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

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

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

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

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

Exhibit 99.1 Beachbody (BODi) Reports First Quarter Financial Results and Announces New Three-Year $25 Million Committed Lending Agreement Strengthens Balance Sheet with New Three-Year $25 Million Committed Lending Agreement Revenues and Net Loss Better Than Guidance Gross Margin of 71%-up 350bps over prior year Adjusted EBITDA Better than Guidance Sixth Consecutive Quarter of Positive Adjusted EBITDA El Segundo, Calif. (May 14, 2025) – The Beachbody Company, Inc. (NYSE: BODi) ("BODi" or the "Company"), a l ...

Core Viewpoint - The Beachbody Company, Inc. (BODI) is expected to report a year-over-year increase in earnings despite lower revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The company is projected to post a quarterly loss of $1.33 per share, reflecting a year-over-year change of +30.7% [3]. - Revenues are anticipated to be $63.1 million, down 47.4% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.01% higher in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with positive readings being more predictive of earnings beats [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have shown a nearly 70% success rate in delivering positive surprises [8]. Historical Performance - In the last reported quarter, the company was expected to post a loss of $2.88 per share but delivered a loss of $1.89, resulting in a surprise of +34.38% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Conclusion - The Beachbody Company does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, but other factors should also be considered for investment decisions [16].

Market Risks - The company faces significant risks related to consumer preferences in the health and fitness industry, which can change rapidly and unpredictably [86]. - The company relies heavily on a few key products for sales, making it vulnerable to market fluctuations and consumer demand shifts [82]. - The company’s revenue is significantly impacted by consumer discretionary spending, which can decline during economic downturns [92]. - The company’s nutritional products, particularly the Shakeology line, are subject to changing consumer perceptions and trends, which could adversely affect demand [91]. - The company faces significant competition in the at-home fitness equipment and nutritional products markets, which is expected to intensify [107]. - The company may experience challenges in attracting and retaining customers, which could materially impact its financial condition [102]. Operational Challenges - The company has initiated cost reduction activities, including a strategic alignment initiative called the Pivot, aimed at streamlining operations and transitioning to a single-level affiliate model [96]. - The company’s operational results may fluctuate due to the seasonal nature of its business [82]. - The company operates with limited control over suppliers and manufacturers, which may lead to risks in product quality and availability [112]. - The company faces risks related to inventory management, which could lead to excess inventory write-downs or shortages affecting sales [126]. - The company relies on high-quality customer service, and any negative experiences could harm its reputation and sales [122]. - The company’s relationships with third-party service providers are crucial, and any failure in their systems could adversely affect operations [182]. Financial Risks - The company’s ability to maintain pricing levels for its products is critical, as failure to do so could significantly reduce revenue and gross margins [88]. - The company’s financing agreements impose restrictions that could adversely affect its operations and ability to engage in certain transactions [80]. - The company may face challenges in maintaining sufficient cash flows from operating activities to meet debt obligations, potentially leading to asset sales or restructuring [142]. - The company may need to raise additional funds through new equity securities or debt due to increased liquidity needs [242]. - The company’s quarterly operating results may fluctuate significantly, making it difficult to predict future performance [243]. - The company’s ability to maintain gross margins and operating margins is critical for its financial health [246]. Regulatory and Compliance Risks - The company is exposed to risks associated with data security and privacy, which could impact its operations if not managed effectively [82]. - The company is subject to stringent data privacy laws, including the CCPA and GDPR, which could increase compliance costs and legal risks [160]. - The enactment of new privacy laws across various states may create a complex regulatory environment for the company [159]. - Non-compliance with FDA regulations could adversely affect the company's business and financial condition [189]. - The company relies on contract manufacturers for compliance with regulatory requirements, which poses risks if they fail to adhere [190]. - The company faces risks related to ACH, credit card, and debit card payments, including potential increases in transaction fees [197]. Legal and Litigation Risks - The company faces potential litigation expenses and loss of rights due to claims of intellectual property infringement, particularly concerning its BODi Bikes products [212]. - The company faces a securities class action suit related to its business combination transaction, which could incur significant expenses and impact stock price [231]. - The company may incur significant legal fees related to securities litigation and stockholder activism, which could divert management's attention [231]. - The company may incur significant costs related to cybersecurity incidents, including potential litigation and regulatory penalties [180]. Governance and Control Risks - The co-founder and CEO, Carl Daikeler, controls over 80% of the voting power through Class X common stock, allowing him to influence major corporate decisions [127]. - The company is classified as a "controlled company," limiting certain corporate governance protections for stockholders [131]. - The company’s internal controls over financial reporting may not be effective, potentially leading to investor confidence issues [232]. International Expansion Risks - Expansion into international markets poses significant risks, including regulatory, economic, and political challenges, which could adversely affect operations [147]. - The company has limited experience with international regulatory environments, which may hinder successful market penetration [148]. - The company’s international business expansion could be adversely affected by inconsistent enforcement of data privacy laws [162]. Market and Stock Risks - The market price of the company's Class A common stock may experience volatility due to various factors, including financial performance and market conditions [219]. - The company may face dilution of its Class A common stock due to future equity offerings or other securities issuances [224]. - The company does not expect to declare cash dividends in the foreseeable future, relying instead on stock price appreciation for returns to investors [229]. Miscellaneous Risks - The company may incur additional costs due to design and manufacturing defects in its products, affecting user experience and market acceptance [119]. - The company anticipates significant additional costs to comply with expanded climate-related disclosures mandated by regulators [187]. - Changes in laws and regulations could increase operating costs and reduce demand for the company's products [191]. - The company’s exposure to interest rate risk is primarily associated with Term Loan borrowings, which are subject to variability in the SOFR rate [405].

