Overstock.com 2005 Annual Report Download - page 46
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Results of Operations
The following table sets forth our results of operations expressed as a percentage of total revenue for 2003, 2004 and 2005.
Years ended December 31,
2003 2004 2005
(as a percentage of
total revenue)
Revenue
Direct revenue 57.8 % 43.1 % 40.4 %
Fulfillment partner revenue 42.2 56.9 59.6
Total revenue 100.0 100.0 100.0
Cost of goods sold
Direct 51.9 37.4 35.1
Fulfillment partner 37.3 49.2 49.9
Total cost of goods sold 89.2 86.6 85.0
Gross profit 10.8 13.4 15.0
Operating expenses:
Sales and marketing expenses 8.4 8.2 10.0
Technology 1.0 1.7 3.5
General and administrative expenses 6.1 4.4 4.5
Amortization of stock-based compensation 0.3 0.1 0.0
Total operating expenses 15.8 14.4 18.0
Operating loss (5.0 ) (1.0 ) (3.0 )
Interest income, net 0.2 0.2 0.0
Interest expense (0.0 ) (0.1 ) (0.7 )
Other income (expense), net 0.0 0.0 0.6
Net loss (4.8 )% (0.9 )% (3.1 )%
Comparison of Years Ended December 31, 2004 and 2005
Revenue
Total revenue grew from $494.6 million in 2004, to $803.8 million in 2005, representing growth of 63%. During this same
period, direct revenue increased from $213.2 million to $324.9 million (52% growth) and fulfillment partner revenue grew from
$281.4 million to $478.9 million (70% growth). The significant increase in total revenue was due primarily to the increase in the
number of orders (including both direct and fulfillment partner orders), which grew from 5.8 million in 2004 to 8.4 million in 2005 as
a result of increased marketing efforts. Additionally, fulfillment partner revenue grew as a result of an increase in the number of
fulfillment partners, which grew from 380 in 2004 to 460 in 2005.
Gross bookings totaled $535.7 million and $868.0 million for the years ended December 31, 2004 and 2005, respectively,
representing an increase of 62%. Gross bookings differ from GAAP revenue in that gross bookings represent the gross sales price of
goods sold by the Company before returns, sales discounts and before payments to fulfillment partners prior to July 1, 2003.
The increase in total revenue is also a reflection of our ability to acquire new customers from our marketing efforts, as evidenced
by the addition of 3.8 million new customers during the year ended December 31, 2005 compared to 2.5 million new customers in the
same period of 2004, an increase of 52%.
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