Expenses hit Overstock profit; big plans for encryption

Salt Lake City – Online discount retailer Overstock.com saw its second quarter profit diminished by expenses including technology spending, but still remains bullish on the upcoming release of its “cryptobond” financial encryption service.

Overstock reported net income of $1.7 million in the second quarter of fiscal 2015, down 10% from $1.9 million the same quarter a year earlier. Rising technology expenses, as well as increased expenses related to staffing and sales and marketing, drove the decrease in profit.

Revenue fared better, growing 17% to $388 million from $332.5 million.

Looking ahead, Overstock is launching digital corporate bonds called “cryptobonds” that will trade using the same technology supporting encrypted “cryptocurrencies” such as bitcoin. Overstock has been soliciting qualified institutional buyers for the bonds, which will trade in a cryptographically-protected distributed ledger. Buyers will be able to track their ownership on the bitcoin blockchain, and Overstock’s TØ.com technology will allow encrypted digital trades to settle on the same day.

“We have funded, developed and launched what may be the most disruptive technology to hit the fintech sector in decades," said CEOPatrick M. Byrne.