Overstock.com(OSTK) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements and management's discussion and analysis for the reporting period ITEM 1. FINANCIAL STATEMENTS (Unaudited) This section presents the unaudited consolidated financial statements of Beyond, Inc. for the periods ended June 30, 2025, and December 31, 2024 (balance sheets), and for the three and six months ended June 30, 2025 and 2024 (statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows). It also includes detailed notes explaining the company's business, significant accounting policies, fair value measurements, asset breakdowns, equity securities, borrowings, leases, commitments, stockholders' equity, stock-based awards, revenue recognition, net loss per share, business segments, and subsequent events Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Assets | | | | Cash and cash equivalents | $120,553 | $159,169 | | Total current assets | $195,855 | $227,507 | | Total assets | $358,072 | $401,954 | | Liabilities & Equity | | | | Total current liabilities | $215,438 | $224,861 | | Total liabilities | $226,867 | $239,222 | | Total stockholders' equity | $131,205 | $162,732 | - Total assets decreased by $43.88 million from December 31, 2024, to June 30, 2025, primarily driven by a reduction in cash and cash equivalents[15] Consolidated Statements of Operations This section details the company's financial performance, including revenue, gross profit, operating loss, and net loss over specific periods | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net revenue | $282,251 | $398,104 | $513,999 | $780,385 | | Gross profit | $66,969 | $80,168 | $125,101 | $154,527 | | Operating loss | $(17,880) | $(47,001) | $(41,427) | $(104,526) | | Consolidated net loss | $(19,313) | $(42,578) | $(59,225) | $(116,506) | | Net loss per share (Basic & Diluted) | $(0.34) | $(0.93) | $(1.07) | $(2.55) | - Net revenue decreased by 29.1% for the three months ended June 30, 2025, and by 34.1% for the six months ended June 30, 2025, compared to the same periods in the prior year. The company reported a reduced net loss for both the three-month and six-month periods year-over-year[17][94] Consolidated Statements of Comprehensive Loss This section reports the company's comprehensive loss, encompassing net loss and other comprehensive income or loss components | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Consolidated net loss | $(19,313) | $(42,578) | $(59,225) | $(116,506) | | Other comprehensive income | $0 | $4 | $0 | $8 | | Comprehensive loss | $(19,313) | $(42,574) | $(59,225) | $(116,498) | - The comprehensive loss for the three and six months ended June 30, 2025, significantly decreased compared to the same periods in 2024, primarily reflecting the reduction in consolidated net loss[20] Consolidated Statements of Changes in Stockholders' Equity This section outlines changes in the company's equity, reflecting net income/loss, stock transactions, and other equity adjustments | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Total equity attributable to stockholders of Beyond, Inc. | $130,868 | $250,354 | | Total stockholders' equity | $131,205 | $250,354 | - Total stockholders' equity decreased from $250.35 million at June 30, 2024, to $131.21 million at June 30, 2025. This change was influenced by net losses, common stock offerings, and share repurchases[23][25] - The company issued 4,332 thousand common shares through offerings for the six months ended June 30, 2025, generating $24.22 million in additional paid-in capital[23] Consolidated Statements of Cash Flows This section analyzes the company's cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash used in operating activities | $(35,092) | $(110,502) | | Net cash used in investing activities | $(20,188) | $(3,308) | | Net cash provided by (used in) financing activities | $16,718 | $(2,597) | | Net decrease in cash, cash equivalents, and restricted cash | $(38,562) | $(116,407) | | Cash, cash equivalents, and restricted cash, end of period | $147,531 | $186,342 | - Net cash used in operating activities significantly decreased from $110.50 million in H1 2024 to $35.09 million in H1 2025. Investing activities saw a higher net cash outflow in H1 2025 ($20.19 million) compared to H1 2024 ($3.31 million). Financing activities shifted from a net outflow of $2.60 million in H1 2024 to a net inflow of $16.72 million in H1 2025, primarily due to common stock sales[27][133][135][137] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements 1. DESCRIPTION OF BUSINESS This section describes Beyond, Inc.'s e-commerce business model, including its retail brands and blockchain assets - Beyond, Inc. is an e-commerce focused retailer utilizing an