Financial Analysis

"14. COMMITMENTS AND CONTINGENCIES Legal proceedings and contingencies From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we have been in the past and we may be in the future subject to judgments requiring us to pay significant damages or associated costs. In some instances, other parties may have contractual indemnification obligations to us. However, such contractual obligations may prove unenforceable or non-collectible, and if we cannot enforce or collect on indemnification obligations, we may bear the full responsibility for damages, fees, and costs resulting from such litigation. As a result of such litigation, we may also be subject to penalties and equitable remedies that could force us to alter important business practices. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. We establish liabilities when a particular contingency is probable and estimable which are included in Accrued liabilities …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"11. BORROWINGS Revolving line of credit In October 2024, the Company entered into a Loan and Security Agreement (the ""Loan Agreement"") with BMO Bank N.A. (in such capacity, ""BMO""), pursuant to which BMO agrees to lend the Company up to $25.0 million on a one-year revolving line of credit to aid the Company in securing strategic ventures. In connection with the Loan Agreement, BMO issued a revolving line of credit promissory note (the ""Revolving Note"") and granted a lien on the cash collateral account specified in the Loan Agreement (the ""Cash Collateral Account""). The revolving line of credit bears interest on the unpaid principal balance at an annual rate equal to the Secured Overnight Financing Rate, or SOFR rate, for a one-month interest period plus 1.00%, established by the Federal Reserve Bank of New York. The Company is obligated to pay certain commitment fees on undrawn amounts under the Loan Agreement in amounts specified in the Loan Agreement. The Loan Agreement and Revolving Note was originally scheduled to terminate on October 18, 2025, and loans thereunder may be borrowed, repaid, and reborrowed up to such date. In September 2025, the Company and BMO extended the term of the Loan Agreement and Revolving Note for an additional year, and it will now terminate in October 2026. As of December 31, 2025, the Company had $7.0 million of outstanding standby letter of credits under the Revolving Note. As of December 31, 2025, the outstanding balance on the line of …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"17. STOCK-BASED AWARDS We have equity incentive and compensatory plans that provide for the grant of stock-based awards, including restricted stock and performance shares, to employees and board members. Those plans include the Company's Amended and Restated 2005 Equity Incentive Plan (the ""Plan"") and the newly adopted Bed Bath & Beyond, Inc. 2025 Employment Inducement Equity Incentive Plan (the ""Inducement Plan"") (collectively, the ""Plans""). Employee accounting applies to equity incentives and compensation granted by the Company to its own employees. When an award is forfeited prior to the vesting date, we recognize an adjustment for the previously recognized expense in the period of the forfeiture. Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Year ended December 31, 2025 2024 2023 Cost of goods sold $ 6 $ 7 $ 37 Sales and marketing 332 594 796 Technology 1,747 6,263 8,733 General and administrative 8,768 12,391 13,452 Total stock-based compensation expense $ 10,853 $ 19,255 $ 23,018 For the year ended December 31, 2025, there was a total $14.8 million of unrecognized compensation cost related to unvested restricted stock units, performance shares, and share options, which is expected to be recognized over a weighted-average period of approximately 2.09 years. At December 31, 2025, 1.1 million shares of stock remained available for future …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. FAIR VALUE MEASUREMENT The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs as of December 31, 2025 and 2024, as indicated (in thousands): Fair Value Measurements at December 31, 2025 Total Level 1 Level 2 Level 3 Assets: Cash equivalentsMoney market funds $ 22,717 $ 22,717 $ $ Equity securities, at fair value 26,903 9,828 17,075 Available-for-sale debt securities (1) 18,417 18,417 Debt securities, at fair value (1) 23,977 23,977 Total assets $ 92,014 $ 32,545 $ 23,977 $ 35,492 Liabilities: Loan commitments, at fair value (2) $ 2,766 $ $ $ 2,766 Total liabilities $ 2,766 $ $ $ 2,766 Fair Value Measurements at December 31, 2024 Total Level 1 Level 2 Level 3 Assets: Cash equivalentsMoney market funds $ 21,799 $ 21,799 $ $ Equity securities, at fair value 21,640 21,640 Available-for-sale debt securities (1) 10,985 10,985 Debt securities, at fair value (1) 14,814 14,814 Total assets $ 69,238 $ 21,799 $ $ 47,439 ___________________________________________ (1) Included in Other long-term assets, net in the consolidated balance sheets. (2) Included in Other long-term liabilities in the consolidated balance sheets. The following table provides activity for our Level 3 investments during the periods presented (in thousands): Amount Level 3 investments at December 31, 2023 $ 51,530 Increase due to purchases of Level 3 investments 17,000 Decrease in fair value of Level 3 investments (21,836) Accrued …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

