Neighborhood Intelligence Q3 loss widens to $26M
Management identified more than $40 million in additional annualized savings and expects 2027 revenue of $2.0 billion to $2.1 billion.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Neighborhood Intelligence, Inc. (NXH) reported third-quarter 2026 revenue of $509 million, up 98% year over year, with $229 million of the increase attributed to acquired businesses, including The Brand House Collective and The Container Store. Core e-commerce revenue rose approximately 9%, led by 75% growth at Overstock.com. Gross profit was $173 million, about 34% of revenue.
Net loss was $26 million versus $5 million a year earlier, and adjusted EBITDA was a loss of $26 million versus a $5 million loss. For the nine months ended September 30, 2026, operating cash use was $118.4 million, compared with $50.2 million a year earlier. Year to date, the company eliminated more than $50 million in annualized SG&A costs and merger synergies, and identified more than $40 million in additional annualized savings.
For 2027, management expects consolidated revenue of $2.0 billion to $2.1 billion and gross margins of 33% to 34%. It expects full integration benefits over approximately six to nine months and believes the company should be positioned for a positive cash-flow inflection in the second half of 2027 if it achieves mid-single-digit organic revenue growth, improved operating efficiencies and expansion of higher-margin home services.
1 point · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue rose 98% year over year, primarily driven by acquisitions.
Negative
- Moderate pointQuarterly net loss widened to $26 million from $5 million.
- Moderate pointNine-month operating cash use was $118.4 million, versus $50.2 million.
Filing Explained
At September 30, long-term debt was $212,807 thousand, compared with zero at December 31, 2025; cash and restricted cash were listed separately.
The September 30 balance sheet reports 98,626 thousand common shares outstanding, compared with 68,863 thousand on
At September 30, the balance sheet lists
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue: $509 million
Revenue growth: 98%
Core e-commerce revenue growth: Approximately 9%
+5 more
8 metrics
Revenue
$509 million
Third quarter 2026
Revenue growth
98%
Year over year in third quarter 2026
Core e-commerce revenue growth
Approximately 9%
Third quarter 2026, year over year
Overstock.com revenue growth
75%
Third quarter 2026, year over year
Net loss
$26 million
Third quarter 2026; compared with $5 million in third quarter 2025
Adjusted EBITDA
($26) million
Third quarter 2026; compared with ($5) million in third quarter 2025
Net cash used in operating activities
$118.4 million
Nine months ended September 30, 2026; compared with $50.2 million in 2025
2027 consolidated revenue
$2.0 billion to $2.1 billion
Management expectation for 2027
Key Terms
adjusted EBITDA, free cash flow, purchase price accounting benefit, operating leverage
4 terms
adjusted EBITDA financial
"Adjusted EBITDA (non-GAAP) was ($26) million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
free cash flow financial
"Free cash flow is a non-GAAP financial measure"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
purchase price accounting benefit financial
"planned $14 million purchase price accounting benefit"
operating leverage financial
"could create meaningful operating leverage"
Operating leverage measures how much a company's profits are affected by changes in sales volume. When a business has high operating leverage, small increases in sales can lead to much larger increases in profit, much like a lever amplifies force. It matters to investors because it indicates how sensitive a company's earnings are to fluctuations in sales, affecting risk and potential returns.
Earnings Snapshot
Revenue: $509 million · Guidance included
Third quarter 2026
Revenue
$509 million
Up 98% year over year
Net loss
$26 million loss
Compared with a $5 million loss in third quarter 2025
Adjusted EBITDA
($26) million
Compared with ($5) million in third quarter 2025
Guidance
For 2027, consolidated revenue of $2.0 billion to $2.1 billion and gross margins of 33% to 34%.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did NXH report in the third quarter of 2026?
NXH reported $509 million in third-quarter 2026 revenue, up 98% year over year. Acquired businesses contributed $229 million of the increase. Core e-commerce revenue grew approximately 9%, led by 75% year-over-year growth at Overstock.com.
