Beyond (BYON) 18 Mar 192018 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Overstock.com 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. It is now my pleasure to hand the conference over to Mr. Officer. Financial Chief Iverson, Greg Sir, you begin. may

Thank XXXX earnings Good morning and quarter fourth our to conference welcome you. call.

Jonathan Medici Joining me Officer; Nielsen, Saum tZERO; Chief President; Founder, J.P. CEO President today are Officer; Operations Dr. Noursalehi, Patrick Knab, Chief Sourcing CEO and Chief and Seth Moore, Ventures; Byrne, Marketing and Johnson, Strategy of Dave of Officer.

include the views forward-looking responses to XXXX reflect management's as Let differ today, our and Actual materially. me your statements. and may remind results may following discussion you XX, of that March questions

Additional information today. could and potentially XX-K financial of forward-looking our in in impact presentation. on review XXXX Please included our about factors disclosed for filed that results two statements is release the the press slide Form today's

non-GAAP certain comparable the financial filings measures, Relations these will turn discuss will including measures. the and slides website, regarding of this on we to With call, the contain these this over with most Patrick. our accompanying that, to our non-GAAP call I GAAP reconciliations each measures. webcast SEC, posted Investor disclosures The additional During measures

for are morning, of addition comes we cash Behold where emphasizing Greg. before First vision know And for strategic everyone's Good Medici. the on our flow period. plan discussing course picture will XXXX and I positive Q&A both giving million which mind. is $XX what this vision discuss shareholders. Medici retail you, year. our we'll you have alternatives Then, our big we Slide? then, a our agenda. and progress, to generating our be we'll Thank discuss discussing in Today, Ventures, new we're

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each that harum-scarum beginning careful these to cultivating company bear in a see been have assembled There has adding not we We companies and way. in fruit.

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let's now Patrick. So, retail, talk about

Jonathan. you, Thank

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happy in the the we over Thank We're and more-happy to you, with have earnings million. outlined we Seth I'm turning up $X contribution plans So, call, the Moore our and Patrick. return quarter second quarter QX growth to contribution growth that, expect to it our QX. and retail in Seth. the In to we contribution said to to say outlook increase it say fourth did accelerate a in that in even sequential to million happen in unusual first we all $XX are seen seasonally way QX, and

to in in that believe We quarter. the being $XX in quarter, the adjusted in next quarter continue million first the year. loss see slide spite the that will translates into improving and second quarter You'll weakest in fourth EBITDA sequentially to million adjusted on improve loss seasonally EBITDA of our $XX the

that call you revenue. combination but nobody But our said into one improve generate a pointed, users XX where XXX and through more traffic also paid to and we is and in when was movement X last the on results to top reduce wining actually then, contribution improved Google, comes our from costs efficient acquisition traffic organic marketing. next You'll to Patrick it strategy slide, remember that that where moves an attention results first actually pay SEO, to looks. top on the recovering the top of

in October even slide, and graph slide, showing in well continuous pronounced on ranking the in So, we spoken bringing the improvement to top on traffic and business; you show with and next last and thus happy keywords to since XX time next revenue top three. that, improvement the as in this the in we're keywords the the as ranking more

Finally, monthly from third-party as describes three tracking rankings top this next popular chart losses other gains tools. in and keyword

consecutive contribution we've see six you'll improvements, first the the year continue XX of in is recover our last that We're ranking. upside we contribution that improvement month over And increasingly significant after enough faced on that to XXXX slides, our months there run generate massive is to for XXXX, and to confident of of ranking. comps to returning deterioration months simply and note one strategies effective posted could model these note now rate levels CAGRs out to ranking SEO our as half And headwinds the where XXXX to we on. goes identified You'll current if positive in ranking improvements. we’ve previous

Now, side the biggest is our strategy of the of the of improvement retention O. Club to our other single improve program loyalty is And our driver contribution customers. retention

on a number we call. report continued our the base that And subscriber see I'm in since program subscribers last slide, to in the this You'll growth saw the paid pleased of year-over-year. allows from paid our revenues than of base, customers acquisitions. -- I of say, continued on expense should XX% is more retained rather being subscriber to up reliant This us harvest

October, next conversion Finally, of made ranking top major to our of we’re site website. the since progresses the on also and seeing enhancing keyword XX% addition start shopping see, slide, we've improvement you the will three in the in

their And industry. awards other that best-in-class ABBI McDonald's from the traditionally goes the Multi-Screen Experience is recognition of for and Our that note, to Web Mobile advertising brands particularly have site Strategy. received really a LoyaltyXXX we Mobile Customer Best major Awards eTail, app Best-In-Class award for awarded meaningful won Association. icons like This Campaign. Award Star mobile and Also, from and recently

next So, to I the retail about there's want quickly note two slide, things financials. on

freight and strategy. made depressed somewhat because volume And carrier major rebalance QX are rebates. in of First, and in shipment in result, allocations. midst We're be again of a a gross will margins were of carrier as the adjustment QX some allocators forfeiting -- wins an we've likely in our

and We accretive have modeled they are out in over year, the margins adjustments but to those that rebates. know gross full as we hurt lose near-term the

to gross So, you it QX of in the see while reverse gross half to period XXXX. that that will QX here, margin you become headwind margin in is shown back we've for and the tailwind

in at growth, XX%. our the we QX earnings contribution we of that increased by The second or XX% showed GMV invest our recall in by increasing you’ll is expense XXXX to call, that spend

forward, XQ And of unusual We because going XXXX. revenue maximizing not to trying continued be through two that will the contribution we're comp quarters. we those strategy of

through to by sustainable past line can growth fourth to we start long-term experienced normalized, to comps expect as of that us most you top However, decade. the the quarter return

