Financial Performance - Total net revenue for the three months ended September 30, 2024, was $311,428, a decrease of 16.6% compared to $373,313 for the same period in 2023[14] - Gross profit for the nine months ended September 30, 2024, was $220,502, down 24.5% from $292,156 in the prior year[14] - Operating loss for the three months ended September 30, 2024, was $(43,553), compared to $(40,930) for the same period in 2023, indicating a worsening of 6.5%[14] - Net loss for the nine months ended September 30, 2024, was $(177,536), an increase of 20.9% from $(146,849) in the same period of 2023[14] - For the three months ended September 30, 2024, the net loss was $61,030 thousand, compared to a net loss of $63,049 thousand for the same period in 2023, representing a decrease of 3.2%[19] - The net loss attributable to common shareholders for the three months ended September 30, 2024, was $61.0 million, resulting in a basic and diluted net loss per share of $1.33[74] - The nine-month net revenue decreased by 7.2% for the period ended September 30, 2024, primarily due to an 11% decrease in average order value[95] - Gross profit for the nine months ended September 30, 2024, decreased by 24.5% compared to the same period in 2023, with gross margin decreasing to 20.2% from 24.8%[100] Assets and Liabilities - Total current assets decreased to $183,082 as of September 30, 2024, from $350,073 as of December 31, 2023, reflecting a decline of 47.5%[10] - Total liabilities decreased to $232,145 as of September 30, 2024, down 16.0% from $276,686 as of December 31, 2023[10] - Cash and cash equivalents were $140,371 as of September 30, 2024, a significant decrease from $302,605 as of December 31, 2023[10] - Total stockholders' equity decreased to $196,193 as of September 30, 2024, down 45.4% from $359,132 as of December 31, 2023[12] - The total stockholders' equity at the end of the period was $196,193 thousand, a significant decrease from $516,184 thousand at the end of the same period in 2023[19] - Total assets as of December 31, 2023, amounted to $298,451 thousand, with cash equivalents at $246,425 thousand and equity securities at fair value of $41,046 thousand[31] Cash Flow and Financing - Cash used in operating activities for the nine months ended September 30, 2024, was $152,625 thousand, compared to cash provided of $9,131 thousand for the same period in 2023[21] - The company reported a net cash decrease of $161,252 thousand for the period, compared to a decrease of $45,984 thousand in the prior year[21] - As of September 30, 2024, the company had $200.0 million available under its "at the market" sales program[59] - For the nine months ended September 30, 2024, the company reported a net cash outflow of $152.6 million from operating activities, compared to a net cash inflow of $9.1 million for the same period in 2023[128] - Financing activities led to a net cash outflow of $2.1 million for the nine months ended September 30, 2024, mainly due to $3.3 million for payment of taxes withheld upon vesting of employee stock awards[130] Expenses - Operating expenses for the three months ended September 30, 2024, totaled $109,528, a decrease of 11.6% from $123,833 in the same period of 2023[14] - Sales and marketing expenses for the three months ended September 30, 2024, were $51,859,000, a decrease of 9.9% compared to $57,541,000 in the same period in 2023[105] - General and administrative expenses for the three months ended September 30, 2024, were $17,571,000, a decrease of 27.1% compared to $24,109,000 in the same period in 2023[109] - Technology expenses totaled $27.7 million for the three months ended September 30, 2024, a decrease of $1.6 million compared to the same period in 2023[89] - Cash payments included in operating cash flows from lease arrangements for the nine months ended September 30, 2024, were $2.628 million, down from $4.475 million in the prior year[50] Strategic Initiatives - Beyond, Inc. continues to focus on its asset-light ecommerce model, owning various retail brands including Overstock and Bed Bath & Beyond[23] - The company announced a reduction-in-force affecting approximately 20% of its workforce to strategically reduce costs[80] - The company plans to expand its global loyalty program, Beyond +, to enhance customer retention[83] - The Zulily acquisition has allowed the company to attract a younger demographic that shops more frequently[87] - The company continues to monitor macroeconomic trends, including higher interest rates and inflation, which may impact consumer confidence and spending[91] Legal and Compliance - Company involved in various legal proceedings which could materially affect business operations and financial position[144] - Potential significant damages and costs associated with ongoing litigation could divert management's focus from business operations[144] Investments and Acquisitions - The company entered into a collaboration agreement and a $40 million investment into The Container Store Group, Inc., involving the purchase of 40,000 shares of Series B Convertible