Revenue Performance - Total revenue for Q1 2025 was $72.4 million, a decrease of 39.7% compared to $120.0 million in Q1 2024[3]. - Digital revenue was $42.9 million, down 30.2% from $61.5 million in the prior year period, with digital subscriptions totaling 1.02 million, a decline of 16.6%[3][7]. - Nutrition and Other revenue was $28.7 million, a decrease of 48.4% from $55.5 million in the prior year, with nutritional subscriptions at 0.08 million, down 47.7%[3][7]. - Connected Fitness revenue fell to $0.8 million, down 73.6% from $3.0 million in the prior year, with approximately 1,500 bikes delivered, a 56.9% decrease[3][7]. - Total revenue for Q1 2025 was $72.363 million, a decrease of 39.8% compared to $120.046 million in Q1 2024[20]. - Digital revenue decreased to $42.911 million, down 30.2% from $61.506 million year-over-year[20]. Profitability and Loss - Operating loss improved to $3.7 million, an improvement of $7.1 million from an operating loss of $10.8 million in the prior year[3]. - Net loss was $5.7 million, significantly improved from a net loss of $14.2 million in the prior year, representing a 59.6% reduction[3][7]. - Net loss for Q1 2025 was $5.748 million, an improvement from a net loss of $14.216 million in Q1 2024[20]. - Adjusted EBITDA for Q1 2025 was $3.7 million, down 19.6% from $4.6 million in the prior year[3][7]. - Adjusted EBITDA for Q1 2025 was $3.713 million, compared to $4.554 million in Q1 2024, reflecting a decrease of 18.5%[26]. Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $18.126 million, down from $20.187 million at the end of Q4 2024[30]. - The net cash position improved to $1.701 million in Q1 2025, compared to $1.019 million in Q4 2024[30]. - Free cash flow for Q1 2025 is $1,648,000, a decrease of 77.8% compared to $7,435,000 in Q1 2024[32]. - Net cash provided by operating activities for Q1 2025 is $2,342,000, down from $9,134,000 in Q1 2024, representing a decline of 74.3%[32]. - Cash used for the purchase of property and equipment in Q1 2025 is $694,000, compared to $1,699,000 in Q1 2024, indicating a reduction of 59.1%[32]. Outlook and Future Projections - The outlook for Q2 2025 projects revenue between $51 million and $61 million, with a net loss expected between $7 million and $3 million[10]. Operational Metrics - Average digital retention improved to 97.0%, up 130 basis points from 95.7% in the prior year[7]. - Operating expenses for Q1 2025 were $55.223 million, down 40.1% from $92.105 million in Q1 2024[20]. - Inventory decreased to $13.480 million in Q1 2025 from $16.303 million in Q4 2024[18]. - The company reported a gross profit of $51.549 million for Q1 2025, down 36.5% from $81.282 million in Q1 2024[20]. - Total current liabilities decreased to $118.844 million in Q1 2025 from $127.638 million in Q4 2024[18]. Debt and Financing - The company announced a new $25 million, 3-year committed lending agreement, which allowed for the retirement of $17.3 million of outstanding debt and added approximately $5 million to the balance sheet[2][5].

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].