affinity model, owning or having interests in retail brands like Bed Bath & Beyond, Overstock, and buybuy BABY, along with a blockchain asset portfolio[29] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section outlines the key accounting principles and policies applied in preparing the financial statements - The unaudited consolidated financial statements are prepared in accordance with SEC rules for interim reporting, omitting certain GAAP disclosures. The company's significant accounting policies remain largely unchanged from the 2024 Annual Report on Form 10-K, with new disclosures regarding noncontrolling interests and debt securities carried at fair value[31][34][35] - In April 2025, a controlled subsidiary launched a token offering, resulting in $467,000 in cumulative proceeds classified as noncontrolling interest[34] - The company amended its Term Loan Credit Agreement with Kirkland's Inc. in May 2025, providing an additional $5.2 million loan and remeasuring an existing $8.5 million loan at fair value, resulting in a $406,000 unrealized loss[35][36] 3. FAIR VALUE MEASUREMENT This section details the valuation methodologies and inputs used for assets and liabilities measured at fair value | Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash equivalents—Money market funds | $22,256 | $21,799 | | Equity securities, at fair value | $24,067 | $21,640 | | Available-for-sale debt securities | $10,989 | $10,985 | | Debt securities, at fair value | $11,769 | $14,814 | | Total assets measured at fair value | $69,081 | $69,238 | - Level 3 investments decreased from $47.44 million at December 31, 2024, to $37.18 million at June 30, 2025, primarily due to a $9.50 million decrease in fair value and $7.51 million in transfers out, partially offset by $6.80 million in purchases[40] 4. PROPERTY AND EQUIPMENT, NET This section presents the company's property and equipment, net of accumulated depreciation | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------------------- | :----------------------------- | :------------------------------- | | Computer hardware and software, including internal-use software and website development | $183,620 | $202,005 | | Total property and equipment, net | $16,461 | $23,544 | - Net property and equipment decreased by $7.08 million from December 31, 2024, to June 30, 2025. Capitalized internal-use software and website development costs were $2.95 million for the six months ended June 30, 2025, down from $7.96 million in the prior year period[42] 5. INTANGIBLE ASSETS, NET This section details the company's intangible assets, including those subject to and not subject to amortization | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Intangible assets subject to amortization, net | $2,225 | $3,094 | | Intangible assets not subject to amortization | $30,351 | $27,152 | | Total intangible assets, net | $32,576 | $30,246 | - The company acquired intellectual property related to the buybuy BABY brand for $7.1 million in February 2025. It also sold its rights in the Zulily brand for $5.0 million, retaining a 25% ownership stake, and sold certain Bed Bath & Beyond trademarks in Canada and the UK for $5.0 million, recognizing a gain on sale[43][44][45] 6. EQUITY SECURITIES This section provides information on the company's investments in equity securities, including ownership interests and valuation methods | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------------------------- | :----------------------------- | :------------------------------- | | Equity securities accounted for under the equity method under ASC 323 | $47,552 | $56,546 | | Equity securities accounted for under the equity method under the fair value option | $24,067 | $21,640 | | Total equity securities | $71,619 | $78,186 | - The company increased its investment in Kirkland's Inc. by $8.0 million and converted an $8.5 million convertible promissory note into Kirkland's common stock, resulting in approximately 40% ownership. It also retained a 25% ownership stake in Zulily Newco[47] | Equity Method Investee | Ownership interest (June 30, 2025) | | :--------------------- | :------------------------------- | | Medici Ventures, L.P. | 99% | | tZERO Group, Inc. | 28% | | SpeedRoute, LLC | 49% | | Kirkland's, Inc. | 40% | | Zulily Newco | 25% | 7. BORROWINGS This section outlines the company's outstanding debt obligations and compliance with debt covenants - As of June 30, 2025, the company had an outstanding balance of $18.5 million on its revolving line of credit with BMO Bank N.A., net of debt issuance costs, and a $6.5 million standby letter of credit[54] - The company is in compliance with its debt covenants, which include maintaining cash in a Cash Collateral Account