BODY
$0.68
The Beachbody Inc Cl A
($.01)
(1.36%)
Earnings Details
3rd Quarter September 2022
Wednesday, November 9, 2022 4:00:00 PM
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Summary

Beachbody Sees Revenue Below Estimates

The Beachbody Inc Cl A (BODY) reported a 3rd Quarter September 2022 loss of $0.10 per share on revenue of $166.0 million. The consensus estimate was a loss of $0.12 per share on revenue of $159.3 million. Revenue fell 20.2% compared to the same quarter a year ago.

The company said it expects fourth quarter revenue of $140.0 million to $150.0 million. The current consensus revenue estimate is $157.16 million for the quarter ending December 31, 2022.

The Beachbody Company is a worldwide leading digital fitness and nutrition subscription company, with over two decades of creating innovative content and powerful brands.

Results
Reported Earnings
($0.10)
Earnings Whisper
-
Consensus Estimate
($0.12)
Reported Revenue
$166.0 Mil
Revenue Estimate
$159.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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

Delivered Third Quarter Revenue and Adjusted EBITDA Results Ahead of Guidance

Maintained Strong Cost Discipline; Reduced Operating Expense by 32% Year-Over-Year

Strong Growth Compared to 2019 Pre-COVID Baseline: Total Digital and Nutritional Subscriptions +15%, Average Digital Retention +50BPS, Total Streams +4%, DAU/MAU +10BPS

EL SEGUNDO, Calif.--(BUSINESS WIRE)--The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its third quarter ended September 30, 2022.

“Our third quarter efforts reflect the solid progress we’re making to improve the business by generating demand through compelling content, and tightly controlling costs, all as we continue to navigate the challenging market dynamics facing our industry,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “Meanwhile, we’re focused on appropriately sizing and designing fitness and nutrition solutions to appeal to the millions of Americans who want to live happier and more fulfilling lives. Looking ahead, we will remain laser-focused on capitalizing on our growth opportunities as we drive towards profitability and free cash flow generation.”

Third Quarter 2022 Results

  • Total revenue was $165.9 million, a 20% decrease compared to 2021 and a 15% decrease compared to 2019
    • Revenue exceeded the mid-point of guidance by 7%
  • Digital revenue was $72.2 million, a 23% decrease compared to 2021
    • Digital subscriptions were 2.10 million, a 20% decrease compared to 2021 and a 24% increase compared to 2019
  • Nutrition and Other revenue was $90.4 million, a 16% decrease compared to 2021
    • Nutritional subscriptions were 0.24 million, a 29% decrease compared to 2021 and a 29% decrease to 2019
  • Connected Fitness revenue was $3.3 million, a 44% decrease compared to 2021
    • Delivered approximately 2,300 bikes in the third quarter
  • Operating expenses were $140.9 million, a 32% decrease compared to 2021
  • Net loss was $33.9 million, compared to a net loss of $39.9 in 2021
  • Adjusted EBITDA1 was ($6.2) million, compared to ($43.4) million in 2021 and $19.5 million in 2019
    • Adjusted EBITDA exceeded the mid-point of guidance by $11.3 million
  • Free cash flow was ($7.7) million, compared to ($147.6) million in 2021
  • Cash and cash equivalents were $94.1 million, a 53% decrease compared to 2021, but a 65% increase compared to the second quarter of 2022, driven by the August 2022 debt financing agreement, enhancing the Company’s financial flexibility

Key Operational and Business Metrics

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2022

2021

Change v
2021

2019

Change v
2019 Pre-Covid
Baseline

2022

2021

Change v
2021

2019

Change v
2019 Pre-Covid
Baseline

Digital Subscriptions (in millions)

2.10

2.64

(20%)

1.70

24%

2.10

2.64

(20%)

1.70

24%

Nutritional Subscriptions (in millions)

0.24

0.34

(29%)

0.34

(29%)

0.24

0.34

(29%)

0.34

(29%)

Total Subscriptions

2.34

2.98

(21%)

2.04

15%

2.34

2.98

(21%)

2.04

15%

 

 

 

 

 

 

 

 

 

 

