Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 78

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 4A
Chunk 78
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 operations could be adversely impacted.

Segment Information

Our
chief operating decision maker (i. e. chief executive officer) reviews financial information presented on a consolidated basis, accompanied
by disaggregated information about net sales by revenue stream, gross margin and operating expenses by expense type for purposes
of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating
results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established
by Accounting Standards Codification (“ ASC

  Operating Results  
 ─────────────────────

Key Components of Results of Operations

Net Sales

Our net sales consist of direct sales revenues,
Marketplace revenues and services revenues. See “ - Newegg’s Business Model” for more information about these
sources of net sales.

Our net sales are reported net of anticipated
discounts, returns, allowances, sales tax and credit card chargebacks, which are all estimated from historical experience. We also offer
customer promotional programs, which we record as reductions in sales based on anticipated redemption rates estimated from historical
experience.

The following table sets forth the components
of our net sales in absolute amounts and as percentages of total net sales, for the periods indicated.

                             For the Year Ended December 31,                                                                                
                             2024                                                                                                           
                             (in millions, except for percentages)                                                                          
  Net sales                  Amount                                                                                                         
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Direct sales revenues      $                                          1,123.5       91.0      1,396.6       93.3      1,607.0       93.4  
  Marketplace revenues                                                     25.2        2.0         32.3        2.2         47.0        2.7  
  Services revenues                                                        86.9        7.0         68.1        4.5         66.3        3.9  
  Total                      $                                          1,235.6      100.0      1,497.0      100.0      1,720.3      100.0  

Cost of Sales

The largest component of our cost of sales is
the purchase price of goods that we directly sell to customers. Cost of sales also includes (i) costs relating to our service revenues,
which include personnel expenses and other costs relating to our