22. INCOME TAXES For financial reporting purposes, loss before income taxes includes the following components (in thousands): Year ended December 31, 2025 2024 2023 United States loss $ (85,491) $ (259,395) $ (267,058) Foreign income 1,695 1,284 936 Total loss before income taxes $ (83,796) $ (258,111) $ (266,122) The provision for income taxes for 2025, 2024 and 2023 consists of the following (in thousands): Year ended December 31, 2025 2024 2023 Current: Federal $ $ $ (55) State and local 50 167 369 Foreign 302 233 58 Total current 352 400 372 Deferred: Federal 197 119 37,160 State and local 216 118 4,201 Foreign 60 47 (13) Total deferred 473 284 41,348 Total income taxes: Federal 197 119 37,105 State and local 266 285 4,570 Foreign 362 280 45 Total provision for income taxes $ 825 $ 684 $ 41,720 The provision for income taxes for 2025, 2024 and 2023 differ from the amounts computed by applying the U.S. federal income tax rate of 21% to loss before income taxes for the following reasons (in thousands): Year ended December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent U.S. federal income tax benefit at statutory rate $ (17,597) 21.00 % $ (54,203) 21.00 % $ (55,886) 21.00 % State income tax expense, net of federal benefit (1) 411 (0.49) 293 (0.11) 4,419 (1.66) Foreign tax effects (31) 0.04 112 (0.04) (78) 0.03 Effect of cross-border tax laws 316 (0.38) 298 (0.12) (736) 0.28 Tax credits Federal research and development tax credit (815) 0.97 (2,071) 0.80 (3,24 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

12. LEASES We have operating leases for office space and a data center. Our leases have remaining lease terms of two years to seven years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within one year. Variable lease costs include executory costs, such as taxes, insurance, and maintenance. The components of lease expense were as follows (in thousands): Year ended December 31, 2025 2024 2023 Operating lease cost $ 2,074 $ 3,240 $ 5,257 Variable lease cost 929 906 1,300 The following tables provides a summary of other information related to leases (in thousands): Year ended December 31, 2025 2024 2023 Cash payments included in operating cash flows from lease arrangements $ 1,628 $ 3,253 $ 5,500 Right-of-use assets obtained in exchange for new operating lease liabilities 7,170 836 The following table provides a summary of balance sheet information related to leases: December 31, 2025 2024 Weighted-average remaining lease termoperating leases 6.76 years 6.65 years Weighted-average discount rateoperating leases 7 % 6 % Maturity of lease liabilities under our non-cancellable operating leases as of December 31, 2025, are as follows (in thousands): Payments due by period 2026 $ 1,285 2027 1,150 2028 1,099 2029 1,132 2030 1,040 Thereafter 2,457 Total lease payments 8,163 Less interest 1,592 Present value of lease liabilities $ 6,571 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently adopted accounting standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. For public entities, ASU 2023-09 is required to be adopted for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted the provisions of ASU 2023-09 as of January 1, 2025. The adoption of ASU 2023-09 resulted in additional income tax disclosures in the Company's consolidated financial statements. Recently issued accounting standards In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) , which requires public entities to disclose disaggregated information about certain income statement line items in the notes to the financial statements. For public entities, ASU 2024-03 is required to be adopted for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted. This ASU will result in us including the additional required disclosures when adopted and does not otherwise have a material impact on the Company's consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles Goodwill and Other Internal-Use Sof …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

18. EMPLOYEE RETIREMENT PLAN We have a 401(k) defined contribution plan which permits participating employees to defer a portion of their compensation, subject to limitations established by the Internal Revenue Code. During the years ended December 31, 2025, 2024 and 2023, employees who completed 30 days of service and are 18 years of age or older are qualified to participate in the plan on the first of a month following 30 days of service, which matches 100% of the first 6% of each participant's contributions to the plan subject to IRS limits. Matching contributions vest immediately. Participant contributions also vest immediately. Our matching contribution totaled $2.9 million, $4.3 million and $5.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. We made no discretionary contributions to eligible participants for the years ended December 31, 2025, 2024 and 2023, respectively.

