Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: The Beachbody Company, Inc. (BODI) - BODI has shown a price increase of 7.5% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, BODI's stock has gained 40.9%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - BODI has a beta of 1.22, suggesting it moves 22% higher than the market in either direction, indicating fast-paced momentum [5] - The stock has a Momentum Score of B, suggesting it is an opportune time to invest [6] - BODI has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.13, indicating it is relatively cheap at 13 cents for each dollar of sales, providing room for growth [7] Group 3: Additional Investment Opportunities - Besides BODI, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Group 1 - The Beachbody Company, Inc. (BODI) is a notable stock in the Consumer Discretionary sector, currently outperforming its peers with a year-to-date return of 18.5% compared to the sector average of 10.2% [4] - BODI has a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for BODI's full-year earnings has increased by 49.1% in the past quarter, reflecting improving analyst sentiment [4] Group 2 - The Beachbody Company, Inc. is part of the Consumer Services - Miscellaneous industry, which has an average loss of 7.4% this year, highlighting BODI's strong performance within this group [6] - In contrast, Betterware de Mexico SAPI de C (BWMX), another stock in the Consumer Discretionary sector, has a year-to-date return of 20.9% and also holds a Zacks Rank of 2 (Buy) [5] - The Consumer Products - Discretionary industry, which includes BWMX, has seen a decline of 12.8% this year, further emphasizing the relative strength of BODI [7]

Core Viewpoint - The Beachbody Company, Inc. (BODI) has shown a significant stock price increase of 40.9% over the past four weeks, with a mean price target of $10.83 indicating a potential upside of 96.6% from its current price of $5.51 [1] Price Targets and Analyst Consensus - The average price target for BODI ranges from a low of $4.00 to a high of $15.50, with a standard deviation of $6.05, indicating variability in analyst estimates [2] - The lowest estimate suggests a decline of 27.4%, while the highest points to an upside of 181.3% [2] - A low standard deviation indicates a strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding BODI's earnings prospects, as evidenced by a strong consensus in revising EPS estimates higher [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 49.1%, with no negative revisions [12] - BODI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on price targets for investment decisions may not be prudent, as analysts' ability to set accurate targets has been questioned [3][10] - Analysts often set optimistic price targets due to business incentives, which can lead to inflated estimates [8]

Summary of The Beachbody Company (BODI) Conference Call - August 20, 2025 Company Overview - The Beachbody Company, now rebranded as Body, is undergoing a significant turnaround after facing financial challenges. The company has a vast library of over 135 fitness programs, totaling more than 9,000 hours of video content, including popular programs like P90X and Insanity [2][3][4]. Financial Turnaround - The company has successfully reduced its cash breakeven point from $900 million to less than $200 million, achieving a reduction of over $700 million [7][8]. - Body has reported seven consecutive quarters of positive adjusted EBITDA, totaling approximately $39.5 million, and has achieved positive free cash flow of $4.1 million for the first half of 2025 [8][10][58]. - The company's debt has been significantly reduced from $50 million to under $20 million, with a refinancing that lowered the cost of capital by nearly 40% [9][10][54]. - The marketing expense as a percentage of revenue has decreased from 51.1% to 39.5%, with a target to reduce it further below 35% [18][19]. Future Growth Initiatives - In 2026, Body plans to launch its products into the retail market, including nutritional supplements under the P90X and Insanity brands, leveraging its established brand recognition [12][13][14]. - The company aims to cross-promote fitness programs with nutritional products, offering consumers incentives such as free access to exercise programs with supplement purchases [13][14]. - Body is transitioning to a virtual consumer packaged goods (CPG) model, outsourcing production and logistics while keeping product development and marketing in-house [39][40][41]. Market Opportunity - The company is targeting a broader market, addressing health issues such as obesity and lifestyle diseases, with a potential customer base of approximately 230 million adults in the U.S. [31][32][35]. - Body's extensive library of fitness content positions it as a unique player in the market, akin to a "Netflix of fitness," appealing to a wide range of consumers [33][34]. Strategic Positioning - The transition to NASDAQ is seen as a strategic move to align with a platform that supports emerging technologies and innovative companies [50][51]. - Body has a strong balance sheet with more cash than debt and significant net operating losses (NOLs) that can be utilized for future growth and acquisitions [55][56]. Investor Value Proposition - The company is currently undervalued with a market cap of approximately $40 million, despite being cash flow positive and having a strong asset base [15][16][64]. - The management believes that the financial turnaround has been successfully executed, and the company is poised for significant growth with new product launches and market expansion [66][67]. Conclusion - Body is positioned for a promising future with a solid financial foundation, innovative product strategies, and a commitment to addressing significant health challenges in the market. The management encourages potential investors to consider the company's growth trajectory as it embarks on this new phase [66][67].

