Core Insights - Beachbody reported Q2 2025 revenue of $63.9 million, exceeding analyst expectations by $6.3 million or 10.9% [1] - The company experienced a loss per share of $0.85, which was an improvement from last year's loss of $1.59, but still fell short of analyst projections [1][2] - Year-over-year revenue declined sharply by 42.0%, with significant drops in digital and nutrition subscriptions [1][5] Financial Performance - Revenue for Q2 2025 was $63.9 million, compared to estimates of $57.6 million and $110.2 million in Q2 2024 [2] - Adjusted EBITDA was $4.6 million, down 6.1% from the previous year, marking the seventh consecutive quarter of positive adjusted EBITDA [2][7] - Digital subscriptions decreased by 18.3% year-over-year to 0.94 million, while nutritional subscriptions fell by 52.1% to 0.07 million [2][6] Business Model Transition - Beachbody shifted from a multi-level marketing approach to a single-level affiliate model and e-commerce-first retail strategy [4] - The transition aims to simplify operations and expand product reach, with success dependent on digital subscriber retention and effective product innovation [4][14] - The company plans to roll out retail versions of its nutritional products in late 2025 and into 2026, targeting a broader audience despite lower gross margins [10][14] Engagement and Retention - Despite a high digital subscription retention rate of 96.7%, overall engagement metrics, including total streams and DAU/MAU ratios, have declined [6][9] - Total streaming activity decreased by 20.4% year-over-year to 18.0 million streams [6][9] - The company acknowledges challenges in attracting new subscribers amid a competitive digital fitness landscape [9] Future Outlook - Management projects Q3 FY2025 revenue between $51 million and $58 million, with adjusted EBITDA expected to be between $2 million and $6 million [13] - Key factors to monitor include the pace of digital subscriber declines, effectiveness of new retail and affiliate strategies, and cash flow management [14]

分组1 - The Beachbody Company reported a quarterly loss of $0.57 per share, which was better than the Zacks Consensus Estimate of a loss of $0.93, and an improvement from a loss of $1.59 per share a year ago, resulting in an earnings surprise of +38.71% [1] - The company achieved revenues of $63.94 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 14.59%, although this represents a decline from year-ago revenues of $110.18 million [2] - The Beachbody Company has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has underperformed, losing about 36.6% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is -$1.19 on revenues of $48.5 million, and for the current fiscal year, it is -$4.40 on revenues of $221.8 million [7] 分组3 - The Zacks Industry Rank indicates that the Consumer Services - Miscellaneous sector is in the top 41% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - The estimate revisions trend for The Beachbody Company was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Data and Key Metrics Changes - The company reported revenues of $63.9 million for Q2 2025, exceeding guidance of $51 million to $61 million, but reflecting an 11.6% sequential decline and a 42% year-over-year decline [22][23] - Gross margin improved to 72.3%, a 300 basis point increase year-over-year, exceeding the long-term target of 65% to 70% [5][23] - Adjusted EBITDA was $4.6 million, marking the seventh consecutive quarter of positive adjusted EBITDA [22][28] - The company achieved a cumulative $39.5 million in adjusted EBITDA over the past seven quarters [6] Business Line Data and Key Metrics Changes - Digital revenue decreased by 7.5% sequentially to $39.7 million and declined 32.5% year-over-year, with digital subscribers down 7.8% sequentially to 940,000 [25][26] - Nutrition revenue fell 15.6% sequentially to $24.2 million and decreased 51.8% year-over-year, with nutrition subscriptions down 12.5% sequentially to 70,000 [25][26] - Digital gross margin was 87.7%, an increase from the prior quarter and year, while nutrition gross margin was 51.4%, reflecting a decline due to promotional offerings [26] Market Data and Key Metrics Changes - The company is transitioning from a multilevel marketing (MLM) model to an omnichannel model, which has impacted revenue in the near term [22][23] - The anticipated revenue split moving forward is approximately 63% digital and 37% nutrition [31] Company Strategy and Development Direction - The company plans to launch Shakeology in retail in early 2026, marking its first entry into brick-and-mortar sales [7][45] - A new P90X nutritional line and Insanity branded supplements are also set for retail launch, creating cross-marketing opportunities [8][20] - The strategic focus is on building a diverse product portfolio and leveraging brand equity to drive growth [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while 2025 may see temporary revenue declines, it is building towards significant growth opportunities [7][10] - The company is focused on disciplined execution and believes it is well-positioned for long-term success [11][21] - Management expressed confidence in achieving positive free cash flow for the full year of 2025 for the first time since 2020 [6][30] Other Important Information - The company reduced its revenue breakeven point from approximately $900 million in 2022 to about $200 million in 2025 [6] - Operating expenses decreased by 9.1% sequentially and 41.5% year-over-year, reflecting the shift away from the MLM model [27] Q&A Session Summary Question: What drove the higher gross margin in the quarter? - The higher gross margin was driven by reduced production spend and fewer fixed costs allocated to production [34] Question: What is the expected level of selling and marketing expenses going forward? - Selling and marketing expenses have decreased significantly since exiting the MLM model, with a goal to reduce them to the mid-thirties percentage of revenue [36][37] Question: Are there plans to roll out new supplements to complement the nutrition business? - Yes, the company plans to launch new nutritional products in retail starting in 2026, including Shakeology and P90X supplements [45][46] Question: What is the status of the nutrition retail launch? - The company is preparing sales presentations for major retailers and expects to begin retail sales in early 2026 [55] Question: Will the Shakeology product have new packaging for retail? - Yes, Shakeology will have a complete packaging refresh designed for retail, highlighting its major brand status [58][59]

Exhibit 99.1 Beachbody (BODi) Reports Second Quarter Financial Results Revenues Better Than Guidance Gross Margin of 72%-up 300bps over prior year Net Loss Within Guidance Adjusted EBITDA Better Than Guidance Seventh Consecutive Quarter of Positive Adjusted EBITDA El Segundo, Calif. (August 5, 2025) – The Beachbody Company, Inc. (NYSE: BODi) ("BODi" or the "Company"), a leading fitness and nutrition company, today announced financial results for its second quarter ended June 30, 2025. Carl Daikeler, BODi's ...

