Newegg(NEGG) - 2023 Q4 - Annual Report

Financial Performance - Net sales for fiscal year 2023 decreased to $1.50 billion, down from $1.72 billion in fiscal year 2022, representing a decline of approximately 12.7%[3] - Gross merchandise value (GMV) decreased to $1.81 billion in 2023, compared to $2.20 billion in 2022, reflecting a decrease of about 17.7%[3] - Gross profit for 2023 was $167.6 million, down from $216.7 million in 2022, indicating a decline of approximately 22.6%[3] - The net loss for 2023 increased to $59.0 million, compared to a net loss of $57.4 million in 2022, marking an increase of about 2.8%[3] - Net loss for 2023 was $58.99 million, compared to a loss of $57.43 million in 2022, indicating a slight increase in losses year-over-year[20] - Adjusted EBITDA for 2023 was $(21.3) million, compared to $0.6 million in 2022, indicating a significant decline in profitability[24] Customer Metrics - Active customers as of December 31, 2023, totaled approximately 2.5 million, a decrease from 2.7 million the previous year, representing a decline of about 7.4%[4] - The average order value decreased to $379 in 2023, down from $411 in the prior year, indicating a decline of approximately 7.8%[4] Future Projections - For fiscal year 2024, the company expects net sales to be between $1.36 billion and $1.56 billion, projecting a potential decrease of up to 9.3% compared to 2023[5] Inventory and Cash Flow - Total inventory decreased from $156.0 million as of December 31, 2022, to $136.2 million as of December 31, 2023, reflecting a reduction of approximately 12.7%[2] - Net cash used in operating activities was $(3.84) million in 2023, a significant decrease from $20.48 million provided in 2022[20] - Cash flows from investing activities resulted in a net cash outflow of $(14.25) million in 2023, compared to $(3.77) million in 2022[20] - Cash and cash equivalents at the end of the period were $106.47 million, down from $123.51 million at the end of 2022[20] Capital Expenditures and Stock - The company incurred $30.27 million in payments to acquire property and equipment in 2023, a substantial increase from $9.19 million in 2022[20] - The company repurchased $2.0 million of its common stock during the first quarter of 2024 under its $10.0 million share repurchase program[2] - Stock-based compensation expenses remained relatively stable at $33.66 million in 2023, compared to $33.94 million in 2022[24] Marketable Securities - The company reported a significant unrealized loss on marketable securities of $4 million in 2023, compared to $55 million in 2022[20] Strategic Initiatives - The company plans to launch a new AI PC product line and a loyalty program, Newegg+, aimed at enhancing customer engagement and driving sales in the second half of 2024[2]