#1overstock.com Overstock.com, Inc. Q3 2014 Financial Results October 23, 2014 1#2Safe Harbor The information presented herein may contain forward-looking statements. Such forward-looking statements include all statements other than statements of historical fact, including forecasts of trends. These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including the amount and timing of our capital expenditures, the mix of products we sell, the results of legal proceedings and claims and the amounts we spend relating to them, the extent to which we owe income taxes, competition, fluctuations in operating results, any difficulties we may encounter as a result of accepting Bitcoin as payment, any inability to raise capital if needed on acceptable terms, our efforts to expand both domestically and internationally, risks of inventory management and seasonality. Other risks and uncertainties include, among others, risks related to new products and services we may offer, and difficulties with our infrastructure, our expectations regarding the benefits and risks of the credit facility we recently entered into for the purpose of, among other things, financing our construction of an office campus to serve as our corporate headquarters, our fulfillment partners or our payment processors, including cyber-attacks or data breaches affecting us or any of them. More information about factors that could potentially affect our financial results is included in our Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the Securities and Exchange Commission on February 27, 2014, our Form 10-Q for the quarter ended March 31, 2014 which was filed with the Securities and Exchange Commission on April 29, 2014, and our Form 10-Q for the quarter ended June 30, 2014 which was filed with the Securities and Exchange Commission on July 29, 2014. These and our other subsequent filings with the Securities and Exchange Commission identify important factors that could cause our actual results to differ materially from those contained in our projections, estimates and other forward-looking statements. 2 overstock.com#3overstock.com Revenue - $353.0 million (17% increase vs. Q3 2013) Gross profit dollars - $67.1 million (13% increase vs. Q3 2013) Gross margin 19.0% (vs. 19.6% in Q3 2013) Contribution dollars* - $41.6 million (13% increase vs. Q3 2013) Contribution margin* - 11.8% (vs. 12.2% in Q3 2013) Tech and G&A expense - $39.3 million (18% increase vs. Q3 2013) Pre-tax income - $2.0 million (vs. $3.6 million in Q3 2013) Net income - $1.6 million (vs. $3.5 million in Q3 2013) * non-GAAP Q3 2014 Results - 3#4overstock.com ($,000) 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Revenue ($) Revenue growth (yoy) 255,352 7% Q3-12 Q4-12 Q1-13 Q2-13 Quarterly Revenue Growth 301,426 18% Q3-13 Q4-13 Q1-14 Q2-14 352,991 17% Q3-14 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 4#5($,000) 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 overstock.com 0 Gross profit ($) Gross profit growth (yoy) 46,542 21% Q3-12 Q4-12 Quarterly Gross Profit Growth 59,150 27% Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 67,058 13% Q3-14 5 80% 70% 60% 50% 40% 30% 20% 10% 0%#6($,000) 50,000 40,000 30,000 20,000 10,000 overstock.com 0 Contribution ($) Contribution growth (yoy) 31,643 Quarterly Contribution & Growth * 29% MU 16% 36,687 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 *Contribution dollars = Gross profit less Sales & Marketing expense 41,630 13% Q3-14 50% 40% 30% 20% 10% 0% -10% 6#725.0% 20.0% 15.0% 10.0% 5.0% 0.0% overstock.com 18.2% 12.4% 17.9% 11.9% Gross margin Contribution margin 18.9% Q3-13 marketing: 7.5% 12.9% 19.7% 19.6% Quarterly Gross Margin and Contribution Margin* 13.2% 12.2% 18.0% 10.2% 18.8% 18.8% 19.0% Q3-14 marketing: 7.2% 11.9% 11.8% 11.8% Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 *Contribution margin = Gross margin less Sales & Marketing percentage. 