PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, showing a year-over-year decline in revenue and a shift to a significant net loss [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$810.6 million** from **$878.5 million**, driven by reduced cash and equity securities, impacting stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $342,891 | $371,263 | | Equity securities | $208,476 | $296,317 | | Intangible assets, net | $25,583 | $9 | | **Total assets** | **$810,552** | **$878,546** | | Total current liabilities | $197,135 | $191,142 | | **Total liabilities** | **$237,386** | **$232,720** | | **Total stockholders' equity** | **$573,166** | **$645,826** | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a **$73.5 million** net loss in Q2 2023, a significant downturn from prior year's net income, with revenue down **20%** Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $422,211 | $528,122 | $803,351 | $1,064,159 | | Gross profit | $94,372 | $121,105 | $184,085 | $246,317 | | Operating income (loss) | $(4,249) | $11,542 | $(12,613) | $23,996 | | **Net income (loss)** | **$(73,493)** | **$7,147** | **$(83,800)** | **$17,270** | | Diluted EPS | $(1.63) | $0.12 | $(1.86) | $0.33 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was **$18.8 million**, while investing activities used **$44.4 million**, primarily for intangible asset purchases Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $18,772 | $21,822 | | Net cash used in investing activities | $(44,435) | $(17,169) | | Net cash used in financing activities | $(2,718) | $(65,232) | | **Net decrease in cash** | **$(28,381)** | **$(60,579)** | [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the Bed Bath & Beyond IP acquisition, significant equity security losses, and ongoing legal matters - On June 28, 2023, the company acquired certain intellectual property assets of the Bed Bath & Beyond brand for a total purchase price of **$25.6 million**. This was allocated to trade names (**$21.8 million**) and customer lists (**$3.8 million**)[46](index=46&type=chunk) - The company recognized a net loss of **$80.7 million** on equity method securities in Q2 2023, a significant increase from the **$2.0 million** loss in Q2 2022. For the six-month period, the loss was **$88.1 million**[77](index=77&type=chunk)[99](index=99&type=chunk)[178](index=178&type=chunk) - The company continues to cooperate with the SEC regarding subpoenas related to its 2019 Series A-1 Preferred stock dividend, executive 10b5-1 plans, and retail guidance[129](index=129&type=chunk) - No shares were repurchased under the stock repurchase program in the first six months of 2023. In the same period of 2022, the company repurchased **$60.1 million** of its stock. As of June 30, 2023, **$19.9 million** remained available for future repurchases[109](index=109&type=chunk)[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **20.1%** revenue decrease in Q2 2023, impacted by macroeconomic factors and equity investment losses, while confirming sufficient liquidity [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q2 2023 revenue declined **20.1%** due to lower orders and average order value, with gross margin contraction and significant equity security losses Key Performance Metrics (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $422.2M | $528.1M | (20.1)% | | Gross Margin | 22.4% | 22.9% | (50 bps) | | Sales & Marketing (% of Revenue) | 11.7% | 11.0% | +70 bps | | Technology Expenses | $27.7M | $30.5M | (9.3)% | - The decrease in revenue was attributed to macroeconomic factors like inflation impacting consumer sentiment, a shift in consumer spending, and the company's strategy to exit non-home product categories[121](index=121&type=chunk)[147](index=147&type=chunk) - Other expense, net, increased to **$80.7 million** in Q2 2023 from **$2.0 million** in Q2 2022, primarily due to a **$78.4 million** increase in losses recognized from equity method securities[178](index=178&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$342.9 million** in cash and equivalents, deemed sufficient for future operations, with **$18.8 million** from operations - As of June 30, 2023, the company had **$342.9 million** in cash and cash equivalents[187](index=187&type=chunk) Six-Month Cash Flow Summary (in thousands) | Activity | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | | Cash from Operating Activities | $18,772 | $21,822 | | Cash from Investing Activities | $(44,435) | $(17,169) | | Cash from Financing Activities | $(2,718) | $(65,232) | - The primary uses of cash in investing activities for the first half of 2023 were **$22.8 million** for intangible asset purchases and **$12.0 million** for property and equipment expenditures[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Key market risks include interest rates, foreign currency, inflation, and significant valuation volatility in **$208.5 million** of equity securities - The company has no direct financial statement risk from interest rate changes as its loan agreements carry a fixed blended annual rate of **4.45%**[205](index=205&type=chunk) - Investment risk is significant, with **$208.5 million** in equity securities as of June 30, 2023. Valuations of private company investments are complex and subject to fluctuation[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[210](index=210&type=chunk) - No changes occurred during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[212](index=212&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with details referenced in Note 9 of the financial statements - The company is periodically involved in litigation concerning consumer protection, employment, intellectual property, and securities laws. For specific details, the report refers to Note 9—Commitments and Contingencies[219](index=219&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) New risks include potential losses on **$208.5 million** equity investments and challenges related to the Bed Bath & Beyond brand acquisition - A key risk is the potential to recognize material losses on the **$208.5 million** held in equity method investments, as these are in private, early-stage companies and may not generate a tax benefit[222](index=222&type=chunk) - The company may not realize the expected benefits from the Bed Bath & Beyond asset purchase due to risks such as brand confusion, loss of customers, higher-than-anticipated marketing costs, and disruptions to the existing business[224](index=224&type=chunk)[225](index=225&type=chunk) [Other Items (Items 2, 3, 4, 5 & 6)](index=36&type=section&id=Other%20Items%20(Items%202,%203,%204,%205%20%26%206)) Remaining disclosures include no stock repurchases in Q2 2023, no defaults on senior securities, and no changes to 10b5-1 plans - There were no repurchases of equity securities during the three months ended June 30, 2023. The remaining authorized amount under the stock repurchase program is **$19.9 million**[226](index=226&type=chunk) - No defaults upon senior securities were reported (Item 3), and Mine Safety Disclosures were not applicable (Item 4)[227](index=227&type=chunk)[228](index=228&type=chunk)

