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BEYOND, INC. (BYON)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered sequential improvement: gross margin rose to 23.0% (+180 bps q/q, +380 bps y/y) and adjusted EBITDA loss narrowed to $27.9M (43% y/y improvement), while revenue declined to $303.2M (-21.1% y/y) as management prioritized profitable transactions over top-line growth .
  • Management reaffirmed a path to profitability driven by SKU/vendor rationalization, marketing efficiency, and margin expansion; near-term targets include gross margin “north of 25%” with a longer-term aim toward 27–30%, and sales & marketing falling from ~17% toward 12% and eventually ~11% .
  • Balance sheet ended Q4 with $186.1M cash and restricted cash; CFO highlighted ~$50M non-cash charges and $6M non-recurring items in the quarter and noted progress monetizing assets (HQ sale, ATM proceeds) to bolster liquidity for growth initiatives .
  • Strategic catalysts: ramp of Overstock brand, SKU and pricing discipline at Bed Bath & Beyond, buybuy BABY acquisition progress, and a material stake in Kirkland’s Home providing omnichannel optionality and vendor leverage to support margin targets .
  • No Wall Street consensus comparison: S&P Global estimates were unavailable for BYON this quarter; consider monitoring as mapping issues resolve.

What Went Well and What Went Wrong

What Went Well

  • Gross margin outperformed targets: delivered 23.0% vs a 21.5% bold target, with management stating “we landed right around 23%,” driven by SKU/vendor rationalization, pricing discipline, and freight cost improvements .
  • Cost actions tracked to plan: G&A and tech expenses decreased y/y, with management reiterating the fixed-cost reduction goal ($65M annualized achieved) and pursuit of $165M annual run-rate for G&A+Tech .
  • Adjusted EBITDA trend: Q4 adjusted EBITDA loss improved to $27.9M (from $49.0M y/y; $31.9M in Q3), validating sequential improvement thesis; CFO emphasized “strong execution proof point” on margin .

What Went Wrong

  • Revenue contraction: total net revenue fell 21.1% y/y to $303.2M as management removed unprofitable SKUs/vendors and reduced discounting, intentionally trading off top-line for profitability .
  • Marketing efficiency still elevated: Q4 sales & marketing ran ~17% of revenue (deemed “unacceptable”), despite December reaching 12%; management targets sub-14% in Q1 before moving toward 12% and ~11% longer term .
  • Non-cash and special charges: Q4 net loss of $81.3M included ~$50M non-cash items (largely non-core), $6M non-recurring costs, and Medici portfolio write-downs contributing to “Other expense, net,” muting reported EPS despite operational progress .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$384.5 $311.4 $303.2
Gross Profit ($USD Millions)$73.9 $66.0 $69.7
Gross Margin %N/A21.2% 23.0%
Diluted EPS ($)$(3.55) $(1.33) $(1.66)
Adjusted Diluted EPS ($)N/A$(0.96) $(0.91)
Adjusted EBITDA ($USD Millions)$(49.0) $(31.9) $(27.9)

Notes:

  • Q4 2024 gross margin improved +180 bps q/q and +380 bps y/y; management’s target for Q4 was 21.5%, with outcome “right around 23%,” aided by SKU/vendor discipline and freight optimization .
  • Adjusted EPS and adjusted EBITDA exclude equity method losses and special items as defined in the non-GAAP reconciliation .

Segment breakdown: Company does not provide segment revenue disclosure; brand-level commentary indicates Overstock is accretive to margin and Bed Bath & Beyond is being curated with fewer, deeper vendor relationships .

KPIs

KPIQ4 2023Q3 2024Q4 2024
Active Customers (000s)5,612 5,961 5,415
Orders Delivered (000s)2,549 1,569 1,675
Average Order Value ($USD)$151 $199 $181
Orders per Active Customer1.41 1.39 1.37

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Margin %Q4 2024 actual vs prior targetTargeted ~21.5% (50 bps q/q) Delivered 23.0% (+180 bps q/q; +380 bps y/y) Beat (raised outcome)
Gross Margin %1H 2025 trajectory“Sequential margin improvement” “North of 25%” near-term; striving for 27–30% longer-term Raised long-term ambition
Sales & Marketing (% of revenue)Q1 2025Q4 run-rate ~17% (“unacceptable”) Below 14% in Q1; aim ~12%, then ~11% with site/CRM optimization Lowered target (more efficient)
Adjusted EBITDA2025 cadenceSequential improvement expected Sequential improvement each quarter (Q4→Q1→Q2…) Maintained, reiterated
G&A + Tech Run RateFY 2025$165M target Continue progress toward $165M run-rate; $65M fixed cost reduction realized Maintained; execution update
Revenue TrajectoryNear term vs laterN/AExpect continued near-term tightening as unprofitable SKUs/vendors removed; push growth after margin base is set Clarified strategy shift

