EX-99.1 2 d516467dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

The Beachbody Company, Inc. Announces First Quarter 2022 Financial Results

First Quarter Results Exceed Guidance

Strong Growth Compared to 2019 Pre-COVID Baseline: Total Digital and Nutritional Subscriptions

+35%, Average Digital Retention +60BPS, Total Streams +44%, DAU/MAU +200BPS

El Segundo, Calif. (May 9, 2022) – The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its first quarter ended March 31, 2022.

“We were pleased to deliver top-and-bottom line results in the first quarter that were ahead of our guidance. This momentum, coupled with a positive response to new launches, demonstrates our ability to quickly create demand through compelling content as well as the power of our synergistic approach that combines digital fitness, nutrition and community within a single ecosystem,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “Our performance in a dynamic environment also reflects the resilience and agility of our content-driven business. With a steady cadence of exciting content launches throughout 2022, and a focus on disciplined marketing and efficient customer acquisition, we expect to not only drive revenue, but also further enhance our operating metrics. We remain on track to deliver significant cost savings this year as we implement our One Brand strategy and other organizational efficiencies.”

First Quarter 2022 Results

 

  •  

Total revenue was $198.9 million, a 12% decrease compared to 2021 and a 6% decrease compared to 2019

 

  •  

Digital revenue was $81.7 million, a 14% decrease compared to 2021

 

  •  

Digital subscriptions were 2.46 million, a 10% decrease compared to 2021 and a 48% increase compared to 2019

 

  •  

95.6% month-over-month average digital retention, a 20-basis point decrease compared to 2021 and a 60-basis point increase compared to 2019

 

  •  

38.2 million total streams, a 32% decrease compared to 2021, and a 44% increase compared to 2019

 

  •  

31.6% DAU/MAU, a 350-basis point decrease compared to 2021, and a 200-basis point increase compared to 2019

 

  •  

Connected Fitness revenue was $19.5 million, compared to none in 2021, which preceded the Myx Fitness acquisition

 

  •  

Approximately 16,600 bikes delivered in the first quarter

 

  •  

On a pre-merger basis, Connected Fitness revenue was $14.7 million in Q1 2021, with approximately 11,900 bikes delivered

 

  •  

Nutrition and Other revenue was $97.7 million, a 25% decrease compared to 2021

 

  •  

Nutritional subscriptions were 0.30 million, compared to 0.42 million in 2021 and 0.38 million in 2019

 

  •  

Net loss was $73.5 million, compared to a net loss of $30.1 million in 2021 and net income of $7.5 million in 2019

 

  •  

Adjusted EBITDA1 was ($19.1) million, compared to ($11.7) million in 2021 and $22.0 million in 2019

 

 

1 

A definition of Adjusted EBITDA and reconciliation to net loss is at the end of this release.

Key Operational and Business Metrics

 

 
    

For the Three Months Ended March 31,

        
     
     2022             2021             Change v
2021		      2019            

Change v

2019

Pre-Covid
Baseline

        

Connected Fitness Units Delivered (in thousands)

      16.6                                0.0                                NM        0.0                                NM    

Digital Subscriptions (in millions)

      2.46           2.74           (10%)        1.66           48%    

Nutritional Subscriptions (in millions)

      0.30           0.42           (29%)        0.38           (21%)    

Total Subscriptions

      2.76           3.16           (13%)        2.04           35%    
     

Average Digital Retention

      95.6%           95.8%           (20bps)        95.0%           60bps    

Total Streams (in millions)

      38.2           56.0           (32%)        26.5           44%    

DAU/MAU

      31.6%           35.1%           (350bps)        29.6%           200bps    
     

Digital

      $81.7           $95.1           (14%)        $66.0           24%    

Connected Fitness

      $19.5           $0.0           NM        $0.0           NM    

Nutrition & other

      $97.7           $131.1           (25%)        $145.0           (33%)    

Revenue (in millions)

      $198.9           $226.2           (12%)        $211.0           (6%)    

Net Income/(Loss) (in millions)

      ($73.5)           ($30.1)           (144%)        $7.5           (1,080%)    

Adjusted EBITDA (in millions)

      ($19.1)                 ($11.7)                 (63%)        $22.0                 (187%)    

2022 Financial Outlook 2

During fiscal 2022, the Company expects to realize a combined Adjusted EBITDA loss improvement and capex reduction of approximately $120 million, $10 million more than previous guidance, compared to 2021.

For the second quarter of 2022 the Company expects:

 

  •  

Total revenue of $175 million to $185 million

 

  •  

Adjusted EBITDA loss of $7 million to $12 million

 

2

Net loss guidance is not reasonably available due to potential changes in matters that we cannot forecast at this time.

Conference Call and Webcast Information

Beachbody will host a conference call at 5:00pm ET on Monday, May 9, 2022 to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (646) 904-5544 (all other locations) and provide the conference identification number: 442851. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/.