What was NXH's net loss in the third quarter of 2026?
NXH reported a $26 million net loss in third-quarter 2026, compared with a $5 million net loss in the prior-year quarter. Adjusted EBITDA was a loss of $26 million, compared with a $5 million loss.
What organic growth does NXH see beyond its 2027 baseline?
Management believes approximately 5% annual organic revenue growth is achievable from its 2027 base over the following three to four years without a housing recovery. It estimates about $30 million of incremental operating contribution for each additional $100 million of organic revenue.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | ||||||||||||
| incorporation) | Identification Number) | |||||||||||||
5310 Maryland Way
(Address of principal executive offices)(Zip Code)
(801 ) 947-3100
(Registrant’s telephone number, including area code)
433 W. Ascension Way, 3rd Floor, Murray, Utah 84123
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On November 5, 2026 , Neighborhood Intelligence, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the quarterly period ended September 30, 2026. A copy of the press release is furnished herewith as Exhibit 99.1. In connection with the release of financial results, the Company posted an updated presentation in the "Events & Presentation" portion of its investor relations website at https://ir.neighborhoodintelligence.com/.
The information in this Current Report on Form 8-K and in Exhibit 99.1 is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as may expressly be set forth in any such filing by specific reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit Number | Exhibit Description | |||||||
| 99.1 | Press Release, dated November 5, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Neighborhood Intelligence, Inc. | ||||||||
| By: | /s/ PAUL KOSTUROS | |||||||
| Paul Kosturos | ||||||||
| Interim Chief Financial Officer | ||||||||
| Date: | ||||||||
3
Neighborhood Intelligence Reports Core E-Commerce Growth of 9%, Led by 75% Growth at Overstock.com; Total Company Revenue Increases 98% Driven by Acquisitions
Gross Margin Performance Positioned for Improvement; Significant Progress on Cost Reductions and Merger Synergies, With Another $40 Million in Annualized Savings Identified
NASHVILLE, Tennessee - November 5, 2026 - Neighborhood Intelligence, Inc. (NASDAQ:NXH), formerly Bed Bath & Beyond, Inc., today reported third quarter 2026 revenue of $509 million, an increase of 98% year over year, primarily driven by the acquisitions of Kirkland’s and The Container Store. Core e-commerce revenue increased approximately 9%, led by 75% year-over-year growth at Overstock.com.
Gross profit was $173 million, representing a reported gross margin of approximately 34%. The quarter included a planned $14 million purchase price accounting benefit associated with inventory conditions identified and factored into the acquisitions before closing. This benefit was substantially offset by the Company’s planned elimination of dated, obsolete and underperforming inventory. Management sees a path to 37% through improved sourcing, assortment, inventory discipline and higher-margin home services.
Year to date, the Company has eliminated more than $50 million in annualized SG&A costs and merger synergies. Management has identified more than $40 million in additional annualized operational and merger savings through supply chain consolidation, elimination of organizational redundancies and optimization of the store fleet. The Company expects the full benefits of integration and merger synergies to develop over approximately six to nine months.
Management believes if it achieves mid-single-digit organic revenue growth, improved operating efficiencies and expansion of higher-margin home services the Company should be positioned to achieve an enterprise-wide positive cash flow inflection by the second half of 2027.
Inclusive of all closed transactions, retail store fleet rationalization and modest organic growth, the Company currently expects consolidated revenue of $2.0 billion to $2.1 billion in 2027, with gross margins ranging from 33% to 34%.
“Our legacy e-commerce business has achieved two important milestones worth noting: sustained revenue growth and adjusted EBITDA neutrality. We have accomplished what we set out to do in the underlying legacy business, and our focus now is on realizing the full potential of the enterprise we have assembled,” said Marcus A. Lemonis, Executive Chairman and Chief Executive Officer of Neighborhood Intelligence.
