Overstock.com(OSTK) - 2025 Q1 - Quarterly Report

Financial Performance - Net revenue for Q1 2025 was $231.748 million, a decrease of 39.4% compared to $382.281 million in Q1 2024[17] - Gross profit for Q1 2025 was $58.132 million, down 21.8% from $74.359 million in Q1 2024[17] - Operating loss for Q1 2025 was $23.547 million, an improvement from a loss of $57.525 million in Q1 2024[17] - Net loss for Q1 2025 was $39.912 million, compared to a net loss of $73.928 million in Q1 2024, reflecting a 46.0% reduction[17] - Net loss attributable to common stockholders improved to $(39,912,000) in Q1 2025 compared to $(73,928,000) in Q1 2024, a reduction of 46%[70] Assets and Liabilities - Total current assets decreased to $196.464 million as of March 31, 2025, down from $227.507 million as of December 31, 2024[15] - Total liabilities decreased to $220.357 million as of March 31, 2025, compared to $239.222 million as of December 31, 2024[15] - Total stockholders' equity decreased to $143.368 million as of March 31, 2025, from $162.732 million as of December 31, 2024[15] - As of March 31, 2025, total assets measured at fair value amounted to $65,633,000, with Level 1 assets at $33,469,000 and Level 3 assets at $32,164,000[35] - Level 3 investments decreased from $47,439,000 at December 31, 2024, to $32,164,000 at March 31, 2025, primarily due to a decrease in fair value of $8,794,000[37] Cash Flow and Investments - Cash, cash equivalents, and restricted cash at the end of Q1 2025 were $141.481 million, down from $186.093 million at the beginning of the period[25] - Cash used in operating activities for Q1 2025 was $50.921 million, compared to $34.610 million in Q1 2024[25] - The company reported a net cash outflow of $50.9 million from operating activities for the three months ended March 31, 2025, compared to a net outflow of $34.6 million in the same period in 2024[115] - Investing activities resulted in a net cash outflow of $13.1 million for the three months ended March 31, 2025, primarily due to $8.0 million for purchases of equity securities and $5.2 million for intangible assets[119] - Financing activities generated a net cash inflow of $19.5 million for the three months ended March 31, 2025, primarily from the sale of common stock[121] Expenses - Sales and marketing expenses decreased by 53.9% to $31.3 million for the three months ended March 31, 2025, representing 13.5% of net revenue, down from 17.8% in the same period in 2024[83][95] - Technology expenses totaled $26.7 million for the three months ended March 31, 2025, a decrease of $2.9 million compared to the same period in 2024, primarily due to reduced staff-related expenses[83] - General and administrative expenses decreased by $6.1 million for the three months ended March 31, 2025, compared to the same period in 2024, also due to a reduction in staff-related expenses[84] - Operating lease cost increased to $912,000 in Q1 2025 from $882,000 in Q1 2024, a rise of 3.4%[51] - Total stock-based compensation expense decreased to $1,094,000 in Q1 2025 from $4,776,000 in Q1 2024, a decline of 77%[59] Shareholder Activity - The company issued 3.487 million shares of common stock through offerings during Q1 2025[23] - The company sold 3,486,895 shares of common stock for proceeds of $19.5 million in Q1 2025, net of offering costs[56] - The approximate dollar value of shares that may yet be purchased under the stock repurchase program is $69.9 million as of March 31, 2025[141] - The company has not made any repurchases of equity securities during the three months ended March 31, 2025[141] Acquisitions and Investments - The Company acquired intellectual property related to the buybuy BABY brand for a total purchase price of $5.0 million, with an aggregate purchase price of $7.1 million including assumed liabilities[39] - The Company funded an additional $8.0 million investment in Kirkland's, increasing its ownership to approximately 40%[42] Market and Economic Conditions - The company continues to monitor macroeconomic trends that may impact consumer confidence and spending, including inflation and geopolitical events[86] - Inflationary pressures from increased commodity and shipping prices, energy, and labor costs are being monitored to limit impacts on customers[130] - The company does not expect changes in prevailing interest rates to have a material impact on its results of operations[128] - Most sales and operating expenses are denominated in U.S. dollars, minimizing current foreign currency risk[129] Compliance and Controls - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended March 31, 2025[134] - The company recognizes that its disclosure controls and procedures can only provide reasonable assurance of achieving desired control objectives[133] - The company is involved in litigation that could materially affect its business and financial position[137] Other Financial Metrics - Total unearned revenue at March 31, 2025, was $40,807,000, down from $43,095,000 at December 31, 2024, a decrease of 5.3%[67] - The allowance for returns decreased to $7,721,000 at March 31, 2025, from $9,526,000 at December 31, 2024, a decline of 19%[69] - The effective tax rate for the three months ended March 31, 2025, was (0.5)%, compared to (0.4)% for the same period in 2024, primarily due to year-to-date losses on retail operations[105] - As of March 31, 2025, the recorded value in equity securities of private and public companies was $77.7 million, with $11.4 million related to publicly-traded companies[131] - $14.0 million of equity securities and $18.2 million of debt securities are recorded at fair value using Level 3 inputs, representing 49.0% of assets measured at fair value[131]