Industry Overview - The health and fitness industry is experiencing significant growth, driven by increasing consumer interest in wellness, technology advancements, and rising concerns about obesity and mental health [2][3] - The global health and wellness market is projected to reach $11 trillion by 2034, with a compound annual growth rate (CAGR) of 5.4% from 2025 [4] Technology Integration - Technology, including wearable devices and digital platforms, is enhancing consumer engagement and health management [2][3] - Major tech companies like Apple and Amazon are entering the health space, with Apple offering real-time health data through its Apple Watch and Amazon acquiring One Medical to integrate AI with virtual care [3] Company Highlights Sprouts Farmers Market - Sprouts Farmers Market focuses on fresh, natural, and organic products, with its private-label brand accounting for 24% of sales [8] - The company operates over 440 stores across 24 states and is building its own distribution network to improve efficiency [8][9] - Online sales represent 15% of total sales, supported by partnerships with delivery services [9] - In 2024, 30% of total sales came from organic products, with plant-based offerings increasing by 27% [9] The Beachbody Company - The Beachbody Company offers a comprehensive health and fitness system, including digital workout programs and nutritional products [11] - The company shifted from a multi-level marketing model to a direct-to-consumer approach, reducing operating costs and improving customer access [11][12] - Plans for physical retail expansion include launching Shakeology products in late 2025 and new digital fitness programs [12] Hims & Hers Health - Hims & Hers Health provides a digital health platform covering various wellness needs, including mental health and weight management [13] - The company has launched weight loss programs and acquired an at-home lab testing provider to enhance its service offerings [14] - Hims & Hers serves nearly 2.4 million subscribers and focuses on preventative wellness through a technology-driven subscription model [15]

Group 1: Financing Details - Tiger Finance has provided $35 million in financing to The Beachbody Company, Inc., which includes a $25 million term loan and a $10 million uncommitted accordion [1][2] - The financing allows Beachbody to retire $17.3 million of outstanding debt and adds approximately $5 million of capital to its balance sheet [2] Group 2: Strategic Partnership and Business Model Transition - The financing is part of a turnaround strategy to support Beachbody's transition to a new business model focused on digital fitness and nutrition [1][3] - Management believes that this partnership will position Beachbody for greater profitability and long-term growth [3] Group 3: Company Background - The Beachbody Company, originally known as Beachbody, has been innovating home fitness and nutrition programs for 25 years, helping over 30 million customers [5] - The company is known for programs like P90X, Insanity, and Shakeology, and has a community focused on health and wellness [5]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and detailed notes on business, accounting, revenue, and other financial aspects [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets, liabilities, and stockholders' equity decreased from December 31, 2024, to March 31, 2025, driven by reductions in cash, inventory, and deferred revenue | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :----- | :----------------------------- | :------------------------------- | :-------------------- | | Total Assets | $152,539 | $174,556 | $(22,017) | | Total Liabilities | $128,504 | $146,386 | $(17,882) | | Total Stockholders' Equity | $24,035 | $28,170 | $(4,135) | | Cash and Cash Equivalents | $18,126 | $20,187 | $(2,061) | | Inventory | $13,480 | $16,303 | $(2,823) | | Deferred Revenue | $69,819 | $77,273 | $(7,454) | | Current Portion of Term Loan | $16,425 | $9,500 | $6,925 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 saw a **40% revenue decrease** but a **60% reduction in net loss**, improving from $(14.2) million to $(5.7) million | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Revenue | $72,363 | $120,046 | $(47,683) | (40%) | | Cost of Revenue | $20,814 | $38,764 | $(17,950) | (46%) | | Gross Profit | $51,549 | $81,282 | $(29,733) | (37%) | | Operating Expenses | $55,223 | $92,105 | $(36,882) | (40%) | | Operating Loss | $(3,674) | $(10,823) | $7,149 | (66%) | | Net Loss | $(5,748) | $(14,216) | $8,468 | (60%) | | Net Loss per Common Share, Basic and Diluted | $(0.84) | $(2.10) | $1.26 | (60%) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Total comprehensive loss for Q1 2025 was **$(5.8) million**, a significant improvement from $(14.2) million, reflecting reduced net loss | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Loss | $(5,748) | $(14,216) | $8,468 | | Total Other Comprehensive Income (Loss) | $(9) | $38 | $(47) | | Total Comprehensive Loss | $(5,757) | $(14,178) | $8,421 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity decreased from **$28.2 million** to **$24.0 million**, mainly due to net loss and other comprehensive loss, partially offset by equity compensation | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | Change (in thousands) | | :----- | :------------------------------- | :---------------------------- | :-------------------- | | Total Stockholders' Equity | $28,170 | $24,035 | $(4,135) | | Net Loss (Q1 2025) | $(5,748) | - | - | | Equity-based compensation (Q1 2025) | $1,726 | - | - | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased significantly, investing activities shifted to outflow, and financing cash usage decreased | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Cash Provided by Operating Activities | $2,342 | $9,134 | $(6,792) | | Net Cash (Used in) Provided by Investing Activities | $(694) | $3,901 | $(4,595) | | Net Cash Used in Financing Activities | $(3,729) | $(7,219) | $3,490 | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(2,061) | $5,520 | $(7,581) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $18,126 | $38,929 | $(20,803) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for the financial statements, covering business, accounting policies, revenue, fair value, and other financial items [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) BODi, a fitness and nutrition company, transitioned from an MLM to a single-level affiliate model, with no material effect from new accounting standards - BODi is a leading fitness and nutrition company offering streaming programs and nutritional products[24](index=24&type=chunk) - The Company announced a strategic initiative on September 30, 2024, to transition its network business from a Multi-Level Marketing (MLM) model to a single-level affiliate model (the "Pivot")[24](index=24&type=chunk) - The adoption of ASU 2023-07, "Improvements to Reportable Segment Disclosures," on January 1, 2024, did not have a material effect on the unaudited condensed consolidated financial statements[28](index=28&type=chunk) [Note 2. Revenue](index=11&type=section&id=Note%202.