“While our baseline for 2027 is deliberately measured and assumes a continued depressed housing market, we are moving quickly to prepare for a more robust return to normalized housing activity. Our decision to accelerate the integration of our acquisitions, recalibrate inventory and simplify our operating structure reflects that conviction. We believe we can compound growth without a housing recovery, but even a modest improvement in housing activity could create meaningful upside and operating leverage.”
Third Quarter 2026 Highlights
Net revenue was $509 million, an increase of 98.0% year over year. Of the year-over-year increase, $229 million was attributable to acquired businesses, reflecting the integration of The Brand House Collective, including the Kirkland’s and Kirkland’s Home brands, and The Container Store, which was acquired during
1
the quarter. The remaining $23 million increase was driven by continued strength in the core online e-commerce business and an improved assortment.
Active customers increased to 9.0 million, up 117% year over year, and orders delivered increased to 4.0 million, up 217% year over year, reflecting growth in the base business and the inclusion of acquired brands. Orders per active customer increased to 2.0 from 1.3 in the prior-year period, an increase of 53%.
Gross profit was $173 million, or approximately 34% of net revenue. Of the year-over-year increase, $97 million was attributable to acquired businesses. The quarter included the planned purchase price accounting benefit and related inventory recalibration described above.
Sales and marketing expense was $54 million, or 10.7% of net revenue, an improvement of 330 basis points year over year.
Technology and general and administrative expense was $165 million compared with $33 million in the prior-year period, primarily due to acquired entities, with the remaining change attributable to various items, including professional fees related to acquisitions.
Net loss was $26 million, compared with a net loss of $5 million in the prior-year period. The current period includes approximately $20 million of special items, primarily acquisition-related costs, restructuring costs, and non-cash store-closure impairments.
Adjusted EBITDA (non-GAAP) was ($26) million, compared with ($5) million in the prior year period.
The Company's available sources of liquidity include, but are not limited to $127 million of cash, cash equivalents and restricted cash, $228 million in inventory and real estate owned free of borrowings of $26M. Equity in inventory at September 30, 2026 was $110 million, net of ABL borrowings of $118M.
Longer-Term Growth Opportunity
The Company’s 2027 baseline assumes continued weakness in housing starts and existing-home sales, with existing-home sales remaining near levels last seen during the Great Recession. Existing-home sales in 2025 were below 2009 levels and approximately 25% below the 2015–2019 average.
Management believes approximately 5% annual organic revenue growth is achievable from its 2027 base over the following three to four years without requiring a housing recovery. We see additional upside from 3 additional primary drivers. High Margin, High Average Order Home Services, Namely Elfa Systems being restocked with rebuilt sales funnel and lead management system; Full integration of Bed Bath & Beyond traditional product assortment and brand across 75+ store fleet (product being fully stocked now with signage and branding complete by Q1 2027); any potential improvement in the housing market currently recording both housing starts and existing home sales below 2009 Great Recession levels.
Even a modest improvement in housing activity could provide additional upside. A gradual return toward mid-cycle levels, still below those experienced during 2016–2019, could create meaningful operating leverage. Management believes it is able to generate approximately $30 million in incremental operating contribution for every additional $100 million of organic revenue.
“We have a clear plan to drive organic growth, strengthen margins and improve operating efficiency across our business,” said Amy Sullivan, President of Neighborhood Intelligence, Inc. “We’re leveraging the brands, sourcing capabilities and home services infrastructure we’ve acquired to create new opportunities for growth, while remaining disciplined in how we manage costs and deploy capital. We believe these initiatives can support normalized gross margins of 33% to 34% in the near term, with a longer-term objective of 37% as our sourcing improvements, assortment strategy and higher-margin home services contribute more fully.”
2
Earnings Webcast and Replay Information
Neighborhood Intelligence, Inc. will host a webcast to discuss its third quarter 2026 financial results, strategic initiatives and business outlook on Thursday, November 5, 2026, at 4:30 p.m. Eastern Time.
Questions may be emailed in advance to ir@neighborhoodintelligence.com.
