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)

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]