Newegg Commerce, Inc. (NEGG): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the true financial engine of Newegg Commerce, Inc. right now, and honestly, the numbers from late 2025 show a definite, sharp pivot back to their core strength: high-performance computing. With full-year sales projected between \$1.38 billion and \$1.42 billion, and Components & Storage accounting for 60.18% of that haul, the focus is clear. I've distilled their entire Business Model Canvas-covering everything from their new October 2025 credit facility to their \$467 average order value in H1 2025-so you can see precisely where they are winning and what risks they are managing. Keep reading to see the full, precise breakdown of their strategy.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Newegg Commerce, Inc. is using to drive growth and manage capital as of late 2025. It's a mix of supply chain, financial engineering, and new market access.

Technology suppliers like NVIDIA and AMD for core component launches

The first half of 2025 saw significant top-line movement directly tied to major product introductions from key silicon partners. Newegg CEO Anthony Chow specifically cited the highly successful launch of the NVIDIA GeForce RTX 50 Series and AMD Radeon RX 9000 Series graphics cards, alongside the AMD Ryzen 9000X3D Series CPUs, as primary drivers for year-over-year growth in Gross Merchandise Volume (GMV) and net sales. This close collaboration with suppliers minimizes tariff impact while maximizing sales velocity on new hardware.

Here are the financial results for the six months ended June 30, 2025, showing the impact of these launches:

To be fair, the broader graphics card market also saw growth in Q3 2025, with the PC add-in-board market reaching 12.0 million units, up 2.8% from the previous quarter. Even with NVIDIA holding a dominant 92% share in Q3 '25, the momentum from these launches was clearly captured by Newegg Commerce, Inc.

East West Bank for a new revolving credit facility secured in October 2025

Newegg Commerce, Inc. has a long-standing relationship with East West Bank, which previously provided inventory financing and working capital to support trade cycles. While the specific terms and principal amount of a new revolving credit facility secured in October 2025 aren't immediately public, East West Bancorp, Inc. (parent of East West Bank) reported total assets of $78.2 billion as of June 30, 2025, and recorded Q2 2025 net income of $310 million. East West Bank operates over 110 locations in the United States and Asia.

PayPal for integrating Agentic Commerce services for AI-shopping

The integration of PayPal's agentic commerce services, announced November 26, 2025, allows customers to purchase Newegg products directly within AI-powered shopping environments like Perplexity. At the time of this announcement, Newegg Commerce, Inc. was valued at $1.6 billion and its gross profit margin stood at 11.28%. The company's stock had seen a 547% price return over the preceding year.

Credit Key to provide B2B financing options up to 12 months

Newegg Business leverages Credit Key to offer flexible Pay Over Time options for eligible business customers. The available plans include Net-30, 3, 6, or 12 months terms. Newegg Business advertises an instant credit line of up to $50K, with higher limits available upon further documentation. Here's a look at the terms:

For context, an illustrative example showed financing $700 over 12 months at a base rate of 1% resulting in a payment of about $69.50/mo.

SHEIN for expanding reach via a storefront on their U.S. Marketplace

The Newegg storefront on SHEIN's U.S. marketplace launched November 11, 2025, to capture the trend-conscious gamer demographic. This partnership brings over 1,000 technology products to SHEIN's platform. This move targets a growing segment, as a 2025 Euromonitor International study indicated that 38% of online female consumers play games weekly. At the time of the launch, Newegg's trailing twelve months revenue was $1.31 billion, and its stock traded at $92.32, significantly up from its 52-week low of $3.32.

• Storefront features over 1,000 technology products.
• Curated selection includes gaming laptops, ultrabooks, earbuds, and PC components.
• Product selections are planned for seasonal updates based on trends.
• The collaboration aims to capitalize on the 38% weekly gaming rate among online female consumers (2025 study).

Finance: draft 13-week cash view by Friday.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Key Activities

You're looking at the core engine driving Newegg Commerce, Inc. right now, late in 2025. The key activities are all about keeping the digital shelves stocked, costs tight, and the enthusiast community engaged. It's a high-wire act in specialized e-commerce.

Operating and maintaining the core Newegg.com e-commerce platform

This is the foundation, the actual marketplace. You saw Net sales for the full year 2024 land at $1.24 billion, down from $1.50 billion in 2023, but the momentum shifted. For the first half of 2025, Net sales rose 12.6% year-over-year to $695.7 million. Digital Commerce 360 projects Newegg online sales for the full year 2025 will reach $1.31 billion. The Gross Merchandise Value (GMV) for H1 2025 was $849.1 million, a 13.7% increase from the prior year period. Honestly, the platform's ability to handle high-value electronics traffic is non-negotiable.