A replay of the webcast will be available at neighborhoodintelligence.com shortly after the live call concludes.
An updated investor presentation will be available in the Events & Presentations section of the Company’s investor relations website at ir.neighborhoodintelligence.com.
About Neighborhood Intelligence, Inc.
Neighborhood Intelligence, Inc. (NASDAQ: NXH), formerly Bed Bath & Beyond, Inc., is a data and technology company organized around three interconnected pillars: Omni-Channel Retail, Home Services and Home Ownership.
Its portfolio includes Bed Bath & Beyond, Overstock, buybuy BABY, Kirkland's, The Container Store, Elfa and Closet Works, along with its expanding Home Services and Home Ownership businesses.
The Company also maintains a portfolio of blockchain-related investments, including tZERO, GrainChain and other assets.
The Company's mission is to make home ownership simpler and more affordable.
Contact Information Investor Relations ir@neighborhoodintelligence.com | |||||
3
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact, including but not limited to statements regarding revenue growth, gross margins, operating efficiencies, financial outlook and guidance, integration and merger synergies, cost savings, expected cash flow, long-term operating and financial objectives and the timing of any of the foregoing. You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made. We undertake no obligation to update any forward-looking statements as a result of any new information, future developments, or otherwise. These forward-looking statements are inherently difficult to predict. Actual results could differ materially due to variety of risks, uncertainties, and other important factors including but not limited to: our dependence on third parties, including our fulfillment partners; our competition; consumer needs, expectations, or trends; our reliance on effective marketing; economic factors including recessions, downturns, inflation, exposure to the housing market, and consumer spending; trade policies or restrictions, including tariffs, and related macroeconomic effects; our changing business model and use of our brands, such as the Overstock brand, Bed Bath & Beyond brand, buybuy BABY brand, Kirkland’s and Kirkland’s Home brands, SFV Services, and The Container Store; the changing job market and changes to our leadership team or compensation approach; our reliance on paid and natural search engines; our ability to become profitable or generate positive cash flows; our ability to raise additional capital, obtain financing, or monetize significant assets; our dependence on the Internet; our infrastructure; and transaction-processing systems; compliance with ever-evolving federal, state, and foreign laws; cyberattacks or data security incidents; legal proceedings to which we are subject; damage to our reputation or brand image; shipping and customer service; operations; technological advancements, including artificial intelligence; global conflicts; product safety and quality concerns, content and quality; our ever evolving business model; risks related to our Warrants; risks related to our completed merger with TBHC and The Container Store and our proposed merger with Fathom Holdings, Inc.; our investments in new business strategies, acquisitions, dispositions, partnerships, or other transactions; and regulatory changes or actions related to cryptocurrencies and blockchain technology. Additional information regarding risks, uncertainties, and other important factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in our subsequent filings with the SEC including, without limitation, our Quarterly Report on Form 10-Q for the Quarterly period ended September 30, 2026. Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
4
Neighborhood Intelligence, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share data) | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 100,435 | $ | 175,295 | |||||||
| Restricted cash | 26,795 | 26,924 | |||||||||
Accounts receivable, net of allowance for credit losses of $2,818 and $3,377 | 50,501 | 20,829 | |||||||||
| Inventories | 227,845 | 5,162 | |||||||||
| Prepaids and other current assets | 38,739 | 11,905 | |||||||||