at three percent greater than BMO's aggregate commitments[55] 8. LEASES This section details the company's lease arrangements, including lease liabilities and related expenses | Lease Metric | June 30, 2025 | | :------------------------------------ | :------------ | | Weighted-average remaining lease term | 7.17 years | | Weighted-average discount rate | 7 % | | Present value of lease liabilities | $6,906 (in thousands) | | Lease Expense Category | Three months ended June 30, 2025 (in thousands) | Six months ended June 30, 2025 (in thousands) | | :--------------------- | :------------------------------------------ | :---------------------------------------- | | Operating lease cost | $521 | $1,433 | | Variable lease cost | $308 | $617 | 9. COMMITMENTS AND CONTINGENCIES This section discloses the company's various commitments and potential liabilities from legal proceedings and other matters - The company is involved in various legal proceedings, including consumer protection, employment, and intellectual property matters, which could result in significant damages or require changes to business practices. Liabilities for probable and estimable contingencies were not material at June 30, 2025[58][59] 10. INDEMNIFICATIONS AND GUARANTEES This section describes the company's indemnification and guarantee obligations - The company has various indemnities, commitments, and guarantees, including those related to facility leases and directors/officers. The potential future payments are generally unlimited and not estimable, thus no liability has been recorded[60] 11. STOCKHOLDERS' EQUITY This section details changes in stockholders' equity, including stock offerings and repurchases - For the six months ended June 30, 2025, the company sold 4,331,713 shares of common stock through its 'at the market' public offering, generating $24.2 million in net proceeds. As of June 30, 2025, $131.4 million remained available under this program[62] - During the three and six months ended June 30, 2025, the company repurchased $1.3 million of common stock at an average price of $3.92 per share. $68.6 million remained available for future repurchases under the program through December 31, 2025[63] 12. STOCK-BASED AWARDS This section provides information on the company's stock-based compensation plans and related expenses | Expense Category | Three months ended June 30, 2025 (in thousands) | Six months ended June 30, 2025 (in thousands) | | :------------------------ | :------------------------------------------ | :---------------------------------------- | | Total stock-based compensation | $3,386 | $4,480 | - The company granted 780,709 performance-based shares (PSUs) to its executive management team in H1 2025, vesting based on Adjusted EBITDA, Gross Margin, and Contribution Margin performance metrics[68] - Stock-based compensation related to PSUs was $807,000 for the three months ended June 30, 2025, and a credit of $1.3 million for the six months ended June 30, 2025, due to staff reductions[69] 13. REVENUE AND CONTRACT LIABILITY This section details the company's revenue recognition policies and contract liabilities | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Unearned revenue | $37,662 | $43,095 | | Unearned revenue (loyalty program rewards) | $6,100 | $11,100 | | Allowance for returns | $8,246 | $9,526 | - Breakage income from loyalty program rewards and gift cards recognized in revenue was $1.1 million for the three months ended June 30, 2025, and $7.7 million for the six months ended June 30, 2025[75] 14. NET LOSS PER SHARE This section presents the calculation of basic and diluted net loss per share | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss per share (Basic & Diluted) | $(0.34) | $(0.93) | $(1.07) | $(2.55) | | Weighted average shares outstanding (Basic & Diluted) | 57,503 (in thousands) | 45,742 (in thousands) | 55,593 (in thousands) | 45,665 (in thousands) | - The net loss per share improved significantly for both the three-month and six-month periods ended June 30, 2025, compared to the prior year, despite an increase in weighted average shares outstanding[77] 15. BUSINESS SEGMENTS This section describes the company's reportable business segments and how performance is evaluated - The company operates with one reportable segment: Retail, which aggregates the Overstock.com and Bed Bath & Beyond (including buybuy BABY) operating segments due to similar economic characteristics and business activities[78] - The Chief Operating Decision Maker (CODM) evaluates segment performance based on Net Revenues, Gross Profit, Sales and Marketing, Technology, General & Administrative expenses as a percentage of Gross Profit, and Operating Income (Loss)[79] 16. SUBSEQUENT