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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis contains forward-looking statements relating to future events or our future financial or operating performance that involve risks and uncertainties, as set forth above under "Special Cautionary Note Regarding Forward-Looking Statements" or in Item 1A under the heading "Risk Factors" or included elsewhere in this Annual Report on Form 10-K. In addition, our future results may be significantly different from our historical results.

Overview

We are an e-commerce-focused retailer with an affinity model that owns or has ownership interests in various brands, offering a comprehensive array of products and services that enable its customers to enhance everyday life through quality, style, and value. In addition, we also offer an increasing number of add-on services across our platforms, including warranties, shipping insurance, and installation services. Our customer engagement and retention are bolstered by our welcome rewards+ membership program, enhancing the overall value proposition for our customers. We currently own Bed Bath & Beyond, Overstock, and buybuy BABY, among other brands. As used herein, "Bed Bath & Beyond," "the Company," "we," "our" and similar terms include Bed Bath & Beyond, Inc. and its controlled subsidiaries, unless the context indicates otherwise.

Through our Bed Bath & Beyond brand, we provide an extensive array of home-related products tailored specifically for our target customers - consumers who seek comprehensive support throughout their shopping journey, aspiring to discover quality, stylish products at competitive prices that align with their budget requirements. We regularly refresh our product assortment to reflect the evolving preferences of our customers and aim to stay aligned with current trends. The mission of this brand is to achieve category-leading ownership of four distinct rooms of the home: the bedroom, the bathroom, the kitchen, and the patio, and our goal is for our assortment to include not only core legacy categories like bedding and kitchenware, but also adjacent categories like bedroom and outdoor furniture and rugs. Furniture across all rooms continues to play a critical role in our strategy. Leveraging an asset-light supply chain, direct shipping is offered to customers from both our suppliers and third-party logistics providers.

Bed Bath & Beyond's strategic priorities include curating stylish, high-quality assortments to make product selection intuitive and affordable, in addition to enhancing offerings with trusted aspirational brands. We transform the customer experience by building trust, creating life-stage experiences, and consistently delivering inspiration, quality, and value.

Through our Overstock brand, we aim to provide a wide array of quality goods at discounted prices, and a treasure hunt-like experience for our target customers - consumers who are highly engaged, very accustomed to purchasing online, and actively seeking great deals. The mission of this brand is to delight our customers by offering them deals on products they will love. Our product assortment includes home categories such as indoor and outdoor furniture, rugs, décor, and lighting, as well as lifestyle categories such as jewelry and watches, apparel and accessories, and designer shoes and handbags.

The buybuy BABY brand acquisition allows us to reunite two traditionally related brands, Bed Bath & Beyond and buybuy BABY, and support our customers through key life stage shopping moments.

In August 2025, we changed our corporate name from Beyond, Inc. to Bed Bath & Beyond, Inc. and changed our ticker symbol from "BYON" to "BBBY".

Merger Agreement

On November 24, 2025, we entered in an Agreement and Plan of Merger (the "Merger Agreement"), 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”), each share of common stock, no par value, of TBHC (the “TBHC Common Stock”) issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of TBHC Common Stock held directly by the Company or Merger Sub) will be converted

into the right to receive 0.1993 shares (the “Exchange Ratio”) of a fully paid and non-assessable share of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”) and, if applicable, cash in lieu of fractional shares, subject to any applicable withholding.

At the Effective Time, (i) each award of TBHC restricted share units (“TBHC RSU”) that is outstanding as of immediately prior to the Effective Time will automatically fully vest and be converted into the right to receive, without interest and subject to applicable withholding taxes, (A) a number of shares of Company Common Stock equal to the number of shares of TBHC subject to the TBHC RSU multiplied by the Exchange Ratio and (B) if applicable, cash in lieu of fractional shares, and (ii) each option to purchase TBHC Common Stock (“TBHC Option”) that is outstanding as of immediately prior to the Effective Time will be automatically converted into the right to receive, without interest and subject to applicable withholding taxes, (A) a number of shares of Company Common Stock equal to the Net Option Share Amount (as defined in the Merger Agreement) applicable to the TBHC Option multiplied by the Exchange Ratio and (B) if applicable, cash in lieu of fractional shares.

For additional information on the proposed merger, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 25—Subsequent Events.

Executive Commentary

This executive commentary is intended to provide investors with a view of our business through the eyes of our management. As an executive commentary, it necessarily focuses on selected aspects of our business. This executive commentary is intended as a supplement to, but not a substitute for, the more detailed discussion of our business included elsewhere herein. Investors are cautioned to read our entire "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our interim and audited financial statements, and the discussion of our business and risk factors and other information included elsewhere or incorporated in this report. This executive commentary includes forward-looking statements, and investors are cautioned to read "Special Cautionary Note Regarding Forward-Looking Statements."

Our cash and cash equivalents balance increased from $159.2 million as of December 31, 2024 to $175.3 million as of December 31, 2025, an increase of $16.1 million, primarily as the result of $137.3 million in net proceeds from the sales of our common stock pursuant to our "at-the-market" public offering, net of offering costs and $6.3 million in proceeds received from the sale of intangible assets; offset by net cash outflows from operating activities of $56.7 million, cash outflows from investing activities including the disbursement of notes receivable to TBHC of $15.2 million, The Container Store of $6.5 million, and GrainChain of $3.0 million, purchases of intangible assets of $15.4 million, purchases of equity securities in TBHC of $8.0 million, and expenditures for property and equipment of $7.4 million. The increase was further offset by cash outflows from financing activities including payments on short-term debt of $9.5 million and repurchases of our common stock under the stock repurchase program of $6.2 million.

Revenue for the year ended December 31, 2025, was $1,044.6 million, compared to $1,395.0 million for the year ended December 31, 2024, representing a decrease of $350.3 million or 25%. The decrease was primarily due to a 30% decrease in the number of orders delivered, which contributed $439.6 million of the revenue decline, partially offset by an 8% or $14.22 increase in average order value, which resulted in a revenue increase of approximately $89.3 million. The decrease in orders delivered was driven by a decline in website visits influenced in part by a reduction in overall sales and marketing spend as we focus on improving more efficient traffic channels and refine our assortment as well as a shift in consumer spending preferences and macroeconomic factors impacting consumer sentiment and the home furnishings industry. The increase in average order value was largely driven by orders mixing into categories with higher average unit retail price.

Gross profit for the year ended December 31, 2025, was $257.5 million, or 24.7% of revenue, compared to $290.2 million, or 20.8%, for the year ended December 31, 2024. This represents a decrease of $32.6 million or 11%. The decrease was primarily attributable to lower revenue, which reduced gross profit by approximately $79.6 million, partially offset by an improved gross margin that contributed an increase of approximately $47.0 million. Gross margin increased by 390 basis points year-over-year, primarily due to approximately 150 basis points of lower carrier costs, 110 basis points of lower loyalty participation prior to new program launch, 100 basis points of lower return costs, and 10 basis points of favorable merchandise actions.

Sales and marketing expenses were $143.4 million, or 13.7% of revenue for the year ended December 31, 2025, compared to $238.6 million, or 17.1% of revenue, for the year ended December 31, 2024. This represents a decrease of $95.2 million, or 40%. The decrease was primarily driven by decreased performance marketing expenses of $78.4 million and a $12.7 million reduction in brand advertising.

Technology expenses decreased by $24.3 million for the year ended December 31, 2025, compared to the prior period. The decrease was primarily due to a reduction in staff-related expenses of $19.0 million and a $3.2 million reduction in third-party expenses primarily driven by our technology transformation efforts, including the adoption of evolving technological advancements such as artificial intelligence.

General and administrative expenses decreased by $20.8 million for the year ended December 31, 2025, compared to the prior period. The decrease was primarily due to a $15.7 million reduction in staff-related expenses and a $2.8 million reduction in third-party expenses driven by our organizational restructuring and cost savings initiatives.

Customer service and merchant fees decreased by $16.3 million for the year ended December 31, 2025, compared to the prior period. The decrease was primarily driven by a $6.5 million decrease in customer service expenses and a $9.8 million decrease in credit card costs, primarily due to decreased order volume.

Other operating income, net decreased by $1.1 million for the year ended December 31, 2025, compared to the prior period. The decrease was primarily attributable to a $10.3 million gain from the 2024 sale of Wamsutta trademark, a $3.4

million loss from the 2024 sale of our corporate headquarters, and a $5.0 million gain from the sales of Canada and the United Kingdom Bed Bath & Beyond trademarks in 2025.

Key Operating Metrics

We review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial forecasts and make strategic decisions. We believe these operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with U.S. GAAP. You should read the key operating and financial metrics in conjunction with the following discussion of our results of operations and together with out consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Year ended December 31,

LTM net revenue per active customer (2) $ 264 $ 258

Orders per active customer (5) 1.30 1.37

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(1) Active customers represent the total number of unique customers who have made at least one purchase during the prior twelve-month period. This metric captures both the inflow of new customers and the outflow of existing customers who have not made a purchase during the prior twelve-month period. We view active customers as a key indicator of our growth.

(2) Last twelve months (LTM) net revenue per active customer represents total net revenue in a twelve-month period divided by the total number of active customers for the same twelve-month period. We view LTM net revenue per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.

(3) Orders delivered represents the total number of orders delivered in any given period, including orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and in those circumstances, we estimate delivery dates based on historical data. We view orders delivered as a key indicator of our growth.

(4) Average order value is defined as total net revenue in any given period divided by the total number of orders delivered in that period. We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers.

(5) Orders per active customer is defined as orders delivered in a twelve-month period divided by active customers for the same twelve-month period. We view orders per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.