Here are some operational metrics from the first half of 2025:

Strategic cost optimization, reducing SG&A expenses throughout 2024 and 2025

The focus on operational discipline was intense. Throughout 2024, Newegg Commerce, Inc. executed SG&A reduction initiatives, including warehouse consolidation and subleasing unused property. This discipline is showing up in the profitability metrics. For the full year 2024, Total Operating Expenses were $183.04 million against a Total Gross Profit of $131.49 million, resulting in an operating income of -$51.55 million. But look at the turnaround: Adjusted EBITDA for H1 2025 was $11.3 million, a massive swing from the $7.3 million loss reported for the same period in 2024. That's the result of those cost-cutting moves.

The inventory management was also key to this optimization:

• Inventory on hand decreased from $136.2 million as of December 31, 2023, to $98.5 million as of December 31, 2024.
• This reduction was largely driven by strong sales during the holiday periods.

The company is projecting this efficiency will continue, with H2 2025 Adjusted EBITDA expected to be between $13.7 million and $19.1 million.

Managing large, high-volume sales events like Black November and FantasTech

These events are critical for moving volume and setting the tone for the following quarter. The Black November® sales event in 2024 featured Doorbuster deals available every day from November 1 through November 29. The Black Friday Sale itself kicked off on November 21, 2024, at 12:00 a.m. PST. They even used a Black Friday Price Protection Program for purchases made through November 20, 2024, with refunds processed by December 10, 2024, if the price dropped by November 30, 2024. The success of the Q4 2024 Black Friday campaign definitely helped push the company to positive Adjusted EBITDA in Q1 2025.

Supply chain management and logistics for high-value electronics

Moving high-value, often new-release, electronics requires tight logistics. The company specifically noted benefiting from pull-forward spending due to tariff uncertainty while simultaneously minimizing tariff impact on supply chain and customer experience through close collaboration with key partners and suppliers in H1 2025. This collaboration is a necessary activity to maintain service levels when facing macroeconomic uncertainty, like the tariff policy concerns mentioned for the remainder of 2025.

Cultivating the Newegg Gamer Community for engagement and feedback

This is a newer, strategic activity. Newegg Commerce, Inc. launched the Newegg Gamer Community in Q2 2025. This platform is integrated into the website and app, allowing users to share hardware builds and discuss tech trends. The market reacted to this strategic pivot; the stock surged by 28.01% in early August 2025, correlating with the platform's launch. The community is designed to foster a sense of belonging, aiming to boost customer retention, which was up to 25.2% in H1 2025. For example, a community giveaway started December 1 and ended December 7, 2025. It's about owning the space where enthusiasts discuss their product choices.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Key Resources

You're looking at the core assets that power Newegg Commerce, Inc.'s operations as of late 2025. These aren't just line items; they are the engines driving the business, especially given the recent volatility in the tech supply chain.

Established brand recognition in the PC enthusiast and builder market remains a foundational, though less easily quantified, resource. This recognition is evident in the customer engagement metrics we see, such as the growth in the active user base.

The proprietary e-commerce platform and IT infrastructure is the digital storefront. While specific uptime percentages aren't public, the platform supported a Gross Merchandise Volume (GMV) of $\mathbf{\$849.1}$ million in the first half of 2025. This infrastructure also managed the successful integration and sales spike from major product launches, like the NVIDIA GeForce RTX 50 Series and AMD Radeon RX 9000 Series graphics cards.

The global fulfillment and distribution network supports the company's reach. As of late 2025, Newegg Commerce, Inc. maintains an employee count of $\mathbf{762}$ people, supporting these complex logistics.

Cash and liquidity saw a strategic enhancement in the fall of 2025. Newegg Commerce, Inc. entered a new revolving credit facility with East West Bank on October 10, 2025, providing access to up to $\mathbf{\$13.41}$ million, with the potential to increase to $\mathbf{\$15.0}$ million, maturing on August 27, 2026. This was complemented by the $\mathbf{\$65.0}$ million At-the-Market (ATM) equity program, from which the company realized $\mathbf{\$35.7}$ million net proceeds as of September 30, 2025, bolstering working capital.