Preferred Stock[76] - The company will provide $17 million in debt financing to Kirkland's Stores, Inc., including an $8.5 million convertible note with a conversion price of $1.85 per share[78] - A Loan and Security Agreement was established with BMO Bank N.A. for a $25 million revolving line of credit to support strategic ventures[79] Miscellaneous - The company has made a strategic change in the presentation of merchant fees and customer service costs, now classified under operating expenses for greater transparency[27] - The company recorded a gain on the sale of intangible assets amounting to $10,250 thousand during the nine months ended September 30, 2024[21] - The company recognized a gain of $10.3 million from the sale of intellectual property related to the Wamsutta brand, included in Other expense, net[40] - The company recorded a value of $112.5 million in equity securities of private companies as of September 30, 2024, with $21.5 million in equity securities and $10.9 million in debt securities recorded at fair value using Level 3 inputs[139] - The company's Senior Note carries a fixed annual interest rate of 4.242%, indicating no material direct financial statement risk associated with changes in interest rates[136] - Most sales and operating expenses are denominated in U.S. dollars, minimizing current exposure to foreign currency risk[137] - The company continues to monitor inflationary pressures affecting commodity and shipping prices, energy, and labor costs, which could impact financial performance[138] - No changes in internal control over financial reporting during the quarter ended September 30, 2024, that materially affected internal controls[142] - The effective tax rate for the three months ended September 30, 2024, was (0.3)%, compared to 17.5% for the same period in 2023[119]

Financial Performance - Total net revenue for Q3 2024 was $311 million, a decrease of 16.6% year-over-year[3] - Gross profit was $66 million, representing 21.2% of total net revenue[3] - The net loss for the quarter was $61 million, with a diluted net loss per share of $1.33[3] - Adjusted EBITDA was ($32) million, or (10.2)% of net revenue[3] - Net loss for the three months ended September 30, 2024, was $61,030,000 compared to a net loss of $63,049,000 for the same period in 2023[22] - Adjusted EBITDA for the three months ended September 30, 2024, was $(31,913,000), compared to $(23,931,000) for the same period in 2023[23] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(161,252,000) for the three months ended September 30, 2024[22] - Free cash flow for the nine months ended September 30, 2024, was $(163,954,000), compared to $(7,412,000) for the same period in 2023[25] - Net cash used in operating activities for the nine months ended September 30, 2024, was $(152,625,000), compared to $9,131,000 for the same period in 2023[25] Customer Metrics - Active customers increased by 21% year-over-year to 6.0 million[3] - Active customers increased to 5,961,000 in the last twelve months, up from 4,907,000 in the previous year, representing a growth of approximately 21.5%[18] - Last twelve months (LTM) net revenue per active customer decreased to $248 from $322, a decline of about 22.9%[18] Orders and Average Order Value - Orders delivered decreased by 19% year-over-year to 1.6 million[3] - Total orders delivered in the three months ended September 30, 2024, were 1,569,000, down from 1,945,000 in the same period last year, a decrease of approximately 19.3%[18] - Average order value increased to $199 from $192, reflecting a growth of about 3.6%[18] Cost Management and Business Strategy - The company expects to reduce its fixed expense base by an annualized $65 million heading into 2025[2] - Beyond is transforming its business model to focus on affinity marketing and data monetization[2] - The company announced a $20 million annualized reduction in staff-related expenses[2] Other Financial Highlights - Cash and cash equivalents totaled $140 million at the end of Q3 2024[3] - The company recognized a gain of $10,250,000 from the sale of intangible assets during the three months ended September 30, 2024[22]

Financial Performance - Net revenue for the three months ended June 30, 2024, was $398.1 million, a decrease of 5.7% compared to $422.2 million for the same period in 2023[23]. - Gross profit for the three months ended June 30, 2024, was $80.2 million, down 25.4% from $107.6 million in the prior year[23]. - Operating loss for the three months ended June 30, 2024, was $(47.0) million, compared to a loss of $(4.2) million for the same period in 2023[23]. - Net loss for the three months ended June 30, 2024, was $(42.6) million, compared to $(73.5) million in the same period last year[23]. - Net loss for the three months ended June 30, 2024, was $42,578 thousand, compared to a net loss of $73,493 thousand for the same period in 2023, representing a 42% improvement[25]. - For the six months ended June 30, 2024, the net loss was $116,506 thousand, an increase from $83,800 thousand in the prior year, indicating a 