Additional commentary related to macroeconomic trends

We continue to monitor recent macroeconomic trends and geopolitical events, including, without limitation, ongoing global conflicts, trade barriers including tariffs, financial and stock market volatility, higher interest rates, inflation, and their impacts. These events have and may continue to negatively impact consumer confidence and consumer spending, which have and may continue to adversely affect our business and our results of operations. Many of our suppliers source from other countries and may be negatively affected by increased tariffs or other import/export controls by the United States and foreign governments, as well as uncertainty in the market as it responds to global macroeconomic factors. Due to the uncertain and constantly evolving nature and volatility of these trends and events, we cannot currently predict their long-term impact on our operations and financial results. As of December 31, 2025, the challenges arising from these events have not adversely affected our liquidity or capacity to service our debt, nor have these conditions required us to reduce our capital expenditures.

Liquidity and Capital Resources

Overview

We believe that our cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for at least the next twelve months. We continue to monitor, evaluate, and manage our operating plans, forecasts, and liquidity considering the most recent developments driven by macroeconomic conditions, such as supply chain challenges, inflation, higher interest rates, tariffs, bans, or other measures or events that increase the effective price of products, and other geopolitical events. We proactively seek opportunities to improve the efficiency of our operations and have in the past and may in the future take steps to realize internal cost savings, including aligning our staffing needs, creating a more variable cost structure to better support our current and expected future levels of operations and process streamlining.

We periodically evaluate opportunities to repurchase our equity securities, obtain credit facilities, or issue additional debt or equity securities, which may impact our future operations and liquidity. In addition, we may, from time to time, consider the investment in, or acquisition of, complementary businesses, products, services, or technologies to expand our business, any of which might affect our liquidity requirements or cause us to issue additional debt or equity securities that would be dilutive to stockholders.

Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to execute on our business strategy, our ability to realize the benefits of any investment in new business strategies, acquisitions, or other transactions, and consumer sentiment towards our offerings. In the event that additional liquidity is required from outside sources, we may not be able to raise the capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.

Current sources of liquidity

Our principal sources of liquidity are existing cash and cash equivalents, and accounts receivable, net. At December 31, 2025, we had cash and cash equivalents of $175.3 million and accounts receivable, net of allowance for credit losses of $20.8 million.

Cash flow information is as follows (in thousands):

Year ended December 31,

Cash provided by (used in):

On June 10, 2024, we entered into a Capital on DemandTM Sales Agreement (the "Sales Agreement") with JonesTrading Institutional Services LLC ("JonesTrading"), under which we from time to time conduct "at the market" public offerings of our common stock. Under the Sales Agreement, JonesTrading, acting as our agent, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. As of December 31, 2025, we had $16.0 million remaining available under our "at the market" sales program. We have no obligation to sell additional shares under the Sales Agreement, but we may do so from time to time. Under the agreement, we will pay JonesTrading up to a 2% sales commission on all sales. 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 recognized $43.0 million in proceeds, net of $879,000 of offering costs, including commissions paid to JonesTrading.

On March 17, 2025, we entered into an Intellectual Property Asset Purchase Agreement with Lyons Trading Company, the operator of Proozy.com, to sell its rights in the Zulily brand for a total sales price of $5.0 million while retaining a 25% ownership stake in the brand in the form of a newly created entity ("Zulily Newco"). In connection with this transaction, we received $1.25 million upfront and will receive the remaining $3.75 million in quarterly installments commencing on April 30, 2026, over the course of five years.

On September 22, 2025, we declared a distribution (the “Warrant Distribution”) to the holders of record of our common stock, in the form of warrants to purchase shares of common stock (the “Warrants”). The Warrants were issued on the terms and conditions described in the Warrant Agreement (as defined below) and were distributed on October 7, 2025, to the holders of record of our common stock as of the close of business on October 2, 2025 (the “Record Date”). Pursuant to the terms of the Warrant Agreement, dated as of October 7, 2025, between us, Computershare, Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., as Warrant Agent (the “Warrant Agreement”), each holder of record of our common stock as of the Record Date will receive one Warrant for every ten shares of our common stock (rounded down to the nearest whole number for any fractional Warrant). Each Warrant will entitle the holder to purchase, at the holder’s sole and exclusive election commencing on the date the registration statement on Form S-3 (File No. 333-290763), filed with the SEC on October 8, 2025, became effective, at a cash exercise price of $15.50 per Warrant (the “Exercise Price”), one share of our common stock. Payment for shares of our common stock upon exercise of Warrants must be in cash.

On May 7, 2025, we entered into an Amended and Restated Term Loan Credit Agreement (the "Amended and Restated Credit Agreement"), which amended and restated the secured Term Loan Credit Agreement ("Existing Credit Agreement") entered on October 21, 2024 and pursuant to which we provided The Brand House Collective, Inc. (formerly known as Kirkland's Inc.) ("TBHC") with an additional term loan in an approximate aggregate original principal amount of $5.2 million (the "Additional Term Loan") and obligations arising under the Existing Credit Agreement in the aggregate amount of $8.5 million were rolled into the Amended and Restated Credit Agreement as obligations thereunder (collectively, the "Notes"). On September 15, 2025, the Company entered into Amendment No. 1 to the Amended and Restated Credit Agreement (such amendment, the "Credit Agreement Amendment" and the Existing Credit Agreement as amended by the Credit Agreement Amendment, the "Amended Credit Agreement"). Pursuant to the terms of the Amended Credit Agreement, new delayed-draw term loan commitments in an aggregate original principal amount of $20.0 million (the "Delayed Draw Term Loan Commitments") were established. On November 24, 2025, the Company entered into Amendment No. 2 to the Amended and Restated Credit Agreement (the "Second Amendment") pursuant to which the Company agreed to increase the Delayed Draw Term Loan Commitments by $10.0 million, to an aggregate principal amount of $30.0 million. Concurrently with the Second Amendment, and as of December 31, 2025, $10.0 million has been drawn under the Delayed Draw Term Loan Commitments (the "Delayed Draw Note"). The Amended Credit Agreement provides us the right to convert the outstanding loans (including loans extended in satisfaction of the Delayed Draw Term Loan Commitments) owing under the Amended and Restated Credit Agreement into shares of TBHC’s common stock at a price equal to the closing price on the Nasdaq Stock Market LLC ("Nasdaq") on the day prior to the date on which a conversion election is made, up to a number of shares equal to 19.90% of the outstanding shares of TBHC’s common stock on the date the Amended Credit Agreement was entered into, and up to a greater number of shares subject to Nasdaq shareholder approval rules. We are currently restricted from holding greater than 75% of outstanding TBHC’s issued shares for so long as any obligations remain outstanding under TBHC’s credit agreement with its senior lender, Bank of America, N.A. On November 24, 2025, we entered in a Merger Agreement with TBHC pursuant to which, subject to the terms and conditions set forth therein, TBHC will survive the Merger as a wholly owned subsidiary of the Company.

On June 30, 2025, we entered into a Trademark and Domain Name Agreement with a large, well-established Canadian retailer to sell certain intellectual property related to the Bed Bath & Beyond trademarks in Canada and the United Kingdom, which was acquired as part of our purchase of the Bed Bath & Beyond brand in June 2023, for a total sales price of $5.0 million, and revenue share payments to be paid to us in perpetuity.

On November 25, 2025, we purchased, via a participation agreement for par/near par trades, a portion of the loans issued by The Container Store, Inc. pursuant to the Term Loan Credit Agreement, dated as of January 28, 2025, as amended on September 15, 2025 (as amended, the "TCS Credit Agreement"). The aggregate purchase price for our participation in certain loans issued pursuant to the TCS Credit Agreement was $6.5 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.

Future liquidity commitments

On January 9, 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.

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.

Following the completion of the merger, we expect to fund the ongoing operations, capital requirements, and working capital needs of TBHC through existing cash balances, cash flows from operations, and available credit facilities.

Operating activities

Cash received from customers generally corresponds to our net revenue as our customers primarily use credit cards to buy from us, causing our receivables from these sales transactions to settle quickly. Our payment terms with our partners generally extend beyond the amount of time necessary to collect proceeds from our customers.

The $56.7 million of net cash used by operating activities during the year ended December 31, 2025 was primarily due to loss from operating activities of $84.6 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, gain on sale of intangible assets, and loss from equity method securities of $50.9 million and cash used by changes in operating assets and liabilities of $23.0 million.

The $174.3 million of net cash used by operating activities during the year ended December 31, 2024 was primarily due to loss from operating activities of $258.8 million, net of the impact from non-cash items such as depreciation and amortization, non-cash operating lease costs, stock-based compensation, gain on sale of intangible assets, and loss from equity method securities of $115.3 million, offset by cash provided by changes in operating assets and liabilities of $30.8 million.

Investing activities

The $49.2 million of net cash used by investing activities during the year ended December 31, 2025 was primarily due to disbursement for notes receivable to TBHC of $15.2 million, The Container Store of $6.5 million, and GrainChain of $3.0 million, purchases of intangible assets of $15.4 million, purchases of equity securities in TBHC of $8.0 million, and expenditures for property and equipment of $7.4 million, offset by proceeds received from the sale of intangible assets of $6.3 million.

The $24.9 million of net cash provided by investing activities during the year ended December 31, 2024 was primarily due to proceeds from the sale of our corporate headquarters of $51.4 million and proceeds received from the sale of the

Wamsutta trademark of $10.3 million, offset by disbursement for Kirkland's notes receivable of $17.0 million, expenditures for property and equipment of $14.3 million, and purchases of intangible assets of $6.0 million.