Average Digital Retention

95.7%

95.6%

10bps

95.2%

50bps

95.6%

95.5%

10bps

95.1%

50bps

Total Streams (in millions)

27.5

35.9

(23%)

26.5

4%

96.7

136.4

(29%)

78.5

23%

DAU/MAU

29.5%

29.6%

(10bps)

29.4%

10bps

30.4%

32.1%

(170bps)

29.2%

120bps

 

 

 

 

 

 

 

 

 

 

Connected Fitness Units Delivered (in thousands)

2.3

6.5

(64%)

0.0

NM

27.7

7.0

299%

0.0

NM

 

 

 

 

 

 

 

 

 

 

Digital

$72.2

$94.1

(23%)

$68.1

6%

$232.0

$283.5

(18%)

$192.8

20%

Nutrition & other

$90.4

$108.1

(16%)

$127.9

(29%)

$278.6

$367.9

(24%)

$397.8

(30%)

Connected Fitness

$3.3

$5.9

(44%)

$-

NM

$33.4

$5.9

466%

$-

NM

Revenue (in millions)

$165.9

$208.1

(20%)

$196.0

(15%)

$544.0

$657.3

(17%)

$590.7

(8%)

Net Income/(Loss) (in millions)

$(33.9)

$(39.9)

15%

$3.4

(1099%)

$(149.3)

$(82.4)

(81%)

$30.5

(589%)

Adjusted EBITDA (in millions)

$(6.2)

$(43.4)

86%

$19.5

(132%)

$(26.8)

$(59.5)

55%

$59.2

(145%)

2022 Financial Outlook 2

For the fourth quarter of 2022 the Company expects:

  • Total revenue to be between $140 million and $150 million
  • Adjusted EBITDA loss to be between $9 million and $14 million

----------------

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

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 Wednesday, November 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: 577340. 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 November 16, 2022 by dialing (866) 813-9403 (U.S & Canada), or (929) 458-6194 (all other locations). The replay passcode is 137285.

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 second 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)
September 30,December 31,

 

2022

 

 

2021

 

(unaudited)
Assets
Current assets:
Cash and cash equivalents

$

94,063

 

$

104,054

 

Restricted cash

 

-

 

 

3,000

 

Inventory, net

 

67,993

 

 

132,730

 

Prepaid expenses

 

7,181

 

 

15,861

 

Other current assets

 

41,028

 

 

43,727

 

Total current assets

 

210,265

 

 

299,372

 

Property and equipment, net

 

82,030

 

 

113,098

 

Content assets, net

 

36,783

 

 

39,347

 

Goodwill and intangible assets, net

 

156,800

 

 

171,533

 

Other assets

 

12,727

 

 

14,262

 

Total assets

$

498,605

 

$

637,612

 

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable

$

13,867

 

$

48,379

 

Accrued expenses

 

71,695

 

 

74,525

 

Deferred revenue

 

102,086

 

 

107,095

 

Current portion of Term Loan

 

1,250

 

 

-

 

Other current liabilities

 

3,879

 

 

6,233

 

Total current liabilities

 

192,777

 

 

236,232

 

Term Loan

 

39,474

 

 

-

 

Deferred tax liabilities

 

1,319

 

 

3,165

 

Other liabilities

 

12,702

 

 

12,830

 

Total liabilities

 

246,272

 

 

252,227

 

Commitments and contingencies (Note 8)
 
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 shares
authorized, none issued and outstanding at September 30, 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: 170,911,819 and 168,333,463 shares issued and
outstanding at September 30, 2022 and December 31, 2021, respectively;

 

17

 

 

17

 

Class X: 141,250,310 shares issued and outstanding at
September 30, 2022 and December 31, 2021, respectively;

 

14

 

 

14

 

Class C: no shares issued and outstanding at
September 30, 2022 and December 31, 2021

 

 

 

 

Additional paid-in capital

 

626,255

 

 

610,418

 

Accumulated other comprehensive income (loss)

 

349

 

 

(21

)

Accumulated deficit

 

(374,302

)

 

(225,043

)

Total stockholders’ equity

 

252,333

 

 

385,385

 