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 & Q3 2024)Current Period (Q4 2024)Trend
AI/Technology initiativesLaunched CRM with Salesforce; data-driven loyalty plans; improving search and site speed; testing personalization layers (e.g., “Versal”) Completed Salesforce core; selected Agentforce rollout in 6–8 months; partnering with Vercel on front-end for site responsiveness; debut of LifeChain concept Expanding scope; execution underway
Margin strategy & vendor consolidationEmphasized curation, freight renegotiation, reducing discounting; Overstock relaunch accretive to margin Delivered 23% GM; targeting 25%+; deeper vendor consolidation; use balance sheet/omnichannel partnerships to improve first cost Improving; targets raised
Marketing efficiencyQ2: elevated CAC amid geopolitics; Q3: S&M ~17% with intent to improve December hit 12%; Q4 overall ~17%; goal sub-14% in Q1, trending to ~12–11% Improving; clear milestones
Tariffs/MacroQ3: macro headwinds, aggressive promotions industry-wide Tariffs not expected to disproportionately impact BYON vs peers Neutralized relative risk
Tokenization/MediciMedici portfolio oversight; exploring monetization; tZERO/GrainChain highlighted Considering tokenizing IP/assets with tZERO (compliant security), weaving blockchain into commerce; GrainChain partnerships imminent Active monetization path
Omnichannel strategyProposed alliances (Kirkland’s/Container Store); Bed Bath small-format concept Completed 40% stake in Kirkland’s; co-brand concepts, vendor leverage to drive first cost and margin Execution progressing

Management Commentary

  • Executive Chairman Marcus Lemonis: “We set a bold target for Q4 of 21.5% [gross margin]… Happy to tell you that we landed right around 23%.”
  • CFO Adrianne Lee: “Adjusted EBITDA loss of $28 million was a 43% improvement year-over year driven by a 380 basis point gross margin expansion… we ended the year with a healthy cash and restricted cash balance of $186 million.”
  • Dave Nielsen (President): “We hit our target of 12% sales and marketing as a percent of revenue in December… We are firmly on a path to achieving our near-term gross margin target of 25%.”

Q&A Highlights

  • Revenue cadence vs ad spend: Management reiterated deliberate revenue tightening as unprofitable SKUs/vendors are removed; expect revenue to be “a little tighter” near term but bottom-line improvement as margins and marketing efficiency improve .
  • Gross margin path: Management expects sequential margin improvement through 2025, targeting “north of 25%” near-term and working toward 27–30% with vendor consolidation and omnichannel leverage (Kirkland’s/Container Store) .
  • Marketing efficiency: Q4 at ~17%; December achieved 12%. Q1 goal is sub-14% and then toward ~12–11% as CRM personalization, email execution, PLA optimization, and site experience improve .
  • Liquidity and ATM usage: ATM proceeds used to “fortify our balance sheet” and fund margin-accretive investments (e.g., Kirkland’s stake); management emphasized dilution only where returns outweigh .
  • Contribution margin: Improving via process efficiencies (lower shipping, better site, reduced discounting); focus on profitable baskets and lifetime value vs one-off discount transactions .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable for BYON due to a mapping issue, so we cannot provide a beat/miss analysis anchored on Wall Street consensus this quarter. Monitor for resolution to compare future results.

Key Takeaways for Investors

  • Sequential margin expansion and adjusted EBITDA improvement validate the pivot to profitable commerce; December’s 12% marketing ratio is a tangible proof point toward sub-14% in Q1 and ~12% thereafter .
  • Expect continued near-term revenue contraction as unprofitable volume is eliminated; the focus is bottom-line momentum and building a margin base before re-accelerating growth .
  • Margin runway remains: vendor consolidation, omnichannel leverage via Kirkland’s/Container Store, and merchant-led curation support “north of 25%” near-term, with longer-term ambition of 27–30% gross margin .
  • Liquidity actions (HQ sale, ATM, asset monetization) and a $186.1M cash/restricted cash balance provide runway to invest in margin and tech initiatives without over-levering .
  • Tech stack upgrades (Salesforce/Agentforce, Vercel) plus retail media and data monetization (LifeChain, tZERO integration) can lower CAC, improve conversion, and create non-transaction revenue streams over time .
  • Brand architecture: Overstock ramp and Bed Bath curation are central to restoring contribution margins; management is reintroducing high-frequency categories (e.g., apparel/beauty) to drive traffic with disciplined economics .
  • Watch execution against explicit milestones (Q1 S&M sub-14%, sequential EBITDA improvements, gross margin north of 25%, progress toward $165M G&A+Tech run-rate) as near-term stock catalysts .