| Total current assets | 444,315 | 240,115 | |||||||||
| Property and equipment, net | 177,348 | 13,712 | |||||||||
| Intangible assets, net | 68,600 | 45,140 | |||||||||
| Goodwill | 140,564 | 6,160 | |||||||||
Equity securities, including securities measured at fair value of $17,075 and $26,903 | 54,905 | 66,641 | |||||||||
| Operating lease right-of-use assets | 443,587 | 5,156 | |||||||||
| Other long-term assets, net | 29,292 | 48,554 | |||||||||
| Total assets | $ | 1,358,611 | $ | 425,478 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 208,170 | $ | 89,992 | |||||||
| Accrued liabilities | 127,343 | 51,297 | |||||||||
| Unearned revenue | 47,804 | 34,429 | |||||||||
| Operating lease liabilities, current | 100,233 | 928 | |||||||||
| Short-term debt, net | — | 15,500 | |||||||||
| Total current liabilities | 483,550 | 192,146 | |||||||||
| Long-term debt, net | 212,807 | — | |||||||||
| Operating lease liabilities, non-current | 343,232 | 5,643 | |||||||||
| Deferred tax liabilities, long-term | 9,436 | — | |||||||||
Other long-term liabilities, including commitments measured at fair value of $— and $2,766 | 17,044 | 9,745 | |||||||||
| Total liabilities | 1,066,069 | 207,534 | |||||||||
| Stockholders' equity: | |||||||||||
Preferred stock, $0.0001 par value, authorized shares - 5,000, issued and outstanding - none | — | — | |||||||||
Common stock, $0.0001 par value, authorized shares - 200,000 | |||||||||||
Issued shares - 106,771 and 76,358 | |||||||||||
Outstanding shares - 98,626 and 68,863 | 11 | 8 | |||||||||
| Additional paid-in capital | 1,401,528 | 1,239,338 | |||||||||
| Accumulated deficit | (924,750) | (842,711) | |||||||||
| Accumulated other comprehensive loss | (4,896) | (2,574) | |||||||||
Treasury stock at cost - 8,145 and 7,495 | (179,675) | (176,478) | |||||||||
| Equity attributable to stockholders of Neighborhood Intelligence, Inc. | 292,218 | 217,583 | |||||||||
| Equity attributable to noncontrolling interests | 324 | 361 | |||||||||
| Total stockholders' equity | 292,542 | 217,944 | |||||||||
| Total liabilities and stockholders' equity | $ | 1,358,611 | $ | 425,478 | |||||||
5
Neighborhood Intelligence, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) | |||||||||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenue | $ | 509,314 | $ | 257,187 | $ | 1,118,228 | $ | 771,186 | |||||||||||||||
| Cost of goods sold | 336,369 | 192,024 | 789,404 | 580,922 | |||||||||||||||||||
| Gross profit | 172,945 | 65,163 | 328,824 | 190,264 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Sales and marketing | 54,272 | 36,126 | 129,690 | 105,625 | |||||||||||||||||||
| Technology | 33,549 | 20,645 | 79,097 | 70,584 | |||||||||||||||||||
| General and administrative | 131,238 | 11,971 | 203,628 | 40,373 | |||||||||||||||||||
| Customer service and merchant fees | 16,217 | 8,873 | 36,814 | 27,561 | |||||||||||||||||||
| Other operating expense (income), net | (262) | — | 2,754 | (5,790) | |||||||||||||||||||
| Total operating expenses | 235,014 | 77,615 | 451,983 | 238,353 | |||||||||||||||||||
| Operating loss | (62,069) | (12,452) | (123,159) | (48,089) | |||||||||||||||||||
| Interest income (expense), net | (3,749) | 1,186 | (1,270) | 2,837 | |||||||||||||||||||
| Other income (expense), net | 20,712 | 6,978 | 21,161 | (17,780) | |||||||||||||||||||
| Loss before income taxes | (45,106) | (4,288) | (103,268) | (63,032) | |||||||||||||||||||
| Provision (benefit) for income taxes | (18,962) | 233 | (21,229) | 714 | |||||||||||||||||||
| Consolidated net loss | (26,144) | (4,521) | (82,039) | (63,746) | |||||||||||||||||||
| Less: Net loss attributable to noncontrolling interests | — | — | — | — | |||||||||||||||||||
| Net loss | $ | (26,144) | $ | (4,521) | $ | (82,039) | $ | (63,746) | |||||||||||||||
| Net loss per share of common stock: | |||||||||||||||||||||||
| Basic | $ | (0.28) | $ | (0.07) | $ | (1.03) | $ | (1.11) | |||||||||||||||
| Diluted | $ | (0.28) | $ | (0.07) | $ | (1.03) | $ | (1.11) | |||||||||||||||
| Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | 94,911 | 60,333 | 79,517 | 57,190 | |||||||||||||||||||
| Diluted | 94,911 | 60,333 | 79,517 | 57,190 | |||||||||||||||||||
6
Neighborhood Intelligence, Inc. Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||||||