Financial Data and Key Metrics Changes - The company generated revenue of $86.4 million in Q4 2024, which was at the high end of the guidance range of $77 million to $87 million [45] - Adjusted EBITDA was $8.7 million, significantly exceeding the guidance range of $2 million to $6 million, marking the fifth consecutive quarter of positive adjusted EBITDA [45][56] - Gross margins improved by 830 basis points year-over-year to 70.5%, the highest quarterly rate since 2020 [15][47] - Cash flow from operations improved dramatically, generating $2.6 million in 2024 compared to a cash use of $22.5 million in 2023, a $25 million improvement [17][56] Business Line Data and Key Metrics Changes - Digital revenue decreased 6.2% sequentially to $50.4 million and decreased 21.4% year-over-year, impacted by a decline in digital subscribers [48] - Nutrition revenue decreased 26.6% sequentially to $34.8 million and decreased 32.8% year-over-year, with nutrition subscriptions declining 29.2% sequentially [49][50] - Digital gross margin was 85.9%, up 540 basis points from the prior quarter, while nutrition gross margin was 52.3%, representing a 630 basis point decline from the prior quarter [50][51] Market Data and Key Metrics Changes - The transition from a multi-level marketing (MLM) model to an omni-channel model has significantly impacted revenue streams, with expectations of a shift towards more direct-to-consumer sales [46][58] - The company is seeing strong growth in its Amazon business and is expanding into Walmart, which is expected to contribute to revenue growth [35][37][113] Company Strategy and Development Direction - The company has restructured into a new business model, phasing out the MLM structure and adopting an omni-channel strategy focused on direct-to-consumer marketing [7][11] - The new strategy aims to enhance revenue streams and empower affiliates with a performance-based compensation structure [11][12] - The company is focused on building profitable revenue and cash flow, with plans to expand into retail and leverage partnerships to enhance product accessibility [25][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 will be a transition year as the new business model is implemented, with expectations of short-term dislocations but a commitment to long-term growth [18][19] - There is optimism about the growth potential of the new initiatives, particularly in the context of increasing demand for fitness and nutrition products [23][24] - The company expects to see a mix of revenue streams, with approximately 60% from digital and 40% from nutrition moving forward [61] Other Important Information - The company has retained more of its legacy nutrition subscription file than expected during the transition, indicating a positive customer experience [39] - Partnerships with telehealth providers and initiatives to leverage HSA and FSA accounts are being pursued to enhance product accessibility [40][41] Q&A Session Summary Question: Can you provide more color on the movement with affiliates during the transition to the new business model? - Management indicated that the transition was moderate, with some affiliates moving over while new affiliates are being attracted from outside the previous network [66][68] Question: How should we think about the P&L structure moving forward? - The company expects a revenue mix of 60% digital and 40% nutrition, with gross margins of approximately 85% for digital and 50% for nutrition [71][77] Question: Can you clarify the reasons for the sequential revenue decline? - The decline is attributed to the transition from MLM to the new model, with many former affiliates not migrating over [86][88] Question: What are the expectations for the nutrition business, particularly regarding retail? - The nutrition business is seen as a major opportunity, with plans to market products like Shakeology in retail for the first time [93][95] Question: How will the company manage potential cannibalization between direct-to-consumer and affiliate channels? - Management believes the channels are complementary, with direct marketing efforts providing support for affiliate sales [115][118]