Group 1 - The Beachbody Company, Inc. (BODI) shares have increased by 27.3% in the past four weeks, closing at $5.04, with a mean price target of $10.83 indicating a potential upside of 114.9% [1] - The average price targets range from a low of $4.00 to a high of $15.50, with a standard deviation of $6.05, suggesting variability in analyst estimates [2] - Analysts show a consensus that BODI will report better earnings than previously estimated, which historically correlates with stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for BODI's current year earnings has risen by 49.1% over the past month, indicating positive sentiment among analysts [12] - BODI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting strong potential for upside [13] - While consensus price targets may not be entirely reliable, the implied direction of price movement appears to be a useful guide for investors [14]

Industry Overview - The health and fitness industry has transformed into a significant market, driven by a cultural shift towards healthier living, with consumers actively seeking better nutrition and structured fitness plans [2] - The global health and wellness market is projected to reach $11 trillion by 2034, growing at a compound annual growth rate (CAGR) of 5.4% from 2025 [4] - Major tech companies like Apple and Amazon are reshaping consumer engagement in wellness through innovative products and services [3] Company Highlights Peloton Interactive - Peloton has developed a connected fitness platform that combines advanced equipment with immersive digital content, creating an interactive fitness experience [7] - The company has shifted its business model to a balanced mix of product and subscription revenues, with subscription services becoming a key driver of recurring income [8] - Peloton continues to innovate and expand its market reach through partnerships and international expansion, positioning itself for long-term growth in the fitness sector [10] Sprouts Farmers Market - Sprouts operates as a health-focused grocery retailer, offering a wide selection of fresh, natural, and organic products, with its private-label brand representing about 24% of total sales [11][12] - The company has embraced digital transformation, with online sales accounting for roughly 15% of total revenues, and has invested in community well-being initiatives [13] - Sprouts has expanded its store locations and created a proprietary distribution network to enhance product freshness and supply chain efficiency [12] SunOpta - SunOpta focuses on plant-based and fruit-based products, catering to the growing demand for health and wellness options [14] - The company has evolved into a high-growth platform centered on scalable, high-margin categories, particularly in oat-based beverages and fruit-based foods [15] - SunOpta integrates sustainability into its product development, enhancing its alignment with health and fitness values [16] The Beachbody Company - Beachbody has built a comprehensive health and fitness ecosystem that combines digital workouts, nutrition, and mindset coaching through its BODi platform [17] - The company has shifted its business model to a direct-to-consumer sales approach, enhancing flexibility in content access and reducing operating expenses [19] - Beachbody is expanding into physical retail and innovating with targeted wellness solutions, aligning with evolving health trends [20]

Summary of The Beachbody Company (BODI) FY Conference Call - August 12, 2025 Company Overview - The Beachbody Company has been a significant player in the fitness industry for over 25 years, known for popular programs like P90X and Insanity [2][3] - The company underwent a financial turnaround after going public in 2021, transitioning from a multi-level marketing (MLM) model to a direct-to-consumer approach [4][7] Financial Performance - The breakeven revenue requirement was reduced from $900 million to $200 million, indicating a significant improvement in financial health [4][5] - Gross margin increased by over 1,000 basis points, with seven consecutive quarters of positive adjusted EBITDA totaling nearly $40 million [5][32] - The company has a market cap of $30 million with $25 million in debt and $25 million in cash, positioning it for future growth [32][25] Growth Strategy - The company plans to launch a retail line in 2026, introducing products like P90X and Shakeology into mainstream retail channels [8][9] - New fitness programs are being developed to coincide with retail product launches, enhancing the overall offering [9][15] - The company aims to leverage its existing subscriber base to cross-sell nutritional products, with a focus on health and longevity rather than just aesthetics [17][19] Market Position and Opportunities - The fitness market is seen as counter-cyclical, with the subscription cost being less than $0.50 a day, making it an attractive option even in weaker economic conditions [43][44] - The company is positioned to address broader health issues, targeting a large total addressable market (TAM) of overweight and obese individuals [56][67] - The introduction of new nutritional products is expected to capitalize on existing brand awareness, with over 60% recognition of the P90X supplement line before its launch [23][24] Competitive Landscape - The company differentiates itself by offering a vast library of high-quality fitness content, which is not easily replicable by competitors [55][67] - The shift from equipment-based fitness solutions to content-driven offerings provides agility and flexibility in responding to market trends [64][66] Future Outlook - The company anticipates significant growth in 2026 and 2027, with a focus on expanding its market presence and improving financial performance [25][32] - The management emphasizes the importance of communicating the company's value proposition to potential investors and consumers [25][52] Additional Insights - The impact of GLP-1 medications on weight loss is seen as an opportunity for the company, as users will need to maintain muscle mass through exercise [59][60] - The company is exploring partnerships with health insurance companies to promote at-home fitness solutions as an alternative to gym memberships [70][71]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify potential candidates [3] Group 2: The Beachbody Company, Inc. (BODI) - BODI has shown a price increase of 15% over the past four weeks, indicating growing investor interest [4] - The stock has gained 17.9% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - BODI has a beta of 1.2, suggesting it moves 20% higher than the market in either direction, indicating fast-paced momentum [5] - The stock has a Momentum Score of A, suggesting it is an opportune time to invest [6] - BODI has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which attract more investors [7] - The stock is trading at a Price-to-Sales ratio of 0.10, indicating it is relatively cheap at present [7] Group 3: Investment Opportunities - BODI appears to have significant potential for growth, and there are other stocks that meet the criteria of fast-paced momentum at a bargain [8] - Various Zacks Premium Screens are available to help identify winning stock picks based on different investing styles [9]

Core Viewpoint - The Beachbody Company, Inc. (BODI) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [2]. - The Zacks rating upgrade for The Beachbody Company signifies an improved earnings outlook, likely to positively affect its stock price [4][6]. Impact of Earnings Estimates on Stock Prices - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to significant price movements based on their buying or selling activities [5]. Earnings Estimate Revisions for The Beachbody Company - For the fiscal year ending December 2025, The Beachbody Company is expected to earn -$2.52 per share, unchanged from the previous year [9]. - Over the past three months, the Zacks Consensus Estimate for The Beachbody Company has increased by 51.3%, indicating a positive trend in earnings estimates [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [8]. - The Beachbody Company's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10][11].