%20Revenue) Total revenue decreased 40% year-over-year, with the US as the primary region, and **$36.3 million** recognized from deferred revenue in Q1 2025 | Geographic Region | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :---------------- | :--------------------------------------------- | :--------------------------------------------- | | United States | $66,852 | $106,750 | | Rest of World | $5,511 | $13,296 | | Total Revenue | $72,363 | $120,046 | - The Company expects to recognize approximately **93%** of its remaining performance obligations as revenue in the next 12 months[33](index=33&type=chunk) - During the three months ended March 31, 2025, the Company recognized **$36.3 million** of revenue that was included in the deferred revenue balance as of December 31, 2024[33](index=33&type=chunk) [Note 3. Fair Value Measurements](index=11&type=section&id=Note%203.%20Fair%20Value%20Measurements) Financial assets and liabilities, including Level 3 Term Loan and Common Stock Warrants, saw fair value increases from December 2024 to March 2025 | Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :----------------------------- | :------------------------------- | | Restricted short-term investments | $4,250 | $4,250 | | Term Loan Warrants | $504 | $390 | | Common Stock Warrants | $2,358 | $1,783 | | Total Liabilities (Warrants) | $2,862 | $2,173 | - Term Loan Warrants and Common Stock Warrants are classified within **Level 3** of the fair value hierarchy because their fair values are based on significant unobservable market inputs[35](index=35&type=chunk) | Warrant Type | Balance, beginning of period (Q1 2025, in thousands) | Change in fair value (Q1 2025, in thousands) | Balance, end of period (Q1 2025, in thousands) | | :----------- | :------------------------------------------------- | :------------------------------------------- | :--------------------------------------------- | | Term Loan Warrants | $390 | $114 | $504 | | Common Stock Warrants | $1,783 | $575 | $2,358 | [Note 4. Inventory](index=18&type=section&id=Note%204.%20Inventory) Total inventory decreased to **$13.5 million**, with excess inventory adjustments significantly lower in Q1 2025 compared to Q1 2024 | Inventory Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------ | :----------------------------- | :------------------------------- | | Raw materials and work in process | $6,421 | $7,650 | | Finished goods | $7,059 | $8,653 | | Total inventory | $13,480 | $16,303 | - Adjustments to the carrying value of excess inventory decreased from **$0.6 million** in Q1 2024 to **$0.1 million** in Q1 2025[45](index=45&type=chunk) [Note 5. Other Current Assets](index=18&type=section&id=Note%205.%20Other%20Current%20Assets) Other current assets decreased to **$18.6 million**, primarily due to a significant reduction in deferred Partner costs | Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------- | :----------------------------- | :------------------------------- | | Deferred Partner costs | $14,963 | $25,578 | | Accounts receivable, net | $1,933 | $1,449 | | Total other current assets | $18,635 | $28,911 | [Note 6. Property and Equipment, Net](index=18&type=section&id=Note%206.%20Property%20and%20Equipment,%20Net) Net property and equipment decreased to **$10.7 million**, with a **$0.8 million** gain from a facility sale in Q1 2024 and reduced depreciation | Component | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------- | :----------------------------- | :------------------------------- | | Total property and equipment, net | $10,661 | $12,749 | - The Company recognized a gain on the sale of its Van Nuys production facility of **$0.8 million** in Q1 2024[47](index=47&type=chunk) | Expense Category | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :--------------- | :--------------------------------------------- | :--------------------------------------------- | | Total depreciation | $2,888 | $5,378 | [Note 7. Accrued Expenses and Other Current Liabilities](index=19&type=section&id=Note%207.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses decreased to **$19.6 million** due to lower inventory, shipping, and Partner costs, while advertising costs increased | Accrued Expense Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Employee compensation and benefits | $4,591 | $5,180 | | Inventory, shipping and fulfillment | $1,410 | $2,925 | | Partner costs | $717 | $3,272 | | Total accrued expenses | $19,573 | $24,982 | - Advertising costs were **$11.5 million** for the three months ended March 31, 2025, compared to **$9.1 million** for the same period in 2024[50](index=50&type=chunk) - The Company entered into financing agreements with AFCO and FIF in October 2024 to finance annual insurance premiums totaling **$4.4 million**, with outstanding balances of **$1.0 million** and **$0.9 million**, respectively, as of March 31, 2025[51](index=51&type=chunk)[52](index=52&type=chunk) [Note 8. Commitments and Contingencies](index=19&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company has **$10.5 million** in purchase commitments and **$3.4 million** in lease obligations, and is involved in several legal proceedings | Commitment Type | Future Minimum Payments (in thousands) | | :-------------- | :----------------------------------- | | Noncancelable service and inventory purchase agreements (total) | $10,493 (through 2028) | | Lease obligations (total) | $3,400 (through 2029) | - The Company is defending a class action complaint alleging misclassification of its Partners as employees, with **12 arbitration actions** already settled for nominal fees[57](index=57&type=chunk) - A patent infringement lawsuit by DISH Entities was dismissed without prejudice following a Confidential Standstill and Tolling Agreement, which included an immaterial one-time payment by the Company[58](index=58&type=chunk) - The Company is involved in a class action lawsuit (Reilly Action) related to the 2021 merger, though aiding and abetting claims against the Company were dismissed without prejudice on December 5, 2024[59](index=59&type=chunk)[61](index=61&type=chunk) - Milberg Coleman Bryson Phillips Grossman filed **10 arbitration demands** alleging that the Company violated the Video Privacy Protection Act on behalf of approximately **6,239 BODi subscribers**[63](index=63&type=chunk) [Note 9. Debt](index=22&type=section&id=Note%209.%20Debt) The Term Loan had an **$18.4 million** balance with a **27.81%** effective interest rate, and was fully repaid post-quarter with a new ABL Facility - The Term Loan facility, initiated on August 8, 2022, had an initial aggregate principal amount of **$50.0 million**[65](index=65&type=chunk) - The Term Loan bore an effective interest rate of **27.81%** and a cash interest rate of **11.64%** for the three months ended March 31, 2025[66](index=66&type=chunk) - Partial prepayments on the Term Loan in Q1 2024 totaled **$6.5 million**, leading to a loss on partial debt extinguishment of **$1.2 million**[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - As of March 31, 2025, the principal balance outstanding under the Term Loan was **$18.4 million** (including capitalized paid-in-kind interest)[175](index=175&type=chunk) - The Term Loan Warrants' exercise price was amended multiple times, most recently to **$6.26 per share** on October 18, 2024[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Subsequent to March 31, 2025, on May 13, 2025, the Term Loan was fully repaid using proceeds from a new **$35.0 million** Asset-Based Lending (ABL) Facility[74](index=74&type=chunk)[80](index=80&type=chunk) [Note 10. Segment](index=26&type=section&id=Note%2010.