A replay of the call will be available until May 16, 2022 by dialing (866) 813-9403 (U.S & Canada), or (929) 458-6194 (all other locations). The replay passcode is 667125.

After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year.

About The Beachbody Company, Inc.

Headquartered in Southern California, Beachbody is a leading digital fitness and nutrition subscription company with over two decades of creating innovative content and powerful brands. The Beachbody Company is the parent company of the Beachbody On Demand streaming platform (BOD) including its live digital streaming subscription BODi, and the Beachbody Bike powered by MYXfitness, the Company’s connected indoor bike. For more information, please visit TheBeachbodyCompany.com.

Safe Harbor Statement

This press release contains “forward-looking” statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are statements other than historical fact or in the future tense. These statements include but are not limited to statements regarding our future performance and our market opportunity, including expected financial results for the first quarter and full year, our business strategy, our plans, and our objectives and future operations.

Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully acquire and integrate new operations; our reliance on a few key products; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as “believe”, “plans”, “expect”, “will”, “should,” “could”, “estimate”, “anticipate” or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the “Risk Factors” section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 1, 2022 and quarterly reports on Form 10-Q, which are available on the Investor Relations page of the Beachbody website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov.

All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements.

The Beachbody Company, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value and share data)

 

    

March 31,

2022

    

December 31,

2021

  
    

 

    

 

  
     (unaudited)        

Assets

     

Current assets:

     

Cash and cash equivalents

    $ 63,426     $ 104,054  

Restricted cash

      —         3,000  

Inventory, net

      99,993       132,730  

Prepaid expenses

      16,154       15,861  

Other current assets

      40,975       43,727  
  

 

 

    

 

 

  

Total current assets

      220,548       299,372  

Property and equipment, net

      102,978       113,098  

Content assets, net

      39,749       39,347  

Goodwill and intangible assets, net

      166,947       171,533  

Other assets

      13,972       14,262  
  

 

 

    

 

 

  

Total assets

    $ 544,194     $ 637,612  
  

 

 

    

 

 

  

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable

    $ 25,626     $ 48,379  

Accrued expenses

      69,897       74,525  

Deferred revenue

      108,977       107,095  

Other current liabilities

      5,785       6,233  
  

 

 

    

 

 

  

Total current liabilities

      210,285       236,232  

Deferred tax liabilities

      2,382       3,165  

Other liabilities

      13,300       12,830  
  

 

 

    

 

 

  

Total liabilities

      225,967       252,227  

Commitments and contingencies (Note 9)

     

Stockholders’ equity:

     

Preferred stock, $0.0001 par value; 100,000,000 shares authorized, none issued and outstanding as of March 31, 2022 and December 31, 2021

      —         —    

Common stock, $0.0001 par value, 1,900,000,000 shares authorized (1,600,000,000 Class A, 200,000,000 Class X and 100,000,000 Class C);

     

Class A: 169,465,971 and 168,333,463 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively;

      17       17  

Class X: 141,250,310 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively;

      14       14  

Class C: no shares issued and outstanding at March 31, 2022 and December 31, 2021

      —         —    

Additional paid-in capital

      616,905       610,418  

Accumulated other comprehensive loss

      (133 )      (21 ) 

Accumulated deficit

      (298,576 )      (225,043 ) 
  

 

 

    

 

 

  

Total stockholders’ equity

      318,227       385,385  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 544,194     $ 637,612  
  

 

 

    

 

 

  

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

     Three Months Ended March 31,  
     2022     2021  

Revenue:

     

Digital

    $ 81,745     $ 95,150  

Connected fitness

      19,513       —    

Nutrition and other

      97,664       131,069  
  

 

 

    

 

 

  

Total revenue

      198,922       226,219  
  

 

 

    

 

 

  

Cost of revenue:

     

Digital

      16,425       11,122  

Connected fitness

      44,706       —    

Nutrition and other

      44,774       56,995  
  

 

 

    

 

 

  

Total cost of revenue

      105,905       68,117  
  

 

 

    

 

 

  

Gross profit

      93,017       158,102  

Operating expenses:

     

Selling and marketing

      106,444       144,696  

Enterprise technology and development

      33,697       27,089  

General and administrative

      20,073       17,946  

Restructuring

      7,223       —    
  

 

 

    

 

 

  

Total operating expenses

      167,437       189,731  
  

 

 

    

 

 

  

Operating loss

      (74,420 )      (31,629 ) 

Other income (expense):

     

Change in fair value of warrant liabilities

      264       —    

Interest expense

      (19 )      (123 ) 

Other income (expense), net

      (64 )      1,299  
  

 

 

    

 

 

  

Loss before income taxes

      (74,239 )      (30,453 ) 

