from, you know, expanded capacity in our sales efforts. Perfect, Bill. Thank you for the details. Appreciate it. Our pleasure.