39% increase in losses[25]. - The company reported a comprehensive loss of $42,574 thousand for the three months ended June 30, 2024, compared to a comprehensive loss of $73,489 thousand for the same period in 2023[25]. Assets and Liabilities - Total current assets decreased to $232.2 million as of June 30, 2024, from $350.1 million as of December 31, 2023, representing a decline of 33.7%[18]. - Total liabilities decreased to $246.4 million as of June 30, 2024, down from $276.7 million at the end of 2023, a reduction of 10.9%[18]. - Cash and cash equivalents were $186.2 million as of June 30, 2024, down from $302.6 million at December 31, 2023, a decrease of 38.5%[18]. - Total cash, cash equivalents, and restricted cash decreased to $186,342 thousand at the end of the period from $343,076 thousand a year earlier, reflecting a decline of 46%[31]. - As of June 30, 2024, total contractual cash obligations amount to $46.354 million, with $4.312 million due within one year and $35.610 million due after five years[150]. Expenses - Sales and marketing expenses increased to $66.3 million for the three months ended June 30, 2024, up 34.7% from $49.2 million in the same period last year[23]. - Technology expenses totaled $27.3 million for the three months ended June 30, 2024, a decrease of $364,000 compared to the same period in 2023[108]. - General and administrative expenses decreased by $3.1 million for the three months ended June 30, 2024, compared to the same period in 2023[109]. - Customer service and merchant fees increased by $1.8 million for the three months ended June 30, 2024, primarily due to increased outsourced labor and credit card costs[109]. - Operating lease costs for the three months ended June 30, 2024, were $677,000, compared to $1,492,000 for the same period in 2023[68]. Stock and Equity - The company reported a weighted average of 45.7 million shares of common stock outstanding for the three months ended June 30, 2024[23]. - The total shares of common stock outstanding remained at 45,750 thousand as of June 30, 2024, unchanged from the previous year[29]. - The company had approximately 2.7 million shares of common stock remaining available under the Employee Stock Purchase Plan (ESPP) as of June 30, 2024[91]. - Stock-based compensation to employees and directors was $10,035 thousand for the six months ended June 30, 2024, down from $12,065 thousand in the prior year, a decrease of 17%[31]. - The stock-based compensation expense for the three months ended June 30, 2024, was $5,259,000, down from $6,270,000 for the same period in 2023[82]. Cash Flow - Operating cash flows showed a net cash used of $110,502 thousand for the six months ended June 30, 2024, compared to a net cash provided of $18,772 thousand in the same period of 2023[31]. - Net cash used in operating activities for the six months ended June 30, 2024, was $110.5 million, primarily due to a loss from operating activities adjusted for non-cash items[146]. - Investing activities resulted in a net cash outflow of $3.3 million for the six months ended June 30, 2024, mainly due to $8.0 million in property and equipment expenditures[147]. - Financing activities resulted in a net cash outflow of $2.6 million for the six months ended June 30, 2024, primarily due to tax payments upon vesting of employee stock awards[148]. Business Operations and Strategy - The company anticipates continued challenges in generating positive cash flow from operations due to ongoing market conditions and competition[12]. - The company is modifying its business model and expanding product offerings, which increases operational complexity and associated risks[170]. - The company is planning to sell its corporate headquarters, which could lead to an increase in remote work[173]. - The company continues to monitor liquidity and expects cash flows from future operations to be sufficient for at least the next twelve months[142]. - The company is evaluating the impact of recently issued accounting standards on its consolidated financial statements[41]. Legal and Regulatory Risks - The company is exposed to various legal proceedings that could materially affect its business and financial position[166]. - The company is subject to a wide variety of laws and regulations that may impede growth and increase expenses[154]. - Accrued tax contingencies as of June 30, 2024, stand at $3.8 million, with potential for additional assessments within the next 12 months[151]. Management and Workforce - The company underwent significant changes to its executive management team and board of directors in 2023 and 2024, with key positions still remaining open[173]. - In 2023, the company implemented a reduction in force and structural changes, including the elimination of Co-Chief Executive roles and dual Chief Merchant roles[173]. - The company emphasizes the importance of attracting and retaining highly-skilled personnel for future success[173]. - Uncertainties related to leadership changes and performance-based compensation may negatively impact employee retention and engagement[173].