%20Segment) The company operates as a single reporting segment, with performance assessed by the CODM based on net loss and budget variances - The Company defines its business as a single reporting segment[82](index=82&type=chunk) - The Chief Operating Decision Maker (CODM) assesses segment performance using net loss and reviews budget-to-actual variances quarterly[83](index=83&type=chunk) [Note 11. Stockholders' Equity](index=28&type=section&id=Note%2011.%20Stockholders'%20Equity) Class A and Class X shares are outstanding, no dividends declared, and accumulated other comprehensive loss increased to **$(58) thousand** - As of March 31, 2025, the Company had **4,259,361 Class A shares** and **2,729,003 Class X shares** issued and outstanding[10](index=10&type=chunk) - No dividends were declared as of March 31, 2025[88](index=88&type=chunk) - An Equity Offering in December 2023 included the issuance of **543,590 Common Stock Warrants** at an exercise price of **$11.24 per share**, and all pre-funded warrants were exercised by January 12, 2024[89](index=89&type=chunk) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----- | :----------------------------- | :------------------------------- | | Accumulated other comprehensive loss | $(58) | $(49) | [Note 12. Equity-Based Compensation](index=29&type=section&id=Note%2012.%20Equity-Based%20Compensation) Equity-based compensation expense decreased significantly to **$1.7 million**, partly due to a **$0.9 million** reduction from modified stock awards | Metric | March 31, 2025 | December 31, 2024 | | :----- | :------------- | :---------------- | | Time-Vesting Options Outstanding | 912,758 | 1,008,017 | | RSUs Outstanding | 603,155 | 326,226 | | Expense Category | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :--------------- | :--------------------------------------------- | :--------------------------------------------- | | Total equity-based compensation | $1,726 | $4,365 | - Modifications to stock awards of terminated employees resulted in a **$0.9 million** reduction to equity-based compensation expense in Q1 2025, compared to **$0.5 million** in Q1 2024[96](index=96&type=chunk) [Note 13. Restructuring](index=30&type=section&id=Note%2013.%20Restructuring) No restructuring charges were recognized in Q1 2025, a decrease from **$1.6 million** in Q1 2024, with the liability reduced to **$0.01 million** - The Company recognized **$1.6 million** in restructuring costs during the three months ended March 31, 2024, primarily for employee termination benefits. No restructuring costs were incurred in Q1 2025[97](index=97&type=chunk)[98](index=98&type=chunk) | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | | :----- | :------------------------------- | :---------------------------- | | Employee-related costs liability | $938 | $10 | [Note 14. Income Taxes](index=31&type=section&id=Note%2014.%20Income%20Taxes) The income tax provision decreased to **$0.045 million**, with an effective tax rate of **(0.8)%**, primarily due to valuation allowance changes | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | | Income tax provision | $45 | $62 | | Effective tax rate | (0.8)% | (0.4)% | - The effective tax rate differs from the U.S. statutory tax rate primarily due to changes in valuation allowances on deferred tax assets[100](index=100&type=chunk) [Note 15. Loss per Share](index=31&type=section&id=Note%2015.%20Loss%20per%20Share) Basic and diluted net loss per common share improved to **$(0.84)**, with antidilutive potential common shares excluded from calculations | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :----- | :-------------------------------- | :-------------------------------- | | Net loss per common share, basic and diluted | $(0.84) | $(2.10) | | Weighted-average common shares outstanding, basic and diluted | 6,882,988 | 6,760,771 | - Approximately **2.6 million** common shares were excluded from the computation of diluted net loss per common share for both periods as their inclusion would have been antidilutive[103](index=103&type=chunk) [Note 16. Subsequent Events](index=32&type=section&id=Note%2016.%20Subsequent%20Events) Post-quarter, the company secured a new **$35.0 million** ABL Facility and fully repaid the Term Loan, with specific financial covenants - On May 13, 2025, the Company entered into a new **$35.0 million** ABL Facility, which includes a **$10 million** uncommitted accordion, maturing on May 13, 2028[104](index=104&type=chunk) - The ABL Facility bears interest based on the one-month SOFR rate plus **9.00%** (initially **13.33%** as of May 13, 2025), with a potential reduction to SOFR plus **7.75%** after one year if the Company's fixed charge coverage ratio exceeds **1.10x**[104](index=104&type=chunk) - Proceeds from the ABL Facility were used to fully repay the existing Term Loan on May 13, 2025, including **$17.3 million** principal, **$0.5 million** paid-in-kind interest, **$0.3 million** prepayment premium, and **$0.2 million** accrued interest[107](index=107&type=chunk) - The ABL Facility includes financial covenants requiring the Company to maintain certain billing levels, subscription counts, liquidity levels (greater than **$12 million**), and limit capital expenditures (less than **$10 million** annually)[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operations) Management discusses financial condition and operations, highlighting the 'Pivot' from MLM to affiliate model, impacting revenue and expenses - The discussion should be read in conjunction with the financial statements and notes included in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the year ended December 31, 2023[110](index=110&type=chunk) - The Company is transitioning its network business from a Multi-Level Marketing (MLM) model to a single-level affiliate model (the "Pivot"), which involved a **33% headcount reduction** (approximately **170 employees**) in the fourth quarter of 2024[119](index=119&type=chunk) | Metric | Three months ended March 31, 2025 (in millions) | Three months ended March 31, 2024 (in millions) | % Change | | :----- | :-------------------------------------------- | :-------------------------------------------- | :------- | | Total Revenue | $72.4 | $120.0 | (40%) | | Net Loss | $(5.7) | $(14.2) | (60%) | | Adjusted EBITDA | $3.7 | $4.6 | (20%) | [Overview](index=35&type=section&id=Overview) BODi, a fitness and nutrition company, focuses on digital content and supplements, recently shifting from an MLM to a single-level affiliate model - BODi is a leading fitness and nutrition company focusing primarily on digital content, supplements, connected fitness, and consumer health and fitness[116](index=116&type=chunk) - Revenue is generated primarily through direct response advertising, affiliates, social media marketing channels, and e-commerce marketplaces like Amazon[118](index=118&type=chunk) - On September 30, 2024, the Company announced a restructuring of its network business (the "Pivot") from a multi-level marketing (MLM) model to a single-level affiliate model, reducing headcount by approximately **170 employees**[119](index=119&type=chunk) [Recent Developments](index=36&type=section&id=Recent%20Developments) The company secured a new **$35.0 million** ABL Facility on May 13, 2025, repaying the Term Loan and establishing new financial covenants - On May 13, 2025, the Company entered into a **$35.0 million** asset-based lending facility (the "ABL Facility"), which includes a **$10 million** uncommitted accordion, maturing