The Beachbody pany(BODY) - 2025 Q1 - Quarterly Report

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]