Financing activities

The $122.1 million of net cash provided by financing activities during the year ended December 31, 2025 was primarily due to net proceeds from the sales of our common stock pursuant to our "at the market" public offering, net of offering costs of $137.3 million, offset by payments on short-term debt of $9.5 million and repurchases of our common stock under the stock repurchase program of $6.2 million.

The $32.7 million of net cash provided by financing activities during the year ended December 31, 2024 was primarily due to net proceeds from the sales of our common stock pursuant to our "at the market" public offering, net of offering costs of $43.0 million and proceeds from our revolving line of credit of $25.0 million, offset by payments on our long-term debt in conjunction with the sale of our corporate headquarters of $34.8 million and payment of taxes withheld upon vesting of employee stock awards of $3.3 million.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of December 31, 2025 and the effect such obligations and commitments are expected to have on our liquidity and cash flow in future periods (in thousands):

Payments due by period

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(1) Represents the future minimum lease payments under non-cancellable operating leases. For information regarding our operating lease obligations, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 12—Leases contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K.

Tax contingencies

We are involved in various tax matters, the outcomes of which are uncertain. As of December 31, 2025, and 2024, tax contingencies were $3.5 million and $3.7 million, respectively, which are included in our reconciliation of unrecognized tax benefits (see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 22—Income Taxes contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K). Changes in federal, foreign, state, and local tax laws may increase our tax contingencies. The timing of the resolution of income tax contingencies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities. These assessments may or may not result in changes to our contingencies related to positions on prior years' tax filings.

Borrowings

In October 2024, we entered into a Loan and Security Agreement (the "Loan Agreement") with BMO Bank N.A. (in such capacity, "BMO"), pursuant to which BMO agreed to lend us up to $25.0 million on a one-year revolving line of credit to aid us 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. We are 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, we and BMO extended the term of the Loan Agreement and Revolving Note for an additional year, and it will now terminate in October 2026.

Results of Operations

Our Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 25, 2025, includes a discussion and analysis of our year-over-year changes, financial condition, and results of operations for the years ended December 31, 2024 and 2023 in Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Net revenue, costs of goods sold, gross profit and gross margin

The following table summarizes our net revenue, costs of goods sold, gross profit and gross margin for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

Cost of goods sold

Year-over-year percentage change

Net revenue (25.1) %

Gross profit (11.2) %

Percent of net revenue

Cost of goods sold

Product costs and other cost of goods sold 75.3 % 79.2 %

Estimate of unearned product revenue on undelivered product

Our revenue related to merchandise sales is recognized upon delivery to our customers. As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times. We review and update our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ from our estimates, which can be further impacted by uncertainty, volatility, and any disruption to our carriers caused by certain macroeconomic conditions, such as supply chain challenges, inflation, rising interest rates, climate and weather events, or geopolitical events.

The following table shows the effect that hypothetical changes in the estimate of average shipping transit times would have had on the reported amount of revenue and income before taxes (in thousands):

As reported As reported As reported

Gross profit and gross margin

Our overall gross margins fluctuate based on factors such as competitive pricing; discounting; product mix of sales; advertising revenue and our marketing allowance program; and operational and fulfillment costs which include costs incurred to operate and staff our warehouses, including rent and depreciation expense associated with these facilities, costs to receive, inspect, pick, and prepare customer order for delivery, and direct and indirect labor costs including payroll, payroll-related benefits, and stock-based compensation, all of which we include as costs in calculating gross margin.

Gross margins for the past eight quarterly periods and years ending December 31, 2025 and 2024 were:

Operating expenses

Sales and marketing expenses

We use a variety of online advertising channels to attract new and repeat customers, including search engine marketing, personalized emails, mobile app, loyalty program, affiliate marketing, display banners, and social media. We also build our brand awareness through linear and streaming TV advertising.

Costs associated with our discounted shipping and other promotions, such as coupons, are not included in sales and marketing expense. Rather, they are accounted for as a reduction in revenue as they reduce the amount of consideration we expect to receive in exchange for goods or services and therefore affect net revenues and gross margin. We consider these promotions to be an effective marketing tool.

The following table summarizes our sales and marketing expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

Advertising expense included in sales and marketing expenses 136,973 228,083

Year-over-year percentage change

Sales and marketing expenses (39.9) %

Advertising expense included in sales and marketing expenses (39.9) %

Percentage of net revenue

Sales and marketing expenses 13.7 % 17.1 %

Advertising expense included in sales and marketing expenses 13.1 % 16.4 %

Technology expenses

We seek to deploy our capital resources efficiently in technology to support operations including private and public cloud, web services, customer support solutions, and product search, and in technology to enhance the customer experience, including machine learning algorithms, improving our process efficiency, modernizing and expanding our systems, and supporting and expanding our logistics infrastructure, and supporting evolving technological advancements such as artificial intelligence. We expect to continue to incur technology expenses to support these efforts and these expenditures may continue to be material.

The frequency and variety of cyberattacks on our Website, enterprise systems, services, and on third parties we use to support our technology continues to increase. The impact of such attacks, their costs, and the costs we incur to protect ourselves against future attacks, have not been material to date. However, we consider the risk introduced by cyberattacks to be serious and will continue to incur costs related to efforts to protect ourselves against them.

The following table summarizes our technology expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

Year-over-year percentage change

Technology expenses (21.2) %

Technology expenses as a percent of net revenue 8.6 % 8.2 %

General and administrative expenses

The following table summarizes our general and administrative expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

General and administrative expenses $ 53,569 $ 74,399

Year-over-year percentage change

General and administrative expenses (28.0) %

General and administrative expenses as a percent of net revenue 5.1 % 5.3 %

Customer service and merchant fees

Customer service and merchant fees include customer service costs and merchant processing fees associated with customer payments made by credit cards and other payment methods and other variable fees. Customer service and merchant fees as a percent of revenue may vary due to several factors, such as our ability to effectively manage customer service and merchant fees.

The following table summarizes our customer service and merchant fees for the years ended December 31, 2025 and 2024 (in thousands):

Year ended December 31,

Customer service and merchant fees $ 37,324 $ 53,586

Year-over-year percentage change

Customer service and merchant fees (30.3) %

Customer service and merchant fees as a percent of net revenue 3.6 % 3.8 %

Customer service and merchant fees decreased by $16.3 million for the year ended December 31, 2025, compared to the same period in 2024. The decrease was primarily driven by a $6.5 million decrease in customer service expenses and a $9.8 million decrease in credit card costs, primarily due to decreased order volume.

Other operating expense (income), net

The following table summarizes our other operating expense (income), net (in thousands):

Year ended December 31,

Other operating expense (income), net $ (5,790) $ (6,882)

Year-over-year percentage change

Other operating expense (income), net (15.9) %

Other operating income, net decreased by $1.1 million for the year ended December 31, 2025, compared to the same period in 2024. The decrease was primarily attributable to a $10.3 million gain from the 2024 sale of Wamsutta trademark, a $3.4 million loss from the 2024 sale of our corporate headquarters, and a $5.0 million gain from the sales of Canada and the United Kingdom Bed Bath & Beyond trademarks in 2025.

Non-operating income (expense)

Other expense, net

The $53.2 million favorable change in other expense, net for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to a $49.1 million decrease in loss recognized from our equity method securities and a $3.9 million favorable change in fair value on our debt securities carried at fair value.

Income taxes

Our effective tax rate for the years ended December 31, 2025 and 2024 was (0.98)% and (0.27)%, respectively. Our effective tax rate is affected by recurring items such as research tax credits and non-recurring items such as changes in valuation allowances. In addition, relative changes in expenses or losses for which tax benefits are limited or not recognized, fluctuations in our stock price, changes in laws, regulations, and administrative practices can impact our rate. Our effective tax rate is also affected to a lesser extent by tax rates in foreign jurisdictions and the relative amount of income we earn in those jurisdictions, which we expect to be fairly consistent in the near term. Our effective tax rate differs from the statutory federal income tax rate of 21% primarily due to the impacts of the valuation allowance against our deferred tax assets, net of deferred tax liabilities.

As we repatriate foreign earnings for use in the United States, the distributions will generally be exempt from federal and foreign income taxes but may be subject to certain state taxes. As of December 31, 2025, the cumulative amount of foreign earnings considered permanently reinvested upon which taxes have not been provided, and the corresponding unrecognized deferred tax liability, was not material.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see Item 8 of Part II, "Financial Statements and Supplementary Data"—Note 2—Accounting Policies and Supplemental Disclosures. We believe that our estimates, assumptions, and judgments are reasonable. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ significantly from these estimates. We note that we have not identified any critical accounting estimates in the current year. Our critical accounting policies are as follows:

•primary beneficiary determination in investments in unconsolidated entities

Primary beneficiary determination in investments in unconsolidated entities

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. The Company reports investments in unconsolidated entities who we can exercise significant influence, but not control under the equity method of accounting.

We evaluated our equity method investment in The Brand House Collective and determined it met the definition of a Variable Interest Entity ("VIE"); however, it is not consolidated because we are not the primary beneficiary of the VIE as we lack the power to direct the activities that most significantly impact The Brand House Collective's economic performance. Due to the judgment required for determining whether we are the primary beneficiary of the VIE or not, which includes our assessment of our ability and power to direct the activities that most significantly impact The Brand House Collective's economic performance, any changes to our assessment could materially affect the presentation and accounting for our equity method investment in The Brand House Collective on the Company's consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk for the effect of interest rate changes, foreign currency fluctuations, and changes in the market values of our investments. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

Interest Rate Sensitivity

The fair value of our cash and cash equivalents (highly-liquid instruments with an original maturity of 90 days or less at the date of purchase) would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments.

Interest on the revolving line of credit incurred pursuant to the Loan Agreement described herein would accrue based on market rates plus 1.00%, for a one-month interest period; however, we do not expect that any changes in prevailing interest rates will have a material impact on our results of operations.