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents The Beachbody Company, Inc.'s unaudited condensed consolidated financial statements for the quarter and six months ended June 30, 2025, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue disaggregation, fair value measurements, inventory, debt, equity, and restructuring activities [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $145,894 | $174,556 | $(28,662) | -16.4% | | Total Liabilities | $125,736 | $146,386 | $(20,650) | -14.1% | | Total Stockholders' Equity | $20,158 | $28,170 | $(8,012) | -28.4% | - Current assets decreased by **$21.39 million (27.2%)** from $78.685 million at December 31, 2024, to $57.295 million at June 30, 2025, primarily driven by decreases in other current assets and inventory[10](index=10&type=chunk) - Current liabilities decreased by **$31.504 million (24.7%)** from $127.638 million at December 31, 2024, to $96.134 million at June 30, 2025, largely due to a decrease in deferred revenue and the current portion of the Term Loan[10](index=10&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Unaudited Condensed Consolidated Statements of Operations – Three Months Ended June 30 (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total Revenue | $63,941 | $110,183 | $(46,242) | -42.0% | | Gross Profit | $46,238 | $76,376 | $(30,138) | -39.5% | | Operating Loss | $(3,964) | $(9,482) | $5,518 | -58.2% | | Net Loss | $(5,900) | $(10,865) | $4,965 | -45.7% | | Net Loss per Share | $(0.85) | $(1.59) | $0.74 | -46.5% | Unaudited Condensed Consolidated Statements of Operations – Six Months Ended June 30 (in thousands) | Metric (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total Revenue | $136,304 | $230,229 | $(93,925) | -40.8% | | Gross Profit | $97,787 | $157,658 | $(59,871) | -38.0% | | Operating Loss | $(7,638) | $(20,305) | $12,667 | -62.4% | | Net Loss | $(11,648) | $(25,081) | $13,433 | -53.6% | | Net Loss per Share | $(1.68) | $(3.70) | $2.02 | -54.6% | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Unaudited Condensed Consolidated Statements of Comprehensive Loss – Three Months Ended June 30 (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net Loss | $(5,900) | $(10,865) | | Total Other Comprehensive Loss | $(6) | $(4) | | Total Comprehensive Loss | $(5,906) | $(10,869) | Unaudited Condensed Consolidated Statements of Comprehensive Loss – Six Months Ended June 30 (in thousands) | Metric (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(11,648) | $(25,081) | | Total Other Comprehensive Income (Loss) | $(15) | $34 | | Total Comprehensive Loss | $(11,663) | $(25,047) | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Unaudited Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric (in thousands) | Balances at Dec 31, 2024 | Net Loss | Other Comprehensive Loss | Equity-based Compensation | Options Exercised, net | Tax Withholdings | ESPP Issuance | Balances at Jun 30, 2025 | | :-------------------- | :----------------------- | :------- | :----------------------- | :------------------------ | :--------------------- | :--------------- | :-------------- | :----------------------- | | Additional Paid-In Capital | $671,735 | — | — | $3,741 | $47 | $(215) | $78 | $675,386 | | Accumulated Deficit | $(643,518) | $(11,648) | — | — | — | — | — | $(655,166) | | Total Stockholders' Equity | $28,170 | $(11,648) | $(15) | $3,741 | $47 | $(215) | $78 | $20,158 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $6,580 | $8,209 | | Net cash (used in) provided by investing activities | $(2,511) | $2,655 | | Net cash provided by (used in) financing activities | $785 | $(11,504) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $5,374 | $(1,082) | | Cash, cash equivalents and restricted cash, end of period | $25,561 | $32,327 | - Operating cash flow decreased by **$1.629 million**, primarily due to increased cash used by deferred revenue and accounts payable, partially offset by a decrease in net loss and increased cash from other assets and inventory[21](index=21&type=chunk)[198](index=198&type=chunk) - Investing activities shifted from a net cash inflow of **$2.655 million** in 2024 to a net cash outflow of **$2.511 million** in 2025, mainly due to the absence of proceeds from the sale of the Van Nuys facility in the current period[21](index=21&type=chunk)[199](index=199&type=chunk) - Financing activities significantly improved from a net cash outflow of **$11.504 million** in 2024 to a net cash inflow of **$0.785 million** in 2025, driven by new debt borrowings from the ABL Facility and the repayment of the Term Loan[21](index=21&type=chunk)[200](index=200&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Description of Business and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The Beachbody Company, Inc. (BODi) is a fitness and nutrition company offering streaming fitness programs and nutritional products, which announced a strategic 'Pivot' on September 30, 2024, transitioning its network business from a Multi-Level Marketing (MLM) model to a single-level affiliate model[24](index=24&type=chunk) - The company adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) retrospectively on January 1, 2024, with no material effect on financial statements[28](index=28&type=chunk) - The company is evaluating the potential impact of ASU 2023-09 (Improvements to Income Tax Disclosures) and ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 2. Revenue](index=11&type=section&id=Note%202.%20Revenue) Revenue by Geographic Region (in thousands) | Geographic Region (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $58,997 | $99,423 | $125,849 | $206,173 | | Rest of world | $4,944 | $10,760 | $10,455 | $24,056 | | Total Revenue | $63,941 | $110,183 | $136,304 | $230,229 | - Approximately **95%** of remaining deferred revenue performance obligations are expected to be recognized in the next 12 months[33](index=33&type=chunk) - The company recognized **$21.5 million** and **$57.8 million** of revenue from deferred revenue balances as of December 31, 2024, for the three and six months ended June 30, 2025, respectively[33](index=33&type=chunk) [Note 3. Fair Value Measurements](index=11&type=section&id=Note%203.