The Beachbody pany(BODY) - 2024 Q3 - Quarterly Results

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].