The Delayed Draw Term Loan Commitments require the Company to originate a loan at a floating interest rate plus an agreed margin upon request from the borrower, so as long as the conditions specified in the Amended Credit Agreement with respect to the origination of such loan are satisfied. The outstanding Delayed Draw Term Loan Commitments expose the Company to the risk that the price of the loans arising from the exercise of the instrument might change from the inception to funding of the loan due to changes in loan interest rate margins; however, we do expect that any changes in prevailing interest rates will have a material impact on our results of operations.

Foreign Currency Risk

Most of our sales and operating expenses are denominated in U.S. dollars, and therefore, our total revenue and operating expenses are not currently subject to significant foreign currency risk.

Inflation

Increases in commodity and shipping prices and energy and labor costs have resulted in inflationary pressures across various parts of our business and operations, including our partners and supply chain. We continue to monitor the impact of inflation in order to minimize its effects on our customers. We work with our partners to limit the amount of cost increases that are passed on through higher pricing. If costs borne by ourselves or our partners were to be subject to incremental inflationary pressures, we may not be able to fully offset such higher costs through pricing actions or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations.

Investment Risk

The fair values of our equity and debt securities may be subject to fluctuations due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions. At December 31, 2025, our recorded value in equity securities of private and public companies was $66.6 million, compared to $78.2 million at December 31, 2024, of which $9.8 million relates to publicly-traded companies, compared to $0.0 million at December 31, 2024, recorded at fair value, which are subject to market price volatility. At December 31, 2025, $24.0 million of our debt securities are recorded at fair value using Level 2 inputs, which are subject to credit risk and $17.1 million of our equity securities and $18.4 million of our debt securities are recorded at fair value using Level 3 inputs. Our fair value assessment of private companies includes a review of recent operating results and trends, recent sales/acquisitions of the equity securities, and other publicly available data. Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, we believe that market sensitivities are not practicable. For our equity interest in Medici Ventures, L.P., we record our proportionate share of the entity's reported net income or loss, which reflects the fair value changes of the underlying investments of the entity and any other income or losses of the entity.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm 57

Consolidated Balance Sheets 59

Consolidated Statements of Operations 60

Consolidated Statements of Comprehensive Loss 61

Consolidated Statements of Changes in Stockholders' Equity 62

Consolidated Statements of Cash Flows 64

Notes to Consolidated Financial Statements 66

Schedule II Valuation and Qualifying Accounts 99

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Bed Bath & Beyond, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Bed Bath & Beyond, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Primary beneficiary determination for The Brand House Collective investment

As discussed in Notes 2 and 8 to the consolidated financial statements, certain of the Company's equity method investments meet the definition of Variable Interest Entities (VIEs); however, they are not consolidated because the Company lacks the power to direct the activities that most significantly impact their economic performance. During the year ended December 31, 2025, the Company funded an investment and convertible promissory note in The Brand House Collective in exchange for The Brand House Collective's common stock. As of December 31, 2025, the Company held a 40% share of The Brand House Collective. The carrying amount of the Company's equity method securities was $66.6 million at December 31, 2025, of which the aggregate fair value of the equity securities in The Brand House Collective was $9.8 million.

We identified the assessment of whether The Brand House Collective should be consolidated into the Company’s financial statements as a critical audit matter. Evaluating the Company’s determination of the primary beneficiary of the VIE involved challenging auditor judgement and specialized skills and knowledge to assess whether the Company has the power to direct the activities that most significantly impact The Brand House Collective’s economic performance.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s consolidation analysis for The Brand House Collective, including controls over the analysis of the Company’s consolidation considerations and the conclusion on whether the Company is the primary beneficiary. We assessed whether the Company is the primary beneficiary of The Brand House Collective by inspecting relevant legal documents related to The Brand House Collective to understand and evaluate the decision-making rights of each party involved to assess which party has the power to direct the activities that most significantly impact the economic performance of The Brand House Collective. We involved professionals with specialized skills and knowledge to assist with our assessment of the Company’s accounting analysis.

/s/ KPMG LLP

We have served as the Company's auditor since 2009.

Salt Lake City, Utah

February 24, 2026

Bed Bath & Beyond, Inc.

Consolidated Balance Sheets

(in thousands, except per share data)

Assets

Current assets:

Operating lease right-of-use assets 5,156 6,858

Liabilities and Stockholders' Equity

Current liabilities:

Operating lease liabilities, current 928 1,342

Operating lease liabilities, non-current 5,643 6,452

Commitments and Contingencies (Note 14)

Stockholders' equity:

Common stock, $0.0001 par value, authorized shares - 100,000

Accumulated other comprehensive loss (2,574) —

Equity attributable to stockholders of Bed Bath & Beyond, Inc. 217,583 162,732

Equity attributable to noncontrolling interests 361 —

Total liabilities and stockholders' equity $ 425,478 $ 401,954

See accompanying notes to consolidated financial statements.

Bed Bath & Beyond, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

Year Ended December 31,

Operating expenses:

Net loss per share of common stock:

Weighted average shares of common stock outstanding:

See accompanying notes to consolidated financial statements.

Bed Bath & Beyond, Inc.

Consolidated Statements of Comprehensive Loss

(in thousands)

Year Ended December 31,

Other comprehensive income (loss):

Unrealized gain on cash flow hedges, net of tax of $0, $0 and $0 — 506 16

Other comprehensive income (loss): (2,574) 506 16

See accompanying notes to consolidated financial statements.

Year Ended December 31,

Equity attributable to stockholders of Bed Bath & Beyond, Inc.

Shares of common stock issued

Common stock issued upon vesting of restricted stock 366 441 550

Common stock issued for ESPP purchases 138 119 118

Common stock sold through offerings 16,294 7,002 —

Shares of treasury stock

Repurchases of common stock 903 — —

Tax withholding upon vesting of employee stock awards 101 135 205

Common stock

Balance at beginning of year $ 5 $ 5 $ 5

Common stock sold through offerings 3 — —

Balance at end of year $ 8 $ 5 $ 5

Additional paid-in capital

Common stock sold through offerings, net 137,309 42,993 —

Issuance of warrant dividends 17,624 — —

Accumulated deficit

Issuance of warrant dividends (17,624) — —

Accumulated other comprehensive loss

Balance at beginning of year $ — $ (506) $ (522)

Net other comprehensive income (loss) (2,574) 506 16

Balance at end of year $ (2,574) $ — $ (506)

Treasury stock

Repurchases of common stock (6,218) — —

Tax withholding upon vesting of employee stock awards (584) (3,331) (3,799)

Continued on the following page

Year Ended December 31,

Equity attributable to noncontrolling interests

Balance at beginning of year $ — $ — $ —

Proceeds from security token offering, net 361 — —

Total equity attributable to noncontrolling interests $ 361 $ — $ —

See accompanying notes to consolidated financial statements.

Bed Bath & Beyond, Inc.Consolidated Statements of Cash Flows(in thousands)

Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Gain on sale of intangible assets (5,790) (10,275) —

Gain on disposal of cryptocurrencies — — (6,361)

Write-down of assets held for sale — 3,385 25,875

(Gain) loss on debt securities carried at fair value (1,439) 2,430 —

Other non-cash adjustments 178 (14) (693)

Changes in operating assets and liabilities:

Cash flows from investing activities:

Purchase of equity securities (8,000) — —

Proceeds from the sale of intangible assets 6,250 10,275 —

Proceeds from the sale of assets held for sale — 51,441 —

Proceeds from the disposal of cryptocurrencies — — 9,804

Other investing activities, net 29 569 563

Net cash provided by (used in) investing activities (49,227) 24,926 (44,630)

Continued on the following page

Bed Bath & Beyond, Inc.Consolidated Statements of Cash Flows(in thousands)

Year Ended December 31,

Cash flows from financing activities:

Proceeds from sale of common stock, net of offering costs 137,312 42,993 —

Payments on short-term debt (9,500) — —

Repurchase of shares (6,218) — —

Proceeds from short-term debt — 25,000 —

See accompanying notes to consolidated financial statements.

Bed Bath & Beyond, Inc.

Notes to Consolidated Financial Statements

1. BASIS OF PRESENTATION

Business and organization

As used herein, "Bed Bath & Beyond," "the Company," "we," "our" and similar terms include Bed Bath & Beyond, Inc. and its controlled subsidiaries, unless the context indicates otherwise. The Company was formed on May 5, 1997 as D2-Discounts Direct, a limited liability company ("LLC"). On December 30, 1998, the Company reorganized as a C Corporation in the State of Utah and reincorporated in Delaware in May 2002. On October 25, 1999, the Company changed its name to Overstock.com, Inc. and on November 6, 2023, the Company changed its name to Beyond, Inc. On August 18, 2025, the Company changed its name to Bed Bath & Beyond, Inc.

Bed Bath & Beyond, Inc., is an e-commerce-focused retailer with an affinity model that owns or has ownership interests in various brands, offering a comprehensive array of products and services that enable its customers to enhance everyday life through quality, style, and value. We currently own Bed Bath & Beyond, Overstock, and buybuy BABY, among other brands. We strive to curate an exceptional online shopping experience. Our suite of premier online retail brands allow us to offer a comprehensive array of products and add-on services, catering to customers in the United States. Our e-commerce platform, which is also accessible through our mobile apps, includes www.bedbathandbeyond.com and www.overstock.com, and is collectively referred to as the "Website." The Website is targeted at customers seeking a diverse array of top-tier, on-trend products at competitive prices. From furniture, bedding, and bath essentials to patio and outdoor furniture, area rugs, tabletop and cookware, décor, storage, jewelry, watches, and fashion – we offer an extensive range of products at a smart value. In addition to products, we also offer an increasing number of add-on services across our platforms, including warranties, shipping insurance, and installation services.

