Beyond, Inc.

Officer, Marcus Limonis, and President and Chief Financial Officer, Adrienne Lee. I'm also joined by Alex Thomas, Chief Operating Officer. Today's discussion and our responses to your questions reflect management views as of today, July 29, 2025, and may include forward-looking statements, including without limitation statements regarding our future business strategy, goals, financial performance, outlook for the remainder of the quarter, and any other period, anticipated growth, stock price, profitability, macroeconomic conditions, the value of any of our brands or investments, relationships with third parties and agreements we are entering into with them, margin improvement, expense reduction, marketing efficiencies, conversion, customer experience, changes to brand or websites, product offerings, blockchain efforts and strategies, tokenization efforts and strategies, 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 on our Form 10-K for the year ended December 31, 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.

Thanks, Melissa. Good morning, everybody. I am joined by Alex Thomas and Adrian Lee. And before we get into their more prepared remarks regarding our results for the quarter, we wanted to open up the call with a slightly, you know, more conversational tone regarding how we feel about our Q2. When we started in October of 2024, just as a reminder, we were very clear about outlining certain operational metrics and guidelines that were really, really important to us. Eliminating non-profitable SKUs, continuing to improve the assortment, working very, very diligently on the site experience and how to retain customers as they come in, improving lifetime value, being clear around the guideposts of our operational metrics, like a margin range of 24 to 26 on an annualized basis, looking at our selling and marketing expense, 13.5 to 14.75 on an annual basis within that range. And as we ended the quarter, what started to become very clear to us is that when we have very tight guideposts and very clear direction around what our objectives are, our company is able to prioritize those and deliver on them. Our revenue for the quarter at 282 was a nice surprise for us, as we had expected revenue increase in Q2 versus Q1, with Q1 being our base for the balance of time. But we really got focused on two principal things in a very micromanagement way, and that was the performance of our patio business, which had long been a huge anchor for Overstock. And we had lost our way over the last several years, and we really wanted to pick one topic specifically where we can work on site experience, work on assortment, work on pricing, and really prove that we can take a single item and execute. That ended up happening. And while our orders for the quarter that we delivered were up over Q1, what was really up nicely was the average order, largely led by Patio. Now, it's true that patio leads to a slightly lower yield on margin from a product. But as everybody knows, we don't pay our bills with margin percentage. We pay our bills with gross dollars. The second thing that we were very pleased by is the continual and, quite frankly, consistent improvement of Overstock. For those of you that are new to our company, we abandoned the Overstock brand a little over two years ago. and have brought it back and brought it back in a way that we are very happy. Continue to see daily, weekly, and monthly improvements at Overstock. And I think what's more encouraging is the type of contribution margin that that brand is able to deliver. We saw really good performance in Overstock and newly launched categories like our luxury store and selling handbags, designer handbags and shoes, And really starting to separate ourselves at Overstock from the customer that had long been a both bed bath and a traditional Overstock customer as it relates to textiles, patio, rug, furniture. In phase two of Overstock's growth, we are going to start leaning into what were big revenue drivers for Overstock in the past. So you'll start to see more in rug business. You can visit the site today and see the launch of our semiannual rug-a-thon. you'll start to see more on the living room side. But when we think about price points, Overstock's going to traditionally, going forward, lean more into a slightly higher, more affluent customer who's looking for big brands at great values, as opposed to a good, better, best, proper assortment at Bed Bath & Beyond built on both life events and furniture, patio, and rug at all price points. Overstock's going to have a very acute focus. What we'll also be launching here in the latter part of Q3 is an expanded fine jewelry and fine watch category, selling watches ranging from Patek to Rolex to Frank Mueller and a number of other products in between. And our primary reason for doing that, and it's really important to note that that comes with a high AOV and a slightly lower margin, is really adding credibility and credence to what the overall overstock offering is. We did a lot of research in the last six months going back to legacy overstock customers and focus grouping them over and over and over again. And what we learned is that the overstock brand was built on confidence with big brands and high value with a discerning customer looking for great, great brands, luxury brands, in fact, at great prices. So we'll continue to lean in that and use that bait of things like Gucci bags and Rolex watches to convince consumers, both old ones and new ones, that when we put brands on the site and when we put products on the site, it's going to deliver super premium quality as we work on delivering white glove experiences with delivery and doing a variety of other things. We're not going to abandon Overstock's what I would call halo effect around how it handles liquidations for companies and how it deals with distressed inventory. that will always be a core part of the business. And you should expect partnerships to continue to develop with national liquidators as they use and utilize the Overstock brand. So that's kind of how we're feeling about our core business. And as we look at Q3, we're expecting continued growth over the Q1 base. We're expecting similar order count, potentially slightly higher in Q3. But it's obvious that what you should also expect is that the AOV is going to be a little bit lower because patio mixes