Q3 Results and Revised 2021 Revenue Guidance
Reflect Product Launch Delays and a Challenging Consumer Demand and
Media Environment
Strong Two-Year Growth in Total
Subscriptions +46%, Average Digital Retention +40BPS, Total Streams
+35%, and DAU/MAU +20BPS, Reflecting Strong Long-Term Secular
Trends
Implements Action Plan to Optimize Near-Term
Performance While Advancing Long-Term Growth Strategies
Announces Strategic Appointments to
Leadership Team
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, 2021.
“While we continued to execute on our strategy to drive growth,
the third quarter proved more challenging than forecasted. Our
results reflect a confluence of external factors, including softer
at-home fitness demand as consumers grew tired of social
distancing, and a challenging media environment that did not meet
our disciplined ROI requirements, coupled with a short delay in
product launches from September to October. Although our digital
subscriber base remains strong and engaged with high levels of
retention, we did not acquire new subscribers at the rate we
expected,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman,
and Chief Executive Officer. “We maintained disciplined cost
control in the quarter, and we are taking immediate steps to
improve customer acquisition and lifetime value, getting back on
course to driving profitable growth. As both the CEO and the single
largest shareholder, I am laser focused on driving revenue growth,
creating value for shareholders, and delivering on our
mission.”
Third Quarter 2021 Results
- Total revenue was $208.1 million, a 17% decrease compared to
2020 and a 6% increase compared to 2019
- Digital revenue was $94.1 million, a 5% decrease compared to
2020 and a 38% increase compared to 2019
- Digital subscriptions were 2.64 million, a 1% increase compared
to 2020 and a 55% increase compared to 2019
- 95.6% month-over-month average digital retention, a 50-basis
point increase compared to 2020 and a 40-basis point increase
compared to 2019
- 35.9 million total streams, a 26% decrease compared to 2020,
and a 35% increase compared to 2019
- 29.6% DAU/MAU, a 250-basis point decrease compared to 2020, and
a 20-basis point increase compared to 2019
- Connected Fitness revenue was $5.9 million, compared to none in
2020, which preceded the Myx Fitness acquisition
- There were approximately 14,700 bikes sold in the third
quarter. However, only 44% of bikes were delivered to customers,
which determines when revenue can be recognized
- On a pro forma basis, Connected Fitness revenue was $8.9
million in Q3 2020, with roughly 8,600 bikes sold and 118% of bikes
sold delivered in the quarter
- Nutrition and Other revenue was $108.1 million, a 29% decrease
compared to 2020 and a 16% decrease compared to 2019
- Nutritional subscriptions were 0.34 million, compared to 0.44
million in 2020 and 0.34 million in 2019
- Net loss was $39.9 million, compared to net income of $13.8
million in 2020 and net income of $3.4 million in 2019
- Adjusted EBITDA was ($43.4) million, compared to $31.4 million
in 2020 and $19.5 million in 2019
Key Operational and Business Metrics
The Beachbody
Company
Post
Merger
Post
Merger
For the
Three Months Ended September 30,
For the
Nine Months Ended September 30,
2021
2020
Change v
2020
2019
Change v
2019
2021
2020
Change v
2020
2019
Change v
2019
Connected Fitness Units Sold (in thousands)
14.7
0.0
NM
0.0
NM
15.2
0.0
NM
0.0
NM
Digital Subscriptions (in millions)
2.64
2.61
1
%
1.70
55
%
2.64
2.61
1
%
1.70
55
%
Nutritional Subscriptions (in millions)
0.34
0.44
-23
%
0.34
0
%
0.34
0.44
-23
%
0.34
0
%
Total Subscriptions
2.98
3.05
-2
%
2.04
46
%
2.98
3.05
-2
%
2.04
46
%
Average Digital Retention
95.6
%
95.1
%
50bps
95.2
%
40bps
95.5
%
95.4
%
10bps
95.1
%
40bps
Total Streams (in millions)
35.9
48.5
-26
%
26.5
35
%
136.4
137.2
-1
%
78.5
74
%
DAU/MAU
29.6
%
32.1
%
(250bps)
29.4
%
20bps
32.1
%
31.9
%
20bps
29.2
%
290bps
Connected Fitness