Basis of presentation

We have prepared the accompanying consolidated financial statements pursuant to generally accepted accounting principles in the United States ("GAAP"). Preparing financial statements requires us to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our actual results may be different from our estimates. The results of operations presented herein are not necessarily indicative of our results for any future period.

2. ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES

Principles of 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 consolidated statements of operations related to the classification of gains on the sale of intangible assets and write-downs of assets held for sale erroneously being included in Other expense, net instead of in operating expenses. The Company assessed the materiality of changes to prior period consolidated financial statements to address these errors in accordance with SEC Staff Accounting Bulletin No. 99, "Materiality", (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its consolidated statements of operations were not material to any previously presented consolidated financial statements. The corrections had no material impact on the consolidated balance sheets, consolidated statements of comprehensive loss, consolidated statements of changes in stockholders' equity, or consolidated statements of cash flows, for any previously presented interim or annual consolidated financial statements.

The financial reporting periods affected by these errors include the Company's previously reported audited consolidated financial statements for the fiscal years ended December 31, 2024 and 2023.

The following table presents the revisions to the consolidated statements of operations for the years ended December 31, 2024 and 2023 (in thousands):

Operating expenses:

Supplemental cash flow information

The following table shows supplemental cash flow information (in thousands):

Year Ended December 31,

Supplemental disclosures of cash flow information:

Cash paid during the period:

Interest paid, net of amounts capitalized $ 1,098 $ 1,489 $ 1,598

Income taxes (refunded) paid, net (382) (132) 556

Non-cash investing and financing activities:

Notes receivable converted to equity securities 7,510 — —

See also Note 12—Leases for additional supplemental disclosures of cash flow information related to our leases.

Cash equivalents

We classify all highly liquid instruments, including instruments with an original maturity of three months or less at the time of purchase, as cash equivalents.

Restricted cash

We consider cash that is legally restricted and cash that is held as compensating balances for credit arrangements as restricted cash.

Fair value of financial instruments

We account for our assets and liabilities using a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the fair-value hierarchy below. This hierarchy requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value.

•Level 1—Quoted prices for identical instruments in active markets;

•Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

•Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Our assets that are adjusted to fair value on a recurring basis are cash equivalents and certain equity securities, which fair values are determined using quoted market prices from daily exchange traded markets on the closing price as of the balance sheet date and are classified as Level 1. Our recurring fair value measurements using observable inputs (Level 2) include our debt securities carried at fair value. Our recurring fair value measurements using unobservable inputs (Level 3) include our equity securities under ASC 323 accounted for under the fair value option, available-for-sale debt securities, and our loan commitments. Our other financial instruments, including cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, and debt are carried at cost, which approximates their fair value. Certain assets, including long-lived assets, certain equity securities under ASC 323, goodwill, and other intangible assets, are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments using fair value measurements with unobservable inputs (Level 3).

Accounts receivable, net

Accounts receivable consist primarily of trade amounts due from customers in the United States and uncleared credit card transactions at period end. Accounts receivables are recorded at invoiced amounts and do not bear interest.We maintain an allowance for expected credit losses based upon our business customers' financial condition and payment history, our historical collection experience, and any future expected economic conditions.

Inventories

Inventories include merchandise acquired for resale and processed returns which are accounted for using a standard costing system which approximates the first-in-first-out ("FIFO") method of accounting and are valued at the lower of cost and net realizable value. Inventory valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, liquidations, and expected recoverable values of each disposition category.

Prepaids and other current assets

Prepaids and other current assets represent expenses paid prior to receipt of the related goods or services, including advertising, license fees, maintenance, packaging, insurance, prepaid inventories, other miscellaneous costs, and cryptocurrencies.

Property and equipment, net

Property and equipment are recorded at cost and stated net of depreciation and amortization. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets as follows:

Life(years)

Furniture and equipment 5-7

Computer hardware 3-4

Computer software, including internal-use software and website development 2-4

Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives.

Included in property and equipment is the capitalized cost of internal-use software and website development, including software used to upgrade and enhance our Website and processes supporting our business. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Costs incurred related to design or maintenance of internal-use software are expensed as incurred.

Upon sale or retirement of assets, cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in our consolidated statements of operations.

Equity securities accounted for under the equity method under ASC 323

At December 31, 2025, we held minority interests in privately held and public entities, Medici Ventures, L.P., tZERO, The Brand House Collective, Inc. (formerly known as Kirkland's Inc.) ("TBHC"), and a newly created entity ("Zulily Newco") upon the sale of the rights in the Zulily brand, accounted for under the equity method under ASC Topic 323, Investments—Equity Method and Joint Ventures ("ASC 323"), which are included in Equity securities in our consolidated balance sheets. We can exercise significant influence, but not control, over these entities through holding more than a 20% voting interest.

We measure our minority interests in TBHC at fair value (based on Level 1 inputs) with changes in fair value recorded in Other expense, net in our consolidated statements of operations. The aggregate fair value of our investment in TBHC was $9.8 million as of December 31, 2025.

Based on the nature of our ownership interests and the extent of our contributed capital, we held a variable interest in Medici Ventures, L.P. and TBHC, both of which meet the definition of variable interest entities; however, we are not the primary beneficiary of these entities for purposes of consolidation as we do not have the power (either explicit or implicit), through voting rights or otherwise, to direct the activities of Medici Ventures, L.P. or TBHC that most significantly impact their economic performance. Our investments in these variable interest entities totaled $49.6 million as of December 31, 2025, representing our maximum exposures to loss.

We record our proportionate share of Medici Ventures, L.P.'s net assets assuming the entity (i) liquidated its net assets at their book values and (ii) distributed the proceeds to the investors based on the distribution waterfall in the investment agreement, which reflects the fair value changes of the underlying investments of the entity, any investor-level adjustments, and any other operating income or losses of the entity, in Other expense, net in our consolidated statements of operations with corresponding adjustments to the carrying value of the asset. If such events or circumstances have occurred that may indicate the fair value of our equity interest is less than its carrying value, we estimate the fair value of our equity interest and recognize an impairment loss equal to the difference between the fair value of the security and its carrying value which is recorded in Other expense, net in our consolidated statements of operations. There is no difference between the carrying amount of our investment in the entity and the amount of underlying equity we have in the entity's net assets.

We have elected to apply the fair value option for valuing our direct minority interests in tZERO as we determined that accounting for our direct minority interests in tZERO under the fair value option would approximate the same valuation approach used by Medici Ventures, L.P. for valuing our indirect interest in tZERO and would be the most meaningful and transparent option for evaluating our continued exposure to the economics of tZERO. We have also elected to apply the fair value option for valuing our interest in Zulily NewCo. The fair value was determined in good faith under our valuation policy and process using generally accepted valuation approaches through the use of a third-party valuation firm. Our assessment includes a review of recent operating results and trends, recent sales/acquisitions of the equity securities, and other publicly available data.

The methods and significant assumptions to estimate the fair value of our direct minority interests in tZERO under the fair value option include using a market approach. The market approach relied upon market transaction valuations of the subject company, adjusted for changes in enterprise value for guideline public companies. Due to the length of time between the last Series B financing round led by the Intercontinental Exchange, the valuation technique used to value our direct interest in tZERO changed to a blended market approach using a transaction backsolve adjusted for enterprise value changes in guideline public companies, with an option pricing model and a book value of equity method in the current year, compared to a blended market approach using a transaction backsolve adjusted for enterprise value changes in guideline public companies, with an option pricing model and a guideline public company method valuation technique in the prior year. The methods and significant assumptions to estimate the fair value of our minority interest in Zulily Newco under the fair value option include using a market approach based on latest market transaction valuations.

The following table summarizes the valuation techniques and significant unobservable inputs used in the fair value measurement of our Level 3 equity securities:

Investment Fair Value Valuation Technique Unobservable Inputs Inputs

Percentage change in enterprise value for guideline public companies (53.4)%

Zulily Newco 1,572 Market approach - latest transactions N/A N/A

A significant change in the term to liquidity, volatility, or percentage change in enterprise value for guideline public companies inputs could result in a significant change in the fair value measurement.

Leases

We determine if an arrangement is a lease at inception. We account for lease agreements as either operating or finance leases depending on certain defined criteria. Operating leases are recognized in Operating lease right-of-use ("ROU") assets, Operating lease liabilities, current, and Operating lease liabilities, non-current on our consolidated balance sheets. Finance leases are included in Other long-term assets, net, Other current liabilities, and Other long-term liabilities on our consolidated balance sheets. Lease assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. In certain of our lease agreements, we receive rent holidays and other incentives. We recognize lease costs on a straight-line basis over the lease term without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Our lease terms may include options to extend or terminate the lease, and we adjust our measurement of the lease when it is reasonably certain that we will exercise that option. Lease payments used in measurement of the lease liability typically do not include executory costs, such as taxes, insurance, and maintenance, unless those costs can be reasonably estimated at lease commencement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. We do not separate lease and non-lease components for our leases.

Treasury stock

We account for treasury stock of our common shares under the cost method and include treasury stock as a component of stockholders' equity.

Goodwill

Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually or when we deem that a triggering event has occurred. When evaluating whether goodwill is impaired, we make a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that it is more likely than not that its fair value is less than its carrying amount, we compare the fair value of the reporting unit to which the goodwill is assigned to its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount over the fair value of the reporting unit, not to exceed the carrying amount of the goodwill. We completed our annual goodwill impairment test as of December 31, 2025 by performing a quantitative assessment and concluded that the estimated fair value of the reporting units exceeded their carrying amount. There were no impairments to goodwill recorded during the years ended December 31, 2025, 2024 and 2023 and no other changes to the carrying amount of goodwill during the years ended December 31, 2025 and 2024. Our goodwill balance was $6.2 million as of December 31, 2025 and 2024.