%20Fair%20Value%20Measurements) Fair Value of Financial Instruments (in thousands) | Financial Instrument (in thousands) | June 30, 2025 (Level 3) | December 31, 2024 (Level 3) | | :---------------------------------- | :---------------------- | :-------------------------- | | Term Loan Warrants | $239 | $390 | | Common Stock Warrants | $1,065 | $1,783 | | Total Liabilities | $1,304 | $2,173 | - Private Placement Warrants and Public Warrants had a fair value of **zero** at June 30, 2025, and December 31, 2024, due to their high exercise price (**$575.00**) compared to the company's stock price (**$4.12** at June 30, 2025)[37](index=37&type=chunk)[40](index=40&type=chunk) - The fair value of Term Loan Warrants decreased by **$265 thousand** for the three months ended June 30, 2025, and by **$151 thousand** for the six months ended June 30, 2025, primarily due to changes in the Class A Common Stock price, contractual term, and risk-free rate[44](index=44&type=chunk) - The fair value of Common Stock Warrants decreased by **$1.293 million** for the three months ended June 30, 2025, and by **$718 thousand** for the six months ended June 30, 2025, driven by similar factors[46](index=46&type=chunk) [Note 4. Inventory](index=16&type=section&id=Note%204.%20Inventory) Inventory Breakdown (in thousands) | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials and work in process | $5,767 | $7,650 | | Finished goods | $5,639 | $8,653 | | Total inventory | $11,406 | $16,303 | - Inventory decreased by **$4.897 million (30.0%)** from December 31, 2024, to June 30, 2025[47](index=47&type=chunk) - Adjustments to inventory carrying value were **$0.4 million** and **$0.6 million** for the three and six months ended June 30, 2025, respectively, primarily recorded in nutrition and other cost of revenue[47](index=47&type=chunk) [Note 5. Other Current Assets](index=17&type=section&id=Note%205.%20Other%20Current%20Assets) Other Current Assets (in thousands) | Other Current Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Deferred Partner costs | $7,736 | $25,578 | | Accounts receivable, net | $1,851 | $1,449 | | Deferred Affiliate costs | $512 | $152 | | Other | $1,292 | $1,732 | | Total other current assets | $11,391 | $28,911 | - Total other current assets decreased by **$17.52 million (60.6%)** from December 31, 2024, to June 30, 2025, primarily due to a significant reduction in deferred Partner costs[48](index=48&type=chunk) [Note 6. Property and Equipment, Net](index=17&type=section&id=Note%206.%20Property%20and%20Equipment,%20Net) Property and Equipment, Net (in thousands) | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Property and equipment, gross | $138,296 | $141,897 | | Less: Accumulated depreciation | $(127,690) | $(129,148) | | Total property and equipment, net | $10,606 | $12,749 | - Net property and equipment decreased by **$2.143 million (16.8%)** from December 31, 2024, to June 30, 2025[49](index=49&type=chunk) - The company recognized a **$0.8 million** gain on the sale of its Van Nuys production facility on February 29, 2024, recorded as a reduction in general and administrative expenses[49](index=49&type=chunk) Depreciation Expense (in thousands) | Depreciation Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $775 | $2,225 | $2,333 | $4,283 | | Enterprise technology and development | $1,247 | $3,186 | $2,577 | $6,506 | | Total depreciation | $2,022 | $5,411 | $4,910 | $10,789 | [Note 7. Accrued Expenses and Other Current Liabilities](index=18&type=section&id=Note%207.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses (in thousands) | Accrued Expenses (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Employee compensation and benefits | $5,868 | $5,180 | | Sales and other taxes | $2,759 | $3,125 | | Outside professional services | $2,496 | $1,997 | | Advertising | $2,010 | $2,208 | | Information technology | $1,720 | $2,211 | | Inventory, shipping and fulfillment | $1,158 | $2,925 | | Partner costs | $459 | $3,272 | | Other accrued expenses | $4,132 | $4,064 | | Total accrued expenses | $20,602 | $24,982 | - Accrued expenses decreased by **$4.38 million (17.5%)** from December 31, 2024, to June 30, 2025, primarily due to reductions in Partner costs and inventory, shipping, and fulfillment expenses[51](index=51&type=chunk) - Advertising costs were **$10.5 million** and **$22.1 million** for the three and six months ended June 30, 2025, respectively, an increase from $8.2 million and $17.3 million in the prior year periods[52](index=52&type=chunk) - The company financed **$2.2 million** in annual insurance premiums with AFCO Acceptance Corporation and **$2.2 million** with First Insurance Funding in October 2024, with outstanding balances of **$0.4 million** and **$0.2 million**, respectively, as of June 30, 2025[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 8. Commitments and Contingencies](index=18&type=section&id=Note%208.%20Commitments%20and%20Contingencies) Future Minimum Payments for Noncancelable Agreements (in thousands) | Future Minimum Payments (in thousands) | Amount | | :------------------------------------- | :----- | | Six months ending December 31, 2025 | $10,852 | | Year ending December 31, 2026 | $2,299 | | Year ending December 31, 2027 | $730 | | Year ending December 31, 2028 | $75 | | Total | $13,956 | - The company has noncancelable inventory purchase and service agreements totaling **$13.956 million** through 2028, with **$10.852 million** due in the second half of 2025[56](index=56&type=chunk) - Lease obligations require payments of approximately **$0.7 million** during the six months ending December 31, 2025, **$1.5 million** for 2026, and **$0.9 million** thereafter through 2029[58](index=58&type=chunk) - The company is involved in several legal proceedings, including a class action alleging misclassification of Partners as contractors, a class action related to the 2021 merger, and arbitration demands alleging Video Privacy Protection Act violations, with the company denying the allegations and intending to vigorously defend itself[60](index=60&type=chunk)[61](index=61&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) [Note 9. Debt](index=22&type=section&id=Note%209.%20Debt) - On May 13, 2025, the company entered into a new **$35.0 million** Asset-Based Lending (ABL) Facility, borrowing **$25.0 million**, which matures on May 13, 2028, and bears interest at SOFR + **9.00%** (with a potential reduction to SOFR + **7.75%**), and has a SOFR floor of **3.5%**[66](index=66&type=chunk) - The ABL Facility proceeds were used to repay the existing Term Loan in full on May 13, 2025, resulting in a **$2.2 million** loss on debt extinguishment for the three and six months ended June 30, 2025[72](index=72&type=chunk) - The Term Loan, initially **$50.0 million**, bore interest at SOFR + **7.15%** plus **3.00%** paid-in-kind interest, with an effective interest rate of **28.00%** from January 1, 2025, to May 13, 2025[74](index=74&type=chunk) - The company had one irrevocable standby letter of credit outstanding for **$0.1 million** at June 30, 2025, collateralized by **$0.1 million** in restricted cash[83](index=83&type=chunk) [Note 10. Segment](index=26&type=section&id=Note%2010.