Total liabilities and stockholders’ equity

$

498,605

 

$

637,612

 

 

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:
Digital

$

72,228

 

$

94,072

 

$

231,988

 

$

283,547

 

Nutrition and other

 

90,416

 

 

108,053

 

 

278,596

 

 

367,895

 

Connected fitness

 

3,331

 

 

5,927

 

 

33,449

 

 

5,937

 

Total revenue

 

165,975

 

 

208,052

 

 

544,033

 

 

657,379

 

Cost of revenue:
Digital

 

16,078

 

 

12,124

 

 

50,909

 

 

34,858

 

Nutrition and other

 

40,486

 

 

50,682

 

 

127,262

 

 

164,679

 

Connected fitness

 

4,745

 

 

10,261

 

 

80,910

 

 

10,417

 

Total cost of revenue

 

61,309

 

 

73,067

 

 

259,081

 

 

209,954

 

Gross profit

 

104,666

 

 

134,985

 

 

284,952

 

 

447,425

 

Operating expenses:
Selling and marketing

 

93,145

 

 

153,782

 

 

286,213

 

 

438,672

 

Enterprise technology and development

 

25,686

 

 

29,680

 

 

83,516

 

 

83,718

 

General and administrative

 

19,532

 

 

23,346

 

 

59,189

 

 

58,523

 

Restructuring

 

1,492

 

 

 

 

10,047

 

 

 

Impairment of intangible assets

 

1,000

 

 

 

 

1,000

 

 

 

Total operating expenses

 

140,855

 

 

206,808

 

 

439,965

 

 

580,913

 

Operating loss

 

(36,189

)

 

(71,823

)

 

(155,013

)

 

(133,488

)

Other income (expense):
Change in fair value of warrant liabilities

 

2,362

 

 

30,274

 

 

4,696

 

 

35,664

 

Interest expense

 

(1,152

)

 

(62

)

 

(1,174

)

 

(490

)

Other income, net

 

571

 

 

202

 

 

696

 

 

3,155

 

Loss before income taxes

 

(34,408

)

 

(41,409

)

 

(150,795

)

 

(95,159

)

Income tax benefit

 

549

 

 

1,487

 

 

1,536

 

 

12,739

 

Net loss

$

(33,859

)

$

(39,922

)

$

(149,259

)

$

(82,420

)

 
Net loss per common share, basic and diluted

$

(0.11

)

$

(0.13

)

$

(0.49

)

$

(0.31

)

Weighted-average common shares outstanding, basic and diluted

 

307,949

 

 

304,599

 

 

307,178

 

 

265,117

 

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

Nine months ended September 30,

 

2022

 

 

2021

 

 
Cash flows from operating activities:
Net loss

$

(149,259

)

$

(82,420

)

Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of intangible assets

 

1,000

 

 

 

Depreciation and amortization expense

 

58,858

 

 

40,557

 

Amortization of content assets

 

18,673

 

 

10,008

 

Provision for inventory and net realizable value adjustment

 

35,195

 

 

4,431

 

Realized losses on hedging derivative financial instruments

 

141

 

 

481

 

Gain on investment in convertible instrument

 

 

 

(3,114

)

Change in fair value of warrant liabilities

 

(4,696

)

 

(35,664

)

Equity-based compensation

 

13,166

 

 

10,839

 

Deferred income taxes

 

(1,754

)

 

(12,964

)

Amortization of debt issuance costs

 

262

 

 

 

Paid-in-kind interest expense

 

221

 

 

 

Other non-cash items

 

311

 

 

 

Changes in operating assets and liabilities:
Inventory

 

31,676

 

 

(68,765

)

Content assets

 

(16,111

)

 

(21,958

)

Prepaid expenses

 

8,681

 

 

(5,364

)

Other assets

 

4,496

 

 

(5,762

)

Accounts payable

 

(30,379

)

 

9,095

 

Accrued expenses

 

(209

)

 

(406

)

Deferred revenue

 

(3,690

)

 

27,041

 

Other liabilities

 

(3,525

)

 

(5,294

)

Net cash used in operating activities

 

(36,943

)

 

(139,259

)