EVENTS This section discloses significant events occurring after the balance sheet date - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which includes tax reform provisions such as elective deduction for domestic R&D and reinstatement of 100% first-year bonus depreciation. The company does not expect a material impact on its effective tax rate or cash flows in the current fiscal year[81][120] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the company's financial condition and results of operations, highlighting key performance drivers, macroeconomic impacts, and strategic initiatives. It details revenue and gross profit trends, operating expense changes, and the company's liquidity and capital resources, including cash flow analysis and contractual obligations Overview This section provides an overview of Beyond, Inc.'s e-commerce strategy and brand portfolio - Beyond, Inc. is an e-commerce retailer with an affinity model, owning Overstock, Bed Bath & Beyond, and buybuy BABY brands. The company plans to expand its loyalty program, Beyond+, across all affiliated entities[83] - The Bed Bath & Beyond brand focuses on home-related products, aiming for category leadership in bedroom, bathroom, kitchen, and patio, with a strategy emphasizing stylish, high-quality assortments and trusted aspirational brands[84][85] - The Overstock brand targets deal-seeking online consumers with discounted quality goods, including home and lifestyle categories. The buybuy BABY acquisition reunites traditionally related brands to support customers through life-stage shopping moments[86][87] Executive Commentary This section offers management's insights into recent financial performance and key operational drivers - Revenue decreased 29.1% for the three months ended June 30, 2025, primarily due to a 34% decrease in orders delivered, partially offset by a 7% increase in average order value. This decline was attributed to reduced website visits, shifts in consumer spending, macroeconomic factors, and a reduction in sales and marketing spend[88] - Gross profit decreased 16.5% for the three months ended June 30, 2025, but gross margin increased to 23.7% (from 20.1% in 2024) due to merchandising actions and reduced carrier and return costs[89] - Sales and marketing expenses as a percent of revenue decreased from 16.7% to 13.5% for the three months ended June 30, 2025, driven by decreased performance marketing, brand advertising, and improved ROAS and email marketing effectiveness[90] - Technology expenses decreased by $4.1 million, and General and administrative expenses decreased by $4.4 million for the three months ended June 30, 2025, both primarily due to reductions in staff-related expenses and third-party vendor costs[91] - Customer service and merchant fees decreased by $5.7 million, mainly due to decreased order volume and outsourced labor[92] Additional commentary related to macroeconomic trends This section discusses the influence of broader economic and geopolitical factors on the company's business - The company continues to monitor macroeconomic trends and geopolitical events, including global conflicts, trade barriers, inflation, and higher interest rates, which have negatively impacted consumer confidence and spending in the home furnishings industry[93] - Despite challenges, these events have not adversely affected the company's liquidity or debt servicing capacity, nor have they required a reduction in capital expenditures as of June 30, 2025[93] Results of Operations This section analyzes the company's financial performance across key revenue and expense categories Net revenue, cost of goods sold, gross profit and gross margin This section analyzes trends in net revenue, cost of goods sold, gross profit, and gross margin | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net revenue | $282,251 | $398,104 | $513,999 | $780,385 | | Cost of goods sold | $215,282 | $317,936 | $388,898 | $625,858 | | Gross profit | $66,969 | $80,168 | $125,101 | $154,527 | | Net revenue YoY % change | (29.1)% | | (34.1)% | | | Gross profit YoY % change | (16.5)% | | (19.0)% | | | Gross margin | 23.7 % | 20.1 % | 24.3 % | 19.8 % | - Net revenue decreased by 29.1% for the three months and 34.1% for the six months ended June 30, 2025, primarily due to a 34% and 40% decrease in orders delivered, respectively. This was partially offset by a 7% and 10% increase in average order value[95][96] Change in estimate of average transit times (days) This section discusses the impact of changes in estimated average shipping transit times on revenue and income - The company uses estimated average shipping transit times to recognize revenue upon delivery. A hypothetical 2-day increase in transit times would