PensionAndOtherPostretirementBenefitsDisclosureTextBlock

19. REVENUE AND CONTRACT LIABILITY Unearned revenue Unearned revenue consists of the following (in thousands): December 31, 2025 2024 Unearned product revenue on undelivered product $ 11,170 $ 11,192 In store credits 10,875 11,462 Loyalty program membership fees and reward points 6,429 13,918 Unearned product revenue on unshipped orders 3,911 3,610 Other 2,044 2,913 Total unearned revenue $ 34,429 $ 43,095 The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the period (in thousands): Amount Unearned revenue at December 31, 2023 $ 49,597 Increase due to deferral of revenue at period end, net 32,802 Decrease due to beginning contract liabilities recognized as revenue (39,304) Unearned revenue at December 31, 2024 43,095 Increase due to deferral of revenue at period end, net 24,725 Decrease due to beginning contract liabilities recognized as revenue (33,391) Unearned revenue at December 31, 2025 $ 34,429 Our total unearned revenue related to outstanding loyalty program rewards was $4.1 million and $11.1 million at December 31, 2025 and 2024, respectively. Breakage income related to loyalty program rewards and gift cards is recognized in Net revenue in our consolidated statements of operations. Breakage included in revenue was $11.1 million, $7.2 million, and $5.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. The timing of revenue recognition …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

24. BUSINESS SEGMENTS The Company currently has one reportable segment, which is its Retail business. The reportable segment is comprised of the Company's Bed Bath & Beyond operating segment and Overstock.com operating segment which primarily sells home goods products to customers. Across each operating segment, the Company offers customers similar products, source from overlapping suppliers, the same customer type, have similar distribution methods, and operate under the same regulatory environment. The Company has determined that each of its operating segments share similar economic characteristics and business activities and are aggregated into a single reportable Retail segment. The Bed Bath & Beyond operating segment includes results from its buybuy BABY brand, which are not material to the business and are not separately reviewed by the Chief Operating Decision Maker. The Retail segment primarily derives revenues from e-commerce sales of home furnishing merchandise through its suite of websites and mobile applications. The accounting policies of the Retail segment are the same as those described in the summary of significant accounting policies. The Chief Operating Decision Maker (CODM), who is the Company's Principal Executive Officer, assesses performance for the Retail segment and decides how to allocate resources based on Operating Income (loss) that also is reported on the Consolidated Statements of Operations. The measure of segment assets is reported on t …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"2. ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES Principles of consolidation The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany account balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, loyalty program reward point and gift card breakage, sales returns, inventory valuation, asset useful lives, equity and debt securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our accounting of these estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected. Revision of previously issued consolidated financial statements As previously disclosed, during the quarterly period ended September 30, 2025, the Company identified errors in the consol …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"16. STOCKHOLDERS' EQUITY Common Stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends. JonesTrading Sales Agreement We entered into a Capital on Demand TM Sales Agreement (the ""Sales Agreement"") dated June 10, 2024 with JonesTrading Institutional Services LLC (""JonesTrading""), under which we conducted and may in the future conduct ""at the market"" public offerings of our common stock. Under the Sales Agreement, JonesTrading, acting as our sales agent or principal, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. We have no obligation to sell additional shares under the Sales Agreement, but we may do so from time to time. For the year ended December 31, 2025, we sold 16,293,806 shares of our common stock pursuant to the Sales Agreement and have recognized $137.3 million in proceeds, net of $2.8 million of offering costs, including commissions paid to JonesTrading. For the year ended December 31, 2024, we sold 7,002,375 shares of our common stock pursuant to the Sales Agreement and have recognized $43.0 million in proceeds, net of $879,000 of offering costs, including commissions paid to JonesTrading. For the year ended December 31, 2023, we did not sell any shares of our …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"25. SUBSEQUENT EVENTS The Container Store, Inc. In January 2026, we purchased, via an amended participation agreement for par/near par trades, an additional portion of the loans issued by The Container Store, Inc. pursuant to the TCS Credit Agreement. The aggregate purchase price for our additional participation in certain loans issued pursuant to the TCS Credit Agreement was $2.2 million. As a result of these transactions, we will participate in the rights to the payment of interest and repayment of the loans and any exercise of rights or remedies related thereto. Delayed Draw Term Loan Commitments In the first quarter of 2026, TBHC drew an additional $15.0 million under the Delayed Draw Term Loan Commitments. There is approximately $5.0 million remaining under the Delayed Draw Term Loan Commitments. Merger Agreement On January 8, 2026, the Company filed a registration statement on Form S-4 (the ""Registration Statement"") with the SEC in connection with the proposed Merger (defined below) with TBHC and was declared effective on January 30, 2026. On November 24, 2025, the Company by and among the Company, Knight Merger Sub II, Inc., a wholly owned subsidiary of the Company, and TBHC, pursuant to which, subject to the terms and conditions set forth therein, Merger Sub will merge with and into TBHC (the ""Merger""), with TBHC surviving such Merger as a wholly owned subsidiary of the Company. Under the Merger Agreement, at the effective time of the Merger (the Effective Time), …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

