#1overstock.com Overstock.com, Inc. Q4 and Fiscal Year 2014 Financial Results January 29, 2015 1#2overstock.com Safe 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, our Form 10-Q for the quarter ended June 30, 2014 which was filed with the Securities and Exchange Commission on July 29, 2014, and our form 10-Q for the quarter ended September 30, 2014 which was filed with the Securities and Exchange Commission on October 28, 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#3- overstock.com Revenue - $470.4 million (18% increase vs. Q4 2013) Gross profit dollars - $85.4 million (19% increase vs. Q4 2013) Gross margin - 18.2% (vs. 18.0% in Q4 2013) Contribution dollars* - $48.3 million (19% increase vs. Q4 2013) Contribution margin* - 10.3% (vs. 10.2% in Q4 2013) Tech and G&A expense - $46.6 million (19% increase vs. Q4 2013) Pre-tax income - $2.3 million (vs. $1.0 million in Q4 2013) Net income - $1.3 million (vs. $69.5 million in Q4 2013) Q4 2013 includes $68.5 million net impact of deferred tax asset valuation release . Q4 2014 Results TTM Operating cash flow - $80.8 million (vs. $83.6 million for 2013) * Non-GAAP 3#4overstock.com ($,000) 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Revenue ($) Revenue growth (yoy) 342,034 9% Q4-12 Q1-13 Q2-13 Q3-13 Quarterly Revenue Growth 397,593 16% Q4-13 Q1-14 470,360 18% Q2-14 Q3-14 Q4-14 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 4#5($,000) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 overstock.com 0 Gross profit ($) Gross profit growth (yoy) 61,211 20% Q4-12 Q1-13 Quarterly Gross Profit Growth 71,735 17% Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 85,380 19% Q4-14 60% 5 50% 40% 30% 20% 10% 0%#6($,000) 50,000 40,000 30,000 20,000 10,000 overstock.com 0 Contribution ($) Contribution growth (yoy) 40,630 27% Quarterly Contribution & Growth * 40,502 N 0% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 * Contribution dollars = Gross profit less Sales & Marketing expense 48,282 50% 19% Q4-14 40% 30% 20% 10% 0% -10% 6#725.0% 20.0% 15.0% 10.0% 5.0% 0.0% overstock.com 17.9% 11.9% 18.9% 12.9% Gross margin Contribution margin 19.7% 19.6% Q4-13 marketing: 7.9% 13.2% 12.2% Quarterly Gross Margin and Contribution Margin* 18.0% 10.2% 18.8% 18.8% 19.0% 11.9% Q4-14 marketing: 7.9% 11.8% 11.8% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 * Contribution margin = Gross margin less Sales & Marketing percentage. 18.2% 10.3% Q4-14 7#825.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% overstock.com Overstock contribution margin Amazon contribution margin Amazon product contribution margin (excludes service sales) o Wayfair contribution margin 11.9% 9.5% -6.1% 12.9% 11.5% 5.5% -7.2% Q4-12 Q1-13 13.2% 12.6% 6.0% -7.6% Q2-13 12.2% 8 11.7% O 5.1% Contribution Margin vs. Amazon.com and Wayfair.com* -9.3% 10.7% 10.2% O 4.3% -8.5% Q3-13 Q4-13 12.7% 11.9% O -1.8% -9.8% Q1-14 13.5% 11.8% 0.2% -9.7% 11.8% 11.3% 0.5% -14.0% 10.3% Q2-14 Q3-14 Q4-14 *Overstock.com Contribution Margin = Gross profit less Sales & Marketing divided by Total net revenue. *Amazon.com Contribution Margin = Total net sales less Cost of Sales, Fulfillment, and Marketing divided by Total net sales. *Amazon.com Product Contribution Margin = Total product sales less Cost of Sales, Fulfillment, and Marketing divided by Total product sales. *Wayfair.com Contribution Margin = Gross profit less Sales & Marketing divided by Total net revenue. 8#9overstock.com ($,000) 60,000 50,000 40,000 30,000 20,000 10,000 G&A G&A and Tech (% of revenue) 9.6% 32.715 5.4% 4.1% Technology and G&A Expenses $s and % of Revenue Legal Case Judgments G&A (% of revenue) 9.8% 38,975 5.2% 4.6% $6.3M Technology Technology (% of revenue) 9.9% 46,574 5.0% 8 4.9% $4.6M Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 9#10overstock.com ($,000) 75,000 70,000 65,000, 10,000 8,000 6,000 4,000 2,000 0 8,787 Q4-12 Q1-13 11 Q2-13 69,450 Quarterly Net Income Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4 2013 includes $68.5 million net impact of deferred tax asset valuation release, after an im material revision related to current and deferred tax assets and our provision for income taxes for Q4 2013. 