decrease revenue by $6.34 million and income before income taxes by $1.04 million for the three months ended June 30, 2025[98][99] Gross profit and gross margin This section provides a detailed analysis of gross profit and gross margin trends | Quarter | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | FY 2024 | Q1 2025 | Q2 2025 | | :---------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Gross margin | 19.5 % | 20.1 % | 21.2 % | 23.0 % | 20.8 % | 25.1 % | 23.7 % | - Gross margin increased to 23.7% for the three months ended June 30, 2025 (from 20.1% in 2024), and to 24.3% for the six months ended June 30, 2025 (from 19.8% in 2024), primarily due to merchandising actions and reductions in carrier and return costs[101][102] Operating expenses This section details the components and trends of the company's operating expenses Sales and marketing expenses This section analyzes sales and marketing expenditures and their impact on revenue | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Sales and marketing expenses | $38,209 | $66,290 | $69,499 | $134,196 | | Sales and marketing expenses YoY % change | (42.4)% | | (48.2)% | | | Sales and marketing expenses as % of net revenue | 13.5 % | 16.7 % | 13.5 % | 17.2 % | - Sales and marketing expenses decreased by 42.4% for the three months and 48.2% for the six months ended June 30, 2025, primarily due to reduced performance marketing, brand advertising, and improved effectiveness of marketing channels[105][106] Technology expenses This section details technology-related expenses and investments in innovation | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Technology expenses | $23,221 | $27,342 | $49,939 | $56,923 | | Technology expenses YoY % change | (15.1)% | | (12.3)% | | | Technology expenses as % of net revenue | 8.2 % | 6.9 % | 9.7 % | 7.3 % | - Technology expenses decreased by $4.1 million for the three months and $7.0 million for the six months ended June 30, 2025, primarily due to a reduction in staff-related expenses[109][110] - The company continues to invest in technology, including machine learning and generative AI, to enhance customer experience and operational efficiency, anticipating material expenditures in this area[107] General and administrative expenses This section outlines general and administrative costs and their changes | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | General and administrative expenses | $14,088 | $18,531 | $28,402 | $38,985 | | General and administrative expenses YoY % change | (24.0)% | | (27.1)% | | | General and administrative expenses as % of net revenue | 5.0 % | 4.7 % | 5.5 % | 5.0 % | - General and administrative expenses decreased by $4.4 million for the three months and $10.6 million for the six months ended June 30, 2025, primarily due to reductions in staff-related expenses and third-party vendor costs[111][112] Customer service and merchant fees This section analyzes customer service and merchant fee expenses | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Customer service and merchant fees | $9,331 | $15,006 | $18,688 | $28,949 | | Customer service and merchant fees YoY % change | (37.8)% | | (35.4)% | | | Customer service and merchant fees as % of net revenue | 3.3 % | 3.8 % | 3.6 % | 3.7 % | - Customer service and merchant fees decreased by $5.7 million for the three months and $10.3 million for the six months ended June 30, 2025, primarily due to decreased order volume and reduced outsourced labor[114][115] Other income (expense), net This section details non-operating income and expenses - The unfavorable change in other income (expense), net, was $4.3 million for the three months and $2.4 million for the six months ended June 30, 2025, primarily due to a decrease in gains recognized on the sale of intangible assets[116][117] Income taxes This section presents the company's income tax provision and effective tax rate | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $287 (in thousands) | $117 (in thousands) | $481 (in thousands) | $446 (in thousands) | | Effective tax rate | (1.5)% | (0.3)% | (0.8)% | (0.4)% | - The effective tax rate for both periods was negative, differing from the statutory federal income tax rate of 21% primarily due to year-to-date losses on retail operations for which tax benefits are limited[121] - The company maintains a valuation allowance against its deferred tax assets for the U.S. jurisdiction due to a cumulative loss position over a three-year period from U.S. retail operations[122] Liquidity and Capital Resources This section assesses the company's ability to meet short-term and long-term financial obligations and fund operations Overview This section provides an overview of the company's liquidity