The loyal customer base is a critical, measurable asset. The average order value (AOV) for the first half of 2025 reached $\mathbf{\$467}$, a clear increase from the $\mathbf{\$401}$ seen in the same period the prior year. This suggests customers are buying more or higher-value items per transaction. The active customer base, defined as unique customer IDs with at least one purchase in the past six months, stood at approximately 1.13 million as of June 30, 2025.

Here's a quick look at the key quantitative resources and performance indicators from H1 2025 and the recent liquidity move:

The improvement in AOV to $\mathbf{\$467}$ is a strong indicator that the core PC enthusiast segment is spending more per visit, which directly impacts the profitability of the platform resource. Also, the $\mathbf{\$11.3}$ million Adjusted EBITDA for the first half shows the operational efficiency of the platform and network is improving, narrowing the net loss to $\mathbf{\$4.2}$ million from $\mathbf{\$25.0}$ million year-over-year for the same period.

You can see the impact of these resources on customer engagement through the following operational metrics:

• Repeat purchase rate: Percentage of active customers making at least two purchases during the period.
• Organic traffic: Boosted by new CPU and GPU launches.
• Cross-category purchasing: Spurred by high-demand component sales.

The new credit facility provides $\mathbf{\$13.41}$ million in immediate flexibility, which is crucial for managing the inventory cycles inherent in the electronics retail business. Finance: draft 13-week cash view by Friday.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Newegg Commerce, Inc. (NEGG) over the competition in late 2025. It really boils down to depth, price, timing, and support for the tech enthusiast and the business buyer alike.

Deep and specialized selection of PC components and gaming hardware

Newegg Commerce, Inc. remains the destination for the serious builder. The platform's catalog is deep, offering access to over 9 million unique items through NeweggBusiness alone. This specialization is what keeps the core audience coming back, especially when new silicon drops.

The focus on high-performance tech is clear in the transaction data. For the six months ended June 30, 2025, the Average Order Value (AOV) hit $467, a jump from $401 in the same period last year. This suggests customers are buying more premium, specialized gear per transaction.

The top-selling categories reflect this focus:

• PC gaming
• Consumer electronics
• Health & beauty
• Automotive

Also, Newegg Commerce, Inc. is pushing its own ABS line into higher-margin areas, planning expansion into high-performance workstations and tower servers powered by components like the NVIDIA RTX PRO 6000 Blackwell cards.

Competitive pricing and aggressive promotional sales events

Price perception is key, even when supply is tight. You see this in how the company managed the market dynamics leading up to the H1 2025 results. Newegg Commerce, Inc. benefited from pull-forward spending due to tariff uncertainty, indicating customers were locking in prices before potential hikes.

For the 2025 holiday season, you can expect aggressive offers. For example, the 2025 Black Friday Deals targeted deep discounts on hot items like Ryzen 9000 CPUs, Intel Core Ultra processors, DDR5 RAM, NVMe Gen5 SSDs, and 80 PLUS Gold PSUs. Plus, they keep financing as a pricing tool, offering 12 Months Special Financing every day on purchases of $499 or more.

Trusted platform for new, high-demand product launches (e.g., new GPUs/CPUs)

This is where Newegg Commerce, Inc. really shines for the enthusiast. The first half of 2025 saw strong growth directly tied to major product cycles. Net sales rose 12.6% year-over-year to $695.7 million for the six months ended June 30, 2025, largely due to this timing.

Specifically, the successful launches driving this included:

The company is also investing in the ecosystem around these launches. They are debuting the Gamer Community and Gamer Zone in the second half of 2025 to support this base.

Flexible B2B financing options for business customers

For NeweggBusiness customers, cash flow management is a stated value. They offer a Net 30 Credit Line, and through a partnership with Credit Key, they extended this to financing options up to 12 months.

To incentivize adoption, they recently offered an extended 0% interest for 60 days promotion for qualified buyers, which is longer than their usual 30-day interest-free window. If you apply for the Net Terms account, you should allow approximately 3-5 business days for processing.

High-touch customer service and community support for tech questions

The value proposition here is built on trust and repeat business, which is showing up in the metrics. The repeat purchase rate stood at 25.2% as of June 30, 2025, an improvement from 23.0% the prior year. Active customers, defined as unique IDs with a purchase in the last six months, reached approximately 1.13 million as of that same date.

The support structure includes:

• Offering 24/7 Support via phone, email, and live chat.
• Staff trained to be knowledgeable about the complex products sold.
• Encouraging customer feedback through Product Reviews and Ratings displayed on pages.