PART I [Business](index=4&type=section&id=Item%201.%20Business) The company provides digital fitness and nutrition products, recently pivoting from an MLM to an affiliate model and discontinuing connected fitness equipment Key Subscriber Metrics (as of December 31, 2024) | Metric | Count (millions) | | :--- | :--- | | Digital Subscriptions | 1.1 | | Nutritional Subscriptions | 0.1 | Customer Engagement and Retention (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Streams (millions) | 87.4 | 98.2 | | DAU/MAU | 31.7% | - | | Month-over-month Retention | 96.8% | - | - The company executed a strategic "Pivot" from an MLM to an affiliate model, **reducing its workforce by approximately 33%**[28](index=28&type=chunk) - Following the Pivot, the company ceased receiving Partner and preferred customer fees, which amounted to **$9.9 million and $14.3 million respectively** in 2024[28](index=28&type=chunk)[46](index=46&type=chunk) - Management decided to **discontinue the sale of connected fitness equipment** beginning in early 2025[29](index=29&type=chunk)[36](index=36&type=chunk) - As of December 31, 2024, the company employed approximately **355 full-time individuals** in a remote-first workplace[76](index=76&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its strategic pivot, competition, debt covenants, and concentrated voting control [Risks Related to Our Business and Industry](index=14&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Key risks include the strategic pivot's execution, reliance on key products, and intense industry competition - The strategic "Pivot" from an MLM to an affiliate model **may not be successful, could be disruptive, and cause revenue to decline**[90](index=90&type=chunk)[96](index=96&type=chunk) - The business relies heavily on its digital platform (54% of revenue) and nutrition products (45% of revenue), with **Shakeology alone constituting 18% of revenue**[105](index=105&type=chunk) - Co-founder and CEO, Carl Daikeler, **controls over 80% of the company's voting power** through Class X "super" voting stock[127](index=127&type=chunk) - The company qualifies as a **"controlled company"** under NYSE rules, exempting it from certain corporate governance requirements[131](index=131&type=chunk) [Risks Related to our Indebtedness](index=24&type=section&id=Risks%20Related%20to%20our%20Indebtedness) Restrictive covenants in the senior secured term loan limit operations and a failure to comply could lead to default - The senior secured term loan facility (Term Loan) contains **restrictive covenants limiting operations**, including incurring debt and paying dividends[134](index=134&type=chunk)[137](index=137&type=chunk) - The Financing Agreement requires maintaining **minimum consolidated EBITDA and liquidity levels**, with non-compliance potentially leading to default[135](index=135&type=chunk)[136](index=136&type=chunk) - The Term Loan matures on February 8, 2026, and while discussions for refinancing are underway, **there is no assurance a new facility will be finalized**[142](index=142&type=chunk)[143](index=143&type=chunk) [Risks Related to Data and Information Systems](index=28&type=section&id=Risks%20Related%20to%20Data%20and%20Information%20Systems) The business is subject to complex data privacy laws and depends on third-party platforms like the Apple App Store - The company is subject to numerous data privacy laws like GDPR and CCPA/CPRA, where **non-compliance can lead to significant fines**[158](index=158&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) - A **security breach of customer data could lead to regulatory investigations**, legal exposure, and significant remediation costs[171](index=171&type=chunk)[174](index=174&type=chunk) - The business depends on the **Apple App Store as a primary distribution platform**, and unfavorable changes to its terms could harm the business[168](index=168&type=chunk)[169](index=169&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[252](index=252&type=chunk) [Cybersecurity](index=43&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program is based on the NIST CSF framework and overseen by the Board's Audit Committee - The company's cybersecurity program is designed and assessed based on the **National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)**[254](index=254&type=chunk) - The Board's Audit Committee has **oversight of cybersecurity risk** and receives quarterly reports from management[258](index=258&type=chunk)[259](index=259&type=chunk) - The company has **not identified any material risks from known cybersecurity threats** to its operations, strategy, or financial condition[257](index=257&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The company downsized its headquarters lease and sold its production facility, entering into a leaseback agreement - The corporate headquarters lease in El Segundo, CA was renewed, and the leased space was **reduced from ~42,000 sq ft to ~9,400 sq ft**[265](index=265&type=chunk) - On February 29, 2024, the company **sold its Van Nuys production facility and entered into a five-year leaseback** for the property[266](index=266&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in several legal proceedings, including class actions and arbitration demands, but has not established reserves - A class action complaint was filed alleging the company **misclassified its Partners as contractors** rather