"9. COMMITMENTS AND CONTINGENCIES Legal proceedings and contingencies From time to time, the Company is involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of the business and the sale of products on the Company's websites. In connection with such litigation, the Company has been in the past and may be in the future subject to judgments requiring the Company to pay significant damages or associated costs. In some instances, other parties may have contractual indemnification obligations to the Company. However, such contractual obligations may prove unenforceable or non-collectible, and if the Company cannot enforce or collect on indemnification obligations, the Company may bear the full responsibility for damages, fees, and costs resulting from such litigation. As a result of such litigation, the Company may also be subject to penalties and equitable remedies that could force the Company to alter important business practices. Such litigation could be costly and time consuming and could divert or distract the Company's management and key personnel from the business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect the Company's business, results of operations, financial position, or cash flows. The Company establishes l …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"7. BORROWINGS In October 2024, the Company entered into a Loan and Security Agreement (the ""Loan Agreement"") with BMO Bank N.A. (in such capacity, ""BMO""), pursuant to which BMO agrees to lend the Company up to $25.0 million on a one-year revolving line of credit to aid the Company in securing strategic ventures. In connection with the Loan Agreement, BMO issued a revolving line of credit promissory note (the ""Revolving Note"") and granted a lien on the cash collateral account specified in the Loan Agreement (the ""Cash Collateral Account""). The revolving line of credit bears interest on the unpaid principal balance at an annual rate equal to the Secured Overnight Financing Rate, or SOFR rate, for a one-month interest period plus 1.00%, established by the Federal Reserve Bank of New York. The Company is obligated to pay certain commitment fees on undrawn amounts under the Loan Agreement in amounts specified in the Loan Agreement. The Loan Agreement and Revolving Note was originally scheduled to terminate on October 18, 2025, and loans thereunder may be borrowed, repaid, and reborrowed up to such date. In September 2025, the Company and BMO extended the term of the Loan Agreement and Revolving Note for an additional year, which will now terminate in October 2026. As of March 31, 2026, the Company had $9.5 million of outstanding standby letter of credits under the Revolving Note. As of March 31, 2026, the outstanding balance on the line of credit was $15.5 million. The to …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"12. STOCK-BASED AWARDS The Company has equity incentive and compensatory plans that provide for the grant of stock-based awards, including restricted stock and performance shares to employees and board members, and provide employees the ability to purchase shares of its common stock through an employee stock purchase plan. Employee accounting applies to equity incentives and compensation granted by the Company to its own employees. When an award is forfeited prior to the vesting date, the Company recognizes an adjustment for the previously recognized expense in the period of the forfeiture. Stock-based compensation expense is classified within the corresponding operating expense categories on the consolidated statements of operations as follows (in thousands): Three months ended March 31, 2026 2025 Cost of goods sold $ $ 1 Sales and marketing 70 103 Technology 354 57 General and administrative 1,108 933 Customer service and merchant fees 1 Total stock-based compensation $ 1,533 $ 1,094 Restricted stock unit awards The Company's Amended and Restated 2005 Equity Incentive Plan (the ""Plan"") provides for the grant of restricted stock units and other types of equity awards to employees and directors of the Company. The Compensation Committee of the Board of Directors approves grants of restricted stock unit awards to the Company's officers, board members, and employees. These restricted stock unit awards generally vest over a period of three years to four years, subject to the …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. FAIR VALUE MEASUREMENT The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis using the following levels of inputs (in thousands): Fair Value Measurements at March 31, 2026 Total Level 1 Level 2 Level 3 Assets: Cash equivalentsMoney market funds $ 22,920 $ 22,920 $ $ Equity securities, at fair value 25,382 8,307 17,075 Available-for-sale debt securities (1) 24,786 24,786 Debt securities, at fair value (1) 44,157 44,157 Total assets $ 117,245 $ 31,227 $ 44,157 $ 41,861 Fair Value Measurements at December 31, 2025 Total Level 1 Level 2 Level 3 Assets: Cash equivalentsMoney market funds $ 22,717 $ 22,717 $ $ Equity securities, at fair value 26,903 9,828 17,075 Available-for-sale debt securities (1) 18,417 18,417 Debt securities, at fair value (1) 23,977 23,977 Total assets $ 92,014 $ 32,545 $ 23,977 $ 35,492 Liabilities: Loan commitments, at fair value (2) $ 2,766 $ $ $ 2,766 Total liabilities $ 2,766 $ $ $ 2,766 ___________________________________________ (1) Included in Other long-term assets, net in the consolidated balance sheets. (2) Included in Other long-term liabilities in the consolidated balance sheets. The following table provides activity for the Company's Level 3 investments (in thousands): Amount Level 3 investments at December 31, 2024 $ 47,439 Increase due to purchases of Level 3 investments 16,266 Transfers out of Level 3 investments (20,046) Decrease in fair value of Level 3 investments (8,711) Accrued …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