Intangible assets other than goodwill

We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third parties are capitalized at cost, including any related direct acquisition costs, while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite-lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired customer lists) which are amortized using an accelerated method of amortization based on estimated customer attrition rates. These definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable as described below under Impairment of long-lived assets.

Impairment of long-lived assets

We review property and equipment, right-of-use assets, and other long-lived assets, including intangible assets other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability is measured by a comparison of the assets' carrying amount to future undiscounted net cash flows the asset group is expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair values. There were no impairments to long-lived assets recorded during the years ended December 31, 2025, 2024 and 2023.

Available-for-sale debt securities

We record our available-for-sale debt securities at fair value, with unrealized gains and losses recorded to other comprehensive loss in the consolidated statements of comprehensive loss. For available-for-sale debt securities in an unrealized loss position, we determine whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and economic conditions. Credit losses, if any, are recorded as an allowance through Other expense, net in the consolidated statements of operations.

At December 31, 2025, we have invested $13.0 million in GrainChain, Inc. in the form of convertible promissory notes (the "Notes"). The Notes bear interest at an annual interest rate of 5% and accrued interest is recorded in Interest income, net in our consolidated statements of operations. The Notes have a maturity date of January 3, 2025 at which time the outstanding principal and any unpaid accrued interest will automatically convert into shares of a newly created series of preferred stock issued by GrainChain, Inc. The Notes have not converted and the Company is negotiating an extension of the Notes. The Notes are in an unrealized loss position as of December 31, 2025. The fair value of the Notes, including accrued interest, was $12.0 million and $11.0 million at December 31, 2025 and 2024, respectively, which is included in Other long-term assets, net on our consolidated balance sheets. The aggregate unrealized losses on our Notes was $2.6 million and were due to a recent decrease in profitability and not credit-related events as we expect we will recover our amortized cost basis upon

conversion of the Notes. Accordingly, no allowance for credit losses was recorded on available-for sale debt securities in an unrealized loss position at December 31, 2025 and 2024.

Based on the nature of our indirect ownership interests in GrainChain, Inc. through Medici Ventures, L.P. and the extent of our contributed capital, we held a variable interest in GrainChain, Inc., which meets the definition of a variable interest entity; however, we are not the primary beneficiary of this entity for purposes of consolidation as we do not have the power (either explicit or implicit), through voting rights or otherwise, to direct the activities of GrainChain, Inc. that most significantly impact its economic performance. Our maximum exposure to loss in this variable interest entity totaled $24.4 million as of December 31, 2025, representing our direct and indirect interest in GrainChain, Inc.

In November 2025, the Company purchased, via a participation agreement for par/near par trades, a portion of the loans issued by The Container Store, Inc. pursuant to the Term Loan Credit Agreement, dated as of January 28, 2025, as amended on September 15, 2025 (as amended, the "TCS Credit Agreement"). The aggregate purchase price for the Company's participation in certain loans issued pursuant to the TCS Credit Agreement was $6.5 million. As a result of these transactions, the Company will participate in the rights to the payment of interest and repayment of the loans and any exercise of rights or remedies related thereto. The fair value of the portion of the loans purchased was $6.5 million at December 31, 2025, which is included in Other long-term assets, net on our consolidated balance sheets.

The following table summarizes the valuation techniques and significant unobservable inputs used in the fair value measurement of our Level 3 available-for-sale securities:

Investment Fair Value Valuation Technique Unobservable Inputs Inputs

Volatility 50%

Percentage change in enterprise value for guideline public companies (12.2)%

The Container Store, Inc. 6,462 Market approach - latest transactions N/A N/A

Debt securities carried at fair value

On May 7, 2025, the Company entered into an Amended and Restated Term Loan Credit Agreement (the "Amended and Restated Credit Agreement"), which amended and restated the secured Term Loan Credit Agreement ("Existing Credit Agreement") entered on October 21, 2024 and pursuant to which the Company provided The Brand House Collective, Inc. (formerly known as Kirkland's Inc.) ("The Brand House Collective") with an additional term loan in an approximate aggregate original principal amount of $5.2 million (the "Additional Term Loan") and obligations arising under the Existing Credit Agreement in the aggregate amount of $8.5 million were rolled into the Amended and Restated Credit Agreement as obligations thereunder (collectively, the "Notes"). On September 15, 2025, the Company entered into Amendment No. 1 to the Amended and Restated Credit Agreement (such amendment, the "Credit Agreement Amendment" and the Existing Credit Agreement as amended by the Credit Agreement Amendment, the "Amended Credit Agreement"). Pursuant to the terms of the Amended Credit Agreement, new delayed-draw term loan commitments in an aggregate original principal amount of $20.0 million (the "Delayed Draw Term Loan Commitments") were established. On November 24, 2025, the Company entered into Amendment No. 2 to the Amended and Restated Credit Agreement (the "Second Amendment") pursuant to which the Company agreed to increase the Delayed Draw Term Loan Commitments by $10.0 million, to an aggregated principal amount of $30.0 million. Concurrently with the Second Amendment, and as of December 31, 2025, $10.0 million has been drawn under the Delayed Draw Term Loan Commitments (the "Delayed Draw Note"). The Amended Credit Agreement provides the Company the right to convert the outstanding loans (including loans extended in satisfaction of the Delayed Draw Term Loan Commitments) owing under the Amended and Restated Credit Agreement into shares of The Brand House Collective's common stock at a price equal to the closing price on the Nasdaq Stock Market LLC ("Nasdaq") on the day prior to the date on which a conversion election is made, up to a number of shares equal to 19.90% of the outstanding shares of The Brand House Collective's common stock on the date the Amended Credit Agreement was entered into, and up to a greater number of shares subject to Nasdaq shareholder approval rules. Bed Bath & Beyond is restricted from holding greater than 75% of outstanding The Brand House Collective's issued shares for so long as any obligations remain outstanding under The Brand House Collective's credit agreement with its senior lender, Bank of America, N.A. On November 24, 2025, we entered in a Merger Agreement with TBHC pursuant to which, subject to the terms and conditions set forth therein, TBHC will survive the Merger as a wholly owned subsidiary of the Company.

We have elected to present the Notes and Delayed Draw Note at fair value, which totaled $24.0 million and $14.8 million at December 31, 2025 and 2024, respectively. The balance of the Notes is included in Other long-term assets, net on our consolidated balance sheets.

The following table summarizes the valuation techniques and significant inputs used in the fair value measurement of our Level 2 debt securities carried at fair value:

Investment Fair Value Valuation Technique Observable Inputs

Other long-term assets, net

Other long-term assets, net consist primarily of long-term prepaid expenses, deposits, long-term receivables, available-for-sale debt securities, and debt securities carried at fair value.

Noncontrolling interests

In April 2025, the Company's controlled subsidiary, Commercial Strategies, Inc. ("Commercial Strategies"), launched a crowdfunding offering (the "token offering") of the right to acquire a tokenized digital security linked to Overstock intellectual property and eligible for future dividends, if any, from the licensing revenue that Commercial Strategies earns from the Overstock intellectual property. The token offering closed on May 16, 2025, and Commercial Strategies issued the tokenized digital security in the form of Series A Preferred Stock. The holders of the preferred shares will be entitled to receive, out of funds and assets legally available for such purpose, an annual dividend that is derived from the royalty fee paid by Bed Bath & Beyond, Inc. to Commercial Strategies for licensing of the Overstock intellectual property. The holders of the preferred stock have no voting rights. At December 31, 2025, cumulative proceeds from the token offering totaled $467,000, have been classified as a component of noncontrolling interest within the consolidated financial statements. As of December 31, 2025,

Commercial Strategies has incurred $305,000 of offering costs associated with the token offering that are classified as a reduction in proceeds within noncontrolling interest within the consolidated financial statements.

In May 2025, the Company's controlled subsidiary, Zion Peaks, Inc. ("Zion Peaks"), launched a crowdfunding offering (the "token offering") of the right to acquire a tokenized digital security linked to buybuy BABY intellectual property and eligible for future dividends, if any, from the licensing revenue that Zion Peaks earns from the buybuy BABY intellectual property. The token offering closed on August 11, 2025, and Zion Peaks issued the tokenized digital security in the form of Series A Preferred Stock. The holders of the preferred shares will be entitled to receive, out of funds and assets legally available for such purpose, an annual dividend that is derived from the royalty fee paid by Bed Bath & Beyond, Inc. to Zion Peaks for licensing of the buybuy BABY intellectual property. The holders of the preferred stock have no voting rights. At December 31, 2025, cumulative proceeds from the token offering totaled $396,000, have been classified as a component of noncontrolling interest within the consolidated financial statements. As of December 31, 2025, Zion Peaks has incurred $197,000 of offering costs associated with the token offering that are classified as a reduction in proceeds within noncontrolling interest within the consolidated financial statements.

Revenue recognition

Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. Revenue excludes taxes that have been assessed by governmental authorities and that are directly imposed on revenue-producing transactions between the Company and its customers, including sales and use taxes. Revenue recognition is evaluated through the following five-step process:

1) identification of the contract with a customer;

2) identification of the performance obligations in the contract;

3) determination of the transaction price;

4) allocation of the transaction price to the performance obligations in the contract; and

5) recognition of revenue when or as a performance obligation is satisfied.