This focus on the customer experience helps drive that higher repeat business. Finance: draft 13-week cash view by Friday.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Customer Relationships

You're looking at how Newegg Commerce, Inc. keeps its customers engaged, moving beyond just a simple transaction. The relationship model blends high-tech self-service with targeted community building and financial incentives.

Automated self-service via the e-commerce platform

The core of the customer relationship is the e-commerce platform itself, designed for high-volume, automated interaction. This is where the bulk of the customer base interacts with Newegg Commerce, Inc. without direct human intervention for routine tasks. The platform supports the transactional relationship focused on price and speed that many customers expect in the tech retail space.

Transactional relationship focused on price and speed

The relationship is fundamentally transactional, driven by competitive pricing and fulfillment speed, especially given the high-demand nature of PC components. For the first six months ended June 30, 2025, the company reported net sales of $695.7 million. This focus on transaction efficiency is reflected in key operational metrics from that same period.

The increase in AOV to $467 suggests customers are buying higher-value items, which aligns with the strong demand for new GPUs and CPUs seen in the first half of 2025.

Dedicated B2B sales and support for Newegg Business clients

Newegg Commerce, Inc. supports its business segment by offering marketing, supply chain, and technical solutions on a single platform. This dedicated support structure is actively being leveraged to capture enterprise spending, as evidenced by the planned expansion of the ABS line of PCs to high-performance workstations and tower servers, powered by NVIDIA RTX PRO 6000 Blackwell graphic cards, specifically to help businesses explore AI advancements. While specific B2B sales figures aren't broken out here, the strategic product alignment shows a clear path for dedicated business relationship management.

Community-driven engagement through the Newegg Gamer Community

To deepen engagement beyond the transaction, Newegg Commerce, Inc. debuted its Newegg Gamer Community in Q2 2025. This platform is designed to foster a PC-centric culture where members can share builds and discuss tech trends. The market reacted positively to this strategic move; the company's stock surged by 28.01% in early August 2025, correlating with the platform's launch, signaling investor belief in its long-term value proposition. This community focus is aimed at supporting the already strong customer retention, which stood at 25.2% as of June 30, 2025.

Store credit card offering a 4% everyday savings benefit

The Newegg Store Credit Card, issued by Synchrony, provides a choice in customer value proposition. Cardholders can opt for an instant 4% discount on everyday purchases or utilize special financing options. You can't combine both benefits. The financing tiers are structured as follows:

• 6 Months Special Financing on purchases of $199 or more.
• 12 Months Special Financing on purchases of $499 or more.

It's important to note the underlying cost structure: for new accounts as of 07/31/2025, the Purchase APR is a stiff 34.99%, with a Penalty APR of 39.99%. The card carries No annual fee.

Finance: draft 13-week cash view by Friday.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Channels

The Channels block for Newegg Commerce, Inc. centers on a multi-pronged digital distribution strategy, heavily weighted toward its proprietary e-commerce platform, but increasingly incorporating third-party access points and specialized B2B services.

Newegg.com e-commerce website (primary sales channel)

The core channel remains the Newegg.com website, which handles the vast majority of transactions, including both first-party (1P) sales where Newegg Commerce, Inc. acts as the seller, and third-party (3P) marketplace sales. For the six months ended June 30, 2025, the platform generated net sales of $695.7 million, marking a 12.6% year-over-year increase. Gross Merchandise Volume (GMV) for the same period reached $849.1 million, up 13.7% year-over-year. Looking at the full-year 2025 guidance, Newegg Commerce, Inc. projects total net sales between $1,375.3 million and $1,423.9 million, with corresponding GMV guidance between $1,691.3 million and $1,751.1 million. As a baseline from 2024, 1P sales accounted for 72% of total GMV, while 3P GMV represented 28%. The momentum continued into the end of the year; revenues for the Newegg.com domain in November of 2025 were reported at $165 million, showing a change of 175-180% from October.

Newegg Business platform for B2B sales

Newegg Commerce, Inc. serves business e-commerce needs through its dedicated platform, which offers marketing, supply chain, and technical solutions. A key channel enhancement for B2B customers involved providing flexible financing options, including extended-term options up to 12 Months, through a partnership with Credit Key. The company is also expanding its ABS line of PCs to high-performance workstations and tower servers, targeting businesses exploring AI applications.

Newegg mobile application

The mobile application is a critical engagement tool, given that 90% of mobile time is spent within apps generally. Customers using mobile apps in e-commerce spend about 202 minutes per month shopping, compared to only 11 minutes on mobile web. For Newegg Commerce, Inc., the platform supported approximately 1.13 million active customers as of June 30, 2025. The Average Order Value (AOV) for the first half of 2025 was $467, up from $401 in the prior year period. The repeat purchase rate for active customers making at least two purchases within the last six months stood at 25.2% as of June 30, 2025.