8. LEASES The Company has operating leases for office space and a data center. The Company's leases have remaining lease terms of one year to seven years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within one year. Variable lease costs include executory costs, such as taxes, insurance, and maintenance. The components of lease expenses were as follows (in thousands): Three months ended March 31, 2026 2025 Operating lease cost $ 318 $ 912 Variable lease cost 12 309 The following table provides a summary of other information related to leases (in thousands): Three months ended March 31, 2026 2025 Cash payments included in operating cash flows from lease arrangements $ 321 $ 851 The following table provides supplemental balance sheet information related to leases: March 31, 2026 December 31, 2025 Weighted-average remaining lease termoperating leases 6.63 years 6.76 years Weighted-average discount rateoperating leases 7 % 7 % Maturity of lease liabilities under non-cancellable operating leases as of March 31, 2026, are as follows (in thousands): Payments due by period Amount 2026 (Remainder) $ 961 2027 1,148 2028 1,099 2029 1,132 2030 1,040 Thereafter 2,457 Total lease payments 7,837 Less interest 1,487 Present value of lease liabilities $ 6,350 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently issued accounting standards In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) , which requires public entities to disclose disaggregated information about certain income statement line items in the notes to the financial statements. For public entities, ASU 2024-03 is required to be adopted for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. This ASU will result in the Company including the additional required disclosures when adopted and does not otherwise have a material impact on the Company's consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software, which clarified and modernizes the accounting for costs related to internal-use software. The amendments in ASU 2025-06 remove all references to project stages throughout Subtopic 350-40 and clarify the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU will result in the Company adopting the new threshold to apply to begin capitalizing costs and does not ot …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

13. REVENUE AND CONTRACT LIABILITY Unearned Revenue The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands): Amount Unearned revenue at December 31, 2024 $ 43,095 Increase due to deferral of revenue at period end, net 24,725 Decrease due to beginning contract liabilities recognized as revenue (33,391) Unearned revenue at December 31, 2025 34,429 Increase due to deferral of revenue at period end, net 18,517 Decrease due to beginning contract liabilities recognized as revenue (18,307) Unearned revenue at March 31, 2026 $ 34,639 The Company's total unearned revenue related to outstanding loyalty program rewards was $3.9 million and $4.1 million at March 31, 2026 and December 31, 2025, respectively. Breakage income related to loyalty program rewards and gift cards is recognized in Net revenue in the consolidated statements of operations. Breakage included in revenue was $0.9 million and $6.6 million for the three months ended March 31, 2026 and 2025, respectively. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. At March 31, 2026 and December 31, 2025, the Company had an additional $2.4 million and $2.4 million, respectively, of unearned contract revenue classified within Other long-term liabilities on the consolidated balance sheets. Sales returns allowa …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