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (82,039) | $ | (63,746) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 28,494 | 12,803 | |||||||||
| Amortization of debt issuance and original issue discount cost | 1,159 | — | |||||||||
| Non-cash operating lease cost | 2,407 | 1,461 | |||||||||
| Stock-based compensation to employees and directors | 2,146 | 8,002 | |||||||||
| Deferred income tax | (18,287) | — | |||||||||
| Gain on sale of intangible assets | — | (5,790) | |||||||||
| Impairment of long-lived assets (including leases) | 4,491 | — | |||||||||
| Gain on lease termination | (2,232) | — | |||||||||
| Loss on disposal of fixed assets | 1,463 | — | |||||||||
| Loss from equity method securities | 3,427 | 16,644 | |||||||||
| Gain on loan commitment | (2,766) | — | |||||||||
| Gain on fair value adjustment for derivative | (20,959) | — | |||||||||
| Other non-cash adjustments | (913) | 1,720 | |||||||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable, net | (11,715) | (1,460) | |||||||||
| Inventories | (35,707) | 4,333 | |||||||||
| Prepaids and other current assets | (1,445) | 2,251 | |||||||||
| Other long-term assets, net | 186 | (493) | |||||||||
| Accounts payable | 16,630 | 12,375 | |||||||||
| Accrued liabilities | 1,324 | (26,990) | |||||||||
| Unearned revenue | 2,578 | (7,275) | |||||||||
| Operating lease assets and liabilities, net | (3,447) | (1,016) | |||||||||
| Other long-term liabilities | (3,256) | (3,031) | |||||||||
| Income taxes payable | 12 | — | |||||||||
| Net cash used in operating activities | (118,449) | (50,212) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Expenditures for property and equipment | (11,963) | (5,249) | |||||||||
| Purchase of intangible assets | (1,973) | (15,214) | |||||||||
| Acquisitions of businesses, net of cash acquired | 13,114 | — | |||||||||
| Purchase of equity securities | — | (8,000) | |||||||||
| Proceeds from the sale of intangible assets | — | 6,250 | |||||||||
| Disbursement of notes receivable | (27,168) | (8,232) | |||||||||
| Proceeds from settlement of loan participation agreement | 6,465 | — | |||||||||
| Other investing activities, net | 50 | 29 | |||||||||
| Net cash used in investing activities | (21,475) | (30,416) | |||||||||
7
Neighborhood Intelligence, Inc. Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||||||
| Nine months ended September 30, | |||||||||||
| (Continued) | 2026 | 2025 | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from sale of common stock, net of offering costs | $ | 18,329 | $ | 101,690 | |||||||
| Proceeds from short-term debt | 7,500 | — | |||||||||
| Payments on short-term debt | — | (7,000) | |||||||||
| Proceeds from long-term debt | 15,778 | — | |||||||||
| Payments on long-term debt | (73) | — | |||||||||
| Proceeds from revolving line of credit, net | 26,298 | — | |||||||||
| Refinancing costs | (149) | — | |||||||||
| Repurchase of shares | — | (6,218) | |||||||||
| Payments of taxes withheld upon vesting of employee stock awards | (1,781) | (544) | |||||||||
| Proceeds from employee stock purchase plan | 500 | 683 | |||||||||
| Dividends from token offering | (37) | — | |||||||||
| Other financing activities, net | (348) | 341 | |||||||||
| Net cash provided by financing activities | 66,017 | 88,952 | |||||||||
| Effect of exchange rate changes on cash | (1,082) | — | |||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (74,989) | 8,324 | |||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 202,219 | 186,093 | |||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 127,230 | $ | 194,417 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Non-cash investing and financing activities: | |||||||||||
| Non-cash acquisition of TBHC, SFV Services, and TCS | $ | 271,198 | $ | — | |||||||
8
Supplemental Operational Data
We measure our business using operational metrics, in addition to the financial metrics shown above and the non-GAAP financial measures explained below. We believe these metrics provide investors with additional information regarding our financial results and provide key performance indicators to track our progress. These indicators include changes in customer order patterns and the mix of products purchased by our customers.
