Business Overview and History
Beyond, Inc. was originally founded in 1997 as D2-Discounts Direct, a limited liability company. The company was reorganized as a C Corporation in Utah in 1998 and then reincorporated in Delaware in 2002. In 1999, the company launched its initial website and changed its name to Overstock.com, Inc. In November 2023, the company underwent another name change, this time to Beyond, Inc., and transferred the principal listing of its common stock from the Nasdaq Global Market to the New York Stock Exchange.
Over the years, Beyond has expanded its portfolio of retail brands, acquiring Bed Bath & Beyond and Zulily in June 2023. These acquisitions have allowed the company to diversify its product offerings and customer base, catering to a wider range of consumer preferences and needs. The company's current brand lineup includes Bed Bath & Beyond, Overstock, and Zulily, all of which operate primarily through e-commerce platforms.
Throughout its history, Beyond has faced various challenges, including competition from other online retailers, managing its supply chain and inventory, and finding the right product mix to appeal to customers. Despite these challenges, the company was able to grow its business and establish the Overstock brand as a destination for discounted home goods and other merchandise.
The integration of the newly acquired brands presented operational and logistical challenges, as the company worked to streamline its supply chain and merchandising processes. Beyond has had to adapt to changes in the e-commerce landscape, including the rise of mobile commerce and the increasing importance of delivering a seamless customer experience across multiple channels. The company has also navigated regulatory and legal issues, such as compliance with data privacy laws and defending against intellectual property claims. Despite these obstacles, Beyond has remained committed to providing its customers with a wide selection of quality products at competitive prices.
Financial Performance and Ratios
In the fiscal year ended December 31, 2024, Beyond reported total revenue of $1.39 billion, a decrease of 11% compared to the prior year. This decline was primarily driven by an 8% decrease in orders delivered and a 3% decrease in average order value. Gross profit for the year was $290.16 million, representing a gross margin of 20.8%, down from 23.4% in the previous year.
The company's net loss for the fiscal year 2024 was $258.80 million, or a loss of $5.56 per diluted share. This compares to a net loss of $307.84 million, or $6.81 per diluted share, in the prior year. Beyond's adjusted EBITDA, a non-GAAP measure, was a loss of $241.31 million in 2024, an improvement from a loss of $225.36 million in 2023.
For the fourth quarter of 2024, Beyond reported revenue of $303.15 million, a 21% decrease year-over-year. The quarterly net loss was $81.26 million. The decline in revenue was attributed to a decrease in orders delivered and lower average order value, influenced by a decline in website visits and conversion, as well as shifting consumer spending preferences and macroeconomic factors impacting consumer sentiment.
Beyond operates primarily in the United States and Canada, with limited international sales through trademark licensing in Mexico.
Liquidity
As of December 31, 2024, Beyond had $159.17 million in cash and cash equivalents, with total assets of $401.95 million and total liabilities of $239.22 million. The company's current ratio stood at 1.01, and its debt-to-equity ratio was 0.20, indicating a relatively low level of leverage. The quick ratio was 0.96, demonstrating the company's ability to meet its short-term obligations.
In October 2024, Beyond entered into a $25 million one-year revolving line of credit with BMO Bank N.A., providing additional financial flexibility.
Operational Initiatives and Transformational Efforts
Beyond's management team, led by Executive Chairman Marcus Lemonis, has been actively addressing the company's operational challenges and implementing strategies to improve its financial performance. Key initiatives include:
1. Margin Expansion: The company has been focused on enhancing its gross margins by rationalizing its product assortment, improving vendor relationships, and optimizing pricing and discounting strategies. In the fourth quarter of 2024, Beyond's gross margin improved to 23%, up from 19.2% in the prior-year period, exceeding their target of 21.5%.
2. Cost Reduction: Beyond has committed to reducing its fixed costs by $65 million on an annualized basis, and the company has exceeded this target through disciplined expense management. The company is targeting an annual G&A and technology run rate of $165 million.
3. Marketing Efficiency: Beyond is working to improve the efficiency of its marketing efforts, with a goal of reducing sales and marketing expenses as a percentage of revenue to below 14% in Q1 2025, with a longer-term target of reaching around 12%. The company is focused on optimizing its digital marketing channels, including search engine marketing, email, and social media.
4. Overstock Brand Revitalization: The management team has brought back former Overstock employees to help revitalize the Overstock brand, leveraging their deep understanding of the brand's core customer base and product assortment. This effort has contributed to improved margins and sequential revenue growth within the Overstock segment.
5. Bed Bath & Beyond Optimization: Beyond has been actively curating the product assortment and vendor relationships within the Bed Bath & Beyond business, eliminating unprofitable SKUs and partnerships to improve the overall profitability of this segment.