position and capital management strategy - The company believes current cash and expected cash flows will be sufficient for operations for at least the next twelve months. It actively manages operating plans and liquidity in response to macroeconomic conditions[125] - Future capital requirements depend on growth, business strategy execution, and consumer sentiment. The company may seek additional liquidity through credit facilities, debt/equity issuance, or acquisitions[126][127] Current sources of liquidity This section identifies the company's primary sources of available cash and capital - As of June 30, 2025, principal liquidity sources include $120.6 million in cash and cash equivalents and $23.3 million in net accounts receivable[128] - The company has a $6.5 million standby letter of credit with BMO Bank N.A. and $131.4 million available under its 'at the market' common stock sales program[129][130] Operating activities This section analyzes cash flows generated from or used in the company's core business operations - Net cash used in operating activities was $35.1 million for the six months ended June 30, 2025, a significant improvement from $110.5 million used in the same period of 2024[133][134] Investing activities This section details cash flows related to the acquisition and disposal of long-term assets and investments - Net cash outflow from investing activities was $20.2 million for the six months ended June 30, 2025, primarily due to purchases of equity securities ($8.0 million), disbursement for notes receivable ($5.2 million), and purchases of intangible assets ($5.2 million)[135] Financing activities This section outlines cash flows from debt, equity, and dividend transactions - Net cash inflow from financing activities was $16.7 million for the six months ended June 30, 2025, driven by $24.2 million in net proceeds from common stock sales, partially offset by $6.5 million in short-term debt payments[137] Contractual Obligations and Commitments This section summarizes the company's future payment obligations under various contracts | Contractual Obligations | Total (in thousands) | Less than 1 year (in thousands) | 1-3 years (in thousands) | 3-5 years (in thousands) | More than 5 years (in thousands) | | :---------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | :----------------------------- | | Operating leases | $8,717 | $1,196 | $2,342 | $2,201 | $2,978 | Tax contingencies This section discusses potential tax liabilities and their associated uncertainties - As of June 30, 2025, accrued tax contingencies were $3.8 million. The timing and ultimate resolution of these matters are uncertain, and changes in tax laws could increase contingencies[140] Critical Accounting Policies and Estimates This section highlights accounting policies requiring significant judgment and estimation - There have been no material changes to the company's critical accounting policies and estimates compared to those disclosed in its 2024 Annual Report on Form 10-K, except as noted in the summary of significant accounting policies[141] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section outlines the company's exposure to various market risks, including interest rate changes, foreign currency fluctuations, and changes in the market values of its securities. It discusses the potential impact of these risks on the company's financial performance and operations Interest Rate Sensitivity This section assesses the company's exposure to fluctuations in interest rates and their potential financial impact - The fair value of cash and cash equivalents is not significantly affected by interest rate changes due to their short-term nature. Changes in prevailing interest rates are not expected to materially impact results of operations for the revolving line of credit[144][145] Foreign Currency Risk This section evaluates the company's exposure to risks arising from foreign currency exchange rate movements - The company's net revenue and operating expenses are not currently subject to significant foreign currency risk as most are denominated in U.S. dollars, though exposure could increase with international growth[146] Inflation This section discusses the impact of inflationary pressures on the company's costs and pricing strategies - Inflationary pressures from commodity, shipping, energy, and labor costs affect the business. The company works with partners to limit cost increases passed to customers, but cannot guarantee offsetting higher costs through pricing or efficiency measures[147] - The effects of inflation on historical results have been immaterial, but future material impacts are not assured[147] Investment Risk This section outlines risks associated with the