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.
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.
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.
Average order value is defined as total net revenue in any given period divided by the total number of orders delivered in that period.
Orders per active customer is defined as orders delivered in a twelve-month period divided by active customers for the same twelve-month period.
The following table provides our key operating metrics, which include data for Kirkland's and The Container Store for the periods presented subsequent to their respective acquisition dates:
(in thousands, except for LTM net revenue per active customer, average order value and orders per active customer)
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Active customers | 8,989 | 4,151 | |||||||||
| LTM net revenue per active customer | $ | 154 | $ | 259 | |||||||
| Orders delivered | 3,978 | 1,254 | |||||||||
| Average order value | $ | 125 | $ | 205 | |||||||
| Orders per active customer | 1.99 | 1.30 | |||||||||
Non-GAAP Financial Measures and Reconciliations
We are providing certain non-GAAP financial measures in this release and related earnings conference call, including adjusted diluted net loss per share, adjusted EBITDA, and free cash flow. We use these non-GAAP measures internally in analyzing our financial results and we believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance and, in the case of free cash flow, our liquidity position, in the same manner as our management and board of directors. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures in this earnings release. These non-GAAP financial measures should be used in addition to and in conjunction with the results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.
9
Adjusted diluted net loss per share is a non-GAAP financial measure that is calculated as net income (net loss) less the income or losses recognized from our equity method securities and the gains on derecognition of loan commitment. We believe that these adjustments to our net income (net loss) before calculating per share amounts provide meaningful supplemental information for investors by excluding items that are not reflective of our core operations and that introduce significant volatility into GAAP results. We believe excluding these adjustments enhances the comparability of our financial results across reporting periods and offers greater and supplemental insight into the performance of our core operations when presented in conjunction with our GAAP disclosures.
More specifically, the income or loss from equity method securities relates to our blockchain asset portfolio, which includes passive investments in early-stage blockchain technology companies. These investments are ancillary to our retail business and are not part of our strategic or operational planning for the retail segment. Additionally, the market value and performance of these investments are subject to material volatility driven by external factors unrelated to our retail business. Similarly, the gain on derecognition of loan commitment arises from non-operating investments where we do not participate in day-to-day operations, capital allocation, or economically significant decision-making. These gains or losses are all non-cash, and the Company believes their inclusion in GAAP net income (net loss) can, in the absence of additional context, distort the comparability of our operating performance across periods.
Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (net loss) before depreciation and amortization, stock-based compensation, interest and other income (expense), provision (benefit) for income taxes, and special items. We believe the exclusion of certain benefits and expenses in calculating adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring.
Free cash flow is a non-GAAP financial measure that is calculated as net cash provided by or used in operating activities reduced by expenditures for property and equipment. We believe free cash flow is a useful measure to evaluate the cash impact of the operations of the business including purchases of property and equipment which are a necessary component of our ongoing operations.
