The Beachbody Company(US:BODI)2023-03-15 02:06Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $148 million, which was 2% higher than the midpoint of guidance [44] - Adjusted EBITDA for the fourth quarter was $3.5 million, a significant improvement from a loss of $26.6 million in the prior-year period [34][50] - The company improved EBITDA and CapEx by $125 million in 2022, exceeding the $110 million target set earlier in the year [13] Business Line Data and Key Metrics Changes - Digital revenue was $69 million, down 16% year-over-year, with digital subscriptions declining 23% to 1.95 million [44] - Nutrition revenue was $75 million, down 23% year-over-year, but the company expects improvements from new initiatives [44] - Connected fitness revenue was $5 million, with approximately 3,700 bikes delivered [45] Market Data and Key Metrics Changes - The company is targeting a significant addressable market of 150 million adults in the U.S. who are overweight or obese, representing 74% of adults [17] - The launch of the Health Esteem category aims to fill a void in the fitness and diet industry, focusing on consumer well-being rather than just physical results [14][19] Company Strategy and Development Direction - The company consolidated its business into one platform, focusing on capital allocation and centralizing technology, marketing, and content investment [8] - The launch of the BODi brand represents a shift towards a holistic health platform, combining fitness, nutrition, and mindset content [10][30] - The company aims to generate long-term, sustainable, profitable growth and shareholder value through these strategic initiatives [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving consistent adjusted EBITDA profitability by Q4 of 2023, despite the unpredictable environment [13][33] - The company is focused on attracting higher value customers with a higher average revenue per user (ARPU) and believes the new Health Esteem platform will drive stronger consumer engagement [57] Other Important Information - The company reduced its headcount by over 40% to 615 employees since January 2022, contributing to significant cost savings [41] - Capital expenditures (CapEx) were reduced by 58% in 2022, from $109 million in 2021 to $46 million [43] Q&A Session Summary Question: What percentage of today's digital subscribers are on BODi, and how will the ASP play out? - The majority of customers are still on the basic BOD platform, but BODi has been growing healthily since the price adjustment [62] Question: Can you help us understand the renewal rate from existing subscribers switching to BODi? - The company has not seen significant pushback on the price increase, and the average total solution pack price has increased from $180 to $220 [66] Question: What is the timeline for achieving target margins across digital, nutrition, and connected fitness? - Digital margins are currently in the high 70s, with expectations to return to the low to mid-80s as revenue scales up [68] - Nutrition margins aim to improve towards 60% through better product mix and inventory management [68] Question: How does the company plan to manage costs while launching new initiatives? - The launch costs were covered in 2022, and the focus is now on running the business efficiently [76] Question: What is the expected year-end cash balance and key performance metrics? - The company aims to avoid going below its net debt balance and plans to generate positive cash flow [81]