Second Quarter 2025 Financial Results Overview [Highlights and CEO Commentary](index=1&type=section&id=Highlights%20and%20CEO%20Commentary) BODi reported better-than-expected Q2 2025 results, achieving its seventh consecutive quarter of positive Adjusted EBITDA and positive H1 2025 free cash flow, with full-year positive free cash flow in sight - **Revenues were better than guidance**, **Gross Margin increased by 300bps** over the prior year, **Net Loss was within guidance**, and **Adjusted EBITDA was better than guidance**, marking the **seventh consecutive quarter of positive Adjusted EBITDA**[1](index=1&type=chunk) - The company **generated free cash flow for the first half of 2025** and has a line of sight to achieving **positive free cash flow for the full year 2025 for the first time since 2020**[2](index=2&type=chunk) - Strategic decisions during the company's transformation are working, leading to **significantly reduced breakeven levels** and **improved cost structure**[2](index=2&type=chunk) [Key Financial and Operational Metrics (Q2 2025)](index=1&type=section&id=Key%20Financial%20and%20Operational%20Metrics%20(Q2%202025)) Q2 2025 revenue and segment revenues declined significantly due to a business model pivot, yet operating and net losses improved, and Adjusted EBITDA slightly decreased - The prior year periods do not reflect the impact of the business model pivot announced on September 30, 2024, and executed in Q4 2024, making results not directly comparable with prior periods[4](index=4&type=chunk) Second Quarter 2025 Key Financial Results (YoY Comparison) | Metric (in millions) | Q2 2025 | Q2 2024 | Change (%) | | :-------------------- | :------ | :------ | :--------- | | Total Revenue | $63.9 | $110.2 | (42.0%) | | Digital Revenue | $39.7 | $58.8 | (32.5%) | | Nutrition & Other Revenue | $24.2 | $50.1 | (51.8%) | | Connected Fitness Revenue | $0.1 | $1.3 | (94.2%) | | Total Operating Expenses | $50.2 | $85.9 | (41.5%) | | Operating Loss | ($4.0) | ($9.5) | 57.9% | | Net Loss | ($5.9) | ($10.9) | 45.7% | | Adjusted EBITDA | $4.6 | $4.9 | (6.1%) | Second Quarter 2025 Key Operational Metrics (YoY Comparison) | Metric (in millions) | Q2 2025 | Q2 2024 | Change (%) | | :------------------- | :------ | :------ | :--------- | | Digital Subscriptions | 0.94 | 1.15 | (18.3%) | | Nutritional Subscriptions | 0.07 | 0.14 | (52.1%) | | Total Subscriptions | 1.01 | 1.30 | (22.0%) | | Average Digital Retention | 96.7% | 96.5% | 20bps | | Total Streams | 18.0 | 22.7 | (20.4%) | | DAU/MAU | 31.4% | 31.9% | -50bps | | Connected Fitness Units Delivered (in thousands) | 0.0 | 1.6 | (98.9%) | [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) BODi provided guidance for the third quarter ending September 30, 2025, projecting revenues between $51 million and $58 million, a net loss between ($4) million and $0 million, and Adjusted EBITDA between $2 million and $6 million Third Quarter 2025 Financial Outlook (in millions) | Metric | Low | High | | :------------ | :---- | :---- | | Revenue | $51 | $58 | | Net Loss | ($4) | $0 | | Adjusted EBITDA | $2 | $6 | Company Information [About BODi and The Beachbody Company, Inc.](index=3&type=section&id=About%20BODi%20and%20The%20Beachbody%20Company,%20Inc.) BODi, formerly Beachbody, is a fitness and nutrition company with 25 years of experience, known for structured home fitness programs and nutrition supplements, serving over 30 million customers - BODi (originally Beachbody) has been innovating structured step-by-step home fitness and nutrition programs for **25 years**[12](index=12&type=chunk) - Key offerings include programs like P90X, Insanity, and 21-Day Fix, and the superfood nutrition supplement Shakeology[12](index=12&type=chunk) - Since 1999, BODi has helped over **30 million customers** achieve health goals, building a community focused on healthy weight loss, improved strength, energy, and mental/physical well-being[12](index=12&type=chunk) [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) BODi will host a conference call and webcast on August 5, 2025, at 5:00 PM ET to discuss its financial results and future guidance - A conference call and live webcast will be held on **Tuesday, August 5, 2025, at 5:00 PM ET**[10](index=10&type=chunk) - Dial-in information: **(833) 470-1428 (U.S. & Canada)**, Conference ID: **327708**. Webcast available at **https://investors.thebeachbodycompany.com/**[10](index=10&type=chunk) - A replay of the call will be available until **August 12, 2025**, by dialing **(866) 813-9403 (U.S & Canada)**, Passcode: **843571**[11](index=11&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) This section serves as a standard disclaimer regarding forward-looking statements, indicating that projections about future performance and strategy are subject to various risks and uncertainties - The press release contains forward-looking statements regarding future performance, market opportunity, business strategy, plans, objectives, and future operations[13](index=13&type=chunk) - Actual results could differ materially due to various factors, including competition in fitness and nutrition, ability to acquire/integrate operations, reliance on key products, market conditions, and intellectual property rights protection[14](index=14&type=chunk) - Readers should not rely on forward-looking statements as predictions of future events and are referred to the 'Risk Factors' section of SEC filings (Form 10-K, 10-Q, 8-K) for more information[14](index=14&type=chunk)[15](index=15&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $145.9 million from $174.6 million, driven by reductions in current assets, while total liabilities also decreased to $125.7 million from $146.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :---------------------- | :------------ | :----------- | | Cash and cash equivalents | $25,561 | $20,187 | | Inventory | $11,406 | $16,303 | | Total current assets | $57,295 | $78,685 | | Total assets | $145,894 | $174,556 | | Accounts payable | $4,970 | $9,534 | | Deferred revenue | $66,640 | $77,273 | | Current portion of Term Loan | — | $9,500 | | Term Loan | $23,300 | $9,668 | | Total liabilities | $125,736 | $146,386 | | Total stockholders' equity | $20,158 | $28,170 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue decreased by 42.0% to $63.9 million, but operating loss improved to ($4.0) million and net loss to ($5.9) million, primarily due to a 41.5% reduction in total operating expenses Unaudited Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------------- | :---------- | :---------- | :---------- | :---------- | | Digital Revenue | $39,693 | $58,771 | $82,604 | $120,277 | | Nutrition and other Revenue | $24,172 | $50,101 | $52,825 | $105,613 | | Connected fitness Revenue | $76 | $1,311 | $875 | $4,339 | | Total revenue | $63,941 | $110,183 | $136,304 | $230,229 | | Total cost of