Overstock.com, Inc. (OSTK) Q2 2023 Earnings Call Transcript July 27, 2023 8:30 AM ET Company Participants Lavesh Hemnani - Head of Investor Relations Jonathan Johnson - Chief Executive Officer Adrianne Lee - Chief Financial Officer Dave Nielsen - President Conference Call Participants Seth Sigmund - Barclays Thomas Forte - D. A. Davidson Curtis Nagle - BOFA Anna Andreeva - Needham and Company Operator Good day and thank you for standing by. Welcome to the Q2 2023 Overstock.com Earnings Conference Call. At t ...

Maturity of lease liabilities under our non-cancellable operating leases as of March 31, 2023, are as follows (in thousands): | --- | --- | |-----------------------------------------------------|------------------| | Payments due by period \n2023 (Remainder) | Amount \n 3,487 | | 2024 | 2,880 | | 2025 | 689 | | 2026 | 250 | | 2027 | 83 | | Thereafter | — | | Total lease payments | 7,389 | | Less interest | 535 | | Present value of lease liabilities | 6,854 | 8. COMMITMENTS AND CONTINGENCIES Legal proceeding ...

Forward-Looking Statements 2 ▪ Disciplined and focused management team ▪ Total addressable market and online penetration growing ▪ Distributed supply chain with vast partner network 3 environmental sustainability human & employee rights Achieve parity in engagement rates among all employee demographic groups, which reflect the level of enthusiasm and dedication the employees feel towards their jobs. Support the needs of hundreds of homes every year through our nonprofit partners. 6 Support the needs of hund ...

54 Unearned Revenue When the timing of our provision of goods or services is different from the timing of the payments made by our customers, we recognize a contract liability (customer payment precedes performance). Customer orders are recorded as unearned revenue when payment is received prior to delivery of products or services ordered. We record amounts received for Club O membership fees as unearned revenue and we recognize it ratably over the membership period. We record Club O Reward dollars earned f ...

Financial Data and Key Metrics - Revenue declined by 34% year-over-year in Q4 2022, pressured by intense competition and the strategic removal of non-home products [39][40] - Gross profit decreased by $49 million YoY in Q4, with gross margin at 22.1%, a 54 basis point decline due to higher discounting and elevated freight costs [41] - Adjusted EBITDA was $7 million in Q4, a decrease of $21 million YoY, with a margin of 1.6% [42] - Active customers declined to 5.2 million at the end of Q4, with order frequency down 4% YoY [43][102] - Full-year 2022 revenue was $1.9 billion, a 30% decline YoY, but a 34% increase compared to 2019 [75] Business Line Performance - The company transitioned to a 100% home-only retailer, with home product assortment more than doubling since January 2021 [50][51] - Mobile app adoption grew rapidly, with mobile app sales increasing by 500 basis points in 2022 [121] - The company added over 4 million new on-trend SKUs from thousands of partners, with more than one-third of Q4 revenue driven by SKUs added in the last two years [24][53] Market Performance - The furniture and home furnishings market is fragmented, with a total addressable market of over $400 billion [56] - The company faced competitive pressure from increased and earlier discounting activity during Q4, particularly during the Cyber 5 period [27][40] - The company's Smart Value pricing strategy held up well during Q4, despite competitors relying on deep discounts to stimulate demand [27] Strategic Direction and Industry Competition - The company is focused on improving product findability, search processing, and customer experience to drive repeat purchases [25][87] - The company is leveraging its asset-light business model to maintain competitive pricing and gross margins [95][101] - The company is expanding its loyalty offerings, including a new co-branded Mastercard credit card in partnership with Citi Retail Services [54][120] Management Commentary on Operating Environment and Future Outlook - Management expects 2023 to be a tale of two halves, with performance improving in the second half due to new product assortments and loyalty initiatives [111][113] - The company anticipates continued inventory rationalization in the industry through at least the first half of 2023 [112] - Management remains committed to profitability for the year, despite potential fluctuations in consumer sentiment [84][116] Other Important Information - The company repurchased $80 million in shares in 2022 and made a $50 million direct investment in tZERO [30] - The company exited 2022 with $371 million in cash and $34 million in long-term debt, resulting in a net cash position of $337 million [59] - The company's Medici Ventures portfolio continues to present a differentiated value opportunity, with significant progress in blockchain investments [31][61] Q&A Session Summary Question: Impact of competitor markdowns on sales and pricing algorithm adjustments [92] - The company maintains its Smart Value proposition by removing non-competitive products from the site, which can be disruptive but ensures pricing integrity [93][125] Question: Gross margin trends and inventory rationalization [94][148] - The company expects gross margins to remain consistent due to its asset-light model, despite industry-wide inventory rationalization [95][148] Question: Comparison of current home e-commerce market to past periods [97] - The company has historically performed well during economic downturns, as consumers become more value-conscious [150][151] Question: Performance of Overstock Day events and new customer demographics [132] - Overstock Day events drove strong mobile app adoption and sales, with a focus on attracting a younger demographic [155] Question: Profitability in a scenario of declining sales [157] - The company is committed to profitability for the year, with a focus on expense management and cost savings [158][159] Question: Active customer base and reactivation strategy [162] - The company is focused on increasing brand association with home and leveraging its loyalty offerings to drive engagement and reactivation [163] Question: Expanding assortment in the home category [144] - The company is strategically adding national brands and giftable assortments, with a focus on improving product findability [178]