7#825.0% 20.0% 10.0% 15.0% 12.4% 5.0% 0.0% -5.0% -10.0% overstock.com -15.0% Overstock contribution margin Amazon contribution margin Amazon product contribution margin (excludes service sales) o Wayfair contribution margin 10.4% -7.1% 11.9% 9.5% -6.1% Q3-12 Q4-12 12.9% 11.5% O 5.5% -7.2% Contribution Margin vs. Amazon.com and Wayfair.com* 13.2% 12.2% 12.6% O 6.0% -7.6% 11.7% O 5.1% -9.3% 10.7% 10.2% O 4.3% -8.5% Q1-13 Q2-13 Q3-13 Q4-13 12.7% 11.9% -1.8% -9.8% 13.5% 11.8% 11.8% 0.2% -9.7% Q1-14 Q2-14 Q3-14 *Overstock.com Contribution Margin = Gross profit less Sales & Marketing divided by Total net revenue. *Amazon.com Contribution Margin = Total net sales less Cost of Sales, Fulfillment, and Marketing divided by Total net sales. *Amazon.com Product Contribution Margin = Total product sales less Cost of Sales, Fulfillment, and Marketing divided by Total product sales. *Wayfair.com Contribution Margin = Gross profit less Sales & Marketing divided by Total net revenue. 8#9overstock.com ($,000) 60,000 50,000 40,000 30,000 IG&A 10,000 11.7% 20,000 5.4% Technology Technology and G&A Expenses $s and % of Revenue G&A and Tech (% of revenue) 11.0% 33,229 + 5.7% G&A (% of revenue) 29,913 6.3% 甜 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 -5.3% Technology (% of revenue) 11.1% 39,275 6.3% 4.8% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 9#10overstock.com ($,000) 75,000 70,000 65,000, 10,000 8,000 6,000 4,000 2,000 0 2,693 Q3-12 Q4-12 Q1-13 Q2-13 3,533 Quarterly Net Income z Q3-13 Q4-13 Q1-14 Q2-14 Q4 2013 includes $69.6 million net impact of deferred tax asset valuation release, after an immaterial revision related to current and deferred tax assets and our provision for income taxes for Q4 2013. 1,617 Q3-14 10#11($,000) overstock.com Operating & Free Cash Flow (TTM) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Cash flow from operations (TTM) ■Free cash flow* (TTM) 28,626 15,666 * non-GAAP 55,266 39,370 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 69,365 32,724 Q3-14 11#1260.0 50.0 40.0 30.0 20.0 10.0 0.0 overstock.com Inventory turns Inventory turns (direct only) 40.4 6.6 GAAP TTM Inventory Turns Q3-12 Q4-12 Q1-13 Q2-13 TTM Inventory Turns: TTM COGS / Average Inventory 42.4 5.9 Q3-13 Q4-13 Q1-14 Q2-14 44.9 5.0 Q3-14 12#13overstock.com 1400% 1200% 1000% 800% 600% 400% 200% 0% GMROI (TTM) -GMROI (direct only TTM) 861% 59% 994% 82% Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 *GMROI (TTM) = TTM GM% * TTM Revenue / Average Inventory TTM GMROI* Q4-13 Q1-14 Q2-14 1027% 72% Q3-14 13#14overstock.com (#,000) 2,500 2,000 1.500 1,000 500 0 Unique customers Marketing $ / unique customers (cost per customer) 1,533 $9.72 Unique Customers & Cost per Customer Q3-12 Q4-12 1,546 $14.53 1,679 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 $15.15 Q2-14 Q3-14 $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 14#15overstock.com (#,000) 1,500 1,200 900 600 300 0 725 Q3-12 Q4-12 753 New Customers Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 817 Q3-14 15#16overstock.com® Customer Orders & Average Order Size (#,000) 3,500 3,000 2,500 2,000 1,952 1,500 1,000 500 B2C customer orders Average order size 0 $147 1,997 $170 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 2,259 $180 Q2-14 Q3-14 $350 $300 $250 $200 $150 $100 $50 $0 16#17$35.00 $30.00 $25.00 $23.84 $20.00 $15.00 $10.00 $5.00 overstock.com $0.00 Gross Profit per Transaction. $29.62 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 $29.68 Q1-14 Q2-14 Q3-14 17#181,200 1,000 800 600 400 200 0 overstock.com 730 Q3-12 Q4-12 Q1-13 Q2-13 833 Corporate Employees Q3-13 Q4-13 Q1-14 Q2-14 1,011 Q3-14 18#19- - 刃 Broke ground on Peace Coliseum on Oct 10, move in Aug 2016 $96M estimated total campus cost (buildings, parking, landscaping, equipment, furniture etc...) before tax incentives ● Expected financing terms: $46M real estate loan, 4.6% interest rate (swapped), 9 year term We fund first $36M (includes $11M land purchase) before first draw Annual debt service of $3.2M vs $5.4M estimated avg rent if we renewed existing HQ (for half the space and no ownership) Also will provide $10M working capital revolving loan $20M future equipment and furniture line under discussion. More details to come in Form 8-K once closed ● overstock™ peace coliseum ● New Headquarters Update ● 19#20overstock.com A Bitcoin B - Pets C - Farmers Market (alpha) D Insurance - E - Supplier Oasis Fulfillment Services. F - Private Label Credit Card G - Medici Key Innovations 20#21overstock.com Questions 21