than employees[268](index=268&type=chunk) - A patent infringement complaint filed by DISH Technologies was **dismissed after a confidential settlement** for an immaterial payment[269](index=269&type=chunk) - The company faces **10 arbitration demands**, with a potential for approximately 6,239 total, alleging violations of the Video Privacy Protection Act[274](index=274&type=chunk) - For all pending matters, the company **has not established reserves** as it cannot reasonably estimate damages[275](index=275&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[277](index=277&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A stock trades on the NYSE, it has never paid dividends, and made no stock repurchases in Q4 2024 - Class A common stock trades on the NYSE, with the ticker **changed from "BODY" to "BODI"** on March 4, 2024[278](index=278&type=chunk) - The company has **never declared or paid cash dividends** and does not expect to in the foreseeable future[281](index=281&type=chunk) - There were **no repurchases of common stock** during the fourth quarter of 2024[283](index=283&type=chunk) [Selected Financial Data](index=49&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is reserved and contains no information - Reserved[283](index=283&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue fell 21% in 2024, but a major restructuring improved profitability, though debt maturity raises going concern doubts [Results of Operations](index=57&type=section&id=Results%20of%20Operations) Total revenue fell 21% in 2024, but lower operating expenses significantly narrowed the company's operating and net losses Revenue by Segment (2024 vs. 2023) | Revenue Segment | 2024 (in thousands) | 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Digital | $224,335 | $258,370 | (13%) | | Nutrition and other | $187,835 | $249,510 | (25%) | | Connected fitness | $6,626 | $19,229 | (66%) | | **Total revenue** | **$418,796** | **$527,109** | **(21%)** | Key Profitability Metrics (2024 vs. 2023) | Metric | 2024 (in thousands) | 2023 (in thousands) | $ Change | | :--- | :--- | :--- | :--- | | Gross Profit | $287,344 | $323,087 | ($35,743) | | Operating Loss | ($66,208) | ($140,988) | $74,780 | | Net Loss | ($71,642) | ($152,641) | $80,999 | - Selling and marketing expenses **decreased by 29% ($82.0 million)**, primarily due to a $49.4 million reduction in Partner compensation[347](index=347&type=chunk) - Enterprise technology and development expenses increased by 3% due to **$11.1 million in accelerated depreciation** related to the Pivot[351](index=351&type=chunk) - A **goodwill impairment charge of $20.0 million** was recorded in 2024, compared to a $40.0 million charge in 2023[359](index=359&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) The 2026 Term Loan maturity and potential covenant violations raise substantial doubt about the company's ability to continue as a going concern - The company's Term Loan matures in February 2026 and it may **violate financial covenants in the second half of 2025**[368](index=368&type=chunk)[369](index=369&type=chunk) - These conditions raise **substantial doubt about the Company's ability to continue as a going concern**[369](index=369&type=chunk) - Management is pursuing a new ABL facility to refinance the debt and has **identified controllable actions to mitigate risk** and provide liquidity[370](index=370&type=chunk)[371](index=371&type=chunk) Cash Flow Summary (2024 vs. 2023) | Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net cash from operating activities | $2,562 | ($22,537) | | Net cash from investing activities | $1,058 | ($10,826) | | Net cash used in financing activities | ($15,868) | ($13,717) | [Critical Accounting Estimates](index=67&type=section&id=Critical%20Accounting%20Estimates) Key estimates involve inventory valuation, which led to a write-down, and goodwill impairment testing, resulting in a $20 million charge - Inventory valuation requires estimates of future demand, leading to **$4.2 million in adjustments in 2024**, including a $1.2 million write-down for discontinued fitness equipment[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) - Goodwill is tested for impairment annually using **significant assumptions about revenue growth, discount rates, and market multiples**[390](index=390&type=chunk)[395](index=395&type=chunk) - The 2024 goodwill impairment test resulted in a **$20.0 million impairment charge**, driven by a sustained decline in stock price and revenue[396](index=396&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency and interest rate risks but has ceased hedging and expects minimal impact from rate changes - The company is exposed to foreign currency risk as **approximately 10% of its revenue was in foreign currencies** in 2024 and 2023[399](index=399&type=chunk) - In 2023, management **decided to stop entering into new foreign exchange option contracts** to hedge currency risk[401](index=401&type=chunk)[404](index=404&type=chunk) - Interest rate risk is primarily from the variable SOFR-based Term Loan; a hypothetical **10% change in exchange rates would impact expenses by approximately $2.1 million**[403](index=403&type=chunk)[405](index=405&type=chunk) [Financial Statements and Supplementary Data](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains audited financial statements, with the auditor identifying the Goodwill Impairment Assessment as a