EX-99.1 2 d293194dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

The Beachbody Company, Inc. Announces First Quarter 2023 Financial Results

Delivered First Quarter Results Ahead of Guidance

Improved First Quarter Operating Loss by $47.0 million

Successfully Launched BODi, the New Health Esteem Platform

El Segundo, Calif. (May 8, 2023) – 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, 2023.

“During the quarter we successfully completed the transition to our expanded BODi platform”, said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “While we are still in the early stages of scaling this transformation, our subscribers clearly recognize the unrivaled value BODi offers with renewals and upgrades ahead of our expectations. We are also seeing the intended increase in LTV with higher than expected nutrition retention and healthy nutrition attachment rates. The early indications we have witnessed from the launch of BODi, along with the positive customer response to our Health Esteem platform and nutrition initiatives, give us confidence in our strategy as we progress towards a return to profitable growth by the end of the year.”

First Quarter 2023 Results

 

  •  

Total revenue was $144.9 million compared to $198.9 million in the prior year period.

 

  •  

Digital revenue was $64.8 million compared to $81.7 million in the prior year and digital subscriptions totaled 1.75 million in the first quarter.

 

  •  

Nutrition and Other revenue was $74.1 million compared to $97.7 million in the prior year and nutritional subscriptions totaled 0.21 million in the first quarter.

 

  •  

Connected Fitness revenue was $6.0 million compared to $19.5 million in the prior year and approximately 4,700 bikes were delivered in the first quarter.

 

  •  

Operating loss improved by $47.0 million to $27.4 million compared to an operating loss of $74.4 million in the prior year period.

 

  •  

Net loss was $29.2 million compared to a net loss of $73.5 million in the prior year period.

 

  •  

Adjusted EBITDA1 was ($0.9) million compared to ($19.1) million in the prior year period.

 

  •  

Cash used in operating activities was $7.9 million compared to $33.4 million in the prior year period, and cash used in investing activities was $3.4 million compared to $12.4 million in the prior year period. Total cash used in operating and investing activities was $11.3 million compared to $45.8 million in the prior year period.

Key Operational and Business Metrics

 

 
   

For the Three Months Ended March 31,

  
   
    2023           2022           Change v
2022		  

Digital Subscriptions (in millions)

     1.75               2.46               (28.9%)  

Nutritional Subscriptions (in millions)

     0.21         0.30         (30.0%)  

Total Subscriptions

     1.96         2.76         (29.0%)  
   

Average Digital Retention

     95.9%         95.6%         30bps  

Total Streams (in millions)

     29.7         38.2         (22.3%)  

DAU/MAU

     32.5%         31.6%         90bps  
   

Connected Fitness Units Delivered (in thousands)

     4.7         16.6         (71.7%)  
   

Digital

     $64.8         $81.7         (20.7%)  

Nutrition & Other

     $74.1         $97.7         (24.2%)  

Connected Fitness

     $6.0         $19.5         (69.2%)  

Revenue (in millions)

     $144.9         $198.9         (27.1%)  

Net Loss (in millions)

     ($29.2)         ($73.5)         60.3%  

Adjusted EBITDA (in millions)

     ($0.9)               ($19.1)               95.3%  

Outlook for The Second Quarter of 2023

 

 
   

Outlook for Quarter Ending June 30, 2023

  
   
(in millions)                  

Revenue

     $125         $140  
   

Net Loss

     ($35)         ($30)  
   

Adjustments:

        

Depreciation and Amortization

     $11         $11  

Amortization of Content Development Assets

     $6         $6  

Interest Expense

     $2         $2  

Equity-Based Compensation

     $6         $6  

Other Adjustment Items

     $1         $1  

Total Adjustments

     $25         $25  
   

Adjusted EBITDA

     ($10)               ($5)  

 

 

1 

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

Conference Call and Webcast Information

Beachbody will host a conference call at 5:00pm ET on Monday, May 8, 2023, to discuss its financial results. To participate in the live call, please dial (833) 470-1428 (U.S. & Canada), or +1 (404) 975-4839 (all other locations) and provide the conference identification number: 878296. 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 15, 2023, by dialing (866) 813-9403 (U.S & Canada), or +1 (929) 458-6194 (all other locations). The replay passcode is 649427.

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

About BODi and The Beachbody Company, Inc.

Headquartered in Southern California, BODi is a leading digital fitness, nutrition, and mindset subscription company with over two decades of creating innovative content and nutritional supplements designed to support and enrich strong Health Esteem. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com.