%20Segment) - The company operates as a single reporting segment, with the Chief Operating Decision Maker (CODM) assessing performance based on net loss and reviewing budget-to-actual variances quarterly[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk) Selected Expenses (in thousands) | Expense (in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :--------------------- | :------------------------------- | :----------------------------- | | Depreciation expense | $2,022 | $4,910 | | Content amortization expense | $2,289 | $5,018 | | Interest income, net | $300 | $500 | [Note 11. Stockholders' Equity](index=26&type=section&id=Note%2011.%20Stockholders'%20Equity) - As of June 30, 2025, the company had **2,000,000,000** authorized shares, including Class A, Class X, Class C common stock, and preferred stock, where Class A holders get one vote, Class X ten votes, and Class C no votes[88](index=88&type=chunk)[89](index=89&type=chunk) - In December 2023, the company completed an Equity Offering, issuing **420,769** shares of Class A common stock, pre-funded warrants for **122,821** shares (exercised in January 2024), and **543,590** Common Stock Warrants[90](index=90&type=chunk) Accumulated Other Comprehensive Income (Loss) (in thousands) | Accumulated Other Comprehensive Income (Loss) (in thousands) | Balances at March 31, 2025 | Other comprehensive loss before reclassifications | Balances at June 30, 2025 | | :----------------------------------------------------------- | :------------------------- | :------------------------------------------------ | :------------------------ | | Total | $(58) | $(6) | $(64) | [Note 12. Equity-Based Compensation](index=27&type=section&id=Note%2012.%20Equity-Based%20Compensation) Equity Options Activity | Equity Options Activity | Outstanding at Dec 31, 2024 | Exercised | Forfeited | Expired | Outstanding at Jun 30, 2025 | | :---------------------- | :-------------------------- | :-------- | :-------- | :------ | :-------------------------- | | Number of Options | 1,008,017 | (7,233) | (79,426) | (60,858) | 860,500 | | Weighted Average Exercise Price | $18.64 | $6.43 | $14.32 | $15.76 | $20.04 | RSU Activity | RSU Activity | Outstanding at Dec 31, 2024 | Granted | Vested | Forfeited | Outstanding at Jun 30, 2025 | | :------------- | :-------------------------- | :------ | :----- | :-------- | :-------------------------- | | Number of RSUs | 326,226 | 414,560 | (123,613) | (62,407) | 554,766 | | Weighted-Average Fair Value (per RSU) | $17.42 | $6.30 | $15.40 | $7.59 | $9.78 | - The fair value of RSUs vested was **$0.8 million** and **$1.9 million** for the three and six months ended June 30, 2025, respectively[95](index=95&type=chunk) Equity-Based Compensation Expense (in thousands) | Equity-Based Compensation Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $195 | $355 | $396 | $731 | | Selling and marketing | $235 | $1,891 | $505 | $3,393 | | Enterprise technology and development | $114 | $244 | $275 | $484 | | General and administrative | $1,471 | $2,249 | $2,565 | $4,496 | | Total equity-based compensation | $2,015 | $4,739 | $3,741 | $9,104 | [Note 13. Restructuring](index=30&type=section&id=Note%2013.%20Restructuring) - On June 26, 2025, the company initiated a post-Pivot restructuring, reducing headcount by approximately **70 employees (22% of the workforce)**, which is expected to incur **$2.6 million** in costs, with **$2.5 million** recorded in Q2 2025[102](index=102&type=chunk) - The 2024 restructuring charges totaled **$1.6 million** for the six months ended June 30, 2024, primarily for termination benefits[104](index=104&type=chunk) Restructuring-Related Liability (in thousands) | Restructuring-Related Liability (in thousands) | Balance at Dec 31, 2024 | Restructuring Charges | Payments / Utilizations | Liability at Jun 30, 2025 | | :--------------------------------------------- | :---------------------- | :-------------------- | :---------------------- | :------------------------ | | Employee-related costs | $938 | $2,492 | $(831) | $2,599 | [Note 14. Income Taxes](index=32&type=section&id=Note%2014.%20Income%20Taxes) Income Tax Provision (in thousands) | Income Tax Provision (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $(101) | $(67) | $(146) | $(129) | | Effective tax rate | -1.7% | -0.6% | -1.3% | -0.5% | - The effective tax rate differs from the U.S. statutory rate primarily due to changes in valuation allowances on deferred tax assets[108](index=108&type=chunk) [Note 15. Loss per Share](index=32&type=section&id=Note%2015.%20Loss%20per%20Share) Loss per Share (in thousands, except per share data) | Loss per Share (in thousands, except per share data) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(5,900) | $(10,865) | $(11,648) | $(25,081) | | Weighted-average common shares outstanding | 6,950,761 | 6,812,750 | 6,917,062 | 6,786,761 | | Net loss per common share, basic and diluted | $(0.85) | $(1.59) | $(1.68) | $(3.70) | - Basic and diluted net loss per common share are the same because the inclusion of potential common shares would have been antidilutive[111](index=111&type=chunk) Antidilutive Common Shares Excluded | Antidilutive Common Shares Excluded | June 30, 2025 | June 30, 2024 | | :---------------------------------- | :------------ | :------------ | | Time-vesting options | 860,500 | 809,765 | | Performance-vesting options | — | 318,440 | | RSUs | 554,766 | 450,528 | | Compensation warrants | 79,612 | 79,612 | | Public and Private Placement Warrants | 306,667 | 306,667 | | Term Loan Warrants | 97,482 | 97,482 | | Common Stock Warrants | 543,590 | 543,590 | | Forest Road Earn-out Shares | 75,000 | 75,000 | | Total | 2,517,617 | 2,681,084 | [Item 2. Management's Discussion and Analysis of Financial Condition and Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting the impact of the 'Pivot' to an affiliate model, recent debt restructuring, and a detailed analysis of revenue, costs, and operating expenses, also discussing key operational metrics, non-GAAP financial measures like Adjusted EBITDA, liquidity, and capital resources [Overview](index=36&type=section&id=Overview) - BODi is a fitness and nutrition company focused on digital content, supplements, and consumer health, known for programs like P90X® and Shakeology®[118](index=118&type=chunk)[119](index=119&type=chunk) - On September 30, 2024, the company initiated a 'Pivot' to transition from a multi-level marketing (MLM) model to a single-level affiliate model, reducing headcount by approximately **170 employees (33% of the workforce)**[121](index=121&type=chunk) Key Financial Metrics – Three Months Ended June 30 (in millions) | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change (%) | | :------------------- | :------------------------------- | :------------------------------- | :--------- | | Total Revenue | $63.9 | $110.2 | -42% | | Digital Revenue | $39.7 | $58.8 | -32% | | Nutrition and other Revenue | $24.2 | $50.1 | -52% | | Connected Fitness Revenue | $0.1 | $1.3 | -94% | | Operating Expenses | $50.2 | $85.9 | -41.5% | | Net Loss | $(5.9) | $(10.9) | -45.9% | | Adjusted EBITDA | $4.6 | $4.9 | -6.1% | Key Financial Metrics – Six Months Ended June 30 (in millions) | Metric (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change (%) | | :------------------- | :----------------------------- | :----------------------------- | :--------- | | Total Revenue | $136.3 | $230.2 | -41% | | Digital Revenue | $82.6 | $120.3 | -31% | | Nutrition and other Revenue | $52.8 | $105.6 | -50% | | Connected Fitness Revenue | $0.9 | $4.3 | -80% | | Operating Expenses | $105.4 | $178.0 | -40.8% | | Net Loss | $(11.6) | $(25.1) | -53.8% | | Adjusted EBITDA | $8.3 | $9.5 | -12.6% | [Recent Developments](index=37&type=section&id=Recent%20Developments) - On May 13, 2025, the company secured a new **$35.0 million** Asset-Based Lending (ABL) Facility, borrowing **$25.0 million**, which matures on May 13, 2028, and bears interest at SOFR + **9.00%**[124](index=124&type=chunk) - Proceeds from the ABL Facility were used to fully repay the existing Term Loan (**$17.3 million** outstanding principal) on May 13, 2025, resulting in a **$2.2 million** loss on debt extinguishment[125](index=125&type=chunk) - On June 26, 2025, the company initiated a post-Pivot restructuring, reducing headcount by approximately **70 employees (22% of the workforce)**, with expected costs of **$2.6 million**, of which **$2.5 million** was recorded in Q2 2025[127](index=127&type=chunk) [Key Operational and Business Metrics](index=37&type=section&id=Key%20Operational%20and%20Business%20Metrics) Subscriptions (in millions) | Metric (in millions) | As of June 30, 2025 | As of June 30, 2024 | Change (%) | | :------------------- | :------------------ | :------------------ | :--------- | | Digital subscriptions | 0.94 | 1.15 | -18.3% | | Nutritional subscriptions | 0.07 | 0.14 | -50.0% | Operational Metrics | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Average digital retention | 96.7% | 96.5% | 96.8% | 96.1% | | Total streams (millions) | 18.0 | 22.7 | 38.8 | 48.3 | | DAU/MAU | 31.4% | 31.9% | 32.0% | 32.6% | - Digital subscriptions decreased by **18%** and nutritional subscriptions by **50%** year-over-year, indicating lower demand[130](index=130&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - Average digital retention slightly increased to **96.7%** (Q2 2025) and **96.8%** (YTD Q2 2025) compared to prior year periods, while total streams and DAU/MAU decreased, suggesting reduced customer engagement despite improved retention rates[131](index=131&type=chunk) [Non-GAAP Information](index=38&type=section&id=Non-GAAP%20Information) - Adjusted EBITDA is a non-GAAP measure used by management to evaluate core operating performance, excluding non-cash expenses (depreciation, amortization, equity-based compensation) and non-recurring items (restructuring costs, interest income/expense)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) Net Loss and Adjusted EBITDA (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(5,900) | $(10,865) | $(11,648) | $(25,081) | | Adjusted EBITDA | $4,632 | $4,928 | $8,345 | $9,482 | - Adjusted EBITDA decreased by **6.1%** for the three months and **12.6%** for the six months ended June 30, 2025, compared to the prior year, despite a reduction in net loss, indicating ongoing operational challenges[140](index=140&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) [Revenue](index=41&type=section&id=Revenue) Revenue by Category – Three Months Ended June 30 (in thousands) | Revenue Category (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :------------------------------ | :------------------------------- | :------------------------------- | :------- | :------- | | Digital | $39,693 | $58,771 | $(19,078) | -32% | | Nutrition and other | $24,172 | $50,101 | $(25,929) | -52% | | Connected fitness | $76 | $1,311 | $(1,235) | -94% | | Total revenue | $63,941 | $110,183 | $(46,242) | -42% | Revenue by Category – Six Months Ended June 30 (in thousands) | Revenue Category (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :------------------------------ | :----------------------------- | :----------------------------- | :------- | :------- | | Digital | $82,604 | $120,277 | $(37,673) | -31% | | Nutrition and other | $52,825 | $105,613 | $(52,788) | -50% | | Connected fitness | $875 | $4,339 | $(3,464) | -80% | | Total revenue | $136,304 | $230,229 | $(93,925) | -41% | - Digital revenue decreased due to **18% fewer subscriptions** and a **$2.9 million** decrease in Partner fees (due to the Pivot) for the three months ended June 30, 2025[145](index=145&type=chunk) - Nutrition and other revenue declined significantly due to **49% fewer nutritional subscriptions**, a **$4.1 million** decrease in preferred customer fees (due to the Pivot), and reduced shipping revenue, partially offset by increased Amazon sales[146](index=146&type=chunk) - Connected fitness revenue decreased by **94%** (three months) and **80%** (six months) as management ceased bike inventory sales in Q1 2025[147](index=147&type=chunk)[150](index=150&type=chunk) [Cost of Revenue](index=41&type=section&id=Cost%20of%20Revenue) Cost of Revenue by Category – Three Months Ended June 30 (in thousands) | Cost of Revenue (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :----------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Digital | $4,893 | $11,476 | $(6,583) | -57% | | Nutrition and other | $11,740 | $19,621 | $(7,881) | -40% | | Connected fitness | $1,070 | $2,710 | $(1,640) | -61% | | Total cost of revenue | $17,703 | $33,807 | $(16,104) | -48% | Gross Margin by Category | Gross Margin | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | | Digital | 87.7% | 80.5% | | Nutrition and other | 51.4% | 60.8% | | Connected fitness | NM | (106.7%) | | Total gross margin | 72.3% | 69.3% | - Digital cost of revenue decreased by **57%** (three months) and **54%** (six months) due to lower content amortization, reduced personnel expenses from restructuring, and decreased depreciation, leading to an increase in digital gross margin[156](index=156&type=chunk)[160](index=160&type=chunk) - Nutrition and other cost of revenue decreased by **40%** (three and six months) due to lower product costs and reduced fulfillment/shipping expenses; however, gross margin decreased due to the elimination of preferred customer fees and higher promotional offerings[157](index=157&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) - Connected fitness cost of revenue decreased by **61%** (three months) and **65%** (six months) due to the cessation of bike inventory sales, resulting in lower freight, shipping, and