8-K: Beachbody (BODi) Reports Fourth Quarter and FY 2024 Financial Results; Achieves Fifth Consecutive Quarter of Positive Adjusted EBITDA

Beachbody's Q4 2024 revenues align with the high end of guidance, featuring a gross margin increase and a net loss that includes a goodwill impairment.

Summary

• The Beachbody Company, Inc. (BODi) announced its financial results for the fourth quarter and full year ended December 31, 2024.
• Total revenue for Q4 2024 was $86.4 million, compared to $119.0 million in the prior year period, aligning with the high end of the guidance range.
• Digital revenue was $50.4 million, with 1.07 million digital subscriptions.
• Nutrition and Other revenue reached $34.8 million, with 0.09 million nutritional subscriptions.
• Connected Fitness revenue was $1.2 million, with approximately 2,700 bikes delivered.
• The company reported a net loss of $34.6 million, including a $20.0 million impairment of goodwill, compared to a net loss of $65.0 million in the prior year period.
• Adjusted EBITDA was $8.7 million, compared to $2.8 million in the prior year period.
• For the full year 2024, total revenue was $418.8 million, compared to $527.1 million in the prior year.
• The net loss for the full year was $71.6 million, including a $20.0 million impairment of goodwill, compared to a net loss of $152.6 million in the prior year.
• Adjusted EBITDA for the full year was $28.3 million, compared to a loss of $8.7 million in the prior year.
• Cash provided by operating activities for the year was $2.6 million, compared to cash used in operating activities of $22.5 million in the prior year.
• Free cash flow was $(2.0) million, compared to $(29.1) million in the prior year.
• The company expects revenue between $60 million and $70 million and a net loss between $(11) million and $(7) million for the first quarter of 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While revenue is down year-over-year, the company is showing improvements in profitability and cash flow, and management expresses optimism about the future. The goodwill impairment and continued net losses temper the positive aspects.

Positives

• Gross margin improved significantly, up 830 bps year-over-year to 70.5%.
• The company achieved its fifth consecutive quarter of positive Adjusted EBITDA.
• Operating loss decreased by $27.5 million in Q4 2024 compared to the prior year period.
• Net loss decreased by $30.4 million in Q4 2024 compared to the prior year period.
• Cash provided by operating activities improved significantly, from cash used of $22.5 million to cash provided of $2.6 million year over year.
• Free cash flow improved from $(29.1) million to $(2.0) million year over year.

Negatives

• Total revenue decreased in both Q4 2024 and full year 2024 compared to the prior year periods.
• Digital revenue, Nutrition and Other revenue, and Connected Fitness revenue all decreased in both Q4 2024 and full year 2024 compared to the prior year periods.
• The company reported a net loss of $34.6 million for Q4 2024 and $71.6 million for the full year 2024.
• Digital subscriptions decreased from 1.31 million to 1.07 million year over year.
• Nutritional subscriptions decreased from 0.16 million to 0.09 million year over year.
• Connected Fitness Units Delivered decreased from 4.1 thousand to 2.7 thousand in Q4 and from 20.9 thousand to 9.0 thousand for the full year.

Risks

• The company faces intense competition in the fitness and nutrition industries.
• Market conditions and global economic factors beyond the company's control could impact results.
• The company's reliance on a few key products poses a risk.
• The company's ability to protect its intellectual property rights is a risk.

Future Outlook

The company expects revenue between $60 million and $70 million and a net loss between $(11) million and $(7) million for the first quarter of 2025.

Management Comments

• Carl Daikeler, BODi's Co-Founder and Chief Executive Officer, stated that 2024 was a pivotal year as the company continued to build upon its strategy to transform the company.
• Carl Daikeler stated that the turnaround plan successfully streamlined the digital platform, lowering the breakeven point and enhancing the liquidity position.
• Carl Daikeler stated that the company generated higher margin revenue streams and achieved positive operating cash flows while successfully rearchitecting the company from a Multi-Level Marketing network to a single level affiliate model.
• Carl Daikeler stated that as the company moves into 2025, it has laid the foundation to execute the next phase of its turnaround which will maximize its market opportunities, and continue to generate positive operating cash flow through its multi-channel strategy and new innovative products.

Industry Context

BODi's focus on digital fitness and nutrition aligns with the broader trend of consumers seeking at-home workout solutions and personalized nutrition plans. The shift from an MLM model to a single-level affiliate model reflects a strategic adjustment to adapt to changing market dynamics and consumer preferences.

Comparison to Industry Standards

• While specific competitor data isn't provided, companies like Peloton, Nautilus, and WW International (formerly Weight Watchers) are key players in the connected fitness and weight management industries.
• BODi's adjusted EBITDA of $28.3 million for the year is a key metric to compare against these competitors, as is the digital subscription number of 1.07 million.
• The company's focus on positive operating cash flow is a common goal in the industry, and its achievement of $2.6 million in cash provided by operating activities is a positive sign.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue but encouraged by the improvements in profitability and cash flow.
• Employees may be impacted by the restructuring and headcount reductions associated with the Pivot.
• Customers will likely see changes in the company's offerings and business model as it transitions to a single-level affiliate model.

Next Steps

• The company will continue to execute its turnaround plan, focusing on maximizing market opportunities and generating positive operating cash flow.
• The company will focus on its multi-channel strategy and new innovative products.
• The company will host a conference call on March 27, 2025, to discuss its financial results and outlook.

Key Dates

Keywords

financial results, BODi, Beachbody, Adjusted EBITDA, revenue, subscriptions, fitness, nutrition