Financial Performance - Total net revenue was $398 million, a decrease of 5.7% year-over-year[2] - The net loss for the quarter was $43 million, with a diluted net loss per share of $0.93[2] - Adjusted EBITDA was ($36) million, representing (9.1)% of net revenue[2] - The company reported a net loss of $116,506 thousand for the three months ended June 30, 2024, compared to a net loss of $83,800 thousand for the same period in 2023[15] - Adjusted EBITDA for the three months ended June 30, 2024, was $(36,376) thousand, compared to $8,234 thousand for the same period in 2023[24] - The company reported a free cash flow of $(118,453) thousand for the six months ended June 30, 2024, compared to $6,724 thousand for the same period in 2023[26] - Net cash used in operating activities was $(110,502) thousand for the six months ended June 30, 2024, compared to $18,772 thousand for the same period in 2023[26] Customer Metrics - Active customers grew to 6.2 million, representing a 35% year-over-year increase[2] - Active customers increased to 6,221 thousand in June 2024, up from 4,621 thousand in June 2023, representing a growth of approximately 34.6%[19] - Last twelve months (LTM) net revenue per active customer decreased to $247 in June 2024 from $361 in June 2023, a decline of approximately 31.6%[19] Orders and Revenue - Orders delivered reached 1.9 million, an increase of 8% year-over-year[2] - Total orders delivered increased to 1,949 thousand in June 2024, compared to 1,803 thousand in June 2023, reflecting a growth of about 8.1%[19] - Average order value decreased to $204 in June 2024 from $234 in June 2023, a decline of approximately 12.8%[19] Cash and Expenses - Cash and cash equivalents totaled $186 million at the end of the second quarter[2] - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $(116,407) thousand for the three months ended June 30, 2024[15] - The company incurred stock-based compensation expenses of $10,035 thousand for the three months ended June 30, 2024, down from $12,065 thousand for the same period in 2023[15] Strategic Outlook - The company is on track to reduce fixed expenses by $45 million on an annualized basis, with significant progress made in the second quarter[1] - The company aims to leverage its brands and technology platforms for strategic partnerships and joint ventures to enhance capital returns[1] - Beyond, Inc. expects financial performance to improve throughout the remainder of the year[1]

Financial Performance - Net revenue for the quarter ended March 31, 2024, was $382.281 million, a slight increase from $381.140 million in the same period last year[22]. - Gross profit decreased to $74.359 million from $101.684 million year-over-year, reflecting a decline of approximately 27%[22]. - Operating loss for the quarter was $57.525 million, compared to an operating loss of $8.364 million in the prior year, indicating a significant increase in losses[22]. - Net loss for the quarter was $73.928 million, compared to a net loss of $10.307 million in the same quarter last year, representing an increase in losses of approximately 617%[22]. - The company reported a basic net loss per share of $1.62 for the quarter, compared to a loss of $0.23 per share in the same quarter last year[22]. - For the quarter ended March 31, 2024, Beyond, Inc. reported a net loss of $73.93 million, compared to a net loss of $10.31 million for the same period in 2023, indicating a significant increase in losses[31]. - The accumulated deficit increased to $555.60 million from $184.14 million year-over-year, highlighting the company's ongoing financial challenges[29]. - A net loss attributable to common shareholders of $73.93 million was reported for the three months ended March 31, 2024, compared to a net loss of $10.31 million for the same period in 2023[93]. Assets and Liabilities - Total current assets decreased to $305.444 million from $350.073 million as of December 31, 2023[18]. - Total liabilities increased to $289.511 million from $276.686 million, indicating a rise in financial obligations[18]. - Cash and cash equivalents decreased to $256.323 million from $302.605 million, reflecting a cash outflow during the quarter[18]. - Total stockholders' equity decreased to $287.747 million from $359.132 million, indicating a decline in the company's net worth[20]. - Total assets as of March 31, 2024, amounted to $242.7 million, a decrease from $298.5 million as of December 31, 2023[44]. - Total liabilities remained stable at $537,000 as of March 31, 2024, compared to $513,000 at December 31, 2023[44]. - Total cash, cash equivalents, and restricted cash decreased to $256.49 million at the end of the period from $374.93 million at the end of the same period in 2023, reflecting a decrease of approximately 31.5%[31]. Cash Flow and Investments - Operating cash flow showed a net cash used of $34.61 million, contrasting with a net cash provided of $20.01 million in the same quarter of 2023[31]. - Cash used in operating activities for the three months ended March 31, 2024, was $(34.6) million, compared to $20.0 million provided in the same period in 2023[134]. - Investing activities for the three months ended March 31, 2024, resulted in a net cash outflow of $9.1 million, mainly due to $5.7 million for purchases of intangible assets and $3.4 million for property and equipment[136]. - Financing activities for the three months ended March 31, 2024, resulted in a net cash outflow of $2.5 million, primarily due to $3.2 million for payment of taxes withheld upon vesting of employee stock awards[136]. Expenses - Sales and marketing expenses as a percentage of revenue rose from 12.3% in Q1 2023 to 17.8% in Q1 2024, primarily due to increased performance marketing and brand advertising expenses[103]. - Technology expenses totaled $29.6 million for the three months ended March 31, 2024, reflecting a $1.0 million decrease compared to the same period in 2023[103]. - General and administrative expenses totaled $20.5 million for the three months ended March 31, 2024, a slight decrease of 0.1% compared to the same period in 2023[120]. - Customer service and merchant fees increased by 16.5% year-over-year to $13.9 million for the three months ended March 31, 2024, representing 3.6% of net revenue[123]. - Other expense, net for the three months ended March 31, 2024, was $18.8 million, up from $7.4 million in the same period in 2023, primarily due to an increase in loss from equity method securities[124]. Corporate Governance and Compliance - The company is committed to compliance with the Securities Exchange Act of 1934, as evidenced by the certifications signed by the Chief Financial Officer[31.1][31.3]. - KPMG LLP has provided a Preferability Letter, confirming the company's adherence to accounting standards[18.1]. - The company has made amendments to its Certificate of Incorporation and Bylaws, reflecting ongoing corporate governance updates as of November 6, 2023[3.2][3.3]. - The company is actively engaging with stakeholders through its reporting and compliance efforts, reinforcing its market position[31.1][31.3]. Strategic Initiatives - The company is preparing for future growth and expansion, as indicated by the ongoing updates to its equity incentive plan[10.4]. - The company is involved in ongoing litigation that could materially affect its business and financial position, with no estimates of possible losses available at this time[69]. - The company committed to a plan to sell its corporate headquarters, expected to complete within one year[48]. - The company is exposed to inflationary pressures due to increases in commodity and shipping prices, which may impact financial condition and results of operations[147].