Product Revenue

We derive our revenue primarily through our Website but may also derive revenue from sales of merchandise through other channels. Our revenue is derived primarily from merchandise sold at a point in time and shipped to customers. Merchandise sales are fulfilled with inventory sourced through our partners or from our owned inventory. The vast majority of our sales, however, are fulfilled from inventory sourced through our partners.

Revenue is recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer or the date a service is provided and is recognized in an amount that reflects the expected consideration to be received in exchange for such goods or services. As such, customer orders are recorded as unearned revenue prior to delivery of products or services ordered. As we ship high volumes of packages through multiple carriers, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times, which are calculated using the following factors: (i) the type of shipping carrier (as carriers have different in-transit times); (ii) the fulfillment source (either our warehouses, those warehouses we control, or those of our partners); (iii) the delivery destination; and (iv) actual transit time experience, which shows that delivery date is typically one to eight business days from the date of shipment. We review and update our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ from our estimates.

Generally, we require authorization from credit card or other payment vendors whose services we offer to our customers (such as PayPal, Apple Pay, Klarna), or verification of receipt of payment, before we ship products to consumers or business purchasers. We generally receive payments from our customers before our payments to our suppliers are due. We do not recognize assets associated with costs to obtain or fulfill a contract with a customer.

Shipping and handling is considered a fulfillment activity, as it takes place prior to the customer obtaining control of the merchandise, and fees charged to customers are included in net revenue upon completion of our performance obligation. We present revenue net of sales taxes, discounts, and expected refunds.

Our merchandise sales contracts include terms that could cause variability in the transaction price for items such as discounts, credits, or sales returns. Accordingly, the transaction price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. At the time of sale, we estimate a sales return liability for the variable consideration based on historical experience, which is recorded within Accrued liabilities in the consolidated balance sheet. We record an allowance for returns based on current period revenues and historical returns experience. We analyze actual historical returns, current economic trends and changes in order volume and acceptance of our products when evaluating the adequacy of the sales returns allowance in any accounting period.

We evaluate the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations, in determining whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned as commissions. When we are the principal in a transaction and control the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. Through contractual terms with our partners, we have the ability to control the promised goods or services and as a result record the majority of our revenue on a gross basis.

Loyalty program

We have a customer membership program called welcome rewards+ for which we sell annual memberships. For welcome rewards+ memberships, we record membership fees as unearned revenue and we recognize revenue ratably over the membership period.

Members earn points which have a reward dollar equivalent for qualifying purchases made on our Bed Bath & Beyond website. As such, the initial transaction price giving rise to the reward dollar is allocated to each separate performance obligation based upon its relative standalone selling price. In determining the stand-alone selling price, we incorporate assumptions about the redemption rates of loyalty points. We recognize revenue for loyalty program reward dollars when customers redeem such rewards as part of a purchase on our Bed Bath & Beyond website.

We record the standalone value of reward dollars earned in unearned revenue at the time the reward dollars are earned. Loyalty program reward dollars expire 30 days after the customer's membership expires. We recognize estimated reward dollar breakage, to which we expect to be entitled, over the expected redemption period in proportion to actual redemptions by customers.

Advertising Revenue

Advertising revenues are derived primarily from sponsored links and display advertisements that are placed on our Website, distributed via email, or sent out as direct mailers. Advertising revenue is recognized in revenue when the advertising services are rendered. Advertising revenues were less than 3% of total net revenues for all periods presented.

Unearned Revenue

When the timing of our provision of goods or services is different from the timing of the payments made by our customers, we recognize a contract liability (customer payment precedes performance).

Customer orders are recorded as unearned revenue when payment is received prior to delivery of products or services ordered. We record amounts received for welcome rewards+ membership fees as unearned revenue and we recognize it ratably over the membership period. We record loyalty program reward dollars earned from purchases as unearned revenue at the time they are earned based upon the relative standalone selling price of the loyalty program reward dollar and we recognize it as revenue in proportion to the estimated pattern of rights exercised by the customer. If reward dollars are not redeemed, we recognize revenue upon expiration. In addition, we sell gift cards and record related unearned revenue at the time of the sale. We sell gift cards without expiration dates and we recognize revenue from a gift card upon redemption of the gift card. The unredeemed portion of our gift cards are recognized in revenue over the expected redemption period based upon the estimated pattern of rights exercised by the customer, if the gift cards are not subject to escheat laws.

Sales returns allowance

Revenue is recorded net of estimated returns. We record an allowance for returns based on current period revenues and historical returns experience. We analyze actual historical returns, current economic trends and changes in order volume and acceptance of our products when evaluating the adequacy of the sales returns allowance in any accounting period.

Cost of goods sold

Our cost of goods sold includes product costs, warehousing costs, outbound shipping costs, and handling and fulfillment costs, and is recorded in the same period in which related revenues have been recorded.

Advertising expense

We expense the costs of producing advertisements the first time the advertising takes place and expense the cost of communicating advertising in the period during which the advertising space or airtime is used. Internet advertising expenses are recognized as incurred based on the terms of the individual agreements, which are generally: 1) a commission for traffic driven to our Website that generates a sale or 2) a referral fee based on the number of clicks on keywords or links to our Website generated during a given period. Advertising expense is included in Sales and marketing expenses in our consolidated statements of operations. Prepaid advertising is included in Prepaids and other current assets in our consolidated balance sheets.

Stock-based compensation

We measure compensation expense for our outstanding unvested restricted stock awards at fair value on the date of grant and recognize compensation expense over the service period for awards at the greater of a straight-line basis or on an accelerated schedule when vesting of the share-based awards exceeds a straight-line basis. 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. See Note 17—Stock-Based Awards.

We use the Black-Scholes option pricing model to determine the fair value of our employee stock purchase plan shares. The determination of the fair value of stock-based payment awards on the date of grant using an option pricing model is affected by our stock price and assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and any expected dividends.

We use the Monte-Carlo valuation model to determine the fair value of the portion of our performance shares and share options with market conditions. The determination of the fair value of stock-based payment awards on the date of grant using the Monte-Carlo valuation model is affected by our stock price and assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility, a risk-free interest rate, the probability of reaching the stock price performance targets, and a 20-trading-day average stock price. The portion of our performance shares with performance conditions are measured at fair value on the date of grant and the probability of the awards meeting the performance condition is not included in the grant date fair value, but is assessed quarterly for expense recognition. Compensation expense for these awards are recognized using a graded vesting schedule over the requisite service period. To the extent that a market-based vesting award is forfeited following completion of the requisite service period, compensation expense for accounting purposes is not reversed.

Loss contingencies

In the normal course of business, we are involved in legal proceedings and other potential loss contingencies. We accrue a liability for such matters when it is probable that a loss has been incurred and the amount, or range of amounts, can be reasonably estimated. When only a range of probable loss can be estimated, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. We expense legal fees as incurred (See Note 14—Commitments and Contingencies).

Income taxes

Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available

positive and negative evidence, including projected future taxable income, scheduled reversals of our deferred tax liabilities, tax planning strategies, and results of recent operations. Our projections of future taxable income are subject to changes in how we do business, economic outlook, political climate, and other conditions such as supply chain challenges, inflation, rising interest rates, geopolitical events, and other macroeconomic conditions, and judgment is required in determining our ability to use our deferred tax assets.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated income statements. Accrued interest and penalties are included within the related tax liability line in our consolidated balance sheets.

Net loss per share

Basic net loss per common share is computed by dividing net loss attributable to common shares by the weighted average number of common shares outstanding during the period.

Diluted net loss per share is computed by dividing net loss attributable to common shares by the weighted average number of common and potential common shares outstanding during the period. Potential common shares, comprising incremental common shares issuable from the employee stock purchase plan, restricted stock awards, and warrants are included in the calculation of diluted net loss per common share to the extent such shares are dilutive.

Warrants

On September 22, 2025, the Company announced that its Board of Directors had declared a warrant dividend distribution (the "Warrant Distribution") to the record holders of the Company's common stock (the "Common Stock"), in the form of warrants to purchase common stock (the "Warrants"). Holders of Common Stock at the close of business on October 2, 2025 (the "Record Date") received one warrant for each ten shares of Common Stock then owned, rounded down to the nearest whole number. The Warrants were distributed to holders of common stock on the terms and conditions described in the Warrant Agreement, dated as of October 7, 2025, between the Company, Computershare, Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., as Warrant Agent. The Warrants have a cash exercise price of $15.50 per Warrant, and will expire on October 7, 2026, unless the Early Expiration Price Condition (as defined in the Warrant Agreement) is met.

The Company accounts for the Warrants in accordance with the guidance in ASC Topic 815, Derivatives and Hedging ("ASC 815"). Accordingly, the warrants meet all of the requirements for equity classification under ASC 815 and are required to be recorded as a component of equity at the time of issuance. Warrants classified as equity are initially recognized at fair value and are not subsequently remeasured.

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 Income—Expense 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 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 otherwise have a material impact on the Company's consolidated financial statements.

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 equivalents—Money market funds $ 22,717 $ 22,717 $ — $ —

Available-for-sale debt securities (1) 18,417 — — 18,417

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 equivalents—Money market funds $ 21,799 $ 21,799 $ — $ —

Available-for-sale debt securities (1) 10,985 — — 10,985

___________________________________________

(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

Increase due to purchases of Level 3 investments 17,000

Decrease in fair value of Level 3 investments (21,836)

Accrued interest on Level 3 investments 745

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 interest, net on Level 3 investments 544

During the year ended December 31, 2025, there were $12.4 million of debt securities carried at fair value transferred from Level 3 to Level 2 due to significant observable inputs used in determining the fair value of these debt securities. Further, during the year ended December 31, 2025, there were $7.5 million of debt securities carried at fair value transferred from Level 3 to Level 1 due to the conversion of the $8.5 million convertible promissory note in TBHC into shares of TBHC common stock.

