Beyond Inc (BYON) Q4 2024 Earnings Call Highlights: Strategic Cost Management Amid Revenue Decline

Despite a challenging revenue environment, Beyond Inc (BYON) focuses on margin improvement and innovative strategies to drive future profitability.

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Feb 26, 2025
Summary
  • Revenue: $1.4 billion for the year ending December 2024, an 11% decline versus full-year 2023.
  • Gross Margin: 23% for Q4, a 380-basis-point improvement year over year.
  • Adjusted EBITDA: Loss of $28 million for Q4, a 43% improvement versus Q4 2023.
  • GAAP EPS: Loss of $1.66 per share for Q4.
  • Adjusted Diluted Loss Per Share: $0.91 for Q4.
  • Cash and Cash Equivalents: $186 million at the end of Q4.
  • SG&A and Tech Expense: $48 million for Q4, a $6 million decrease year over year.
  • Marketing Efficiency: 12% of revenue in December, with a 2024 run rate of 17%.
  • SKU Reduction: Reduced Bed Bath & Beyond SKU count from 12 million to under 6 million by November, with an additional 1 million SKUs cut in December.
  • Vendor Reduction: 800 vendor partners cut in December.
  • Net Cash Proceeds: $17 million from building sale and $43 million from sale of common stock via ATM.
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Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Beyond Inc (BYON, Financial) achieved a gross margin of 23% in Q4, surpassing their target of 21.5%, indicating effective cost management and pricing strategies.
  • The company successfully reduced SG&A expenses by $65 million in 2024, exceeding their initial target and demonstrating disciplined cost control.
  • Beyond Inc (BYON) has made significant progress in vendor consolidation, eliminating millions of SKUs and focusing on profitable vendor relationships to improve margins.
  • The company has strengthened its balance sheet with $186 million in cash and cash equivalents, supported by strategic investments and asset sales.
  • Beyond Inc (BYON) is actively exploring blockchain and tokenization strategies, such as LifeChain, to unlock additional value and integrate innovative technology into their business model.

Negative Points

  • Revenue declined by 21% year-over-year in Q4 and 11% for the full year 2024, as the company focused on margin improvement and profitability over top-line growth.
  • Despite improvements, Beyond Inc (BYON) reported an adjusted EBITDA loss of $28 million for Q4, highlighting ongoing challenges in achieving profitability.
  • The company anticipates continued revenue contraction in the short term as they prioritize profitability, which may impact growth prospects.
  • Marketing efficiency remains a challenge, with a Q4 marketing spend of 17% of revenue deemed unacceptable by management, though improvements are targeted.
  • The integration of acquired brands like Bed Bath & Beyond and Overstock is still in progress, with ongoing SKU rationalization and vendor streamlining needed to optimize operations.

Q & A Highlights

Q: Can you provide insights into the revenue trends throughout the quarter as you reduced ad spend?
A: Marcus Lemonis, Executive Chairman of the Board, explained that while they don't disclose monthly revenue, the focus has been on profitable transactions. Revenue declined as they eliminated unprofitable SKUs and vendors, which is part of their strategy to achieve profitability. Despite a contraction in revenue, they expect EBITDA and net income to grow significantly as margins improve and marketing expenses decrease.

Q: What progress has been made in SKU rationalization, and how does it impact gross margin expansion?
A: Marcus Lemonis stated that they are committed to sequential margin improvement, driven by growth from Overstock and vendor consolidation. While they aim for a short-term gross margin target of 27%, the ultimate goal is to exceed 30%. The investment in Kirkland's is expected to enhance the Bed Bath & Beyond omnichannel business, contributing to better first costs and revenue opportunities.

Q: How are you generating shareholder value from Medici Ventures' portfolio, and what is the potential impact of offering a buybuy BABY token with tZERO?
A: Marcus Lemonis discussed the potential of tokenization as a loyalty program and a way to rebuild community engagement. The goal is to prove the efficacy of tZERO and unlock value without significant capital investment. They aim to demonstrate how these assets can work together to drive revenue and unlock value.

Q: How do the contribution margins of Bed Bath & Beyond and Overstock compare, and what is needed to achieve free cash flow neutrality?
A: David Nielsen, President, noted that Overstock has a slightly better contribution margin than Bed Bath & Beyond. They continue to curate and improve vendor relationships to enhance margins. Adrianne Lee, CFO, emphasized the need to recalibrate key operating metrics to historic levels to achieve profitability and generate free cash flow.

Q: What are the expectations for marketing efficiency and gross margin improvement?
A: Marcus Lemonis highlighted the importance of site experience and vendor partnerships in achieving marketing efficiency. Adrianne Lee expects sales and marketing expenses to improve sequentially, with a long-term target of reducing them further. David Nielsen mentioned a clear path to achieving a 25% gross margin through strategic vendor relationships and optimizing product mix.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.