The following tables reflect the reconciliation of diluted net loss per share to adjusted diluted net loss per share (in thousands, except per share data):
| Three months ended September 30, | |||||||||||
| 2026 | |||||||||||
| Diluted EPS | Adjusted Diluted EPS | ||||||||||
| Numerator: | |||||||||||
| Net loss attributable to common stockholders | $ | (26,144) | $ | (26,144) | |||||||
| Denominator: | |||||||||||
| Weighted average shares of common stock outstanding—diluted | 94,911 | 94,911 | |||||||||
| Net loss per share of common stock: | |||||||||||
| Diluted | $ | (0.28) | $ | (0.28) | |||||||
10
| Three months ended September 30, | |||||||||||||||||
| 2025 | |||||||||||||||||
| Diluted EPS | Less: equity method gain1 | Adjusted Diluted EPS | |||||||||||||||
| Numerator: | |||||||||||||||||
| Net loss attributable to common stockholders | $ | (4,521) | $ | 7,005 | $ | (11,526) | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted average shares of common stock outstanding—diluted | 60,333 | 60,333 | 60,333 | ||||||||||||||
| Net loss per share of common stock: | |||||||||||||||||
| Diluted | $ | (0.07) | $ | 0.12 | $ | (0.19) | |||||||||||
1 There was no income tax effect related to the non-GAAP adjustments for any of the periods presented. Our non-GAAP income tax rate was 0% for each period primarily due to having operating losses and the gains and losses reflected in the non-GAAP adjustments were unrealized. Further, there is no deferred income tax impact related to these adjustments primarily due to the valuation allowance against our deferred tax assets.
The following table reflects the reconciliation of adjusted EBITDA to net loss (in thousands):
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net loss | $ | (26,144) | $ | (4,521) | $ | (82,039) | $ | (63,746) | |||||||||||||||
| Depreciation and amortization | 17,335 | 3,879 | 28,494 | 12,803 | |||||||||||||||||||
| Stock-based compensation | (1,462) | 3,522 | 2,146 | 8,002 | |||||||||||||||||||
| Interest (income) expense, net | 3,749 | (1,186) | 1,270 | (2,837) | |||||||||||||||||||
Other (income) expense, net1 | (20,712) | (6,978) | (21,161) | 17,780 | |||||||||||||||||||
| Provision (benefit) for income taxes | (18,962) | 233 | (21,229) | 714 | |||||||||||||||||||
| Special items (see table below) | 19,745 | 115 | 46,037 | 1,042 | |||||||||||||||||||
| Adjusted EBITDA | $ | (26,451) | $ | (4,936) | $ | (46,482) | $ | (26,242) | |||||||||||||||
| Special items: | |||||||||||||||||||||||
Acquisition-related costs1 | $ | 13,499 | $ | — | $ | 26,842 | $ | — | |||||||||||||||
Restructuring costs1, 2 | 3,925 | 115 | 11,125 | 6,832 | |||||||||||||||||||
Gains on discrete asset disposals3 | — | — | — | (5,790) | |||||||||||||||||||
Store-closure non-cash asset impairments4 | (756) | — | 4,491 | — | |||||||||||||||||||
Acquisition-related non-cash purchase-accounting adjustments5 | 2,849 | — | 3,351 | — | |||||||||||||||||||
| Other non-recurring charges | 228 | — | 228 | — | |||||||||||||||||||
| $ | 19,745 | $ | 115 | $ | 46,037 | $ | 1,042 | ||||||||||||||||
1 Amounts in prior period columns have been reclassified to conform to current period's presentation.
2 Reflects cash costs as incurred to combine and realign operations, including workforce optimization, organizational realignment, systems and process integration, severance, separation costs, and related costs.
3 Amounts in prior period columns have been revised to conform to current period's presentation for the correction of immaterial errors.
4 Non-cash impairment of right-of-use and related long-lived store assets arising from store-closure decisions.
5 Non-cash amortization of acquisition-date fair-value lease and other adjustments; cash rent remains in the measure.
11
The following table reflects the reconciliation of free cash flow to net cash used in operating activities (in thousands):
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash used in operating activities | $ | (118,449) | $ | (50,212) | |||||||
| Expenditures for property and equipment | (11,963) | (5,249) | |||||||||
| Free cash flow | $ | (130,412) | $ | (55,461) | |||||||
12