Revenue and Growth - Revenue growth of 0.3% year-over-year, reaching $382 million in Q1 2024[6] - Net revenue for March 2024 was $382.3 million, a slight increase from $381.1 million in March 2023[21] - Delivered 2.2 million orders, a 27% YoY increase in transaction volume[6] - Orders delivered increased to 2.21 million in March 2024 from 1.74 million in March 2023[27] - Active customers reached 6.0 million, a 26% YoY increase[6] - Active customers grew to 6.04 million in March 2024, up from 4.80 million in March 2023[27] Profitability and Losses - Gross profit of $74 million, representing 19.5% of total net revenue[6] - Gross profit decreased to $74.4 million in March 2024 from $101.7 million in March 2023, reflecting higher cost of goods sold[21] - Operating loss of $58 million and net loss of $74 million in Q1 2024[6] - Operating loss widened to $57.5 million in March 2024 compared to $8.4 million in March 2023, driven by increased sales and marketing expenses[21] - Net loss increased significantly to $73.9 million in March 2024 from $10.3 million in March 2023[21] - Adjusted EBITDA (non-GAAP) of ($48) million, representing (12.5)% of net revenue[6] - Adjusted EBITDA was negative $47.8 million in March 2024, compared to positive $3.4 million in March 2023[33] Financial Position and Cash Flow - Cash and cash equivalents totaled $256 million at the end of Q1 2024[6] - Free cash flow was negative $38.0 million in March 2024, a significant decline from positive $14.8 million in March 2023[35] Customer Metrics - LTM net revenue per active customer decreased to $259 in March 2024 from $370 in March 2023[27] - Average order value dropped to $173 in March 2024 from $220 in March 2023[27] Strategic Initiatives - Acquired Zulily, aiming to double down on off-priced home and lifestyle business[1] - Soft launched Overstock site 6 months ahead of schedule, showing promising early growth[1] - Plan to reduce expenses by $45 million on an annualized basis, with half already achieved[5]

Company Overview - Beyond, Inc. reported a name change from Overstock.com, Inc. to Beyond, Inc. and transferred its stock listing to the New York Stock Exchange under the ticker symbol "BYON" as of November 6, 2023[17]. - The company achieved sales primarily from customers in the United States, with no single customer accounting for more than 1% of total net revenue during the years ended December 31, 2023, 2022, and 2021[19]. - Beyond, Inc. offers a diverse range of home products, with millions of items available to meet evolving customer preferences[19]. Customer Experience - The company emphasizes a simplified customer experience through a user-friendly interface and a dedicated customer care team[18]. - Beyond, Inc. employs various sales and marketing strategies, including digital channels and traditional advertising, to engage its retail consumer audience[22]. - Beyond, Inc. leverages proprietary technologies and strategic partnerships to enhance its operational capabilities and customer experience[24]. Employee Relations - Beyond, Inc. has approximately 830 full-time employees as of December 31, 2023, with a focus on maintaining good employee relations and high competition for qualified personnel[32]. - The company maintains competitive compensation programs to attract and retain employees, linking compensation to overall company performance[36]. - The average employee tenure is six and a half years, with customer service and warehouse departments averaging six years[40]. - The company provides a comprehensive benefits package, including medical, dental, vision insurance, and a flexible work schedule[41]. - In January 2024, the company expanded benefits to include unlimited flexible time away for all exempt employees[41]. - The company offers a 401(k) matching program, matching dollar for dollar up to 6% of employee savings[38]. Diversity and Inclusion - The company is committed to diversity and inclusion, aiming to create a workplace that values unique backgrounds and perspectives[34]. - The company emphasizes diversity and inclusion training to strengthen its workforce and foster an inclusive environment[43]. - The company has established relationships with universities and industry groups to attract diverse talent[39]. Talent Management - The company actively manages talent acquisition and retention, recruiting from 23 states and the Republic of Ireland[39]. - The company’s focus on human capital management is seen as a competitive advantage, with a dedicated board committee reviewing hiring trends and engagement[46]. Financial Overview - The company has a recorded value of $155.9 million in equity securities as of December 31, 2023, down from $296.3 million in 2022[179]. - The company’s loan agreements carry a fixed blended annual interest rate of 4.45%, mitigating direct financial statement risk from interest rate changes[176]. - The company actively cultivates relationships with manufacturers, distributors, and suppliers to ensure a diverse product offering and flexibility in supplier selection[21].