I to I explosive guidance be give lower to want will giving growth, exactly to in we're going more This looking we do because about do on as that contribution. we're year that, able be normally you along and than And, going we contribution footnote one what you corner at explosive. the of we're put year years a previous saying left going is from see it. going be to this be hand follow home, guidance, don't in to number. to but It's

of an Well, is quite that from going expense $XX business we're to least goals do do ambitious slide? that's million how goal. going each we is our in taking that One do slide, than Next It million is $XX $XX the at two other on an achievable. and $XX million. First, and retail better Slide? back If million -- management. $XXX number, million. what number two timing $XXX we we're million $XX Well, $XXX million we decomposes one collectively is million Remember, last is million do and saying those to better we're to that those can $XX better, those? do we going on be numbers, contribution possible contribution are to year. improvement into

can see XXX% impossible growth. in that is previous years, as may of it you not it although As sound, should as the context be

we’ll million upside maintained to in $XX quarter, to will year, end number. which the And you're you're double-digits. please. the us see You're third, third you first that check telling million. by those going -- quarter, the to well to to second quarter, on the second will think rates, growth, not XXX% have end XXX% of the far end maintaining and be over -- wait third over be me the kinds quarter, I of think actually of to there's million I'm to going maintaining high of that see by this. we’ll that whole through be the year high, And and Go that approaching $XX the for the we I of have going forward, through us to the -- gets $XXX we --

basically on This in huge strategy, expense all path, we're last partially couple already swell a addition, did taken artificial that Next we the million built for we preparation intelligence getting machine have course. result and out the savings, the years. was of G&A. that follow $XX that and our hit our strategy. have over of we a XX% as we as now and of, afterburner technology we learning in reversed having from And But, payoff we that strategy, cut

quite comfortable number. actually we with feel So, this

better to achieve when is that or be to telling better G&A, XX% XX% I isn't improvement of would this we year you on hockey doing what time honest contribution on -- tell so stuff this the to about million I'm we're This the XX% sky million stuff. $XX $XX And that to you of actually XX% make we it. stick can

Okay. how On to over to numbers about to going next slide, turn be forward. discussing talk I'd we'll Greg like

Patrick. over blockchain to moving that we like a our our and minute support businesses has and Clearly, businesses. time, leverage Medici. within to to Overstock operating structure discussing retail from portfolio how includes Thanks, evolved I'd single our resources a business of retail a spend companies

to to business have our our support scalable and functions evolved efficient services has we the As evolved, businesses. provide administrative

facilities. and have These and Next to finance retail. Historically, we costs we allocated slide? for these as substantially which administrative Inc., legal, all human refer include accounting, resources, of services,

costs data reflected all financial look you at retail our in administrative segment, by segment. as are these So, historical

to these plan allocate and on Next two which estimate retail in includes we thirds which slide? services Beginning XXXX, estimated cost business are the utilization, we based Medici, for for units of about currently to third tZERO. one

XXXX next approach. reflects corresponding be plan you Seth the will in slide our expenses will increased other expenses change The retail. reportable discussing tZERO for decreases beginning see QX So, with and that segments in allocation our reporting, in in our

a put I First, on that. footnote

retail basis well. know should wanted have understand standalone potential to on that Seth? as You acquirers a

that, million, and feel mentioned to with chart that that results plan this by at let's we retail Patrick coming illustrate obtainable. the as improve are EBITDA why jump next number $XXX helps So, looking year. is we into this adjusted they

in see a in QX improved of $XX black already average $X that monthly from XXXX just line you'll monthly million. over million First, contribution of we’ve the towards average contribution over outlook

at you'll four to the steadily been we XXXX, reduce the slide, vendors on appear in incurred that end activities headcount the operating quarter top of all next both now be of costs to and based XXXX the on operate see our we the run have rate outside throughout million. have business. able we’ve $XX On under After we a clear, and operating spend restructuring QX to amount automation costs cash -- discussed that

in SEO, and turning elsewhere continuing we efficiency On make in the optimization the we'll continue expense as contracts additional to to expect next term to improve in forward contribution freight Likewise, and including based going we cancel reaching other in software improvements earlier, a from business. correspondingly gross slide, operating to lowing improvements factors believe intend the their of we margin improvement you of our end the discussed we to will mostly see that plan number result our marketing us. cost and on

quarter. And we the contribution like will positive is past believe the months, QX improvements robust OpEx said, is we us in will generate While cash six softest in given fourth seasonally contribution, we to the positive improvement in cash in with flow see number. believe flow reduction return position of significant Patrick SEO, the quarter. upside actually in there to the that Continuing quarter significant the third as in continued

turn alternatives. So, discussions with that, let's of go ahead strategic and the to

businesses and blockchain for periods, value unlock we previous in said we shareholders. As will believe separating retail the

mean being the to of meant valuable high more we is what we have right that’s as them to retail best this that valuable web right find the is actualize who valuations process for assets. to we to forever. buyers far makes the that We're we what value model believe to we’re our will recovery going is the more with operate ongoing. for the continue do and cash with potential plan as speak, each and healthy we one cost, mortar, right us. forward just believe to our with and business are for is if to results know business and and We ensure say And property we’re own cash value We with That far it than -- it’s that maximize retail grade we in buyers structure business the we generating as announced we deal. continue saying when business shareholder said, the brick that more so seeking we QX, long-term to attractive work

we those investment for who announced next see structure Finally, with X-K, and didn't our in $XXX for MoU Makara GSR the common. an million colead recent on them slide, to tZERO outlining

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So, with over to it to that, turn really I'll Patrick summarize.

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going Thanks to for a to work trying lot. to get to shareholders add our value listening. We're back thank your We investment.

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This in disconnect. day. wonderful conclude the we conference. and Ladies and all for Everybody, gentlemen, does a program, may your thank today's you participation have