out. But when we look at what the market expectations are for Q3, we're very comfortable with those guideposts and very comfortable with what the market has outlined for us and feel very good. You may have also noticed that the cash flow for the quarter was materially better than Q1. And some of that is a function of timing of payments And other things are really a function of us just managing inventory in and out, managing our SG&A really well. It's the best performing cash flow quarter that we've had in, gosh, several years. We're not satisfied with that result because what we really, really want to see is cash flow being positive from operations, not just from other nuanced things. But we'll take credit for the nuances because they're real, but we want to see cash flow positivity. As we also head into the third quarter, you can expect us to continue to tighten up on SG&A. We believe there's additional opportunities in all areas of our business, not just improving on sales and marketing and not just tightening up on headcount and not just looking for more efficiency with shipping and returns and losses and customer service, but really everywhere here. Because for the quarter, I think the thing that the employees of this company feel very proud about is that we're getting much closer to the mandated expectation that we don't lose money, period, end of story. And so as you walk the halls of our office, the idea of just growing revenue for revenue's sake, that's not going to change. We are locked down on making sure that both products and vendors are delivering us profitability. And we're going to continue with vendor consolidation when there are certain vendors that don't make that possible. So that core business continues to get better. I think the piece that I like more about it than anything else is, as I've told people over time, it'll take a while, back a couple of years, call it a year and a half ago, it'll take a while to really figure out directionally and strategically how we extract the most amount of value out of this company. And what we know for sure is having the core e-commerce operations deliver positive cash flow and not be the reason that the company is burning cash, boy, that's at the top of the priority list. As we get closer to that, it doesn't go to number two, but there starts to be other things that share that same shelf at the number one level. Throughout the quarter, we looked at unlocking value in a number of ways. We were successful at creating a long-term partnership in Canada where we were able to receive an upfront payment of $5 million and and enter into a long-term licensing agreement, well, this company will receive the monetization of that IP into perpetuity. It's a big swing from us operating in Canada. And you'll see us do things like, when we're not the best in class at operating at something, we still want to extract the value out of our assets and out of our IP, evidenced by the transaction that you see reported in our net income. We did receive the cash from that transaction, the day after the quarter, so it'll be reflected in our third quarter cash. We also continue to be very pleased about the strategic investment that we made in our retail partner business, Kirkland's, now known as the Brandhaus Collective. Our company here beyond in Salt Lake City, its core competency is not to operate retail locations, not to spend our shareholders' cash on CapEx growth and things of that nature. But it is our obligation to extract every single dollar of value out of the IP that our shareholders own. We are excited to announce that the first Bed Bath & Beyond home store, and that's a smaller format neighborhood concept that leans into Kirkland's strong categories, along with Bed Bath's strong soft categories like top of bed, bath, tabletop, but it won't have traditional low margin, high volume appliances, vacuums. That's not what this first model is. Part of the reason we went down this route is that both our company and Kirkland's, of which our company owns 40% of and has the right to convert to much, much more of that, needs to be diligent with every single dollar of top box. What I'm looking to see happen now is how do we grow revenue? How do we grow profitability? And how do we grow return on assets both in our core company overstock and in the company that we own and, quite frankly, control in Kirkland, and making sure that operationally that our management team there that we believe in wholeheartedly is thinking about every single dollar, making sure that in the case of the first-door conversion, we tightly manage what it costs to convert and we maximize revenue growth. I think Amy Sullivan, our CEO there, and myself and Adrianne, would argue that we expect revenue improvement in that first location right out of the RIP. But the cost to do it, cost to convert that store, separate from the change in inventory mix, is less than $100,000. If we can prove out that we can deploy that kind of capital, get our brand out there, grow the revenue in that business that we are invested in, that will be utopia for us. We will continue to invest in that business as we see fit here over the coming quarters, smartly, making sure that our shareholders have what they need from a return on their investment. But we feel very comfortable with that. I think the next piece, because those first two are pretty obvious, aren't really where we believe the explosive value creation can come from. We're going to deliver on our core business. I can promise you that. But as we start to really unpack where we think the value is, This asset-light business known as Beyond has two significant assets that we believe need to be significantly unlocked. You may have seen over the last several weeks that we have issued very strong opinion letters from myself to the board of directors at T-Zero demanding a change in what has happened. We believe strongly in management's understanding of that business. We believe strongly in the technology that's there. The reason that we do is that we did two tokenizations, both with Overstock and Bye Bye Baby, and saw great results. We saw a high level of engagement. But the time has come, particularly with the Genius Act passing, particularly with value being created by other companies in this space who do not possess the patents, who do not possess the special licenses, to finally unlock the