critical audit matter - The independent auditor identified the **Goodwill Impairment Assessment as a critical audit matter** due to significant management judgments[415](index=415&type=chunk)[417](index=417&type=chunk) Consolidated Balance Sheet Summary (as of Dec 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total Current Assets | $78,685 | $119,273 | | Total Assets | $174,556 | $276,839 | | Total Current Liabilities | $127,638 | $165,203 | | Total Liabilities | $146,386 | $194,079 | | Total Stockholders' Equity | $28,170 | $82,760 | Consolidated Statement of Operations Summary (Year Ended Dec 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $418,796 | $527,109 | | Gross Profit | $287,344 | $323,087 | | Operating Loss | ($66,208) | ($140,988) | | Net Loss | ($71,642) | ($152,641) | | Net Loss Per Share | ($10.51) | ($24.47) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=122&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[671](index=671&type=chunk) [Controls and Procedures](index=122&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2024[672](index=672&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2024[675](index=675&type=chunk) - No attestation report from the registered public accounting firm is included because the company qualifies as a **"non-accelerated filer"**[676](index=676&type=chunk) [Other Information](index=123&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[681](index=681&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=123&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[682](index=682&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=124&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's 2025 proxy statement - Information is **incorporated by reference** from the Proxy Statement for the 2025 Annual Meeting of Shareholders[684](index=684&type=chunk) [Executive Compensation](index=124&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the company's 2025 proxy statement - Information is **incorporated by reference** from the Proxy Statement for the 2025 Annual Meeting of Shareholders[685](index=685&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information is incorporated by reference from the company's 2025 proxy statement - Information is **incorporated by reference** from the Proxy Statement for the 2025 Annual Meeting of Shareholders[686](index=686&type=chunk)[687](index=687&type=chunk)[689](index=689&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Required information is incorporated by reference from the company's 2025 proxy statement - Information is **incorporated by reference** from the Proxy Statement for the 2025 Annual Meeting of Shareholders[690](index=690&type=chunk) [Principal Accounting Fees and Services](index=124&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Required information is incorporated by reference from the company's 2025 proxy statement - Information is **incorporated by reference** from the Proxy Statement for the 2025 Annual Meeting of Shareholders[691](index=691&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=125&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report - This section lists the financial statements, financial statement schedules, and all exhibits filed with the Form 10-K[693](index=693&type=chunk) [Form 10-K Summary](index=130&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - None[702](index=702&type=chunk)

Core Insights - The Beachbody Company, Inc. (BODI) reported a quarterly loss of $1.89 per share, which was better than the Zacks Consensus Estimate of a loss of $2.88, and an improvement from a loss of $4.80 per share a year ago, indicating a significant earnings surprise of 34.38% [1] - The company achieved revenues of $86.37 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.72%, although this represents a decline from year-ago revenues of $119.01 million [2] - The stock has increased approximately 22.6% since the beginning of the year, contrasting with a decline of -2.9% in the S&P 500 [3] Earnings Outlook - The earnings outlook for The Beachbody Company is mixed, with the current consensus EPS estimate for the upcoming quarter at -$1.08 on revenues of $73.6 million, and for the current fiscal year at -$4.60 on revenues of $273.4 million [7] - The company has surpassed consensus EPS estimates three times over the last four quarters, indicating a potential for future performance [2] Industry Context - The Consumer Services - Miscellaneous industry, to which The Beachbody Company belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, suggesting that the overall industry outlook may negatively impact the stock's performance [8]