on May 13, 2028[122](index=122&type=chunk) - The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025 (outstanding principal balance of **$17.3 million**)[123](index=123&type=chunk) - The ABL Facility has financial covenants that require the Company to maintain certain billing levels, subscription counts, and liquidity levels[122](index=122&type=chunk) [Key Operational and Business Metrics](index=36&type=section&id=Key%20Operational%20and%20Business%20Metrics) Digital and nutritional subscriptions decreased significantly year-over-year, while average digital retention improved, and total streams declined | Metric | As of March 31, 2025 | As of March 31, 2024 | % Change | | :----- | :------------------- | :------------------- | :------- | | Digital subscriptions (millions) | 1.02 | 1.22 | (16%) | | Nutritional subscriptions (millions) | 0.08 | 0.15 | (47%) | | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | | :----- | :-------------------------------- | :-------------------------------- | :----- | | Average digital retention | 97.0% | 95.7% | +1.3 pp | | Total streams (millions) | 20.7 | 25.6 | (19%) | | DAU/MAU | 32.5% | 33.2% | (0.7 pp) | - Digital subscriptions include paid and free-to-pay subscriptions, with free-to-pay subscriptions representing less than **1%** of total digital subscriptions on average[126](index=126&type=chunk) [Non-GAAP Information](index=38&type=section&id=Non-GAAP%20Information) Adjusted EBITDA, a non-GAAP measure, decreased to **$3.7 million** in Q1 2025, used to evaluate core operating performance and trends - Adjusted EBITDA is a non-GAAP performance measure used to supplement GAAP results, similar to measures reported by public competitors[132](index=132&type=chunk) - Adjusted EBITDA excludes non-cash expenses (depreciation and amortization, equity-based compensation) and items not related to underlying business performance (restructuring costs, interest income and expense)[134](index=134&type=chunk) | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Loss | $(5,748) | $(14,216) | $8,468 | | Adjusted EBITDA | $3,713 | $4,554 | $(841) | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) This section details the company's consolidated financial results for Q1 2025 versus Q1 2024, covering revenue, costs, and expenses - The Company has one operating segment, and the discussion of results and operations is on a consolidated basis[138](index=138&type=chunk) | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Total Revenue | $72,363 | $120,046 | $(47,683) | (40%) | | Total Cost of Revenue | $20,814 | $38,764 | $(17,950) | (46%) | | Gross Profit | $51,549 | $81,282 | $(29,733) | (37%) | | Total Operating Expenses | $55,223 | $92,105 | $(36,882) | (40%) | | Operating Loss | $(3,674) | $(10,823) | $7,149 | (66%) | | Net Loss | $(5,748) | $(14,216) | $8,468 | (60%) | [Revenue](index=41&type=section&id=Revenue_Results_of_Operations) Total revenue decreased **40%** due to fewer digital and nutritional subscriptions and cessation of connected fitness inventory sales | Revenue Type | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----------- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Digital | $42,911 | $61,506 | $(18,595) | (30%) | | Nutrition and other | $28,653 | $55,512 | $(26,859) | (48%) | | Connected fitness | $799 | $3,028 | $(2,229) | (74%) | | Total revenue | $72,363 | $120,046 | $(47,683) | (40%) | - The decrease in digital revenue was primarily attributable to a **$13.8 million** decrease from digital streaming services due to **17% fewer subscriptions** and a **$3.1 million** decrease in fees from Partners due to the Pivot[142](index=142&type=chunk) - The decrease in nutrition and other revenue was primarily due to an **$18.1 million** decrease from nutritional products (**48% fewer subscriptions**) and a **$4.4 million** decrease in preferred customer fees due to the Pivot[143](index=143&type=chunk) - The decrease in connected fitness revenue was primarily due to management's decision to no longer sell connected fitness inventory beginning in early 2025, resulting in an approximate **57% decrease** in bikes delivered[144](index=144&type=chunk) [Cost of Revenue](index=41&type=section&id=Cost%20of%20Revenue_Results_of_Operations) Total cost of revenue decreased **46%**, improving digital gross margin but declining nutrition and connected fitness gross margins | Cost of Revenue Type | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :------------------- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Digital | $6,211 | $12,862 | $(6,651) | (52%) | | Nutrition and other | $13,451 | $22,284 | $(8,833) | (40%) | | Connected fitness | $1,152 | $3,618 | $(2,466) | (68%) | | Total cost of revenue | $20,814 | $38,764 | $(17,950) | (46%) | | Gross Margin Type | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change (bps) | | :---------------- | :-------------------------------- | :-------------------------------- | :----------- | | Digital | 85.5% | 79.1% | +640 | | Nutrition and other | 53.1% | 59.9% | (680) | | Connected fitness | (44.2%) | (19.5%) | (2470) | | Total gross margin | 71.2% | 67.7% | +350 | - Digital cost of revenue decreased primarily due to lower personnel-related expenses (**$1.8 million**), digital content amortization (**$1.8 million**), customer service expenses (**$1.0 million**), and digital content revisions (**$0.8 million**)[148](index=148&type=chunk) - The decrease in nutrition and other gross margin was primarily a result of a 'buy one get one free' program in the current quarter and the elimination of preferred customer fees[149](index=149&type=chunk) [Operating Expenses](index=43&type=section&id=Operating%20Expenses_Results_of_Operations) Total operating expenses decreased **40%**, driven by reductions in selling and marketing, technology, and general and administrative expenses | Operating Expense Category | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Selling and marketing | $30,970 | $59,261 | $(28,291) | (48%) | | Enterprise technology and development | $12,596 | $17,717 | $(5,121) | (29%) | | General and administrative | $11,657 | $13,483 | $(1,826) | (14%) | | Restructuring | $0 | $1,644 | $(1,644) | (100%) | | Total operating expenses | $55,223 | $92,105 | $(36,882) | (40%) | [Selling and Marketing](index=43&type=section&id=Selling%20and%20Marketing_Operating_Expenses) Selling and marketing expenses decreased **48%** due to lower Partner compensation and personnel costs, partially offset by increased media and affiliate expenses | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Selling and marketing expense | $30,970 | $59,261 | $(28,291) | (48%) | | As a percentage of total revenue | 42.8% | 49.4% | (6.6 pp) | - The decrease was primarily due to a **$21.9 million** decrease in Partner compensation due to the Pivot and a **$7.1 million** decrease in personnel-related expenses[153](index=153&type=chunk) - This decrease was partially offset by a **$3.8 million** increase in media expenses and a **$0.9 million** increase in affiliate compensation[153](index=153&type=chunk) [Enterprise Technology and Development](index=43&type=section&id=Enterprise%20Technology%20and%20Development_Operating_Expenses) Enterprise technology and development expenses decreased **29%** due to reduced personnel and depreciation, but increased as a percentage of revenue | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Enterprise technology and development | $12,596 | $17,717 | $(5,121) | (29%) | | As a percentage of total revenue | 17.4% | 14.8% | +2.6 pp | - The decrease was primarily due to a **$3.1 million** reduction in personnel-related expenses and a **$2.0 million** decrease in depreciation expense[156](index=156&type=chunk) [General and Administrative](index=45&type=section&id=General%20and%20Administrative_Operating_Expenses) General and administrative expenses decreased **14%** due to lower personnel costs, partially offset by the absence of a prior-year facility sale gain | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | General and administrative | $11,657 | $13,483 | $(1,826) | (14%) | | As a percentage of total revenue | 16.1% | 11.2% | +4.9 pp | - The decrease was primarily due to a **$2.7 million** reduction in personnel-related expenses, partially offset by a **$0.8 million** gain on the sale of the Van Nuys facility in the prior year period[159](index=159&type=chunk) [Restructuring](index=45&type=section&id=Restructuring_Operating_Expenses) No restructuring charges were incurred in Q1 2025, a **100% decrease** from **$1.6 million** in Q1 2024, which were employee termination costs | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Restructuring | $0 | $1,644 | $(1,644) | (100%) | - Restructuring charges in 2024 primarily related to the Company's key initiatives, consisting of employee termination costs[161](index=161&type=chunk) [Other Income (Expense)](index=45&type=section&id=Other%20Income%20(Expense)_Results_of_Operations) No debt extinguishment loss in Q1 2025, interest expense decreased **17%** due to prepayments, and other income, net, decreased **53%** | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | $ Change | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :------- | :------- | | Loss on partial debt extinguishment | $0 | $(1,209) | $1,209 | (100%) | | Change in fair value of warrant liabilities | $(689) | $(724) | $35 | (5%) | | Interest expense | $(1,565) | $(1,875) | $310 | (17%) | | Other income, net | $225 | $477 | $(252) | (53%) | - The decrease in interest expense was primarily due to principal prepayments of **$13.7 million** on the outstanding Term Loan balance from January 1, 2024, to March 31, 2025[165](index=165&type=chunk) [Income Tax Provision](index=46&type=section&id=Income%20Tax%20Provision_Results_of_Operations) The income tax provision decreased **27%** to **$0.045 million**, primarily due to changes in valuation allowances and discrete events | Metric | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | | Income tax provision | $(45) | $(62) | - The income tax provision decrease was primarily driven by changes in valuation allowances and a decrease in the net expense from discrete events[167](index=167&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was impacted by the new ABL Facility and Term Loan repayment, with sufficient cash and cost controls for future needs - As of March 31, 2025, the Company had cash and cash equivalents totaling **$18.1 million**[171](index=171&type=chunk) - The Company believes that existing cash and cash equivalents and cost control initiatives will provide sufficient liquidity to meet anticipated cash needs for the next twelve months as well as for the longer-term[178](index=178&type=chunk) - The Company may explore additional debt or equity financing to supplement working capital and strengthen its financial position, but there are no assurances regarding the availability or terms of such capital[179](index=179&type=chunk) [ABL Facility and Repayment of Term Loan](index=46&type=section&id=ABL%20Facility%20and%20Repayment%20of%20Term%20Loan_Liquidity) The company secured a **$35.0 million** ABL Facility and repaid the Term Loan, providing **$5 million** in additional capital post-quarter - On May 13, 2025, the Company entered into a **$35.0 million** ABL Facility and borrowed **$25.0 million** on the Asset-Based Lending Facility Effective Date[168](index=168&type=chunk) - The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025 (outstanding principal balance of **$17.3 million**), along with paid-in-kind interest, prepayment premium, and accrued interest[169](index=169&type=chunk) - After repaying the existing Term Loan, the ABL Facility provided the Company with approximately **$5 million** in additional capital on its balance sheet[169](index=169&type=chunk) [Cash Provided By (Used In) Operating, Investing and Financing Activities](index=46&type=section&id=Cash%20Provided%20By%20(Used%20In)%20Operating,%20Investing%20and%20Financing%20Activities_Liquidity) Operating cash decreased due to deferred revenue and accrued expenses, investing shifted to outflow, and financing cash usage decreased | Cash Flow Activity | Three months ended March 31, 2025 (in thousands) | Three months ended March 31, 2024 (in thousands) | Change (in thousands) | | :----------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $2,342 | $9,134 | $(6,792) | | Net cash (used in) provided by investing activities | $(694) | $3,901 | $(4,595) | | Net cash used in financing activities | $(3,729) | $(7,219) | $3,490 | - The decrease in net cash provided by operating activities was primarily due to a **$12.3 million** decrease in cash provided by deferred revenue and a **$4.2 million** increase in cash used in accrued expenses[172](index=172&type=chunk) - The decrease in net cash provided by investing activities was due to proceeds from the sale of the Van Nuys facility of **$5.6 million** in Q1 2024, partially offset by a **$1.0 million** decrease in capital expenditures[173](index=173&type=chunk) [Term Loan](index=48&type=section&id=Term%20Loan_Liquidity) The Term Loan had an **$18.4 million** balance with a **27.81%** effective interest rate, and the company was compliant with covenants before its repayment - As of March 31, 2025, the principal balance outstanding (including capitalized paid in kind interest) under the Term Loan was **$18.4 million**[175](index=175&type=chunk) - During the three months ended March 31, 2025, the Term Loan had an effective interest rate of **27.81%** and a cash interest rate of **11.64%**[175](index=175&type=chunk) - The Company was in compliance with the financial covenants (minimum liquidity of **$13.0 million** and minimum consolidated EBITDA targets) as of March 31, 2025[176](index=176&type=chunk) [Contractual Commitments](index=48&type=section&id=Contractual%20Commitments_Liquidity) The company had **$13.9 million** in lease obligations and purchase commitments as of March 31, 2025, primarily due within the next year - As of March 31, 2025, the Company had **$13.9 million** of lease obligations and purchase commitments associated with contracts that are enforceable and legally binding[177](index=177&type=chunk) [Future Capital Requirements](index=48&type=section&id=Future%20Capital%20Requirements_Liquidity) Existing cash and cost controls are expected to provide sufficient liquidity for short and long-term needs, with potential for additional financing - The Company believes that existing cash and cash equivalents and cost control initiatives will provide sufficient liquidity to meet anticipated cash needs for the next twelve months as well as for the longer-term[178](index=178&type=chunk) - The Company may explore additional debt or equity financing to supplement anticipated working capital balances and further strengthen its financial position, but there can be no assurances