FORM 10-Q Filing Information This section presents the essential filing details for the company's Quarterly Report on Form 10-Q [Filing Details](index=1&type=section&id=Filing%20Details) This section provides basic filing information for the Quarterly Report on Form 10-Q for Overstock.com, Inc. for the period ended September 30, 2023 - The registrant, **OVERSTOCK.COM, INC.**, is a large accelerated filer[1](index=1&type=chunk)[2](index=2&type=chunk) - The report covers the quarterly period ended **September 30, 2023**[2](index=2&type=chunk) Registrant Information | Detail | Value | | :--- | :--- | | Exact name of registrant | OVERSTOCK.COM, INC. | | State of incorporation | Delaware | | Commission file number | 001-41850 | | Trading Symbol(s) | OSTK | | Exchange on which registered | NASDAQ Global Market | | Common Stock, par value | $0.0001 | | Shares outstanding (Oct 27, 2023) | 45,304,946 | Table of Contents This section outlines the structure of the Form 10-Q, detailing its two main parts and their respective items [Report Structure](index=3&type=section&id=Report%20Structure) The Table of Contents outlines the two main parts of the Form 10-Q: Part I, Financial Information, and Part II, Other Information, detailing the specific items and their corresponding page numbers within the report - The report is divided into two main parts: **Part I. Financial Information** and **Part II. Other Information**[4](index=4&type=chunk)[7](index=7&type=chunk) - Part I includes Financial Statements, Management's Discussion and Analysis, Market Risk disclosures, and Controls and Procedures[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - Part II covers Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, Other Information, and Exhibits[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) Special Cautionary Note Regarding Forward-Looking Statements This section warns that the report contains forward-looking statements subject to various risks and uncertainties [Forward-Looking Statements and Associated Risks](index=4&type=section&id=Special%20Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements, which involve inherent risks and uncertainties, cautioning readers that actual results may differ materially from projections due to various factors - The report contains forward-looking statements, identifiable by words like 'expect,' 'anticipate,' 'predict,' and 'project,' which are subject to risks and uncertainties[12](index=12&type=chunk)[13](index=13&type=chunk) - Actual results may differ materially due to factors such as economic downturns, inflation, reliance on third parties, competition, supply chain challenges, and difficulties with the Bed Bath & Beyond brand integration[13](index=13&type=chunk) - Other risks include inability to attract/retain key personnel, cybersecurity risks, potential losses on equity/debt investments, and impacts from litigation or global conflicts[13](index=13&type=chunk)[14](index=14&type=chunk) PART I. FINANCIAL INFORMATION This part presents the unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies and specific financial line items for the periods ended September 30, 2023 and December 31, 2022 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a decrease in total assets and stockholders' equity from December 31, 2022, to September 30, 2023, primarily driven by a reduction in cash and cash equivalents and equity securities, while total liabilities increased Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | Change (vs Dec 31, 2022) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $325,435 | $371,263 | $(45,828) | | Total current assets | $375,729 | $414,509 | $(38,780) | | Intangible assets, net | $25,501 | $9 | $25,492 | | Equity securities | $169,326 | $296,317 | $(126,991) | | Total assets | $770,784 | $878,546 | $(107,762) | | Total current liabilities | $209,391 | $191,142 | $18,249 | | Total liabilities | $254,600 | $232,720 | $21,880 | | Total stockholders' equity | $516,184 | $645,826 | $(129,642) | - Significant increase in intangible assets, net, from **$9 thousand** to **$25.5 million**, likely due to the acquisition of the Bed Bath & Beyond brand[18](index=18&type=chunk) - A substantial decrease in equity securities from **$296.3 million** to **$169.3 million**[18](index=18&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant net loss for both the three and nine months ended September 30, 2023, compared to the prior year, driven by decreased net revenue, lower gross profit, and increased operating expenses Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $373,313 | $460,279 | $1,176,664 | $1,524,438 | | Gross profit | $69,960 | $107,472 | $254,045 | $353,789 | | Operating income (loss) | $(40,930) | $5,659 | $(53,543) | $29,655 | | Net loss | $(63,049) | $(36,995) | $(146,849) | $(19,725) | | Basic Net loss per share | $(1.39) | $(0.81) | $(3.25) | $(0.46) | - Net revenue decreased by **18.9%** for the three months and **22.8%** for the nine months ended September 30, 2023, compared to the same periods in 2022[23](index=23&type=chunk) - The company