$5.9
$0.0
NM
$0.0
NM
$5.9
$0.0
NM
$0.0
NM
Digital
$94.1
$99.1
-5
%
$68.1
38
%
$283.5
$240.0
18
%
$192.8
47
%
Nutrition & other
$108.1
$152.4
-29
%
$127.9
-16
%
$367.9
$399.3
-8
%
$397.8
-8
%
Revenue (in millions)
$208.1
$251.5
-17
%
$196.0
6
%
$657.4
$639.3
3
%
$590.7
11
%
Net Income/(Loss) (in millions)
($39.9
)
$13.8
-390
%
$3.4
-1277
%
($82.4
)
($4.6
)
-1707
%
$30.5
-370
%
Adjusted EBITDA (in millions)
($43.4
)
$31.4
-238
%
$19.5
-322
%
($59.5
)
$34.9
-270
%
$59.2
-201
%
Near-Term Actions to Optimize Performance
The Company has implemented immediate actions to optimize
near-term performance, while advancing its long-term growth
strategies. Actions include:
- Sharpening Marketing Focus by adjusting media investment
to maximize ROI
- Prioritizing the Highest-Return Growth Opportunities by
leveraging BODi to drive acquisition and lifetime value and
continuing to scale the Connected Fitness business across the
Beachbody on Demand and Openfit platforms
- Maximizing the Micro-Influencer Coach Network through
the return of in-person live events and new product
introductions
- Maintaining Cost Discipline, including a transition to a
work-from-anywhere environment with the successful lease assignment
of our Santa Monica office
- Strengthening the Leadership Team with a specific focus
on revenue growth and long-term strategy, with appointments
including:
- Jon Congdon, Beachbody’s Co-Founder and CEO of Openfit
appointed as Vice Chairman of the Company, in a newly created role
focused on long-term strategy and business development effective
November 15, 2021
- Jean-Michel Fournier appointed to the new role of President,
Global Partnerships and Corporate Development effective November 1,
2021
- Christina Cartwright appointed to the role of Senior Vice
President, Nutrition effective October 28, 2021
- Blake Bilstad appointed as Chief Legal Officer and Corporate
Secretary effective October 28, 2021
2021 Guidance1
While the Company remains confident in the significant long-term
opportunity in the health and wellness space, the third quarter
results, delayed product launches, media spend reassessment,
COVID-related consumer behavior and market uncertainty have
resulted in a more conservative view for 2021 revenue compared to
previous guidance.
Accordingly, for the fiscal year ended December 31, 2021 the
Company now expects:
- Total revenue2 to be between $820.0 million and $830.0
million
- Adjusted EBITDA2 to be between ($110.0) million and ($100.0)
million, consistent with previous expectations
1 Net loss guidance is not reasonably available due to changes
in stock compensation, taxes and other matters that we cannot
forecast at this time.
2 Total revenue and Adjusted EBITDA project the post-merger
consolidated revenue and Adjusted EBITDA ranges (with only six
months and five days of Myx results in 2021 from
6/26/2021-12/31/2021).
Conference Call and Webcast Information
Beachbody will host a conference call at 5:00pm ET on Monday,
November 15, 2021 to discuss its financial results. To participate
in the live call, please dial (833) 989-3106 (domestic) or (873)
415-0233 (international) and provide the conference identification
number: 2666107. 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 22, 2021
by dialing (800) 585-8367 (domestic) or (416) 621-4642
(international) and entering the conference identification number:
2666107.
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 worldwide
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), the live digital
streaming platform Openfit, and MYXfitness, the Company’s connected
indoor bike. For more information, please visit
TheBeachbodyCompany.com.
Safe Harbor Statement
This press release 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 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 Amendment No. 5 to
Form S-4 Registration Statement filed with the SEC on May 27, 2021,
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.