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 [44] - 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 [15][44] - Total revenues declined 15% sequentially and 27% year over year, primarily due to the transition from a multi-level marketing (MLM) platform to an omnichannel model [45] - Cash flow from operations improved dramatically to $2.6 million for 2024, compared to a cash usage of $22.5 million in 2023, representing a $25 million improvement [17][56] Business Line Data and Key Metrics Changes - Digital revenue decreased 6.2% from the prior quarter to $50.4 million and decreased 21.4% year over year, impacted by a decline in digital subscriber count [47] - Nutrition revenue decreased 26.6% sequentially to $34.8 million and decreased 32.8% year-over-year, with nutrition subscriptions declining 29.2% sequentially [48] - Digital gross margin was 85.9% for the quarter, exceeding the long-term target of 80% [49] Market Data and Key Metrics Changes - The transition to the new affiliate model has resulted in a moderate success, with some affiliates migrating over while new affiliate acquisition has been slower than desired [70] - The company is seeing strong growth in its Amazon business and has launched on Walmart.com, with expectations for significant growth potential [34][36] Company Strategy and Development Direction - The company has restructured into a new business model, phasing out the MLM structure in favor of an omni-channel strategy focused on direct-to-consumer marketing [10][11] - The strategic shift aims to enhance revenue streams and empower affiliates with a performance-based compensation structure [11] - 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][39] 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 for short-term dislocation but long-term competitive positioning [18] - The company is optimistic about the growth potential of its new initiatives, particularly in the nutrition segment and direct response marketing [24][30] Other Important Information - The company has retained more of its legacy nutrition subscription file than expected during the transition, indicating a positive customer experience [38] - The launch of new products under popular brand names is anticipated within the next 12 months, which will be marketed through various channels [13][36] 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 as expected, with some affiliates migrating over, but new affiliate acquisition has been slower than desired. Plans are in place to attract more affiliates from both internal and external sources [68][70] Question: How should we think about the P&L structure 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 [72][76] Question: Can you clarify the sequential revenue decline and its attribution? - The decline is attributed to the transition from the MLM model, with many former active sellers not migrating to the new affiliate model [85][86] Question: What is the outlook 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, which is expected to significantly enhance revenue [92][96] 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 expected to enhance affiliate sales through increased exposure [112][115]

Revenue Performance - Total revenue for Q4 2024 was $86.4 million, down 27.4% from $119.0 million in the prior year period, and at the high end of guidance[5]. - Full year 2024 total revenue was $418.8 million, down 20.5% from $527.1 million in the prior year[5]. - Total revenue for the year ended December 31, 2024, was $418.8 million, a decrease of 20.6% compared to $527.1 million in 2023[20]. - Digital revenue decreased to $224.3 million in 2024 from $258.4 million in 2023, representing a decline of 13.2%[20]. - Nutrition and other revenue fell to $187.8 million in 2024, down 24.7% from $249.5 million in 2023[20]. Digital and Subscription Metrics - Digital revenue decreased by 21.4% to $50.4 million, with digital subscriptions totaling 1.07 million, an 18.1% decline from 1.31 million[5][8]. - Nutrition and Other revenue fell by 32.8% to $34.8 million, with nutritional subscriptions down 44.1% to 0.09 million[5][8]. Profitability and Loss - Net loss for Q4 2024 was $34.6 million, a 46.8% improvement from a net loss of $65.0 million in the prior year[5][8]. - The company reported a net loss of $71.6 million for the year ended December 31, 2024, compared to a net loss of $152.6 million in 2023, indicating an improvement of 53%[20]. - The company achieved a significant reduction in operating loss, decreasing by $27.5 million to $32.9 million compared to the prior year[5]. - Operating loss for 2024 was $66.2 million, a reduction from an operating loss of $141.0 million in 2023[20]. Cash Flow and Assets - Cash and cash equivalents at the end of 2024 were $20.2 million, down from $33.4 million at the end of 2023[22]. - Total current assets decreased to $78.7 million in 2024 from $119.3 million in 2023, a decline of 34.1%[20]. - The net cash position as of December 31, 2024, was $1,019 thousand, down from $3,850 thousand in 2023[34]. - Free cash flow for the year ended December 31, 2024, was $(1,980) thousand, an improvement from $(29,113) thousand in 2023[37]. Restructuring and Costs - The company incurred approximately $9.3 million in costs associated with the Pivot restructuring in the three months ended December 31, 2024[38]. - The Pivot restructuring resulted in a reduction of approximately 170 employees, representing 33% of the company's workforce[38]. - The company recorded total restructuring costs of $18.5 million for the year ended December 31, 2024, due to the Pivot[39]. - Accelerated depreciation expense related to the Pivot was $8.2 million for the three months ended December 31, 2024[27]. Future Outlook - The outlook for Q1 2025 projects revenue between $60 million and $70 million, with an expected net loss between $11 million and $7 million[9]. - The company is focused on executing a multi-channel strategy and developing new innovative products to maximize market opportunities in 2025[2]. - The company expects to cease the sale of connected fitness inventory beginning in early 2025, leading to inventory adjustments of $1.2 million[41].