Safe Harbor Statement

This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in 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, the potential impact of COVID-19 on the fitness and wellness industry in general as well as our business, 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 16, 2023 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our 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.

Consolidated Balance Sheets

(in thousands, except par value and share data)

 

     March 31,
2023		     December 31,
2022		  
     (unaudited)        

Assets

     

Current assets:

     

Cash and cash equivalents

    $ 66,393     $ 80,091  

Inventory, net

      48,304       54,060  

Prepaid expenses

      11,403       13,055  

Other current assets

      45,687       39,248  
  

 

 

    

 

 

  

Total current assets

      171,787       186,454  

Property and equipment, net

      67,395       74,147  

Content assets, net

      31,551       34,888  

Goodwill

      125,166       125,166  

Intangible assets, net

      6,926       8,204  

Right-of-use assets, net

      4,520       5,030  

Other assets

      8,428       9,506  
  

 

 

    

 

 

  

Total assets

    $ 415,773     $ 443,395  
  

 

 

    

 

 

  

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable

    $ 16,754     $ 17,940  

Accrued expenses

      54,784       64,430  

Deferred revenue

      99,894       95,587  

Current portion of lease liabilities

      2,100       2,150  

Current portion of Term Loan

      1,250       1,250  

Other current liabilities

      3,513       3,283  
  

 

 

    

 

 

  

Total current liabilities

      178,295       184,640  

Term Loan

      40,276       39,735  

Long-term lease liabilities, net

      2,794       3,318  

Deferred tax liabilities

      172       181  

Other liabilities

      4,679       3,979  
  

 

 

    

 

 

  

Total liabilities

      226,216       231,853  

Commitments and contingencies (Note 8)

     

Stockholders’ equity:

     

Preferred stock, $0.0001 par value; 100,000,000 shares
authorized, none issued and outstanding at March 31, 2023
and December 31, 2022

      —         —    

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: 177,004,131 and 170,911,819 shares issued and
outstanding at March 31, 2023 and December 31,
2022, respectively;

      18       17  

Class X: 141,250,310 shares issued and outstanding at
March 31, 2023 and December 31, 2022, respectively;

      14       14  

Class C: no shares issued and outstanding at
March 31, 2023 and December 31, 2022

      —         —    

Additional paid-in capital

      638,135       630,709  

Accumulated deficit

      (448,423 )      (419,235 ) 

Accumulated other comprehensive income (loss)

      (187 )      37  
  

 

 

    

 

 

  

Total stockholders’ equity

      189,557       211,542  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 415,773     $ 443,395  
  

 

 

    

 

 

  

The Beachbody Company, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

 

     Three Months Ended March 31,  
     2023     2022  

Revenue:

     

Digital

    $ 64,773     $ 81,745  

Nutrition and other

      74,120       97,664  

Connected fitness

      6,008       19,513  
  

 

 

    

 

 

  

Total revenue

      144,901       198,922  
  

 

 

    

 

 

  

Cost of revenue:

     

Digital

      14,967       16,425  

Nutrition and other

      31,039       44,774  

Connected fitness

      7,555       44,706  
  

 

 

    

 

 

  

Total cost of revenue

      53,561       105,905  
  

 

 

    

 

 

  

Gross profit

      91,340       93,017  

Operating expenses:

     

Selling and marketing

      76,576       106,444  

Enterprise technology and development

      19,096       33,697  

General and administrative

      17,716       20,073  

Restructuring

      5,387       7,223  
  

 

 

    

 

 

  

Total operating expenses

      118,775       167,437  
  

 

 

    

 

 

  

Operating loss

      (27,435 )      (74,420 ) 

Other income (expense):

     

Change in fair value of warrant liabilities

      57       264  

Interest expense

      (2,331 )      (19 ) 

Other income (expense), net

      569       (64 ) 
  

 

 

    

 

 

  

Loss before income taxes

      (29,140 )      (74,239 ) 

Income tax (provision) benefit

      (48 )      706  
  

 

 

    

 

 

  

Net loss

    $ (29,188 )    $ (73,533 ) 
  

 

 

    

 

 

  

Net loss per common share, basic and diluted

    $ (0.09 )    $ (0.24 ) 
  

 

 

    

 

 

  

Weighted-average common shares outstanding, basic and diluted

      309,141       306,363  
  

 

 

    

 

 

  

The Beachbody Company, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 

     Three months ended March 31,  
     2023     2022  

Cash flows from operating activities:

     

Net loss

    $ (29,188 )    $ (73,533 ) 

Adjustments to reconcile net loss to net cash used in operating activities:

     

Depreciation and amortization expense

      10,713       21,587  

Amortization of content assets

      5,561       6,164  

Provision for inventory and inventory purchase commitments

      2,734       16,896  

Realized (gains) losses on hedging derivative financial instruments

      (87 )      69  

Change in fair value of warrant liabilities

      (57 )      (264 ) 

Equity-based compensation

      9,555       4,564  

Deferred income taxes

      (53 )      (808 ) 

Amortization of debt issuance costs

      479       —    

Paid-in-kind interest

      374       —    

Other non-cash items

      —         91  

Changes in operating assets and liabilities:

     

Inventory

      3,056       15,887  

Content assets

      (2,224 )      (6,448 ) 

Prepaid expenses

      1,652       (293 ) 

Other assets

      (4,958 )      2,895  

Accounts payable

      (1,366 )      (20,752 ) 

Accrued expenses

      (8,768 )      (1,386 ) 

Deferred revenue

      4,746       2,370  

Other liabilities

      (38 )      (410 ) 
  

 

 

    

 

 

  

Net cash used in operating activities

      (7,869 )      (33,371 ) 
  

 

 

    

 

 

  

Cash flows from investing activities:

     

Purchase of property and equipment

      (3,417 )      (12,403 ) 
  

 

 

    

 

 

  

Net cash used in investing activities

      (3,417 )      (12,403 ) 
  

 

 

    

 

 

  

Cash flows from financing activities:

     

Proceeds from exercise of stock options

      —         2,115  

Remittance of taxes withheld from employee stock awards

      —         (192 ) 

Debt repayments

      (313 )      —    

Tax withholding payments for vesting of restricted stock

      (2,128 )      —    
  

 

 

    

 

 

  

Net cash (used in) provided by financing activities

      (2,441 )      1,923  
  

 

 

    

 

 

  

Effect of exchange rates on cash

      29       223  

Net decrease in cash and cash equivalents

      (13,698 )      (43,628 ) 

Cash, cash equivalents and restricted cash, beginning of period

      80,091       107,054  
  

 

 

    

 

 

  

Cash and cash equivalents, end of period

    $ 66,393     $ 63,426  
  

 

 

    

 

 

  

Supplemental disclosure of cash flow information:

     

Cash paid during the year for interest

    $ 1,464     $ 10  

Cash (received) paid during the year for income taxes, net

      (265 )      32  

Supplemental disclosure of noncash investing activities:

     

Property and equipment acquired but not yet paid for

    $ 1,291     $ 4,225  

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, inventory net realizable value adjustments, restructuring, 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 income (loss) can be found below:

 

     Three Months Ended March 31,  
(in thousands)    2023     2022  

Net loss

    $ (29,188 )    $ (73,533 ) 

Adjusted for :

     

Depreciation and amortization

      10,713       21,587  

Amortization of capitalized cloud computing implementation costs

      41       168  

Amortization of content assets

      5,561       6,164  

Interest expense

      2,331       19  

Income tax provision (benefit)

      48       (706 ) 

Equity-based compensation

      9,555       4,564  

Employee incentives, expected to be settled in equity (1)

      (5,466 )      —    

Inventory net realizable value adjustments (2)

      —         14,934  

Restructuring and platform consolidation costs (3)

      6,059       7,887  

Change in fair value of warrant liabilities

      (57 )      (264 ) 

Non-operating (4)

      (484 )      72  
  

 

 

    

 

 

  

Adjusted EBITDA

    $ (887)     $ (19,108 ) 
  

 

 

    

 

 

  

 

1

The non-cash charge for employee incentives which were expected to be settled in equity was recorded and included in the Adjusted EBITDA calculation during the year ended December 31, 2022. During the three months ended March 31, 2023, we reclassified the non-cash charge from employee incentives expected to be settled in equity to equity-based compensation because we settled certain employee incentives with RSU awards during the period.

2

Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment was included during the three months ended March 31, 2022, because of its unusual magnitude due to disruptions in the connected fitness market.

3

Includes restructuring expense and non-recurring personnel costs associated with executing our key growth priorities during the three months ended March 31, 2023, and with the consolidation of our digital platforms during the three months ended March 31, 2022.

4

Primarily includes interest income.

Investor Relations

ICR, Inc.

BeachbodyIR@icrinc.com