reported an operating loss of **$(40.9 million)** for the three months and **$(53.5 million)** for the nine months ended September 30, 2023, a significant decline from operating income in the prior year[23](index=23&type=chunk) [Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) The consolidated statements of comprehensive loss show a comprehensive loss of $(63.0 million) for the three months and $(146.8 million) for the nine months ended September 30, 2023, primarily driven by the net loss Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(63,049) | $(36,995) | $(146,849) | $(19,725) | | Other comprehensive income | $4 | $4 | $12 | $12 | | Comprehensive loss | $(63,045) | $(36,991) | $(146,837) | $(19,713) | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) The consolidated statements of changes in stockholders' equity reflect a decrease in total stockholders' equity from $645.8 million at December 31, 2022, to $516.2 million at September 30, 2023, primarily due to the accumulated deficit from net losses Changes in Stockholders' Equity (in thousands) | Metric | Sep 30, 2023 (9 Months) | Dec 31, 2022 | | :--- | :--- | :--- | | Additional paid-in capital (end of period) | $1,002,494 | $982,718 | | Accumulated deficit (end of period) | $(320,678) | $(173,829) | | Treasury stock at cost (end of period) | $(165,127) | $(162,546) | | Total stockholders' equity (end of period) | $516,184 | $645,826 | - Accumulated deficit significantly increased from **$(173.8 million)** at the beginning of the nine-month period to **$(320.7 million)** at the end, reflecting the net loss[3

Financial Data and Key Metrics Changes - Revenue declined 19% year-over-year in Q3 2023, showing a slight improvement compared to Q2 [32] - Average Order Value (AOV) decreased by 21% to $192, primarily due to a shift towards lower AUR categories [38] - Gross profit was $70 million, down $37 million from the previous year, with a gross margin of 18.7%, a decrease of 461 basis points [33] Business Line Data and Key Metrics Changes - Active customer base grew to 4.9 million, an increase of nearly 300,000 customers in the quarter, marking a 7% growth since the launch of Bed Bath & Beyond [37][19] - Orders increased by 3%, returning to growth for the first time in several quarters [32] - The Bed Bath and kitchen categories led the improvement in order performance, while furniture remains a top category [20] Market Data and Key Metrics Changes - The company experienced a significant increase in customer engagement in Canada, with average monthly sales trends up three times compared to Q2 [20] - The legacy Overstock customer group accounted for over 900,000 of the total order volume during August and September [27] - The TAM New customer group, which did not exist in either database, accounted for 23% of orders and had the highest average order value [29] Company Strategy and Development Direction - The company aims to transform into a house of brands, expanding its product and service offerings beyond a single brand e-commerce retailer [9] - Plans are in place to relaunch the Overstock brand as a liquidation-only website by the end of 2024 [10] - The company is focused on growing its active customer file as a key measure of success from the Bed Bath & Beyond acquisition [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the macro environment, including low consumer engagement and a weak housing market [32] - The company expects revenue to improve modestly in Q4 compared to Q3, with active customers projected to reach around 5.2 million [39] - Management remains optimistic about the long-term potential of the Bed Bath & Beyond brand and its ability to capture market share [25] Other Important Information - The company has invested approximately $50 million to date in the Bed Bath & Beyond acquisition and related activities, with plans to spend the remaining $175 million over the next 12-15 months [63][40] - The company is focusing on enhancing its CRM capabilities to improve customer retention and repeat purchases [72] Q&A Session Summary Question: What exceeded or fell short of expectations during the brand transition? - Management noted that mobile app downloads exceeded expectations, while warming up the email file took longer than anticipated [44][45] Question: What caused the revenue slowdown in September? - Management indicated that the slowdown was influenced by the timing of customer acquisition strategies and promotional activities [49][50] Question: What is the status of the Chief Marketing Officer position? - The company is in the process of hiring a CMO, with expectations to have someone in place by early 2024 [53][54] Question: What are the trends in the business quarter-to-date? - Management reported that trends are performing in line with expectations, with a focus on maintaining customer engagement [58] Question: How will the liquidation site influence the P&L? - Management emphasized that the liquidation site will avoid channel pollution by not offering similar products, ensuring distinct pricing strategies [59]