that it will be able to raise additional capital in amounts or on terms acceptable[179](index=179&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) No material changes occurred in the company's critical accounting estimates since the 2024 Annual Report on Form 10-K - There have been no material changes to the Company's critical accounting estimates discussed in the 2024 Annual Report on Form 10-K[180](index=180&type=chunk) [Recent Accounting Pronouncements](index=49&type=section&id=Recent%20Accounting%20Pronouncements) Information on recently adopted accounting pronouncements is detailed in Note 1 of the financial statements - Information on recently adopted accounting pronouncements is detailed in Note 1, Description of Business and Summary of Significant Accounting Policies[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces foreign currency risk, with **8%** of Q1 2025 revenue in foreign currencies, and is exiting nutritional product sales in the UK and France - Approximately **8%** of the Company's revenue for the three months ended March 31, 2025, was in foreign currencies (primarily Canadian dollars and British pounds), down from **11%** in Q1 2024[182](index=182&type=chunk) - Management made a determination in 2023 to cease entering into any further foreign exchange options, resulting in a **zero notional amount** of outstanding foreign exchange derivative instruments at March 31, 2025[184](index=184&type=chunk)[187](index=187&type=chunk) - As part of the Pivot, the Company has decided to exit the sale of nutritional and other physical products in the United Kingdom and France[184](index=184&type=chunk) - A hypothetical **10% change** in exchange rates would result in an approximate **$1.7 million** increase or decrease in cost of revenue and operating expenses[186](index=186&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[188](index=188&type=chunk) - There have been no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[189](index=189&type=chunk) - Management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met[190](index=190&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several legal proceedings, including class actions and arbitration demands, and intends to vigorously defend itself - The Company is involved in a class action complaint alleging misclassification of its Partners as contractors rather than employees, with **12 arbitration actions** already settled for nominal fees[192](index=192&type=chunk) - A patent infringement complaint by Dish Technologies LLC and SLING TV LLC was dismissed without prejudice following a Confidential Standstill and Tolling Agreement, which included an immaterial one-time payment by the Company[193](index=193&type=chunk) - Claims against the Company and Raine in the Reilly Action (class action related to the 2021 merger) for aiding and abetting breach of fiduciary duty were dismissed without prejudice on December 5, 2024[195](index=195&type=chunk) - Milberg Coleman Bryson Phillips Grossman filed **10 arbitration demands** alleging that the Company violated the Video Privacy Protection Act on behalf of approximately **6,239 BODi subscribers**[197](index=197&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material developments regarding risk factors were reported since the 2024 Annual Report on Form 10-K - No material developments regarding risk factors were reported since the 2024 Annual Report on Form 10-K[198](index=198&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities and use of proceeds were reported[199](index=199&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[200](index=200&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable to the Company[201](index=201&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section provides additional information on the new ABL Facility and the subsequent repayment of the Blue Torch Term Loan - No director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended March 31, 2025[202](index=202&type=chunk) [Asset Based Lending Facility](index=53&type=section&id=Asset%20Based%20Lending%20Facility_Other_Information) The company entered a **$35.0 million** ABL Facility on May 13, 2025, secured by assets, with specific interest rates and financial covenants - On May 13, 2025, the Company entered into a **$35.0 million** ABL Facility, which includes a **$10 million** uncommitted accordion, that matures on May 13, 2028[203](index=203&type=chunk) - The ABL Facility bears interest based on the one-month SOFR rate plus **9.00%** (initially **13.33%**) and is secured by a first lien on substantially all of the Company's assets[203](index=203&type=chunk) - Financial covenants under the ABL Facility require the Company to maintain certain billing levels, subscription counts, liquidity greater than **$12 million**, and annual capital expenditures less than **$10 million**[205](index=205&type=chunk)[206](index=206&type=chunk) [Blue Torch Term Loan Repayment](index=55&type=section&id=Blue%20Torch%20Term%20Loan%20Repayment) The Term Loan was fully repaid on May 13, 2025, using ABL Facility proceeds, including principal, interest, and prepayment premium - The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025[207](index=207&type=chunk) - The repayment included an outstanding principal balance of **$17.3 million**, **$0.5 million** of outstanding paid-in-kind interest, a **$0.3 million** prepayment premium, and **$0.2 million** of outstanding accrued interest[207](index=207&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents, warrant forms, a letter agreement, and certifications - The exhibits include corporate governance documents (Certificate of Incorporation, Bylaws), warrant forms, a letter agreement, the Credit Agreement for the new ABL Facility, and certifications from the CEO and CFO[211](index=211&type=chunk) [Signatures](index=57&type=section&id=Signatures) The report was signed by the CEO and Interim CFO on May 15, 2025, certifying its submission - The report was signed by Carl Daikeler, Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Officer, on May 15, 2025[215](index=215&type=chunk)

Financial Data and Key Metrics Changes - The company generated revenue of $72.4 million in Q1 2025, exceeding the guidance range of $60 million to $70 million, but reflecting a 16.2% sequential decline and a 39.7% year-over-year decline [24][25] - Adjusted EBITDA was $3.7 million, significantly exceeding the guidance range of a $2 million loss to $2 million profit, marking the sixth consecutive quarter of positive adjusted EBITDA [24][31] - The net loss for Q1 2025 was $5.7 million, an improvement from a net loss of $14.2 million in the prior year [31] Business Line Data and Key Metrics Changes - Digital revenue decreased 14.8% sequentially to $42.9 million and decreased 30.2% year-over-year, with digital subscribers declining 5.1% sequentially to 1,020,000 [26] - Nutrition revenue decreased 17.7% sequentially to $28.7 million and fell 48.4% year-over-year, with nutrition subscriptions declining 13.1% sequentially to 80,000 [26] Market Data and Key Metrics Changes - The company has transitioned from a multilevel marketing (MLM) model to an omnichannel approach, which is expected to provide additional flexibility and revenue growth over the next 24 months [25][33] - The cash breakeven level has been significantly reduced from over $900 million in 2022 to just under $225 million in 2025 [6][7] Company Strategy and Development