Condensed Consolidated Balance
Sheets
(in thousands, except par value and share
amounts)
As of September 30,
As of December 31,
2021
2020
(unaudited)
Assets Current assets: Cash and cash equivalents
$199,839
$56,827
Accounts receivable, net
1,378
855
Inventory, net
141,139
65,354
Prepaid expenses
14,014
8,650
Other current assets
48,556
37,364
Total current assets
404,926
169,050
Property and equipment, net
115,338
80,169
Content assets, net
34,786
19,437
Intangible assets, net
92,587
21,120
Goodwill
176,903
18,981
Right-of-use assets, net
27,434
33,272
Other assets
6,847
14,224
Total assets
$858,821
$356,253
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable
$48,298
$28,981
Accrued expenses
89,844
79,955
Deferred revenue
126,894
97,504
Current portion of lease liabilities
9,977
10,371
Other current liabilities
2,656
3,106
Total current liabilities
277,669
219,917
Long-term lease liabilities, net
23,845
31,252
Deferred tax liabilities
6,415
3,729
Warrant liabilities
19,900
—
Other liabilities
5,362
2,097
Total liabilities
333,191
256,995
Commitments and contingencies (Note 14) Stockholders' equity:
Preferred stock, $0.0001 par value; 100,000,000 shares authorized,
none issued and outstanding as of September 30, 2021 and December
31, 2020
—
—
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); 168,218,173 and 101,762,614 Class A shares issued and
outstanding at September 30, 2021 and December 31, 2020,
respectively; 141,250,310 Class X shares issued and outstanding at
September 30, 2021 and December 31, 2020, respectively and no Class
C shares issued and outstanding at September 30, 2021 and December
31, 2020
31
24
Additional paid-in capital
604,665
96,097
Accumulated other comprehensive income (loss)
15
(202
)
Retained earnings (accumulated deficit)
(79,081
)
3,339
Total stockholders’ equity
525,630
99,258
Total liabilities and stockholders' equity
$858,821
$356,253
The Beachbody Company, Inc.
Condensed Consolidated Statements of
Income
Unaudited (in thousands, except per share
amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenue: Digital
$94,072
$99,082
$283,547
$239,964
Connected fitness
5,927
—
5,937
—
Nutrition and other
108,053
152,397
367,895
399,335
Total revenue
208,052
251,479
657,379
639,299
Cost of revenue: Digital
12,124
9,843
34,858
27,507
Connected fitness
10,261
—
10,417
—
Nutrition and other
50,682
61,082
164,679
151,654
Total cost of revenue
73,067
70,925
209,954
179,161
Gross profit
134,985
180,554
447,425
460,138
Operating expenses: Selling and marketing
153,782
123,980
438,672
352,872
Enterprise technology and development
29,680
23,852
83,718
67,558
General and administrative
23,346
16,523
58,523
46,229
Restructuring gain
—
(1,677
)
—
(1,677
)
Total operating expenses
206,808
162,678
580,913
464,982
Operating income (loss)
(71,823
)
17,876
(133,488
)
(4,844
)
Other income (expense) Change in fair value of warrant liabilities
30,274
—
35,664
—
Interest expense
(62
)
(89
)
(490
)
(432
)
Other income, net
202
113
3,155
555
Income (loss) before income taxes
(41,409
)
17,900
(95,159
)
(4,721
)
Income tax benefit (provision)
1,487
(4,129
)
12,739
161
Net income (loss)
($39,922
)
$13,771
($82,420
)
($4,560
)
Net income (loss) per common share, basic
($0.13
)
$0.06
($0.31
)
($0.02
)
Net income (loss) per common share, diluted
($0.13
)
$0.05
($0.31
)
($0.02
)
Weighted-average common shares outstanding, basic
304,599
238,831
265,117
238,374
Weighted-average common shares outstanding, diluted
304,599
252,085
265,117
238,374
The Beachbody Company, Inc.