Financial Performance - Net revenue for Q2 2023 was $422.2 million, a decrease of 20% compared to $528.1 million in Q2 2022[24] - Gross profit for Q2 2023 was $94.4 million, down 22% from $121.1 million in Q2 2022[24] - Operating loss for Q2 2023 was $4.2 million, compared to an operating income of $11.5 million in Q2 2022[24] - Net loss for Q2 2023 was $73.5 million, compared to a net income of $7.1 million in Q2 2022[24] - Net income for the three months ended June 30, 2023, was $(73,493) thousand, compared to $7,147 thousand for the same period in 2022, representing a significant decline[26] - For the six months ended June 30, 2023, net income was $(83,800) thousand, down from $17,270 thousand in the prior year[26] - Comprehensive income (loss) for the three months ended June 30, 2023, was $(73,489) thousand, compared to $7,151 thousand for the same period in 2022[26] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(28,381) thousand for the six months ended June 30, 2023[33] Assets and Liabilities - Total current assets decreased to $388.9 million as of June 30, 2023, from $414.5 million at the end of 2022[18] - Total liabilities increased to $237.4 million as of June 30, 2023, compared to $232.7 million at the end of 2022[19] - Cash and cash equivalents were $342.9 million as of June 30, 2023, down from $371.3 million at the end of 2022[18] - The company reported a decrease in total stockholders' equity to $573.2 million as of June 30, 2023, from $645.8 million at the end of 2022[21] - The balance of accumulated deficit increased to $(257,629) thousand as of June 30, 2023, from $(121,323) thousand a year earlier[31] - The total outstanding debt as of June 30, 2023, was $36.2 million, with a current portion of $2.0 million included in other current liabilities[59] - Total contractual cash obligations as of June 30, 2023, amounted to $52.6 million, including $5.9 million in operating leases and $46.7 million in loan agreements[137] Expenses - The company experienced a 15% reduction in sales and marketing expenses in Q2 2023 compared to Q2 2022[24] - Stock-based compensation to employees and directors was $12,065 thousand for the six months ended June 30, 2023, compared to $9,334 thousand in the same period of 2022[33] - Operating lease costs for the three months ended June 30, 2023, were $1.49 million, slightly down from $1.57 million for the same period in 2022[61] - General and administrative expenses increased by $592,000 for the three months ended June 30, 2023, primarily due to increased legal and third-party expenses[99] - Technology expenses totaled $27.7 million for the three months ended June 30, 2023, a decrease of $2.8 million compared to the same period in 2022[98] Investments and Acquisitions - Overstock.com invested $10.0 million in GrainChain, Inc. through a convertible promissory note with a 5% annual interest rate, maturing on January 3, 2025[40] - The total purchase price for the intellectual property assets acquired from Bed Bath & Beyond was $25.6 million, allocated as $21.8 million for trade names and $3.8 million for customer lists[50] - The company recently purchased certain assets from Bed Bath & Beyond, which may involve risks and uncertainties that could affect financial results[159] Market and Operational Insights - The company is focusing on international market expansion and optimizing its distribution operations[13] - International net revenues were less than 2% of total net revenues for the three and six months ended June 30, 2023, and 2022[105] - The company continues to monitor macroeconomic trends, including inflation and geopolitical events, which may impact consumer confidence and spending[100] - Overstock.com received tens of millions of visits per month on its online shopping site, indicating strong user engagement[36] Stock and Shareholder Information - Total shares of common stock outstanding as of June 30, 2023, were 45,202 thousand, a decrease from 45,695 thousand a year earlier[29] - The company had $19.9 million available for future share repurchases under its current repurchase authorization[76] - The company did not repurchase any shares of common stock during the three and six months ended June 30, 2023[76] - The average purchase price per share under the Employee Stock Purchase Plan (ESPP) for the six months ended June 30, 2023, was $16.46, compared to $48.37 for the same period in 2022[81] Legal and Regulatory Matters - The company has been involved in various legal proceedings, including a securities class action lawsuit, which could materially affect its business and financial position[66] - The company is subject to various laws and regulations that may impede growth and increase expenses, including those related to taxation, privacy, and consumer protection[141] Miscellaneous - The company has established liabilities for contingencies that are probable and estimable, but these were not material as of June 30, 2023[71] - There were no changes in disclosure controls and procedures or internal controls over financial reporting during the quarter ended June 30, 2023[152]