Third-party marketplaces, including the new SHEIN U.S. Marketplace storefront

The 3P marketplace is a growing component of the overall GMV. The company has established a storefront on the SHEIN U.S. Marketplace, integrating Newegg Commerce, Inc.'s offerings into a major fashion and lifestyle platform to capture a broader consumer base. This strategy diversifies the sales footprint beyond the primary domain.

Direct fulfillment from warehouses to customers

Direct fulfillment underpins the customer experience, especially for high-demand components like GPUs and CPUs that drove H1 2025 results. The company focuses on optimizing its supply chain strategies to minimize macroeconomic impacts. The total employee count for Newegg Commerce, Inc. was reported at 762, with Revenue Per Employee at $1.72 million for the last twelve months.

• Active Customers (H1 2025 End): Approximately 1.13 million unique customer IDs.
• Repeat Purchase Rate (H1 2025 End): 25.2% of active customers made two or more purchases.
• Gross Profit (H1 2025): Increased 26.5% to $79.8 million.

Finance: draft 13-week cash view by Friday.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Customer Segments

You're looking at the core groups Newegg Commerce, Inc. serves as of mid-2025, right after they posted strong first-half numbers. The customer base remains deeply rooted in technology but shows clear diversification.

PC builders and hardware enthusiasts seeking specialized components represent the foundational segment. This group demands niche parts and the latest silicon. The success of this segment directly impacts the topline; for instance, the first half of 2025 saw net sales increase 12.6% year-over-year to $695.7 million and Gross Merchandise Volume (GMV) rise 13.7% to $849.1 million, largely driven by the launch of new NVIDIA and AMD products. This indicates high-value transactions within this core group. The Average Order Value (AOV) for the six months ended June 30, 2025, hit $467, up from $401 in the prior year period, suggesting enthusiasts are buying more expensive, specialized gear.

Gamers and content creators demanding high-performance GPUs and CPUs are a critical subset of the enthusiast market, especially during new product cycles. The strong H1 2025 performance was explicitly boosted by robust sales of PC components, particularly the launch of the NVIDIA GeForce RTX 50 Series and AMD Radeon RX 9000 Series graphics cards, and AMD Ryzen 9000X3D Series CPUs. This group drives high-margin sales and repeat business. The repeat purchase rate for active customers was 25.2% as of June 30, 2025, showing loyalty among those purchasing high-end hardware.

Small to medium-sized businesses (SMBs) and IT resellers (B2B) are served through the NeweggBusiness division. This segment values bulk purchasing power and specialized financing. NeweggBusiness provides access to an extensive product catalog, reportedly covering over 9 million unique items. The company is actively trying to attract more of these customers with tailored financial support.

• NeweggBusiness partnered with Credit Key for flexible financing options.
• Financing plans stretch up to 12 months.
• Eligible buyers receive an extended interest-free period of 60 days.
• The B2B platform supports large quantity orders via wholesale distribution networks.

Here's a quick look at the B2B support structure:

General consumers purchasing electronics and smart home devices make up the broader base, though the core focus remains tech. As of December 31, 2024, the total active customer count stood at approximately 2.1 million. By June 30, 2025, the active customer count (defined as unique IDs with a purchase in the past six months) was approximately 1.13 million. The platform has diversified beyond core PC parts into categories like health & beauty and home office, with female visitors accounting for 26.6% of the site traffic as of early 2025, showing a broadening appeal outside the traditional enthusiast demographic.

International customers in Canada and other regions contribute a notable, though smaller, portion of the total revenue. For the full fiscal year 2024, the geographic revenue distribution showed the United States accounted for $1.13 billion, representing 91.6% of the total $1.24 billion in net sales. Canada was the next largest market, contributing $90.04 million, or 7.3% of the total revenue for 2024. The Rest of World segment accounted for $13.84 million, or 1.1%.

The geographic revenue split for fiscal year 2024 was:

The company is definitely focused on optimizing its domestic operations while maintaining its international footprint, especially in Canada.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Cost Structure

You're looking at the major expenses Newegg Commerce, Inc. has to cover to keep the lights on and the servers running. For a high-volume electronics retailer, the cost structure is dominated by the price of the goods themselves and getting them to the customer.