Condensed Consolidated Statements of
Cash Flows
Unaudited (in thousands)
Nine Months Ended September
30,
2021
2020
Cash flows from operating activities: Net loss
($82,420
)
($4,560
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization expense
40,557
31,881
Amortization of content assets
10,008
5,103
Provision for excess and obsolete inventory
4,431
1,083
Allowance for doubtful accounts
—
77
Change in fair value of derivative financial instruments
294
16
Gain on investment in convertible instrument
(3,114
)
—
Change in fair value of warrant liabilities
(35,664
)
—
Equity-based compensation
10,839
3,169
Deferred income taxes
(12,964
)
398
Other non-cash items
—
6
Changes in operating assets and liabilities: Accounts receivable
(226
)
(2,150
)
Inventory
(68,765
)
(17,510
)
Content assets
(21,958
)
(9,922
)
Prepaid expenses
(5,364
)
7,838
Other assets
(5,575
)
(4,387
)
Accounts payable
9,095
9,216
Accrued expenses
(406
)
19,806
Deferred revenue
27,041
41,775
Other liabilities
(5,068
)
(9,499
)
Net cash provided by (used in) operating activities
(139,259
)
72,340
Cash flows from investing activities: Purchase of property
and equipment
(61,065
)
(28,107
)
Investment in convertible instrument
(5,000
)
—
Other investment
(5,000
)
—
Cash acquired in acquisition of Ladder
—
1,247
Cash paid for acquisition of Myx, net of cash acquired
(37,280
)
—
Net cash used in investing activities
(108,345
)
(26,860
)
Cash flows from financing activities: Proceeds from exercise
of stock options
4,477
—
Remittance of taxes withheld from employee stock awards
(3,154
)
—
Borrowings under Credit Facility
42,000
32,000
Repayments under Credit Facility
(42,000
)
(32,000
)
Business Combination, net of issuance costs paid
389,125
—
Net cash provided by financing activities
390,448
—
Effect of exchange rates on cash
168
(397
)
Net increase in cash and cash equivalents
143,012
45,083
Cash and cash equivalents, beginning of period
56,827
41,564
Cash and cash equivalents, end of period
$199,839
$86,647
Supplemental disclosure of cash flow information: Cash paid
during the year for interest
$389
$335
Cash paid during the year for income taxes, net
$389
$377
Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for
$13,640
$3,914
Class A Common Stock issued in connection with the acquisition of
Myx
$162,558
$0
Fair value of Myx instrument and promissory note held by Old
Beachbody
$22,618
$0
Old Beachbody Common units issued in connection with acquisition
$0
$27,889
Supplemental disclosure of noncash financing activities: Tax
asset contribution
$0
($135
)
Net assets assumed from Forest Road in the Business Combination
$293
$0
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, 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 their most
directly comparable GAAP financial measure. A reconciliation of the
non-GAAP Adjusted EBITDA to GAAP measures can be found below:
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income (loss)
($39,922
)
$13,771
($82,420
)
($4,560
)
Adjusted for: Depreciation and amortization
14,616
11,203
40,557
31,881
Amortization of capitalized cloud computing implementation costs
168
—
504
—
Amortization of content assets
3,889
1,907
10,008
5,103
Interest expense
62
89
490
432
Income tax (benefit) provision
(1,487
)
4,129
(12,739
)
(161
)
Equity-based compensation
5,744
1,261
10,839
3,169
Transaction costs
677
612
2,819
612
Restructuring gain
—
(1,677
)
—
(1,677
)
Change in fair value of warrant liabilities
(30,274
)
—
(35,664
)
—
Other adjustment items (1)
3,044
—
9,082
—
Non-operating items (2)
71
77
(3,017
)
131
Adjusted EBITDA
($43,412
)
$31,372
($59,541
)
$34,930
(1) Other adjustment items include
incremental costs associated with Covid-19.
(2) Non-operating primarily includes
interest income and gain on investment in the Myx convertible
instrument.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211115006061/en/
Media Madeleine O'Hagan madeleine.ohagan@teneo.com
Investor Relations Edward Plank eplank@beachbody.com
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