The Beachbody Company(BODI) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $179.1 million, in line with guidance, reflecting a shift in consumer priorities and a focus on profitable customer acquisition [33][8] - Adjusted EBITDA loss improved to $1.5 million, significantly better than the loss recorded in Q1 2022 [43][28] - Cash burn was reduced to approximately $6 million in Q2, a nearly $38 million improvement compared to Q1 [28][8] - The company ended the quarter with $57 million in cash on hand and entered into a $50 million debt financing agreement to enhance financial flexibility [8][45] Business Line Data and Key Metrics Changes - Digital revenue was $78 million, a 17% decline year-over-year, but showed solid growth of 35% compared to Q2 2019 [33][34] - Nutrition and other revenue decreased by 30% year-over-year to $90.5 million, correlating with the decline in digital subscriptions [34][33] - Connected fitness revenue was $10.6 million with 8,800 bikes delivered, indicating higher engagement among digital subscribers who own a bike [36][33] Market Data and Key Metrics Changes - The global dietary supplements market was valued at $151.9 billion in 2021 and is expected to grow at a CAGR of 8.9% from 2022 to 2030 [20] - The global home fitness category is projected to reach $21.8 billion by 2026, growing at a CAGR of 9.6% [20] Company Strategy and Development Direction - The company is focused on a "one brand strategy" to consolidate content and leverage subscriber scale, aiming to enhance customer acquisition and engagement [9][10] - New product launches and a disciplined marketing approach are key to driving profitable customer acquisitions [10][11] - The company is optimizing its nutritional offerings and managing operating expenses tightly while continuing to invest in transformation [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, focusing on cost management and profitable growth [19][51] - The company anticipates variability in demand patterns for at-home fitness due to post-pandemic consumer behavior and inflationary pressures [47][19] - Management highlighted the importance of a strong coach network as a countercyclical momentum during economic uncertainty [15][19] Other Important Information - The company has made significant improvements in cash burn and liquidity, with a focus on maintaining strict cost discipline [45][8] - Management team changes include the appointment of a new CFO and COO, aimed at enhancing strategic and operational efficiency [21][22] Q&A Session Summary Question: Digital subscriber changes and impact of pricing - Management acknowledged that the decline in digital subscribers is partly due to the pandemic's effects and emphasized the importance of a variable cost structure to manage demand uncertainty [55][56] Question: Floor on membership and revenue - Management believes that the current state of subscribers is stable, with expectations for continued growth in the BOD Interactive subscription [57][58] Question: De-risking connected fitness - Management indicated that they have sufficient inventory and are focusing on creating great content to drive sales without needing to chase acquisition costs [62][63] Question: Guidance clarification for 2022 - Management confirmed that the definition of guidance remains the same, with a focus on EBITDA minus CapEx, while being cautious about the macro environment [66][68] Question: Customer acquisition trends - Management reported that customer acquisition costs have remained steady, with a focus on leveraging the coach network for direct sales [85][86]