Financial Performance and Key Metrics - Revenue for Q2 2024 was $110 million, exceeding the midpoint of guidance, but down 8% quarter-over-quarter and 18% year-over-year [24] - The company reported a gross margin of 69%, the highest in three years, with a 160 basis points improvement from the prior quarter and an 800 basis points improvement year-over-year [24][26] - Net loss improved to $11 million from $14 million in the prior quarter and a 58% improvement from a $26 million loss in the same quarter last year [28] - Adjusted EBITDA was $5 million, marking the third consecutive quarter of positive adjusted EBITDA [28] Business Line Performance - Digital revenue decreased 4% from the prior quarter to $59 million and decreased 10% year-over-year, with a digital subscriber count of 1.15 million [24][25] - Nutrition revenue decreased 10% from the prior quarter to $50 million and decreased 22% year-over-year, with nutrition subscriptions at 145,000 [24][25] Market Data and Key Indicators - The total addressable market (TAM) for nutrition is estimated at $164 billion, significantly larger than the $13 billion TAM for fitness [8][9] - The nutrition business was previously a $800 million segment at its peak, indicating substantial growth potential [9][37] Company Strategy and Industry Competition - The company is focused on enhancing cash liquidity and reducing costs, with a goal of achieving $250 million in cost savings by 2024 compared to 2021 levels [6][7] - Strategic initiatives include expanding the digital program purchase option and launching new nutrition products, such as a zero-added sugar version of Shakeology [15][16] - The company aims to leverage its unique position of combining fitness and nutrition to capture a larger market share [8][9] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in the nutrition segment, particularly as the company begins to market products outside its direct selling network [37][46] - The company is committed to maintaining a lower cost structure while focusing on generating free cash flow and profitable customer acquisition [42][46] Other Important Information - The company has successfully reduced its revenue breakeven point from over $900 million in 2022 to under $500 million in 2024 [6] - The company has entered the Australian market, launching the BODi app for digital fitness and nutrition content [22][23] Q&A Session Summary Question: What has driven the bullish outlook on the nutrition business? - Management highlighted the large TAM for nutrition and the potential to market superior products to a broader audience beyond the current subscriber base [37][38] Question: What is the status of the win-back campaign with the 14 million database? - The CRM campaign is gradually gaining traction, with efforts to segment the database for better targeting and conversion rates [40][41] Question: How has the partner network trended since commission changes? - The partner network has responded positively to the changes, with ongoing training and support to help them leverage new products and promotions [44]
The Beachbody Company(BODI) - 2024 Q2 - Earnings Call Transcript