values. My expectation, and we will be very disciplined and very stern about this, is that we come up with a way to unlock the value and either see T0 have an initial public offering, find themselves reversing into a SPAC, or find themselves potentially even utilizing the Beyond platform to unlock the value. Now, the capital structure isn't easy at T0. And one of the things that was created several years ago was the tokens. Basically a revenue rights that's called the T zero ROP token. There's about 21.2 million tokens that are out there. They trade on T zero. Our company owns 3 million of them. We are the largest, most influential token holder. As we look to drive change and whether that's on the board, whether that's with the way it markets or its technology or the way it goes to market to raise new capital, bring on new partners who have real world assets. we understand that that capital structure has to be attractive. When you look at the T0 ROP holders, of which we are the largest, we have had to recognize on our own that the conversion of those T0 ROP tokens into some form of equity, my preference is that it's preferred, into some form of equity gives the company the ability to go out and do things that it needs to, to either raise capital, to come up with a liquidity event, to go public, to do a lot of different things. So we're going to be working closely to determine and represent those T0 ROP holders, of which we are the largest, a way for that to be converted at a value that we are comfortable with. It is of no interest of ours to have T0 ROP, particularly our interest, be a blocker and block the unlock of value. When you look at T0's ability, to bring things onto its platform, particularly global, real estate, real world assets, along with partnering with other firms that can bring all sorts of other IP, including sports teams and a variety of other things onto this platform, we believe the money is ripe and ready to pour into this platform. And because we believe that, we are going to drive expeditious change. It may seem a little angry at times. It may seem a little hyperbolic. But at the end of the day, we believe the window is clear and it's not forever. As it relates to our grain chain asset, we couldn't be more proud of what Luis and the team have created there. For those of you that are not familiar with it, on the surface, it looks like blockchain technology with unbelievable field technology that allows agriculture around the world to be able to access the capital markets by using this technology. But what's become more clear And we've communicated to Luis, and he is on board with this idea, is that grain chain isn't just an agriculture supply chain tool. It's a supply chain tool for manufacturing around the world. The reason that's relevant is that the TAM that everybody identified for grain chain, particularly in the agriculture space, was massive. But it's minuscule compared to the macro opportunity when you look at the supply chain opportunity overall. Now, Grain Chain's a private company, and we will continue to respect the fact that it's a private company. There have been a couple of announcements that have happened, but I will tell you, without spilling the tea for the party, that there are a number of other transactions that Luis has already signed, already engaged in, that he's not prepared yet to announce. But I can tell you that our confidence level is massive. so massive that if there was another opportunity for us to invest in that particular business, one of the uses of our capital on our balance sheet would be to continue to invest in that business. We are really a split personality business. We operate a core e-commerce business, but we have a goal and a desire to continue to deploy capital intelligently in the blockchain, Bitcoin, and the whole crypto space when we see investment opportunities that can be wildly accretive for our business. Over the last couple of years, we've been shown a number of deals, but we weren't willing to take our hard-working capital and risk it until we stabilized our core business. Now that our core business is stabilized, you could expect us to opportunistically look for transactions in the technology space, and quite frankly, in any space around the businesses that we're involved in, for opportunistic accretive investments. We'd love that. Our shareholders can also expect, as we stabilize our cash flow, for us to part a certain amount of cash in Bitcoin, a bit of a Bitcoin reserve. And as we start to generate additional capital, we'll do the same. We want to make sure that every dollar that sits in our till that our shareholders have given us are being deployed in a way that extracts value in every single way. To sum it up here, we recognize that the retail business has had a rebound and is stabilizing. And boy, are we praying for a housing market to return and an economy to stabilize. Because the one thing that shouldn't be lost on everybody is in a proper, normal, stabilized housing market where the consumer feels a little better about spending money, Beyond will be a massive winner with tailwinds coming behind the revenue that has been suppressed with a new cost structure that will drop massive incremental cash flow for every dollar that will be generated over the revenue number. One piece that we are going to commit to today is the exploration of something that came over in a shareholder letter about a week ago. Now the shareholder letter that was published by Shea Capital is one of very many communications we have, both with them and a lot of different shareholders. We're operating our company very differently than we used to, where we look at some of our larger shareholders and some of our individual shareholders who have ideas that maybe we haven't thought of. They have ideas of different ways to think of things, how to unlock value. And while every single idea that we see in front of us isn't going to get executed, for a variety of reasons. There are certain ideas that we think, wow, we didn't think of that. One idea that we're exploring, and you'll be able to see it in the slides that have been issued today. On the slide deck, you will see that our entire Medici portfolio has been disclosed. And our ownership stake in them have also been disclosed. In what form it takes in have also been disclosed. For those of you that have been around a while, there's