Financial Data and Key Metrics Changes - The company generated revenue of $86.4 million in Q4 2024, which was at the high end of the guidance range of $77 million to $87 million [31] - Adjusted EBITDA was $8.7 million, significantly exceeding the guidance range of $2 million to $6 million, marking the fifth consecutive quarter of positive adjusted EBITDA [10][31] - The company reported a net loss of $34.6 million in Q4 2024, compared to a net loss of $12 million in the prior quarter, which included $20 million of goodwill impairment expenses [36][37] - Cash generated from operations improved to $2.6 million for the year 2024, compared to cash used in operations of $22.5 million in 2023, representing a $25.1 million improvement year over year [11][38] Business Line Data and Key Metrics Changes - Digital revenue decreased by 6.2% sequentially to $50.4 million and decreased by 21.4% year over year [32] - Nutrition revenue decreased by 26.6% sequentially to $34.8 million and decreased by 32.8% year over year [33] - Digital subscriber count decreased by 3.4% sequentially to 1.07 million and declined by 19.1% compared to the same period a year ago [32] Market Data and Key Metrics Changes - The transition from a multi-level marketing (MLM) model to an omni-channel model has impacted revenue, particularly in the nutrition segment [32][33] - The company is seeing strong growth in its Amazon business and has launched on Walmart.com, which is expected to grow significantly [23][24][66] Company Strategy and Development Direction - The company has restructured into a single-level affiliate model, phasing out the MLM structure to enhance revenue streams and improve profitability [5][6] - The focus is on an omnichannel strategy that includes direct-to-consumer marketing, Amazon, and conventional retail distribution for nutrition products [7][8] - The company aims to introduce new products under popular brand names like T90X and Insanity within the next twelve months [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 will be a transition year as the new business model is implemented, which may involve short-term dislocation [12] - There is optimism about the growth potential ahead, particularly in the nutrition segment, as the company can now market products outside the former MLM network [10][26] - The management emphasizes the importance of building profitable revenue and cash flow while leveraging strategic partnerships and new sales channels [30] Other Important Information - The company has retained more of the legacy nutrition subscription file than expected during the transition, indicating a positive customer experience [26] - Partnerships with telehealth providers and initiatives to leverage HSA and FSA accounts are being pursued to enhance product accessibility [28][29] Q&A Session Summary Question: What was the reaction to the transition to the new affiliate model? - Management indicated that the transition was moderately successful, with some affiliates migrating over, but new affiliate acquisition has been slower than desired [44][45] Question: How should the P&L structure be viewed moving forward? - The company expects revenues to approximate 60% digital and 40% nutrition, with gross margins of approximately 85% for digital and 50% for nutrition [48][51] Question: What is the outlook for the nutrition business and retail expansion? - The nutrition segment is seen as a major opportunity, with plans to market products like Shakeology in retail for the first time, which could significantly increase revenue [65][66]