The following table provides activity for the Company's Level 3 liabilities (in thousands):

Amount

Level 3 liabilities at December 31, 2024 $ —

Fair value of Level 3 liabilities assumed 2,766

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consist of the following (in thousands):

December 31,

Credit card receivables, trade $ 12,334 $ 9,614

Less: allowance for credit losses (3,377) (2,236)

5. PREPAIDS AND OTHER CURRENT ASSETS

Prepaids and other current assets consist of the following (in thousands):

December 31,

Total prepaids and other current assets $ 11,905 $ 14,021

6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands):

December 31,

Total property and equipment, net $ 13,712 $ 23,544

Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands):

Year ended December 31,

Depreciation expense is classified within the corresponding operating expense categories in the consolidated statements of operations as follows (in thousands):

Year ended December 31,

During the years ended December 31, 2025 and 2024, we retired $22.4 million and $58.6 million, respectively, of fully depreciated property and equipment that were removed from service in 2025 and 2024.

7. INTANGIBLE ASSETS, NET

On January 30, 2025, the Company entered into an Asset Purchase Agreement with BBBY Acquisition Co., LLC ("BBBY") to acquire certain intellectual property related to the buybuy BABY brand and closed the transaction on February 21, 2025. The Company acquired BBBY’s rights in the buybuy BABY brand, assets, information and content related to the associated buybuy BABY website, including trademarks, domain names, data, information, content, and select contractual rights, and goodwill associated with the brand for a total purchase price of $5.0 million which was paid at closing, and the assumption of certain contractual liabilities described therein. The aggregate purchase price, inclusive of contractual liabilities assumed and direct acquisition-related expenses, totaled $7.1 million which has been allocated to trade names, with an indefinite useful life.

On March 17, 2025, the Company entered into an Intellectual Property Asset Purchase Agreement with Lyons Trading Company, the operator of Proozy.com, to sell its rights in the Zulily brand for a total sales price of $5.0 million while retaining a 25% ownership stake in the brand in the form of a newly created entity ("Zulily Newco"). In connection with this transaction, the Company received $1.25 million upfront and will receive the remaining $3.75 million in quarterly installments commencing on April 30, 2026, over the course of five years, which is recorded as a long-term receivable and included in Other long-term assets, net in the consolidated balance sheets. The Company also recognized $1.57 million, which represents its 25% ownership stake in Zulily Newco, and is included in Equity securities in the consolidated balance sheets.

On June 30, 2025, the Company entered into a Trademark and Domain Name Agreement with a large, well-established Canadian retailer to sell certain intellectual property related to the Bed Bath & Beyond trademarks in Canada and the United Kingdom, which was acquired as part of its purchase of the Bed Bath & Beyond brand in June 2023, for a total sales price of $5.0 million, and revenue share payments to be paid to the Company in perpetuity. In July 2025, the Company received the $5.0 million cash proceeds. For the year ended December 31, 2025, the Company recognized the entire $5.0 million as a gain on the sale which is included in Other operating expense (income), net in the consolidated statements of operations.

On May 7, 2025, the Company entered into an Asset Purchase Agreement and on September 15, 2025, entered into an Amendment No. 1 to the Asset Purchase Agreement with The Brand House Collective to acquire certain trademarks and domain names comprised of or containing the element KIRKLAND'S (the "Kirkland's Brand") and certain related marks and brand assets for a total purchase price of $10.0 million. Concurrently, on September 15, 2025, the Company entered into an amendment to the existing trademark license agreement with The Brand House Collective, pursuant to which the Company agreed to license the Kirkland's Brand to The Brand House Collective for use in connection with certain goods and services. The total purchase price was paid at closing on September 15, 2025 concurrently with the assignment of the Kirkland's Brand to the Company. In connection with this transaction, the Company also transferred to The Brand House Collective noncash consideration in the form of Delayed Draw Term Loan Commitments valued at $2.8 million, which has also been included in the acquisition cost. See Note 14—Commitments and Contingencies, for further discussion of the agreement. The aggregate purchase consideration, inclusive of direct acquisition-related costs, totaled $12.9 million which has been allocated to trade names, with an indefinite useful life.

Intangible assets, net consist of the following (in thousands):

December 31,

Intangible assets subject to amortization, gross (1) $ 5,645 $ 6,239

Less: accumulated amortization of intangible assets (3,813) (3,145)

Intangible assets subject to amortization, net 1,832 3,094

Intangible assets not subject to amortization 43,308 27,152

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(1) At December 31, 2025, the weighted average remaining useful life for intangible assets subject to amortization, gross was 2.3 years.

8. EQUITY SECURITIES

Equity securities consist of the following (in thousands):

December 31,

The Company's equity securities accounted for under the equity method under ASC 323 include equity securities in which the Company can exercise significant influence, but not control, over these entities through holding more than a 20% voting interest in the entity. During the year ended December 31, 2025, after stockholder approval was obtained from The Brand House Collective's stockholders, the Company funded the additional $8.0 million investment in The Brand House Collective in exchange for The Brand House Collective's common stock and converted the $8.5 million convertible promissory note (plus accrued interest) into shares of The Brand House Collective's common stock. After all transactions, the Company owns approximately 40% of The Brand House Collective's outstanding shares of common stock. In addition, as part of the sale of the Company's rights in the Zulily brand, the Company retained a 25% ownership stake in the brand in the form of a newly created entity, Zulily Newco. See Note 7—Intangible Assets, Net, for further information.

In August 2025, the members of SpeedRoute, LLC, a privately-held entity in which the Company held a minority interest, filed dissolution documents to wind down and dissolve SpeedRoute, LLC. There was no gain or loss recorded on dissolution.

The following table includes our equity securities accounted for under the equity method (ASC 323) and related ownership interest as of December 31, 2025:

Ownershipinterest

Medici Ventures, L.P. 99%

tZERO Group, Inc. 26%

The Brand House Collective, Inc. 40%

Zulily Newco 25%

The carrying amount of our equity method securities was $66.6 million at December 31, 2025, which is included in Equity securities on our consolidated balance sheets, of which $26.9 million is valued under the fair value option (tZERO, The Brand House Collective, and Zulily Newco). Equity securities in The Brand House Collective are carried at fair value based on Level 1 inputs. The aggregate fair value of the equity securities in The Brand House Collective at December 31, 2025, was $9.8 million. Equity securities in tZERO and Zulily Newco are valued using Level 3 inputs, which represents 18.6% of assets measured at fair value. For our equity method investments, there are no differences in the carrying amount of the assets and liabilities and our maximum exposure to loss, and there is no difference between the carrying amount of our investment in Medici Ventures, L.P. and the amount of underlying equity we have in the entity's net assets.

The following table summarizes the net loss recognized on equity method securities recorded in Other expense, net in our consolidated statements of operations (in thousands):

Year ended December 31,

Regulation S-X Rules 4-08(g) and 3-09

In accordance with SEC Rules 4-08(g) and 3-09 of Regulation S-X, we must determine which, if any, of our equity method securities is a "significant subsidiary". Regulation S-X mandates the use of three different tests to determine if any of our equity securities are significant subsidiaries: the investment test, the asset test, and the income test. The table below provides the summarized financial informationrequired by Rule 4-08(g) for those equity method securities in aggregate that have met the significance criteria, using the equity method securities' most recently available year-to-date financial statements (in thousands):

December 31,

Year ended December 31,

Medici Ventures, L.P. was deemed not significant for the year ended December 31, 2025 under Rule 3-09 of Regulation S-X, but was significant for the periods ended September 30, 2024 and 2023, their fiscal year-ends, and as such, in accordance with Rule 3-09 of Regulation S-X, separate financial statements for the periods ended September 30, 2024 and 2023 are being included as Exhibit 99.2 and Exhibit 99.1, respectively, and as such are excluded from the table above. In addition, tZERO was deemed not significant for the years ended December 31, 2025 and 2024, but was significant for the year ended December 31, 2023. In accordance with Rule 3-09 of Regulation S-X, separate audited financial statements for tZERO for the year ended December 31, 2023 is being included as Exhibit 99.3.

9. OTHER LONG-TERM ASSETS, NET

Other long-term assets, net consist of the following (in thousands):

December 31,

Debt securities carried at fair value $ 23,977 $ 14,814

Prepaid other, long-term portion 2,115 3,242

Total other long-term assets, net $ 48,554 $ 29,453

10. ACCRUED LIABILITIES

Accrued liabilities consist of the following (in thousands):

December 31,

Accrued compensation and other related costs 7,827 8,345

Sales and other taxes payable 6,121 6,205

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 credit was $15.5 million. Our total outstanding debt on the line of credit is included in Short-term debt, net on our consolidated balance sheets.

The Loan Agreement is subject to limited affirmative covenants and negative covenants, including the requirement that the Company maintain cash in the Cash Collateral Account in an amount that is three percent greater than BMO's aggregate commitments under the Loan Agreement. We are in compliance with our debt covenants and continue to monitor our ongoing compliance with our debt covenants.

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,

The following tables provides a summary of other information related to leases (in thousands):

Year ended December 31,

The following table provides a summary of balance sheet information related to leases:

December 31,

Weighted-average remaining lease term—operating leases 6.76 years 6.65 years

Weighted-average discount rate—operating 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

Total lease payments 8,163

Present value of lease liabilities $ 6,571

13. OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of the following (in thousands):

December 31,

Unearned revenue, long-term portion $ 2,432 $ 4,583

BBBY US Equity

BBBY · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BBBY US Equity☆

BBBY · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BBBY US Equity