this misnomer that the bulk of our blockchain assets are held in our Medici portfolio and controlled under a transaction that we entered into with Pellion. While it is true that some of our assets are held there, it's important to note that there's also a significant amount of value, both in T0, the T0 ROP tokens, and our grain chain asset where we have direct interests. If you go on to the investor site later today, or even after this call, you're going to see a chart. And it shows you T0, T0 ROP, grain chain. And then it lists all the Medici portfolio companies that were there. Unbelievable company like Ripio, great company like Voatz, and a variety of other ones. We are committing, as we sit here today, to explore the issuance of a contingent value right. That is the contract for the revenue that could be created in the liquidity event, all the way down to dollar one net of any fees that Teleon may get paid or any fees that a lawyer or a transaction may come with. 100% of the net revenue associated with the companies in the Medici portfolio, excluding T-Zero and GrainChain, we are exploring issuing a contingent value right. Let me give it to you in plain English. It is our goal to issue a dividend. That's what a contingent value right would be. It would be the dividend of a contract, and that dividend would come on something like a 10 for 1 or 5 for 1, meaning for every 10 shares you own, we would issue you one contingent value right contract. That number has not been solidified, so I use 10. As an illustrative example, it is not a security. You don't need to pay for it. There will be a record date. That record date will be issued as soon as Adrian has confirmation from the New York Stock Exchange on the process to issue the contingent value right. Every shareholder in that record date, which we expect that record date to be here in short order. I don't want to put a number of days on it, but it shouldn't take that long. will be issued as a dividend we expect that dividend that contract right to trade so that every shareholder that is a record holder that owns 10 shares on that given day will be given one contract that contract will give you the right to all of the net proceeds that could be created in the entire Medici portfolio other than t0 any cash generated or equity generated from T0 ROP or any cash generated from grain chain. As shareholders, you already will enjoy the value that will be created both direct and indirect on those two pieces. So we'll be able to answer many more questions in the Q&A, but that's essentially the state of the union. I'll now turn it over to Adrienne Lee.

Great. Thank you, Marcus, for that helpful insight into our 2Q results, our company strategy, and how we intend to create shareholder value. With that, I'd like to turn to details on our second quarter financial results and the progress we continue to deliver. Revenue declined 29% year-over-year in the second quarter, but improved 22% versus the first quarter of 2025, as we committed to on our last earnings call. The 22% increase was driven by a seasonal AOV improvement of $25, and an 8% increase in orders delivered. The AOV improvement of $25 was due to solid promotional execution in seasonally relevant categories. We made significant progress on stabilizing the business and getting back to our e-commerce fundamentals, providing an improved assortment, competitive and engaging promotions, all while improving our site experience, which Alex will discuss in detail later. Gross margin landed at 23.7% for the quarter, a 360 basis point improvement compared to the same period last year. Although the print was slightly below our anticipated range, it was driven by our focus to exceed our internal sales target on outdoor categories. I am pleased with this outcome and to see that our unique business model is competing again in established categories where we can win. While we have shown consistency improving our margin profile over the last five quarters as we work the six-part plan I outlined at the beginning of 2024, And I expect the team to maintain our margin guardrails and disciplined approach going forward. Sales and marketing decreased by $28 million or improved its efficiency by 320 basis points as a percent of revenue versus last year. And was flat as a percent of revenue to the first quarter 2025. This illustrates our ability to generate sales and maintain necessary discipline. The decline year over year was mainly driven by the intentional reduction of less efficient spend while investing in channels that are more contributory. We are still finding efficiencies and productive customer journeys in our own channels to help us achieve our targets. The team is committed to doing this day in and day out while improving the site experience and sharpening pricing to support conversion. G&A and tech expense of $37 million decreased by $9 million year over year as a result of our commitment to reduce fixed costs by an annualized amount of $80 million. I am pleased that we have delivered on our commitment to achieve a $150 million annual run rate. We continue to be disciplined with our capital deployment, identifying efficiencies and automation, and restructuring to create an agile, simple way to operate. All in, adjusted EBITDA came in at a loss of $8 million, a 78% or $28 million improvement versus the second quarter of 2024, and an improvement of $5 million over the first quarter of 2025. Reported gap EPS was a loss of 34 cents per share, excluding losses recognized from our equity method securities adjusted diluted loss was 22 cents, a 54 cent improvement year over year. We ended the quarter with cash, cash equivalents, restricted cash and inventory at a solid balance of 156 million. Year to date cash used in operating activities improved year over year by $75 million or 68% illustrating significant progress against our transformation initiatives and the stabilization of our core operations. With the vast majority of our restructuring behind us, our organization is lean, and we are creating simpler yet effective ways to operate, maniacally focused on our key KPIs. I believe that we have now stabilized the business, have the right team in place, and are well positioned to keep driving improved results. With that, I'd like to turn the call over to Alex Thomas to provide some additional details on our fundamental operational improvements.