1,305 Q4-14 10#11($,000) 90,000 overstock.com Operating & Free Cash Flow (TTM) 80,000 70,000 60,000 50,000 40,000 30,000 28,145 20,000 10,000 Cash flow from operations (TTM) Free cash flow* (TTM) 0 15,656 83,645 * Non-GAAP 65,578 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 80,834 39,488 Q4-14 11#1260.0 50.0 40.0 30.0 20.0 10.0 0.0 overstock.com 34.4 Inventory turns Inventory turns (direct only) 5.4 GAAP TTM Inventory Turns Q4-12 Q1-13 Q2-13 Q3-13 TTM Inventory Turns: TTM COGS / Average Inventory 36.9 4.8 Q4-13 Q1-14 Q2-14 Q3-14 41.8 4.4 Q4-14 12#13overstock.com 1400% 1200% 1000% 800% 600% 400% 200% 0% * GMROI (TTM) -GMROI (direct only TTM) 757% 57% 866% 69% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 GMROI (TTM) = TTM GM% * TTM Revenue / Average Inventory TTM GMROI* Q1-14 Q2-14 Q3-14 958% 62% Q4-14 13#14overstock.com (#,000) 3,000 2,500 2,000 1,500 1,000 500 0 Unique customers Marketing $ / unique customers (cost per customer) 2,301 Unique Customers & Cost per Customer $8.94 2,311 $13.52 2,481 $14.96 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 $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 1,179 Q4-12 Q1-13 Q2-13 Q3-13 1,181 New Customers Q4-13 Q1-14 Q2-14 Q3-14 1,259 Q4-14 15#16overstock.com Customer Orders & Average Order Size (#,000) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 B2C customer orders Average order size 2,985 $132 Q4-12 Q1-13 3,083 $149 Q2-13 Q3-13 Q4-13 Q1-14 3,454 $159 Q2-14 Q3-14 Q4-14 $350 $300 $250 $200 $150 $100 $50 $0 16#17$35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 overstock.com $20.51 Gross Profit per Transaction. $23.27 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 $24.72 Q3-14 Q4-14 17#18overstock.com Revenue - $1,497 million (15% increase vs. 2013) Gross profit dollars - $279.1 million (13% increase vs. 2013) Gross margin - 18.6% (vs. 19.0% in 2013) Contribution dollars* - $169.6 million (9% increase vs. 2013) Contribution margin* - 11.3% (vs. 12.0% in 2013) Tech and G&A expense - $158.0 million (13% increase vs. 2013) Pre-tax income - $13.2 million (vs. $16.3 million in 2013) Net income - $8.8 million (vs. $84.4 million in 2013) - 2013 includes $68.5 million net impact of deferred tax asset valuation release Operating cash flow - $80.8 million (vs. $83.6 million for 2013) * *Non-GAAP 2014 Annual Results 18#19overstock.com ($,000) 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 1,089,873 1,099,289 1,054,277 ||| 2011 2010 2012 Annual Revenue 1,304,217 2013 1,497,103 15% increase 2014 19#20overstock.com ($,000) 300,000 250,000 200,000 150,000 100,000 50,000 0 Gross profit ($) Gross profit growth (yoy) 189,640 Annual Gross Profit Growth 2010 198,430 179,088 15% MI 11% -6% 2011 2012 247,660 25% 2013 279,059 13% 2014 50% 40% 30% 20% 10% 0% -10% 20#21overstock.com ($,000) 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Contribution ($) Contribution growth (yoy) 128,306 17% 117,275 -9% Annual Contribution & Growth* 134,963 15% 2010 2011 * O Contribution dollars = gross profit less sales & marketing expense 2012 156,051 16% 2013 169,598 9% 2014 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% 21#2225% 20% 15% 10% 5% 0% overstock.com 17.4% 11.8% Gross margin Contribution margin 2010 17.0% 11.1% 2011 18.1% 12.3% 2012 Annual Gross Margin and Contribution Margin* * Contribution margin = Gross margin less Sales & Marketing percentage. 19.0% 2014 marketing: 7.3% 12.0% 2013 18.6% 11.3% 2014 22#23overstock.com ($,000) 250,000 200,000 150,000 100,000 50,000 G&A 10.5% 113,910 5.3% 5.1% 2010 Technology G&A and Tech (% of revenue) 12.8% 134,809 6.4% 6.4% Technology and G&A Expenses $s and % of Revenue 2011 11.2% 122,726 6.0% 5.2% 2012 G&A (% of revenue) 10.7% 139,957 5.5% 5.2% 2013 -Technology (% of revenue) 10.6% 158,035 5.8% 4.8% 2014 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 23#24overstock.com ($,000) 100,000 80,000 60,000 40,000 20,000 0 (20,000) (40,000) 13,889 2010 (19,438) 2011 Annual Net Income/(Loss) 14,669 2012 84,378 2013 8,801 2014 2013 includes $68.5 million net impact of deferred tax asset valuation release, after an im material revision related to current and deferred tax assets and our provision for income taxes for 2013. 24#251,200 1,000 800 600 400 200 0 overstock.com 769 Q4-12 Q1-13 Q2-13 Q3-13 882 Corporate Employees Q4-13 Q1-14 Q2-14 Q3-14 1,044 Q4-14 25#26overstock.com A Bitcoin. B - Pets C - Farmers Market (alpha) D Insurance E - Supply Chain and SOFS F - Private Label Credit Card G - Medici Key Innovations 26#27overstock.com Questions 27