The Beachbody Company(US:BODI)2021-11-15 21:16Financial Performance - Total revenue for the three months ended September 30, 2021, was $208.1 million, a 17% decrease compared to $251.5 million for the same period in 2020[172] - Digital revenue for the three months ended September 30, 2021, was $94.1 million, a 5% decrease compared to $99.0 million for the same period in 2020[172] - Adjusted EBITDA for the three months ended September 30, 2021, was $(43.4) million, compared to $31.4 million for the same period in 2020[172] - Nutrition and other revenue for the three months ended September 30, 2021, was $108.1 million, a 29% decrease compared to $152.5 million for the same period in 2020[172] - The net loss for the three months ended September 30, 2021, was $39.9 million, compared to net income of $13.8 million for the same period in 2020[172] - Gross profit for the three months ended September 30, 2021, was $135.0 million, with a gross margin of 65%, compared to $180.6 million and 72% for the same period in 2020[180] - Total revenue for the three months ended September 30, 2021, was $208,052, a decrease of 17% compared to $251,479 for the same period in 2020[190] - Digital revenue for the three months ended September 30, 2021, was $94,072, down 5% from $99,082 in the prior year, primarily due to lower growth in digital subscriptions[190] - Nutrition and other revenue decreased by 29% to $108,053 for the three months ended September 30, 2021, primarily due to a $33.6 million drop in nutritional subscriptions[192] - For the nine months ended September 30, 2021, total revenue was $639,299, a slight increase of 3% from $657,379 in the same period of 2020[193] - Digital revenue for the nine months ended September 30, 2021, increased by 18% to $283,547, compared to $239,964 in the prior year[193] Expenses and Costs - Total cost of revenue for the three months ended September 30, 2021, was $73,067, an increase of 3% from $70,925 in the same period of 2020[200] - Gross profit for the three months ended September 30, 2021, was $134,985, down 25% from $180,554 in the prior year[200] - Operating expenses for the three months ended September 30, 2021, totaled $206,808, an increase of 27% compared to $162,678 in the same period in 2020[200] - Selling and marketing expenses for the three months ended September 30, 2021, were $123.98 million, a 24% increase from $153.78 million in the same period in 2020, representing 73.9% of total revenue[209] - Selling and marketing expenses for the nine months ended September 30, 2021, were $438.67 million, up 24% from $352.87 million in the same period in 2020, accounting for 66.7% of total revenue[211] - Enterprise technology and development expenses for the three months ended September 30, 2021, increased by 24% to $29.68 million from $23.85 million in the same period in 2020, representing 14.3% of total revenue[214] - General and administrative expenses for the three months ended September 30, 2021, rose by 41% to $23.35 million from $16.52 million in the same period in 2020, accounting for 11.2% of total revenue[218] - Enterprise technology and development expenses for the nine months ended September 30, 2021, were $83.72 million, a 24% increase from $67.56 million in the same period in 2020, representing 12.7% of total revenue[216] - General and administrative expenses for the nine months ended September 30, 2021, increased by 27% to $58.52 million from $46.23 million in the same period in 2020, accounting for 8.9% of total revenue[219] Cash Flow and Financial Position - As of September 30, 2021, the company had cash and cash equivalents of $199.8 million and $32.0 million of borrowing capacity available under its Credit Facility[232] - The company reported a net cash used in operating activities of $139.3 million for the nine months ended September 30, 2021, primarily due to a net loss of $82.4 million[238] - Net cash provided by financing activities was $390.4 million for the nine months ended September 30, 2021, mainly from $389.1 million in net proceeds from the Business Combination[242] - The company incurred $108.3 million in net cash used in investing activities for the nine months ended September 30, 2021, which included $37.3 million for the acquisition of Myx[240] - Total contractual cash obligations as of September 30, 2021, amounted to $116.7 million, with $59.9 million due within one year[243] - The company anticipates that existing cash and cash equivalents will be sufficient to meet working capital and capital expenditure needs for at least the next 12 months[233] - The company had no borrowings outstanding under the Credit Facility as of September 30, 2021, with a letter of credit issued for $3.0 million[236] - The company reported a significant increase in inventory, with a $68.8 million rise contributing to the net cash used in operating activities[238] - The company plans to maintain a compensating cash balance for the $3.0 million letter of credit after terminating the Credit Facility in November 2021[237] Tax and Liabilities - The change in fair value of warrant liabilities was $30.27 million for the three months ended September 30, 2021, primarily due to a decrease in stock price[225] - The income tax benefit for the three months ended September 30, 2021, was $1.49 million, a 136% increase compared to a provision of $4.13 million in the same period in 2020[228] - The income tax benefit for the nine months ended September 30, 2021, was $12.74 million, a significant increase of 7812% compared to $161 in the same period in 2020[231] - The company recorded a net deferred tax asset of $16.6 million as a benefit for income taxes from operations following a change in entity status for income tax purposes[257] Foreign Currency and Inflation - Approximately 10% of the company's revenue for the three and nine months ended September 30, 2021, was in foreign currencies, up from 9% in the same periods of 2020[263] - The aggregate notional amount of foreign exchange derivative instruments was $32.6 million as of September 30, 2021, compared to $34.0 million at December 31, 2020[267] - A hypothetical 10% change in exchange rates would not result in a material increase or decrease in cost of revenue and operating expenses[266] - The company does not believe inflation has had a material effect on its business or financial condition[269] Market Strategy - The company plans to leverage its distribution, marketing, and content creation capabilities to expand its market share in the connected fitness segment[168] - Connected fitness revenue for the three months ended September 30, 2021, was $5,927, attributed to the acquisition of Myx in June 2021[191] - Average digital retention for the three months ended September 30, 2021, was 95.6%, compared to 95.1% for the same period in 2020[180]