Company Overview - The Beachbody Company, Inc. (BODI) shares increased by 5.3% to $8.36 in the last trading session, with a higher-than-average trading volume [1] - The stock has gained 8.3% over the past four weeks, indicating positive momentum [1] Financial Performance - The company is expected to report a quarterly loss of $2.88 per share, reflecting a year-over-year increase of 40% in losses [2] - Projected revenues for the upcoming quarter are $81.7 million, which is a decline of 31.4% compared to the same quarter last year [2] Earnings Estimates - The consensus EPS estimate for The Beachbody Company has remained unchanged over the last 30 days, suggesting stability in earnings expectations [3] - The stock's price typically does not continue to rise without trends in earnings estimate revisions, indicating the importance of monitoring future earnings updates [3] Industry Context - The Beachbody Company operates within the Zacks Consumer Services - Miscellaneous industry, which includes other companies like BJ's Wholesale Club [3] - BJ's Wholesale Club has a consensus EPS estimate of $0.86 for its upcoming report, representing a year-over-year decrease of 22.5% [4] - BJ's currently holds a Zacks Rank of 1 (Strong Buy), contrasting with The Beachbody Company's Zacks Rank of 3 (Hold) [3][4]

Financial Performance - The Beachbody Company reported a quarterly loss of $1.75 per share, slightly better than the Zacks Consensus Estimate of a loss of $1.76, and a significant improvement from a loss of $5 per share a year ago, indicating an earnings surprise of 0.57% [1] - The company posted revenues of $102.19 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.40%, and down from $128.25 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - The Beachbody Company shares have declined approximately 19.7% since the beginning of the year, contrasting with the S&P 500's gain of 25.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.57 on revenues of $98.2 million, and for the current fiscal year, it is -$7.02 on revenues of $431.1 million [7] Industry Outlook - The Consumer Services - Miscellaneous industry, to which The Beachbody Company belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of The Beachbody Company stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Revenue Performance - Total revenue for Q3 2024 was $102.2 million, a 20% decrease compared to Q3 2023[141] - For the nine months ended September 30, 2024, total revenue was $332.4 million, a 19% decrease year-over-year[142] - Total revenue decreased by 20% to $102,193,000 for the three months ended September 30, 2024, down from $128,250,000 in the same period of 2023[167] - Total revenue for the nine months ended September 30, 2024, was $332,422 thousand, a decrease of 19% compared to $408,099 thousand in 2023[170] Digital Revenue - Digital revenue decreased by 17% to $53.7 million, while nutrition and other revenue also decreased by 20% to $47.4 million[141] - Digital revenue declined by 17% to $53,702,000 for the three months ended September 30, 2024, primarily due to a 20% decrease in subscriptions[167] - Digital revenue decreased by $20,347 thousand, or 10%, for the nine months ended September 30, 2024, primarily due to a $19.9 million decrease in digital streaming services revenue[170] Nutrition and Other Revenue - Nutrition and other revenue fell by 20% to $47,416,000 for the three months ended September 30, 2024, attributed to a 27% decrease in nutritional subscriptions[168] - Nutrition and other revenue decreased by $44,700 thousand, or 23%, for the nine months ended September 30, 2024, attributed to a 27% decrease in nutritional subscriptions[170] Connected Fitness Revenue - Connected fitness revenue saw a significant decline of 78%, totaling $1.1 million[141] - Connected fitness revenue decreased by approximately 66% for the nine months ended September 30, 2024, from $16,044 thousand in 2023 to $5,414 thousand in 2024[170] Profit and Loss - The company reported a net loss of $12.0 million for Q3 2024, an improvement from a net loss of $32.7 million in Q3 2023[141] - The company experienced a net loss of $12,003,000 for the three months ended September 30, 2024, compared to a net loss of $32,666,000 for the same period in 2023[160] Adjusted EBITDA - Adjusted EBITDA for Q3 2024 was $10.1 million, compared to a loss of $5.8 million in the same period last year[141] - Adjusted EBITDA for the three months ended September 30, 2024, was $10,136,000, compared to an Adjusted EBITDA loss of $5,833,000 for the same period in 2023[160] Restructuring and Workforce Changes - The company announced a restructuring plan (the "Pivot") that will reduce headcount by approximately 170 employees, representing 33% of the workforce[141] - The Pivot is expected to incur approximately $18.4 million in costs, with $9.2 million recorded in Q3 2024[145] Expenses - Operating expenses totaled $81,821,000 for the three months ended September 30, 2024, compared to $104,035,000 for the same period in 2023[164] - Selling and marketing expenses for the three months ended September 30, 2024, were $45,592 thousand, a decrease of 34% from $69,127 thousand in 2023[184] - General and administrative expenses for the three months ended September 30, 2024, decreased by $2.999 million (20%) compared to the same period in 2023, mainly due to a $1.5 million decrease in professional and accounting fees[191] Cash Flow and Liquidity - As of September 30, 2024, the company had cash and cash equivalents totaling $32.3 million, with net cash used in financing