6. Acquisitions and Partnerships: The company's acquisition of Buy Buy Baby in 2025 and its strategic partnership with Kirkland's Home are aimed at expanding the company's market reach and leveraging complementary strengths to drive profitable growth.
Diversification and Innovative Initiatives
In addition to its core retail operations, Beyond has been exploring new avenues for growth and value creation, including its blockchain and tokenization initiatives.
1. Blockchain and Tokenization: The company has been actively exploring the use of blockchain technology and tokenization to monetize its intellectual property and create new revenue streams. Beyond is working with its subsidiary, tZERO, to develop tokenization offerings that could provide shareholders with the rights to the monetization of specific assets.
2. LifeChain Platform: Beyond is developing a blockchain-powered platform called LifeChain, which is designed to provide secure, verifiable, and tokenized asset management for home ownership and broader financial, insurance, and asset record-keeping applications. The company sees LifeChain as a potential opportunity to leverage its retail expertise and customer base to expand into new, technology-driven verticals.
3. Medici Ventures Portfolio: Beyond has maintained a portfolio of blockchain-related investments through its Medici Ventures subsidiary. The company is taking a more active role in managing and unlocking the value of these investments, which include companies like tZERO and GrainChain.
Risks and Challenges
While Beyond's diversified strategies and transformational efforts hold promise, the company faces several risks and challenges:
1. Macroeconomic Headwinds: The retail industry is subject to fluctuations in consumer spending, which can be influenced by factors such as inflation, interest rates, and economic uncertainty. Any significant economic downturn could adversely impact Beyond's financial performance.
2. Competitive Landscape: Beyond operates in a highly competitive e-commerce environment, competing with established players as well as emerging players in the home goods and lifestyle sectors. The company's ability to differentiate its offerings and maintain a strong competitive position is crucial.
3. Integration and Execution Risks: The successful integration of acquired brands and the effective execution of the company's transformational initiatives are critical to achieving the desired operational and financial outcomes.
4. Regulatory and Compliance Risks: Beyond's blockchain and tokenization efforts may be subject to evolving regulatory frameworks, which could introduce uncertainty and compliance challenges.
5. Dependence on Third-Party Relationships: The company's reliance on third-party suppliers, logistics providers, and technology partners presents risks related to service disruptions, cost increases, and the potential loss of key partnerships.
Business Segments
Beyond, Inc. operates through two primary business segments: Retail and Services.
Retail Segment: This segment, which includes the Overstock.com and Bed Bath & Beyond brands, is the core of Beyond's business and generates the majority of the company's revenue. It focuses on e-commerce sales of home furnishings, décor, and other lifestyle products.
The Overstock.com brand offers a wide assortment of discounted, brand-name merchandise, providing customers with a "treasure hunt" shopping experience. Product categories include furniture, home décor, bedding and bath, jewelry and watches, apparel and accessories, sports and outdoor, and beauty and wellness.
The Bed Bath & Beyond brand, which also includes the Zulily brand, offers an extensive array of high-quality, stylish home-related products. Its product assortment spans categories such as the bedroom, bathroom, kitchen, and outdoor living. The brand's strategic priorities include curating an elevated product selection and enhancing the customer experience to build emotional connections and brand loyalty.
Services Segment: This segment encompasses various product and service offerings that complement the core Retail business, such as warranties, shipping insurance, installation services, and access to home loans. While not a significant contributor to the company's overall financial results at this time, the Services segment provides additional value-add solutions for customers and diversifies Beyond's revenue streams.
Financial Outlook and Guidance
Beyond has provided the following guidance and targets for its future performance:
1. Sequential EBITDA Improvement: The company expects to continue seeing sequential EBITDA performance improvements from Q4 2024 through each quarter of 2025.
2. Margin Expansion: Beyond anticipates modest margin improvements in upcoming quarters, with a near-term target of 25% gross margin and a longer-term goal of achieving gross margins over 27-30%.
3. Cost Reduction: The company aims to further reduce SG&A expenses, targeting a $165 million annual G&A and technology run rate.
4. Marketing Efficiency: Beyond is targeting marketing expenses of less than 14% of revenue in Q1 2025, with a goal of reaching around 12% over time.
5. Path to Profitability: While the company believes it has a path to profitability with potential inflection points throughout the year, it cautions that it may not be profitable for the full year 2025.
Despite these challenges, Beyond's diversified strategy, focus on operational efficiency, and exploration of innovative growth opportunities position the company to navigate the shifting retail landscape and potentially unlock new avenues for value creation.