Revenue Performance - For the three months ended June 30, 2024, total revenue was $110.2 million, an 18% decrease compared to $134.9 million for the same period in 2023[115] - Digital revenue was $58.8 million, a 10% decrease, while nutrition and other revenue was $50.1 million, a 22% decrease[115] - Connected fitness revenue was $1.3 million, reflecting a 74% decrease[115] - Total revenue for Q2 2024 was $110.2 million, a decrease of 18% compared to $134.9 million in Q2 2023[130] - Digital revenue decreased by 10% to $58.8 million in Q2 2024 from $65.2 million in Q2 2023, primarily due to a 25% reduction in subscriptions[133] - Nutrition and other revenue fell by 22% to $50.1 million in Q2 2024 from $64.6 million in Q2 2023, driven by a 26% decrease in nutritional subscriptions[134] - Connected fitness revenue dropped 74% to $1.3 million in Q2 2024 from $5.1 million in Q2 2023, attributed to a 70% decrease in bikes delivered[134] - For the six months ended June 30, 2024, total revenue was $230.2 million, an 18% decrease from $279.8 million in the same period of 2023[135] Operating Expenses and Profitability - Operating expenses were $85.9 million, down from $106.9 million[115] - Adjusted EBITDA for the three months ended June 30, 2024, was $4.9 million, compared to a loss of $4.8 million in the same period last year[115] - Net loss for the three months ended June 30, 2024, was $10.9 million, compared to a net loss of $25.7 million for the same period in 2023[115] - Adjusted EBITDA for Q2 2024 was $4.9 million, compared to a loss of $4.8 million in Q2 2023[128] - Net loss for Q2 2024 was $10.9 million, an improvement from a net loss of $25.7 million in Q2 2023[130] - Total operating expenses for Q2 2024 were $85.9 million, down from $106.9 million in Q2 2023[130] - The company incurred a loss of $719,000 on partial debt extinguishment in Q2 2024[130] Subscription and Retention Metrics - Digital subscriptions decreased to 1.15 million from 1.53 million year-over-year[119] - Average digital retention improved to 96.5% for the three months ended June 30, 2024, compared to 95.2% for the same period in 2023[120] - Total streams decreased to 22.7 million for the three months ended June 30, 2024, down from 25.3 million in the same period last year[120] Cost Management and Margins - Total revenue cost decreased by 35% to $33,807,000 in Q2 2024 from $52,204,000 in Q2 2023[141] - Digital gross margin increased to 80.5% in Q2 2024 from 75.0% in Q2 2023, while total gross margin improved to 69.3% from 61.3%[141] - Selling and marketing expenses decreased by 26% to $56,308,000 in Q2 2024 from $76,492,000 in Q2 2023, representing 51.1% of total revenue[145] - Nutrition and other revenue cost decreased by 28% to $19,621,000 in Q2 2024 from $27,202,000 in Q2 2023[141] - Connected fitness cost of revenue decreased by 69% to $2,710,000 in Q2 2024 from $8,666,000 in Q2 2023[141] - Total gross profit decreased by 8% to $76,376,000 in Q2 2024 from $82,744,000 in Q2 2023[141] - Enterprise technology and development expenses decreased by 8% to $17,162,000 in Q2 2024 from $18,650,000 in Q2 2023[148] - Nutrition and other gross margin increased to 60.8% in Q2 2024 from 57.9% in Q2 2023[141] - Total cost of revenue for the first six months of 2024 decreased by 31% to $72,571,000 from $105,765,000 in the same period of 2023[143] - Connected fitness gross margin remained flat despite a significant decrease in revenue, indicating stable cost management[143] General and Administrative Expenses - General and administrative expenses for the three months ended June 30, 2024, were $12.4 million, an increase of 4% compared to $11.9 million for the same period in 2023[153] - General and administrative expenses as a percentage of total revenue increased by 240 basis points to 11.2% for the three months ended June 30, 2024, compared to 8.8% in the prior year[154] - For the six months ended June 30, 2024, general and administrative expenses decreased by 13% to $25.9 million from $29.6 million in the same period in 2023[155] Restructuring and Debt Management - Restructuring charges for the six months ended June 30, 2024, were $1.6 million, a decrease of 69% compared to $5.3 million in the same period in 2023[158] - The company made a partial prepayment of $4.0 million on the Term Loan as part of the Fifth Amendment to the Financing Agreement[117] - As of June 30, 2024, the principal balance outstanding under the Term Loan was $25.4 million, with an effective interest rate of 22.71%[167] - The company made partial prepayments on the Term Loan totaling $25.5 million from June 30, 2023, to June 30, 2024[161] Cash Flow and Liquidity - Net cash provided by operating activities was $8.2 million for the six months ended June 30, 2024, compared to a cash used of $(14.4) million in the same period in 2023[165] - The company had cash and cash equivalents totaling $32.3 million as of June 30, 2024[164] - The Financing Agreement contains a minimum revenue financial covenant of $100 million for each fiscal quarter ending on or prior to December 31, 2024[168] - Future capital requirements may vary materially and will depend on revenue growth and economic conditions, with existing cash and cost control initiatives expected to provide sufficient liquidity for the next twelve months[171] Foreign Currency Exposure - Approximately 10% of the company's revenue for the six months ended June 30, 2024, was in foreign currencies, primarily in Canadian dollars and British pounds[175] - The notional amount of the company's outstanding foreign exchange options decreased to zero at June 30, 2024, as all options expired prior to March 31, 2024[176] - A hypothetical 10% change in exchange rates would result in an approximate $2.2 million increase or decrease in cost of revenue and operating expenses[178] - The aggregate notional amount of foreign exchange derivative instruments was $4.4 million at the year ended December 31, 2023[178]
The Beachbody Company(BODI) - 2024 Q2 - Quarterly Report