● overstock.. Making Dream Homes Come True Smart Value = Quality & Style for less Savvy Shoppers Reluctant Refreshers Overstock Customers Smart Value Seekers Home Goods Expertise Department Store Generalist Value Inspiration IKEA Bed Bath & Beyond Wayfair West Elm Pottery Barn Restoration Hardware Amazon Walmart Target 1 Cash less long-term debt. 1. FY 2022 vs. FY 2019 2. Overstock home-only revenue compared to (a) Census furniture and home furnishings sales, (b) Home-related personal consumption expenditur ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ (Mark One) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000 ...

Financial Data and Key Metrics Changes - Revenue declined by 33% year-over-year in Q3 2022, totaling $460 million, impacted by weak consumer sentiment and high inflation [31][35] - Adjusted EBITDA was $15 million with a margin of 3.2%, a decrease of $21 million compared to the previous year [41] - Reported EPS loss was $0.81, primarily due to noncash, non-operating expenses related to equity securities [31][32] - Gross profit was $107 million, down $49 million year-over-year, with a gross margin of 23.3%, reflecting a 60 basis point improvement [37] Business Line Data and Key Metrics Changes - Home-only revenue grew by 53% compared to 2019, although it declined nearly 30% year-over-year in Q3 2022, showing signs of stabilization [19][20] - Average order value increased by 13% year-over-year to $243, driven by a shift in product assortment [46] - Active customer base decreased to 5.8 million, influenced by weak consumer sentiment and the exit from non-home products [43] Market Data and Key Metrics Changes - The U.S. economy remains unsettled, with high interest rates affecting consumer purchasing behavior, particularly in the housing market [11] - The competitive landscape is characterized by aggressive promotional activities, with competitors like Target and Walmart engaging in early holiday promotions [94] Company Strategy and Development Direction - The company is focused on profitability and market share growth, emphasizing an asset-light model and strategic partnerships [10][18] - A new brand campaign, "C'mon, Get Comfy," was launched to enhance brand recognition and attract new customers [27][30] - The company aims to leverage its strong balance sheet to navigate economic uncertainties and pursue strategic M&A opportunities [50][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current challenges and return to growth, despite a highly promotional environment [9][18] - The focus remains on controlling business elements within their control, with an emphasis on profitability over growth [12][14] - Management acknowledged the ongoing headwinds from inflation and shifting consumer preferences but remains optimistic about long-term positioning [16][90] Other Important Information - The company has a strong net cash position of $392 million with minimal debt, providing flexibility in a volatile market [50] - The Medici Ventures Fund portfolio includes blockchain-focused startups, which are expected to add value to the company [15][80] Q&A Session Summary Question: Comments on pricing environment and competition - Management noted that promotional activity remains fierce, with competitors engaging in early holiday promotions [94] Question: Impact of supply chain improvements on gross margin - Supply chain costs have decreased, but some domestic costs remain high; gross margin improvements are attributed to operational efficiencies [96][97] Question: Expectations for EBITDA margins in 2023 - Management is still in the planning phase for 2023 and aims for mid-single-digit adjusted EBITDA margins, though this may be challenging [100][103] Question: Customer demographic trends and engagement - There is an increase in higher-income customers, with the mobile app attracting a younger demographic [105][107] Question: Initial impact of the brand ambassador campaign - Early results from the "C'mon, Get Comfy" campaign are encouraging, particularly in online channels [115]

o overstock. Q3 2022 Earnings Call Forward-Looking Statements The information presented herein may contain forward-looking statements within the meaning of the federal securities laws. Such forward- looking statements include all statements other than statements of historical fact, including forecasts of trends, market conditions, and other factors that will impact our results of operations. You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made ...