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]

Revenue Performance - Total revenue for the three months ended March 31, 2025, was $72.4 million, a 40% decrease compared to $120.0 million in the same period of 2024[121] - Digital revenue decreased by 30% to $42.9 million, while nutrition and other revenue saw a 48% decrease to $28.7 million[121] - Connected fitness revenue dropped significantly by 74% to $0.8 million[121] - Total revenue for the three months ended March 31, 2025, was $72,363,000, a decrease of 40% compared to $120,046,000 in the same period of 2024[142] - Digital revenue decreased by 30% to $42,911,000, primarily due to a $13.8 million decline in digital streaming services from 17% fewer subscriptions[142] - Nutrition and other revenue fell by 48% to $28,653,000, driven by an $18.1 million decrease in nutritional product revenue due to 48% fewer subscriptions[143] - Connected fitness revenue dropped 74% to $799,000, attributed to a 57% decrease in the number of bikes delivered[144] Operating Expenses and Profitability - Operating expenses were reduced to $55.2 million from $92.1 million, contributing to a net loss of $5.7 million, an improvement from a net loss of $14.2 million in the prior year[121] - Adjusted EBITDA for the quarter was $3.7 million, down from $4.6 million year-over-year[121] - Gross profit for the quarter was $51,549,000, a 37% decline from $81,282,000 in the prior year[148] - Selling and marketing expenses decreased by 48% to $30,970,000, representing 42.8% of total revenue[153] - Enterprise technology and development expenses were $12,596,000, down 29% from $17,717,000, with an increase in percentage of total revenue to 17.4%[156] - The net loss for the quarter was $5,748,000, compared to a net loss of $14,216,000 in the same period last year[142] - General and administrative expenses decreased by $1.8 million (14%) from $13.5 million in Q1 2024 to $11.7 million in Q1 2025, primarily due to a $2.7 million decrease in personnel-related expenses[159] - General and administrative expenses as a percentage of total revenue increased by 490 basis points due to a faster decrease in revenue compared to the reduction in expenses[160] - Restructuring charges in Q1 2024 were $1.6 million, while there were no restructuring charges in Q1 2025, indicating a significant reduction in restructuring costs[162] Cash Flow and Financing - Net cash provided by operating activities decreased from $9.1 million in Q1 2024 to $2.3 million in Q1 2025, primarily due to a $12.3 million decrease in cash provided by deferred revenue[172] - The company entered into a $35 million Asset-Based Lending (ABL) Facility on May 13, 2025, borrowing $25 million at inception, with a maturity date of May 13, 2028[168] - The company repaid its existing Term Loan of $17.3 million in full using proceeds from the ABL Facility, providing approximately $5 million in additional capital[169] - As of March 31, 2025, the company had cash and cash equivalents totaling $18.1 million[171] - The company plans to explore additional debt or equity financing to strengthen its financial position, although the terms and form are currently uncertain[179] Customer Engagement and Subscriptions - Digital subscriptions decreased to 1.02 million from 1.22 million, while nutritional subscriptions fell to 0.08 million from 0.15 million[125] - Average digital retention improved to 97.0% from 95.7% year-over-year[125] - Total streams decreased to 20.7 million from 25.6 million, indicating a decline in customer engagement[125] Restructuring and Workforce Changes - The company announced a restructuring of its network business, converting to a single-level affiliate model and reducing headcount by approximately 170 employees, or 33% of the workforce[119] - The company expects a significant decrease in Partner compensation in 2025 due to the transition from the MLM model to an affiliate model[154] Foreign Currency Impact - Approximately 8% of the company's revenue for Q1 2025 was in foreign currencies, down from 11% in Q1 2024, primarily in Canadian dollars and British pounds[182] - 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]

分组1 - The Beachbody Company reported a quarterly loss of $0.84 per share, which was better than the Zacks Consensus Estimate of a loss of $1.33, and an improvement from a loss of $1.92 per share a year ago, resulting in an earnings surprise of 36.84% [1] - The company posted revenues of $72.36 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 14.68%, but down from $120.05 million in the same quarter last year [2] - The Beachbody Company's shares have declined approximately 16.2% year-to-date, contrasting with the S&P 500's slight gain of 0.1% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.97 on revenues of $58.1 million, and for the current fiscal year, it is -$4.60 on revenues of $224 million [7] - The Zacks Industry Rank for Consumer Services - Miscellaneous is in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

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].