Direction - The company has eliminated the MLM model and is focusing on a multichannel approach with an emphasis on direct-to-consumer and retail distribution channels [8] - A new lending agreement with Tiger Finance for a $25 million loan facility has been established to retire existing debt and provide additional capital [7][60] - The company plans to launch nutritional products in retail channels starting late Q4 2025, with a focus on well-known brands [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, emphasizing the need for patience and discipline as the company transitions to its new business model [11][12] - The company anticipates growth as new products are launched and the affiliate program is simplified to attract more participants [15][19] Other Important Information - The company has seen improvements in gross margins, with consolidated gross margins at 71.2%, exceeding the long-term target of 65% to 70% [25] - The transition to the new affiliate model is expected to enhance customer engagement and retention [15][19] Q&A Session Summary Question: How is the transition of sellers from the old model to the new direct affiliate model performing? - Management is pleased with some strong affiliates but acknowledges that overall performance has not met expectations due to the complexity of the current platform. A simpler model is set to launch in mid-June [37][38] Question: How will selling and marketing be balanced going forward? - The company plans to reinvest savings from the new business model into marketing to maximize gross profit dollars, focusing on the relationship between lifetime value and customer acquisition cost [39][40] Question: What changes are being made to the new affiliate platform? - The new platform will be user-friendly, integrating community features and simplifying the process for subscribers to become affiliates, launching in mid-June [46][50] Question: How is the nutrition business adjusting pricing ahead of retail launches? - The company is focusing on one-time purchases to attract new customers, which may lower overall gross margins but is expected to increase gross profit through higher unit sales [52][55] Question: What are the terms of the new credit facility? - The new loan has an interest rate of SOFR plus nine, approximately 13.3%, with a one-year moratorium on principal repayment, significantly improving the company's financial flexibility [58][60]

Financial Data and Key Metrics Changes - The company generated revenue of $72.4 million in Q1 2025, exceeding the guidance range of $60 million to $70 million [25] - Adjusted EBITDA was $3.7 million, significantly above the guidance range of a $2 million loss to $2 million [25] - Total revenues declined 16.2% sequentially and 39.7% year over year, aligning with expectations due to the strategic transition [25][26] - Consolidated gross margins were 71.2%, reflecting an increase of 70 basis points over the prior quarter and an increase of 350 basis points year over year [26] Business Line Data and Key Metrics Changes - Digital revenue decreased 14.8% from the prior quarter to $42.9 million and decreased 30.2% year over year [27] - Nutrition revenue decreased 17.7% from the prior quarter to $28.7 million and fell 48.4% year over year [27] - Digital subscriber count decreased 5.1% sequentially to 1,020,000 and declined 16.6% compared to the same period a year ago [27] Market Data and Key Metrics Changes - The company is transitioning from a multilevel marketing (MLM) model to an omnichannel model, which is expected to provide additional flexibility and revenue growth over the next 24 months [26] - The shift to the new model has impacted nutritional subscribers significantly, as these products were historically sold through the MLM network [27] Company Strategy and Development Direction - The company has eliminated the MLM business model and transitioned to a multichannel approach, emphasizing direct-to-consumer and retail distribution channels [8] - A new lending agreement with Tiger Finance for a $25 million loan facility has been established, allowing the company to retire existing debt and improve its financial position [7][56] - The company plans to launch nutritional products in retail channels, starting with Shakeology in late Q4 2025, followed by P90X and Insanity nutritional lines in 2026 [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting the importance of patience and discipline in executing the new business model [11] - The company anticipates growth as it builds out its retail distribution strategy and launches new products [12][34] - Management acknowledged the challenges faced during the transition but remains optimistic about future performance and profitability [33] Other Important Information - The company has cut its debt by more than 50% to $18 million and reduced its cash breakeven level from over $900 million in 2022 to just under $225 million [6][7] - The company is focusing on performance marketing to improve customer acquisition and retention, with a new digital agency hired to enhance marketing efforts [19][20] Q&A Session Summary Question: How is the transition of sellers from the old model to the new direct affiliate model performing? - Management indicated that while there are strong affiliates, overall performance has not met expectations due to the complexity of the current platform. A simpler model is expected to launch in June [38][39] Question: How is management balancing reinvestment in marketing with the new business model? - Management stated that selling and marketing expenses as a percentage of revenue have decreased, and they plan to reinvest cash generated into marketing to maximize gross profit dollars [40][41] Question: What changes are being made to the new affiliate platform? - The new platform will be user-friendly, allowing subscribers to easily promote programs and earn commissions, which is expected to enhance affiliate participation [44][46] Question: How is the company tracking customer migration from subscriptions to one-time purchases? - Management noted that they are institutionalizing a Subscribe and Save program to rebuild the nutritional subscription file while also focusing on one-time purchases to attract new customers [62][63] Question: Is the Connected Fitness segment being phased out? - Management confirmed that no new bikes will be produced, but they will continue to support existing customers and explore partnerships for content delivery [67][68]

Company Overview - The Beachbody Company (BODi) operates a fitness, nutrition, and wellness platform [1, 9] - The company's FY23 revenue was $527 million [18] - The company has impacted over 30 million consumers [18] Key Metrics and Financials - Digital subscriptions totaled 1.2 million [47] - Nutrition subscriptions reached 151,000 [43] - Digital streaming boasts 9,000 unique videos [47] - Digital streaming has 96% average monthly retention [47] - Q1 2024 saw $9.1 million in cash flows from operations [96] Revenue Streams - Nutrition products and supplements accounted for 46% of revenue [35, 42] - Digital streaming contributed 51% of revenue [35, 45] - Connected fitness represented 3% of revenue [35, 39] Market Opportunity - The company operates in a large market with a total addressable market (TAM) of $237 billion [105] - Nutrition supplements represent a $164 billion market [106, 112] - Digital fitness accounts for $13 billion [106, 112]