activities decreasing to $11.8 million from $17.7 million in the previous year[203][205] - The company generated $1.6 million in net cash from investing activities for the nine months ended September 30, 2024, compared to $(9.7) million in the same period of 2023, driven by proceeds from the sale of the Van Nuys facility[204] - The company expects to generate additional liquidity through continued cost control initiatives and believes existing cash and cash equivalents will meet anticipated cash needs for the next twelve months[210] Tax and Compliance - The income tax provision increased by $52,000 (83%) for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to changes in valuation allowance and net expense from discrete events[201] - The company is in compliance with financial covenants, including a minimum liquidity requirement of $18.0 million as of September 30, 2024, which will be amended to $9.5 million through December 31, 2024[207][208] Other Financial Metrics - The company recorded a gross profit of $68,811,000 for the three months ended September 30, 2024, down from $75,031,000 in the same period of 2023[164] - The principal balance outstanding under the Term Loan was $25.3 million as of September 30, 2024, with an effective interest rate of 23.35% for the nine months ended September 30, 2024[206]

Revenue Performance - Total revenue for Q3 2024 was $102.2 million, a decrease of 20.3% compared to $128.3 million in Q3 2023[3]. - Digital revenue was $53.7 million, down 16.5% from $64.3 million in the prior year, with digital subscriptions totaling 1.11 million, a decline of 19.7%[4]. - Nutrition and Other revenue was $47.4 million, a decrease of 19.6% from $59.0 million in the prior year, with nutritional subscriptions totaling 0.13 million, down 27.3%[4]. - Connected Fitness revenue fell to $1.1 million, down 78.2% from $4.9 million in the prior year, with approximately 1,300 bikes delivered in Q3[4]. - The outlook for Q4 2024 projects revenue between $77 million and $87 million[8]. - Digital revenue decreased to $53.7 million in Q3 2024 from $64.3 million in Q3 2023, representing a decline of 16.8%[18]. - Nutrition and other revenue fell to $47.4 million in Q3 2024, down 19.5% from $59.0 million in Q3 2023[18]. Profitability and Loss - Adjusted EBITDA for Q3 2024 was $10.1 million, compared to a loss of $5.8 million in the prior year[4]. - Net loss for Q3 2024 was $12.0 million, significantly improved from a net loss of $32.7 million in the prior year, including $9.2 million in restructuring costs[4]. - The company reported a net loss of $12.0 million in Q3 2024, compared to a net loss of $32.7 million in Q3 2023, showing an improvement of 63.3%[18]. - Operating loss for Q3 2024 was $13.0 million, significantly reduced from an operating loss of $29.0 million in Q3 2023[18]. - Adjusted EBITDA is used to evaluate the company's core operating performance, excluding non-cash and non-recurring expenses[20][21][22]. - The company reported a net loss of $12,003,000 for the three months ended September 30, 2024, compared to a net loss of $32,666,000 for the same period in 2023, representing a 63.2% improvement[23]. - Adjusted EBITDA for the three months ended September 30, 2024, was $10,136,000, compared to an Adjusted EBITDA loss of $5,833,000 in the same period of 2023, indicating a significant turnaround[23]. Operating Expenses and Cash Flow - Total operating expenses decreased to $81.8 million, down from $104.0 million in the prior year[4]. - Cash provided by operating activities for the nine months ended September 30, 2024, was $9.3 million, compared to cash used of $14.6 million in the prior year[4]. - Cash flows from operating activities provided $9.3 million in Q3 2024, a significant improvement compared to cash used of $14.6 million in Q3 2023[19]. - The company ended Q3 2024 with cash, cash equivalents, and restricted cash of $32.3 million, down from $38.2 million at the end of Q3 2023[19]. - Free cash flow for the nine months ended September 30, 2024, was $5,317,000, compared to a negative free cash flow of $20,082,000 for the same period in 2023, showing a positive shift in cash generation[28]. Strategic Initiatives - The company announced a strategic shift from a multi-level marketing model to a single-level affiliate network, aiming for long-term profitable growth[2]. - The company plans to continue focusing on digital and nutrition segments while managing costs to improve profitability[20]. - The company announced a restructuring initiative called the Pivot, which will convert its MLM model to a single-level affiliate model and reduce its workforce by approximately 170 employees, or 33% of its workforce[29]. - Total restructuring costs associated with the Pivot are expected to be approximately $18.4 million, with $9.2 million recorded in the three and nine months ended September 30, 2024[29]. - The company expects to record an additional $1.1 million in restructuring expenses in the three months ended December 31, 2024, related to the Pivot[30]. Asset Management - Accelerated depreciation expense of $2.9 million was recorded due to the Pivot, impacting certain long-lived assets that will not be used after December 31, 2024[30]. - Inventory adjustments of $1.2 million were made due to the decision to cease the sale of connected fitness inventory after December 31, 2024[30]. - The company recorded a loss on partial debt extinguishment of $1,928,000 for the nine months ended September 30, 2024, compared to a loss of $3,168,000 for the same period in 2023[23].