company's investment portfolio, including market volatility and valuation complexities - The fair values of equity and debt securities are subject to market volatility and economic conditions. As of June 30, 2025, $71.6 million in equity securities were held, with $9.6 million in publicly-traded companies and $14.4 million in equity securities and $22.8 million in debt securities valued using Level 3 inputs[148] - Valuations of private companies (Level 3 inputs) are complex due to a lack of market data, making sensitivity analysis impracticable[148] ITEM 4. CONTROLS AND PROCEDURES This section details the evaluation of the company's disclosure controls and procedures and internal control over financial reporting, confirming their effectiveness and noting no material changes during the quarter Evaluation of Disclosure Controls and Procedures This section reports on the effectiveness of the company's controls for financial reporting and disclosure - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[149] Limitations on Disclosure Controls and Procedures This section acknowledges inherent limitations in any control system, providing reasonable but not absolute assurance - Management acknowledges that any control system provides only reasonable, not absolute, assurance of achieving objectives and may not prevent or detect all errors or fraud[150] Changes in Internal Control Over Financial Reporting This section reports on any material changes to the company's internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[151] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other disclosures relevant to the company's operations ITEM 1. LEGAL PROCEEDINGS This section reiterates the company's involvement in various legal proceedings, including consumer protection, employment, and intellectual property matters, and the potential for adverse outcomes to materially affect its business and financial results - The company is subject to litigation that could result in significant damages, equitable remedies, and diversion of management resources, potentially affecting business, financial condition, or results of operations[154] Risk Factors This section highlights key risks associated with an investment in the company's securities, emphasizing that these risks could materially adversely affect the business, financial condition, and market price of securities. It specifically adds a new risk factor related to tariffs and trade barriers - A new risk factor addresses tariffs, bans, or other measures that increase product prices or limit access to products, which could materially adversely affect the business, financial results, and prospects, especially given the reliance on sourcing from China and other countries[157] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section provides details on the company's common stock repurchases during the quarter ended June 30, 2025 | Period | Total Number of Common Shares Purchased | Average Price Paid per Common Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | :------------- | :------------------------------------ | :---------------------------------- | :----------------------------------------------------------------- | | May 1 - 31 | 332,694 | $3.92 | 332,694 | - As of June 30, 2025, approximately $68.57 million remained available for future share repurchases under the company's plans or programs[158] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This section states that there were no defaults upon senior securities during the reporting period ITEM 4. MINE SAFETY DISCLOSURES This section indicates that mine safety disclosures are not applicable to the company ITEM 5. OTHER INFORMATION This section confirms no disclosure in lieu of Form 8-K, no material changes to director nominee recommendation procedures, and no Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[164] ITEM 6. EXHIBITS This section lists all exhibits filed as part of the Form 10-Q, including various agreements, certificates, and certifications - Exhibits include the Amended and Restated Term Loan Credit Agreement, Letter Amendment to Subscription Agreement, Amended and Restated Investor Rights Agreement, Asset Purchase Agreement, Amended and Restated Collaboration Agreement, and License Agreement Letter Agreement, all dated May 7, 2025, related to Kirkland's, Inc.[166] - Certifications from the Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15d-14(a) and Section 1350) are filed or furnished[166] SIGNATURES This section contains the required signatures for the Form 10-Q, confirming its submission on behalf of Beyond, Inc. - The report was signed by Adrianne B. Lee, President and Chief Financial Officer (Principal Financial Officer), on July 29, 2025[170][171]