Income tax benefit

      706       395  
  

 

 

    

 

 

  

Net loss

    ($ 73,533 )    ($ 30,058 ) 
  

 

 

    

 

 

  

Net loss per common share, basic and diluted

    ($ 0.24 )    ($ 0.12 ) 
  

 

 

    

 

 

  

Weighted-average common shares outstanding, basic and diluted

      306,363       243,013  
  

 

 

    

 

 

  

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended March 31,  
     2022     2021  

Cash flows from operating activities:

     

Net loss

    ($ 73,533 )    ($ 30,058 ) 

Adjustments to reconcile net loss to net cash provided by operating activities:

     

Depreciation and amortization expense

      21,587       13,726  

Amortization of content assets

      6,164       2,817  

Provision for inventory and net realizable value adjustment

      16,896       2,040  

Realized losses on hedging derivative financial instruments

      69       167  

Gain on investment in convertible instrument

      —         (1,379 ) 

Change in fair value of warrant liabilities

      (264 )      —    

Equity-based compensation

      4,564       2,573  

Deferred income taxes

      (808 )      (528 ) 

Other non-cash items

      91       —    

Changes in operating assets and liabilities:

     

Inventory

      15,887       (2,321 ) 

Content assets

      (6,448 )      (7,425 ) 

Prepaid expenses

      (293 )      (2,139 ) 

Other assets

      2,895       (8,476 ) 

Accounts payable

      (20,752 )      7,137  

Accrued expenses

      (1,386 )      6,136  

Deferred revenue

      2,370       9,224  

Other liabilities

      (410 )      (374 ) 
  

 

 

    

 

 

  

Net cash used in operating activities

      (33,371 )      (8,880 ) 
  

 

 

    

 

 

  

Cash flows from investing activities:

     

Purchase of property and equipment

      (12,403 )      (13,299 ) 

Investment in convertible instrument

      —         (5,000 ) 
  

 

 

    

 

 

  

Net cash used in investing activities

      (12,403 )      (18,299 ) 
  

 

 

    

 

 

  

Cash flows from financing activities:

     

Proceeds from exercise of stock options

      2,115       —    

Remittance of taxes withheld from employee stock awards

      (192 )      —    

Borrowings under Credit Facility

      —         20,000  

Deferred financing costs

      —         (2,242 ) 
  

 

 

    

 

 

  

Net cash provided by financing activities

      1,923       17,758  
  

 

 

    

 

 

  

Effect of exchange rates on cash

      223       243  

Net decrease in cash and cash equivalents

      (43,628 )      (9,178 ) 

Cash, cash equivalents and restricted cash, beginning of period

      107,054       56,827  
  

 

 

    

 

 

  

Cash and cash equivalents, end of period

    $ 63,426     $ 47,649  
  

 

 

    

 

 

  

Supplemental disclosure of cash flow information:

     

Cash paid during the year for interest

    $ 10     $ 58  

Cash paid during the year for income taxes, net

      32       16  

Supplemental disclosure of noncash investing activities:

     

Property and equipment acquired but not yet paid for

    $ 4,225     $ 6,196  

Supplemental disclosure of noncash financing activities:

     

Deferred financing costs, accrued but not paid

      —       $ 3,812  

The Beachbody Company, Inc.

Adjusted EBITDA

In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance.

We define and calculate Adjusted EBITDA as net income (loss) adjusted for depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income taxes, equity-based compensation, net realizable value adjustment, transaction costs, restructuring expense, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net loss can be found below:

 

(in thousands)    Three Months Ended March 31,  
     2022     2021  

Net loss

    ($ 73,533 )    ($ 30,058 ) 

Adjusted for:

     

Depreciation and amortization

      21,587       13,726  

Amortization of capitalized cloud computing implementation costs

      168       168  

Amortization of content assets

      6,164       2,817  

Interest expense

      19       123  

Income tax benefit

      (706 )      (395 ) 

Equity-based compensation

      4,564       2,573  

Inventory net realizable value adjustment (1)

      14,934       —    

Transaction costs

      2       633  

Restructuring and platform consolidation costs (2)

      7,887       —    

Change in fair value of warrant liabilities

      (264 )      —    

Non-operating (3)

      70       (1,331 ) 
  

 

 

    

 

 

  

Adjusted EBITDA

    ($ 19,108 )    ($ 11,744 ) 
  

 

 

    

 

 

  

 

(1)

Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market.

(2)

Includes restructuring expense and non-recurring personnel costs associated with the consolidation of our digital platforms.

(3)

Includes interest income, and during the three months ended March 31, 2021, also includes the gain on investment on the Myx convertible instrument.

Source: The Beachbody Company, Inc.

Media

Madeleine O’Hagan

madeleine.ohagan@teneo.com

Investor Relations

Edward Plank

eplank@beachbody.com