Delivered First Quarter Results Ahead of
Guidance
Improved First Quarter Operating Loss by
$47.0 million
Successfully Launched BODi, the New Health
Esteem Platform
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
March 31, December 31, (in thousands, except
par value and share data)
2023
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 sharesauthorized,
none issued and outstanding at March 31, 2023and December 31, 2022
—
—
Common stock, $0.0001 par value, 1,900,000,000 sharesauthorized
(1,600,000,000 Class A, 200,000,000 Class X and100,000,000 Class
C); Class A: 177,004,131 and 170,911,819 shares issued
andoutstanding at March 31, 2023 and December 31,2022,
respectively;
18
17
Class X: 141,250,310 shares issued and outstanding atMarch 31, 2023
and December 31, 2022, respectively;
14
14
Class C: no shares issued and outstanding atMarch 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
Three months ended March 31, (in thousands)
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:
(in thousands)
Three Months Ended March
31,
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.
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Investor Relations ICR, Inc. BeachbodyIR@icrinc.com
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