Beyond, Inc.

Thank you for standing by and welcome to the Beyond Inc. second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Alexis Callahan, Vice President of Investor Relations and Public Relations. Please go ahead.

Thank you, Operator. Good morning, and welcome to Beyond Inc.' 's second quarter 2024 earnings conference call. Joining me on the call today are Executive Chairman Marcus Limonis, Chief Financial and Administrative Officer Adrian Lee, and President Dave Nielsen. Today's discussion and our responses to your questions reflect management's views as of today, July 30th, 2024, and may include forward-looking statements, including without limitation regarding our future goals, revenue, file size, financial performance, our outlook for the remainder of the year or any other period, growth, stock price, profitability, strategy, macroeconomic conditions, customer demand, the value of any of our brands or investments, relationships with third parties, and agreements we are entering into with them, margin improvement, customer experience, and related efficiencies, loyalty programs, the launch, relaunch, or other upcoming changes for any brands or websites, and the timing of any of the foregoing. Actual results could differ materially from such statements. Additional information about risks, uncertainties, and other important factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31st, 2023, in our Form 10-Q for the quarter ended March 31st, 2024, and in our subsequent filings with the SEC. During this call, we'll discuss certain non-GAAP financial measures. Our filings with the SEC, including our second quarter earnings release, which is available on our investor relations website at investors.beyond.com, contain important additional disclosures regarding these non-GAAP measures. including reconciliations of these measures to the most comparable GAAP measures. Following management's prepared remarks, we will open the call for questions. A slide presentation with supporting data is available for download on our investor relations website. Please review the important forward-looking statements disclosure on slide two of that presentation. With that, let me turn the call over to you, Marcus.

Good morning and thank you. As Alexis mentioned, I'm joined today by Adrian Lee and Dave Nielsen. This morning we'll be summarizing our second quarter results as well as answering specific questions about our company and the meaningful progress we are making. As a refresher, there are a number of imperatives we entered this quarter with that have framed the remainder of the year. I'll start off with my reaffirmation that I not only believe, but expect this company to do great things. My conviction is around this company's ability to operate multiple brands profitably, all while growing revenue and file size. Earlier in the second quarter, our shareholders approved a performance stock unit plan that awarded me options that vest when the stock price reaches $45, $50, and $60. I appreciate the acknowledgement, but recognize that I only make money when we all make money. I personally believe we'll get there. For those invested in the company today or contemplating it, I want you to know the topics on our mind every single day, as the management team, in some cases, things that even keep us up at night. It's imperative that every decision we make is to drive towards profitability, and once there, we maintain that rigor along with holding firm to an asset-light model. Establishing a definitive strategy for Bed Bath & Beyond, not only to be a billion-dollar-plus e-commerce brand, but find thoughtful and creative ways to expand the brand, generate cash flow off the IP, while also expanding its brand presence even further. increasing the brand value while maintaining its position as one of the world's most well-known home brands. We also want to focus on the relaunch of Overstock in a way that allows it to return to its roots of retailing furniture, patio, and rugs, but leverage its strong brand name in value shopping to more than just its historical categories. It is our vision, particularly with many off-price retailers leaving the e-commerce space, to become the North American leader where companies big and small can utilize the platform to reduce inventory in their own businesses and improve their terms and margins. They are essentially our vendors and suppliers. In addition to our traditional vendors, we are in the early innings of entering the true liquidation reverse logistics and closeout business. We have formed material relationships with liquidators, jobbers, wholesalers, and reverse logistics companies and are finalizing a formal agreement with a large-scale closeout and reverse logistics company. We are working to normalize margins through proper curation with the right product listed on the appropriate brand platform at the right time, especially at the right price. The merchandising team, led by Stacy Shively, our chief merchant, has done exceptional work to begin the curation process around key products and vendors. They have successfully reestablished direct relationships with key vendors, improving both profitability and process for both sides. As we continue that work, along with entering the closeout space, We expect to see continued quarterly sequential margin improvement over the next 12 to 18 months. Look, we need to achieve new technology, excuse me, we need to activate new technology and innovative thinking to attract and retain our customer files. We have made significant strides in improving search functionality with a constant push to catch up and keep up with fast-moving tech all around us. Part of attracting and retaining customers is the data management around them. Building customized experiences for specific audience attributes, improving conversion, and annual spend is a solid roadmap. Our relationship with Salesforce And companies like Purcell will help us create that efficiency and experience over the next six to nine months. Over the next 18 months, we expect to develop a world-class loyalty program, utilizing both our database as well as other companies who coexist with us but do not compete in the same sector as us. That loyalty shall be rewarded with unique content, information, ideas, and inspiration delivered to them through various mediums. Most of the content will be delivered across the streaming platform, YouTube channels, social channels, and funnel marketing programs. We will move slowly towards this to test and ensure that we feel the return on investment can be realized over the lifetime value of the newly acquired customer. We have made significant progress in the past several months and will continue to execute on our plan to achieve growth and profitability. To recap, in the second quarter, we achieved our revenue target and improved our bottom line by roughly 25%. We improved our gross margin through improved vendor relations, curation, and the launch of Overstock. We increased our active customer base and their average order. We established new partnerships around liquidation, closeouts, and factory direct. We launched Overstock.com, our mobile app for Overstock. and launched our CRM process with Salesforce. We completed the architecture and POV on Zulily, signed and are trading over 100 legacy vendors with another 100 suppliers in the onboarding pipeline. And the site is now in the internal testing phase. We are targeting to launch Zulily on September 10th. This effort has been led by a combination of our own and existing staff, as well as an unbelievable team of added key legacy Zulily leaders. We also reduced fixed costs, all of which resulted in sequential improvement of more than $11 million in adjusted EBITDA. Lastly, we also refined our org structure during the quarter. And I'm pleased to see the flatter structure working so well with teams really starting to gel and getting their sea legs. With that, I'll now turn it over to Dave Nielsen to talk more about the progress of our business.