product costs[159](index=159&type=chunk)[162](index=162&type=chunk) [Operating Expenses](index=45&type=section&id=Operating%20Expenses) [Selling and Marketing](index=45&type=section&id=Selling%20and%20Marketing) Selling and Marketing Expenses – Three Months Ended June 30 (in thousands) | Selling and Marketing (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Selling and marketing | $25,528 | $56,308 | $(30,780) | -55% | | As a percentage of total revenue | 39.9% | 51.1% | | -11.2% | Selling and Marketing Expenses – Six Months Ended June 30 (in thousands) | Selling and Marketing (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Selling and marketing | $56,498 | $115,569 | $(59,071) | -51% | | As a percentage of total revenue | 41.4% | 50.2% | | -8.8% | - Selling and marketing expenses decreased significantly (**55%** for three months, **51%** for six months) primarily due to a **$24.4 million** (three months) and **$46.3 million** (six months) decrease in Partner compensation following the Pivot, and reduced personnel and event expenses[164](index=164&type=chunk)[166](index=166&type=chunk) - The decrease was partially offset by increased media expense (**$3.4 million** for three months, **$7.2 million** for six months) and affiliated compensation (**$0.7 million** for three months, **$1.6 million** for six months) related to the Pivot transition[164](index=164&type=chunk)[166](index=166&type=chunk) - Selling and marketing expense as a percentage of total revenue decreased by **1,120 basis points** (three months) and **880 basis points** (six months) due to the significant reduction in Partner compensation[165](index=165&type=chunk)[167](index=167&type=chunk) [Enterprise Technology and Development](index=45&type=section&id=Enterprise%20Technology%20and%20Development) Enterprise Technology and Development Expenses – Three Months Ended June 30 (in thousands) | Enterprise Technology and Development (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :--------------------------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Expense | $10,611 | $17,162 | $(6,551) | -38% | | As a percentage of total revenue | 16.6% | 15.6% | | 1.0% | Enterprise Technology and Development Expenses – Six Months Ended June 30 (in thousands) | Enterprise Technology and Development (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :--------------------------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Expense | $23,207 | $34,879 | $(11,672) | -33% | | As a percentage of total revenue | 17.0% | 15.1% | | 1.9% | - Expenses decreased by **38%** (three months) and **33%** (six months) due to lower personnel-related expenses from restructuring and a decrease in depreciation expense as certain long-lived assets were fully depreciated by December 31, 2024, following the Pivot[170](index=170&type=chunk)[172](index=172&type=chunk) - As a percentage of total revenue, these expenses increased by **100 basis points** (three months) and **190 basis points** (six months) because revenue decreased at a faster pace than the expense reductions[171](index=171&type=chunk)[173](index=173&type=chunk) [General and Administrative](index=48&type=section&id=General%20and%20Administrative) General and Administrative Expenses – Three Months Ended June 30 (in thousands) | General and Administrative (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :---------------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Expense | $11,571 | $12,388 | $(817) | -7% | | As a percentage of total revenue | 18.1% | 11.2% | | 6.9% | General and Administrative Expenses – Six Months Ended June 30 (in thousands) | General and Administrative (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :---------------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Expense | $23,228 | $25,871 | $(2,643) | -10% | | As a percentage of total revenue | 17.0% | 11.2% | | 5.8% | - Expenses decreased by **7%** (three months) and **10%** (six months) primarily due to lower personnel-related expenses from restructuring activities and a **$0.8 million** gain on the sale of the Van Nuys facility in 2024[176](index=176&type=chunk)[178](index=178&type=chunk) - As a percentage of total revenue, these expenses increased by **690 basis points** (three months) and **580 basis points** (six months) due to revenue declining faster than expense reductions[177](index=177&type=chunk)[179](index=179&type=chunk) [Restructuring](index=48&type=section&id=Restructuring) Restructuring Charges – Three Months Ended June 30 (in thousands) | Restructuring Charges (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Restructuring | $2,492 | $0 | $2,492 | NM | Restructuring Charges – Six Months Ended June 30 (in thousands) | Restructuring Charges (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Restructuring | $2,492 | $1,644 | $848 | 52% | - Restructuring charges in 2025 primarily relate to additional post-Pivot headcount reductions, totaling **$2.492 million** for both the three and six months ended June 30, 2025[180](index=180&type=chunk)[181](index=181&type=chunk) - In 2024, restructuring charges were **$1.644 million** for the six months ended June 30, primarily for employee termination costs related to key initiatives[180](index=180&type=chunk)[181](index=181&type=chunk) [Other Income (Expense)](index=48&type=section&id=Other%20Income%20(Expense)) Other Income (Expense) – Three Months Ended June 30 (in thousands) | Other Income (Expense) (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | :------- | | Loss on debt extinguishment | $(2,166) | $(719) | $(1,447) | NM | | Change in fair value of warrant liabilities | $1,558 | $647 | $911 | NM | | Interest expense | $(1,268) | $(1,652) | $384 | -23% | | Other income, net | $41 | $408 | $(367) | -90% | Other Income (Expense) – Six Months Ended June 30 (in thousands) | Other Income (Expense) (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :------- | :------- | | Loss on debt extinguishment | $(2,166) | $(1,928) | $(238) | 12% | | Change in fair value of warrant liabilities | $869 | $(77) | $946 | NM | | Interest expense | $(2,833) | $(3,527) | $694 | -20% | | Other income, net | $266 | $885 | $(619) | -70% | - Loss on debt extinguishment increased due to the full repayment of the Term Loan in May 2025, compared to partial prepayments in 2024[184](index=184&type=chunk)[185](index=185&type=chunk) - The change in fair value of warrant liabilities shifted from a loss to a gain, primarily driven by a **45%** decline in the company's stock price in Q2 2025, compared to a **12%** decrease in Q2 2024[184](index=184&type=chunk)[185](index=185&type=chunk) - Interest expense decreased by **23%** (three months) and **20%** (six months) due to a lower average principal debt balance and a reduced effective