High Cost of Goods Sold (COGS) due to low-margin electronics retail

The core cost is the Cost of Revenue, which is essentially the COGS for Newegg Commerce, Inc. Selling electronics, especially components like GPUs, means razor-thin margins. For the first half of 2025, the Cost of Revenue was substantial relative to sales, reflecting this low-margin reality. The company's strategy relies on high volume to make up for the small profit on each item sold.

Here's a look at the key cost drivers based on the latest figures:

Significant logistics and fulfillment expenses (shipping, warehousing)

Logistics and fulfillment costs are baked into the Cost of Revenue and operating expenses, but for an e-commerce player, they are massive. While Newegg Commerce, Inc. doesn't break these out separately in the high-level guidance, we know they are a major component of the total operating expenses, which were $183.04 million in FY 2024. The company mentioned optimizing supply chain strategies in 2025 to mitigate macroeconomic impacts, which directly targets these fulfillment costs.

Selling, General, and Administrative (SG&A) expenses, currently being optimized

SG&A represents the overhead of running the business-salaries, rent, and administrative functions. You can see a clear trend of optimization here, as the company has been actively working to bring this line item down relative to revenue. This focus on cost discipline is key to moving toward profitability.

• SG&A Expense for FY 2024 was $183.04 million.
• SG&A Expense for FY 2023 was $238.64 million.
• SG&A Expense for FY 2022 was $266.16 million.
• The reduction from $238.64 million in 2023 to $183.04 million in 2024 shows a significant drive to cut overhead.

Marketing and promotional costs for major sales events

Marketing is a necessary evil in competitive retail, especially for driving traffic during peak events like Cyber Monday. These costs fall under SG&A, but they spike significantly around key promotional periods. The company's ability to generate $11.3 million in Adjusted EBITDA in H1 2025, up from a loss of $7.3 million in H1 2024, suggests marketing spend was more efficient or better controlled during the first half of 2025, even while driving a 13% rise in net sales.

Technology development and platform maintenance costs

As a digital platform, Newegg Commerce, Inc. has ongoing costs for its website, marketplace infrastructure, and security. These are embedded within the SG&A line item, as there is no separate Research and Development (R&D) expense reported in the summary tables, with R&D being $0.00 million for FY 2024 and TTM periods shown. This suggests technology costs are fully absorbed into SG&A or Cost of Revenue, rather than being capitalized or separately tracked in the high-level income statement view you're seeing.

The company's continued operation and expansion of its third-party marketplace depend on this technology base, which is a fixed-cost element that scales better as revenue grows toward the 2025 guidance of up to $1.42 billion in net sales.

Newegg Commerce, Inc. (NEGG) - Canvas Business Model: Revenue Streams

You're looking at how Newegg Commerce, Inc. actually brings in the money, which is key to understanding its valuation right now. The company has guided its full-year 2025 Net Sales to be between $\mathbf{\$1.38}$ billion and $\mathbf{\$1.42}$ billion. That's the top-line target we're working with for the year ending December 31, 2025.

The core of the business is still direct product sales, which is where the bulk of the revenue comes from. For the latest reported period breakdown, Components & Storage made up $\mathbf{60.18\%}$ of revenue, which was $\mathbf{\$743.51}$ million in the prior full-year period. To be fair, H1 2025 saw Net Sales of $\mathbf{\$695.7}$ million, showing strong growth year-over-year.

The revenue streams are varied, but the product focus is clear. Here's a look at the components that make up the sales mix based on the most recent detailed breakdown available:

• Direct product sales, with Components & Storage being $\mathbf{60.18\%}$ of revenue.
• Commissions and fees from third-party marketplace sellers.
• Sales of Computer Systems and Office Solutions.
• Revenue from Software & Services, representing $\mathbf{4.78\%}$ of revenue.

The marketplace activity is important; for instance, the Gross Merchandise Volume (GMV) for the first half of 2025 reached up to $\mathbf{\$870.1}$ million. That GMV figure includes the value of goods sold by third parties, from which Newegg Commerce, Inc. collects commissions and fees.

Here's the quick math on how the revenue was segmented in the last fully detailed period, which helps map out the current structure:

The Software & Services stream, while smaller, is a distinct source, coming in at $\mathbf{4.78\%}$ of revenue, or $\mathbf{\$59.1}$ million in the prior full-year reporting. Also, keep in mind the geographic split: the United States accounted for $\mathbf{91.59\%}$ of the revenue in that same period. Finance: draft a sensitivity analysis on the 2025 sales projection range by Friday.