Cash flows from investing activities:
Purchase of property and equipment

 

(23,236

)

 

(61,065

)

Investment in convertible instrument

 

 

 

(5,000

)

Other investment

 

 

 

(5,000

)

Cash paid for acquisition, net of cash acquired

 

 

 

(37,280

)

Net cash used in investing activities

 

(23,236

)

 

(108,345

)

Cash flows from financing activities:
Proceeds from exercise of stock options

 

3,162

 

 

4,477

 

Remittance of taxes withheld from employee stock awards

 

(308

)

 

(3,154

)

Borrowings under Credit Facility

 

 

 

42,000

 

Repayments under Credit Facility

 

 

 

(42,000

)

Business combination, net of issuance costs paid

 

 

 

389,125

 

Shares withheld for tax withholdings on vesting of restricted stock

 

(183

)

 

 

Borrowings under Term Loan

 

50,000

 

 

 

Repayments under Term Loan

 

(313

)

 

 

Payment of debt issuance costs

 

(4,075

)

 

 

Net cash provided by financing activities

 

48,283

 

 

390,448

 

Effect of exchange rates on cash

 

(1,095

)

 

168

 

Net (decrease) increase in cash and cash equivalents

 

(12,991

)

 

143,012

 

Cash, cash equivalents and restricted cash, beginning of period

 

107,054

 

 

56,827

 

Cash and cash equivalents, end of period

$

94,063

 

$

199,839

 

Supplemental disclosure of cash flow information:
Cash paid during the year for interest

$

738

 

$

389

 

Cash paid during the year for income taxes, net

 

365

 

 

389

 

Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for

$

789

 

$

13,640

 

Class A Common Stock issued in connection with acquisition

 

 

 

162,558

 

Fair value of Myx instrument and promissory note held by Old Beachbody

 

 

 

22,618

 

Supplemental disclosure of noncash financing activities:
Net assets assumed in the Business Combination

$

 

$

293

 

Warrants issued in relation to Term Loan

 

5,236

 

 

 

Debt issuance costs, accrued but not paid

 

136

 

 

 

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 impairment of goodwill and intangible assets, 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, 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:

Three Months Ended September 30,

Nine Months ended September 30,

(in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

$

(33,859

)

$

(39,922

)

$

(149,259

)

$

(82,420

)

Adjusted for:
Impairment of intangible assets

 

1,000

 

 

 

 

1,000

 

 

 

Depreciation and amortization

 

17,306

 

 

14,616

 

 

58,858

 

 

40,557

 

Amortization of capitalized cloud computing implementation costs

 

126

 

 

168

 

 

462

 

 

504

 

Amortization of content assets

 

5,493

 

 

3,889

 

 

18,673

 

 

10,008

 

Interest expense

 

1,152

 

 

62

 

 

1,174

 

 

490

 

Income tax benefit

 

(549

)

 

(1,487

)

 

(1,536

)

 

(12,739

)

Equity-based compensation

 

5,601

 

 

5,744

 

 

13,166

 

 

10,839

 

Inventory net realizable value adjustment (1)

 

(1,867

)

 

 

 

23,569

 

 

 

Transaction costs

 

 

 

677

 

 

2

 

 

2,819

 

Restructuring and platform consolidation costs (2)

 

1,745

 

 

 

 

11,718

 

 

 

Change in fair value of warrant liabilities

 

(2,362

)

 

(30,274

)

 

(4,696

)

 

(35,664

)

Other adjustment items (3)

 

 

 

3,044

 

 

 

 

9,082

 

Non-operating (4)

 

(15

)

 

71

 

 

61

 

 

(3,017

)

Adjusted EBITDA

$

(6,229

)

$

(43,412

)

$

(26,808

)

$

(59,541

)

(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 primarily with the consolidation of our digital platforms.

(3)

Incremental costs associated with COVID-19.

(4)

Includes interest income, and during the nine months ended September 30, 2021, also includes the gain on investment on the Myx convertible instrument.

 

Media
Jill Murray
Jillian.Murray@teneo.com

Investor Relations
Edward Plank
eplank@beachbody.com

Source: The Beachbody Company, Inc.