interest rate on the new ABL Facility (**15.4%**) compared to the Term Loan (**28.0%**)[184](index=184&type=chunk)[185](index=185&type=chunk) [Income Tax Provision](index=50&type=section&id=Income%20Tax%20Provision) Income Tax Provision – Three Months Ended June 30 (in thousands) | Income Tax Provision (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | $ Change | % Change | | :---------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Income tax provision | $(101) | $(67) | $(34) | 51% | Income Tax Provision – Six Months Ended June 30 (in thousands) | Income Tax Provision (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | $ Change | % Change | | :---------------------------------- | :----------------------------- | :----------------------------- | :------- | :------- | | Income tax provision | $(146) | $(129) | $(17) | 13% | - The income tax provision increased by **51%** (three months) and **13%** (six months) primarily due to changes in the valuation allowance and an increase in net expense from discrete events[187](index=187&type=chunk)[188](index=188&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) - The company secured a new **$35.0 million** ABL Facility on May 13, 2025, borrowing **$25.0 million**, and used the proceeds to fully repay its existing Term Loan, providing approximately **$5 million** in additional capital[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - The ABL Facility includes financial covenants such as minimum billings targets, minimum digital subscriptions targets, capital expenditure limits, and a minimum liquidity requirement of **$12 million**[193](index=193&type=chunk)[195](index=195&type=chunk) - As of June 30, 2025, the company had **$25.6 million** in cash and cash equivalents and was in compliance with its financial covenants[194](index=194&type=chunk)[197](index=197&type=chunk) - Management believes existing cash, cash equivalents, and cost control initiatives will provide sufficient liquidity for the next twelve months and longer-term, but may explore additional debt or equity financing[203](index=203&type=chunk)[204](index=204&type=chunk) [Critical Accounting Policies and Estimates](index=54&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the company's critical accounting estimates discussed in the 2024 Annual Report on Form 10-K[206](index=206&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 1, 'Description of Business and Summary of Significant Accounting Policies,' for information on recently adopted accounting pronouncements[207](index=207&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to foreign currency exchange risk, noting that approximately 8% of revenue for the six months ended June 30, 2025, was in foreign currencies, and the company has ceased entering into foreign exchange options and is exiting the sale of physical products in the UK and France - Approximately **8%** of the company's revenue for the six months ended June 30, 2025, was in foreign currencies, primarily Canadian dollars and British pounds[208](index=208&type=chunk) - The company has ceased entering into foreign exchange options and is exiting the sale of nutritional and other physical products in the United Kingdom and France as part of the Pivot[210](index=210&type=chunk) - A hypothetical **10%** change in exchange rates would result in an approximate **$1.5 million** increase or decrease in cost of revenue and operating expenses[212](index=212&type=chunk) - The aggregate notional amount of foreign exchange derivative instruments was **zero** at June 30, 2025, and December 31, 2024[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Interim CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the most recent fiscal quarter - The Chief Executive Officer and Interim Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[214](index=214&type=chunk) - There have been no material changes in internal control over financial reporting during the most recent fiscal quarter[216](index=216&type=chunk) - Management acknowledges that any control system has inherent limitations and cannot provide absolute assurance of achieving its objectives[217](index=217&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) This section updates on ongoing legal proceedings, including a class action lawsuit alleging misclassification of Partners as employees, a class action related to the 2021 merger, and arbitration demands concerning Video Privacy Protection Act violations, with the company denying the allegations and vigorously defending these matters - A class action complaint filed May 22, 2023, alleges misclassification of Partners as contractors rather than employees and other California Labor Code violations; the company is defending against this, with **13 arbitrations settled for nominal fees**[219](index=219&type=chunk) - A class action filed June 14, 2024 (Reilly Action) alleges breach of fiduciary duty related to the 2021 merger; aiding and abetting claims against the company were dismissed without prejudice on December 5, 2024, but indemnification obligations remain[220](index=220&type=chunk)[221](index=221&type=chunk) - On October 14, 2024, **10 arbitration demands** were filed, alleging Video Privacy Protection Act violations, with intentions to file similar demands for approximately **6,239 additional subscribers**; the company denies these allegations[223](index=223&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material developments regarding the risk factors previously reported in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material developments with respect to the risk factors previously reported in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report[226](index=226&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[227](index=227&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[228](index=228&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section reports that no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[229](index=229&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, warrant forms, credit agreements, and certifications - The exhibits include the Second Amended and Restated Certificate of Incorporation and Bylaws, Form of Third Amended and Restated Warrant to Purchase Stock, and the Credit Agreement dated May 13, 2025[231](index=231&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) are filed herewith[231](index=231&type=chunk) [Signatures](index=60&type=section&id=Signatures) This section contains the official signatures of the registrant's Chief Executive Officer and Interim Chief Financial Officer, certifying the report's submission - The report is signed by Carl Daikeler, Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Officer, on August 6, 2025[237](index=237&type=chunk)