15. BUSINESS SEGMENTS Segment Operations: The Company currently has one reportable segment, which is its Retail business. The reportable segment is comprised of the Company's Bed Bath & Beyond operating segment and Overstock.com operating segment which primarily sells home goods products to customers. Across each operating segment, the Company offers customers similar products, source from overlapping suppliers, the same customer type, have similar distribution methods, and operate under the same regulatory environment. The Company has determined that each of its operating segments share similar economic characteristics and business activities and are aggregated into a single reportable Retail segment. The Bed Bath & Beyond operating segment includes results from its buybuy BABY brand, which are not material to the business and are not separately reviewed by the Chief Operating Decision Maker. The Retail segment primarily derives revenues from e-commerce sales of home furnishing merchandise through its suite of websites and mobile applications. The accounting policies of the Retail segment are the same as those described in the summary of significant accounting policies. The Chief Operating Decision Maker (CODM), who is the Company's Principal Executive Officer, assesses performance for the Retail segment and decides how to allocate resources based on Operating Income (loss) that also is reported on the Consolidated Statements of Operations. The measure of segment ass …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (""SEC"") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (""GAAP"") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to the Company's significant accounting policies disclosed in Note 2Accounting Policies and Supplemental Disclosures, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, except as disclosed below. The accompanying unaudited consolidated financial statements include the Company's accounts and the accounts of the Company's wholly-owned subsidiaries and other subsidiaries for which the Company exercises control, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the Company's opinion, necessary for a fair presentation of results …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"11. STOCKHOLDERS' EQUITY Common Stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends. JonesTrading Sales Agreement The Company entered into a Capital on Demand TM Sales Agreement (the ""Sales Agreement"") dated June 10, 2024 with JonesTrading Institutional Services LLC (""JonesTrading""), under which the Company has conducted and may in the future conduct ""at the market"" public offerings of its common stock. Under the Sales Agreement, JonesTrading, acting as the Company's sales agent or principal, may offer the Company's common stock in the market on a daily basis or otherwise as the Company requests from time to time. The Company has no obligation to sell shares under the Sales Agreement, but it may do so from time to time. For the three months ended March 31, 2026, the Company did not sell any shares of its common stock pursuant to the Sales Agreement. For the three months ended March 31, 2025 , the Company sold 3,486,895 shares of its common stock pursuant to the Sales Agreement and has recognized $19.5 million in proceeds, net of $0.4 million of offering costs, including commissions paid to JonesTrading. As of March 31, 2026, the Company had $16.0 million remaining available under its ""at the market"" sales program. Warra …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"16. SUBSEQUENT EVENTS Merger Agreement with The Container Store Holdings, LLC On April 2, 2026 (the Effective Date), the Company entered into an Agreement and Plan of Merger (the TCS Merger Agreement) by and among the Company, Falcon Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (TCS Merger Sub) and The Container Store Holdings, LLC, a Delaware limited liability company (TCS), pursuant to which, subject to the terms and conditions set forth therein, TCS Merger Sub will merge with and into TCS (the TCS Merger), with TCS surviving such TCS Merger as a wholly owned subsidiary of the Company (the Surviving Entity). Pursuant to the terms of the TCS Merger Agreement, the aggregate consideration to be delivered at closing is expected to be approximately $150 million (the Purchase Price), subject to certain adjustments and structural considerations as set forth in the TCS Merger Agreement. The consideration will consist of a combination of (i) senior convertible notes of the Company with an aggregate principal amount of at least $54.0 million, subject to adjustment, and (ii) shares of the Companys common stock, subject to certain limitations, including an equity issuance cap. To the extent such equity issuance cap is exceeded, additional consideration will be delivered in the form of senior convertible notes. The TCS merger consideration (as defined in the TCS Merger Agreement) may be paid to TCS equityholders or, under certain circ …

SubsequentEventsTextBlock · excerpt; the full note is in the filing