Fourth Quarter Results Exceed Guidance and
Reflect Strong Execution
Solid Two-Year Growth in Total Digital and
Nutritional Subscriptions +42%, Average Digital Retention +90BPS,
Total Streams +21%, Reflecting Positive Secular Trends
Announces Strategy to Accelerate Path to
Profitability, Reduce Cash Use from Operations by Approximately
$110 Million, and Strengthen Competitive Position
The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the
“Company”), a leading subscription health and wellness company,
today announced financial results for its fourth quarter and full
year ended December 31, 2021.
“Our performance in the fourth quarter reflects disciplined
execution against the plan we laid out in November to prioritize
the highest return marketing opportunities, which in conjunction
with a strong portfolio of new product offerings, enabled us to
exceed our previous guidance,” said Carl Daikeler, Beachbody’s
Co-Founder, Chairman, and Chief Executive Officer. “Our
content-driven model, powerful flywheel of fitness combined with
nutrition and unique coach network, provides an incredibly strong
foundation unlike any other in the industry. We are capitalizing on
the strengths we’ve built to adjust our business back to the
profitable playbook that has served us well for more than two
decades: narrowing our focus to the strongest elements of our
business, investing in the highest return, lowest risk
opportunities, and maintaining an unwavering commitment to
disciplined cost management and capital efficiency. We believe
these efforts best position us to deliver positive earnings and
cash flow in 2023.”
Fourth Quarter 2021 Results
- Total revenue was $216.3 million, a 4% decrease compared to
2020 and a 31% increase compared to 2019
- Digital revenue was $81.9 million, a 14% decrease compared to
2020 and a 41% increase compared to 2019
- Digital subscriptions were 2.54 million, a 3% decrease compared
to 2020 and a 50% increase compared to 2019
- 96.5% month-over-month average digital retention, a 90-basis
point increase compared to 2020 and a 90-basis point increase
compared to 2019
- 30.8 million total streams, a 27% decrease compared to 2020,
and a 21% increase compared to 2019
- 28.9% DAU/MAU, a 240-basis point decrease compared to 2020, and
a 10-basis point decrease compared to 2019
- Connected Fitness revenue was $36.8 million, compared to none
in 2020, which preceded the Myx Fitness acquisition
- Approximately 23,900 bikes sold in the fourth quarter, with a
bikes-delivered to sales ratio of 124%
- On a pre-merger basis, Connected Fitness revenue was $17.6
million in Q4 2020, with approximately 12,300 bikes sold and a
bikes-delivered to sales ratio of 114% in the quarter
- Nutrition and Other revenue was $97.6 million, a 25% decrease
compared to 2020 and a 9% decrease compared to 2019
- Nutritional subscriptions were 0.30 million, compared to 0.39
million in 2020 and 0.31 million in 2019
- Net loss was $146.0 million, compared to a net loss of $16.9
million in 2020 and net income of $1.8 million in 2019
- Adjusted EBITDA was ($26.6) million, compared to $16.5 million
in 2020 and $19.2 million in 2019
- We recorded goodwill and intangibles impairment charges of
$94.9 million in the fourth quarter. These impairment charges are
non-cash and excluded from net loss in our Adjusted EBITDA
calculation
Full Year 2021 Results
- Total revenue was $873.6 million, a 1% increase compared to
2020 and a 16% increase compared to 2019
- Digital revenue was $365.4 million, a 9% increase compared to
2020 and a 46% increase compared to 2019
- Connected Fitness revenue was $42.7 million, following the Myx
Fitness acquisition in June 2021
- Nutrition and Other revenue was $465.5 million, a 12% decrease
compared to 2020 and an 8% decrease compared to 2019
- Net loss was $228.4 million, compared to a net loss of $21.4
million in 2020 and net income of $32.3 million in 2019
- Adjusted EBITDA was ($86.1) million, compared to $51.5 million
in 2020 and $78.4 million in 2019
Key Operational and Business
Metrics For the
Three Months Ended December 31, For the Year Ended December 31,
2021
2020
Change v 2020
2019
Change v 2019
2021
2020
Change v 2020
2019
Change v 2019
Connected Fitness Units Sold (in thousands)
23.9
0.0
NM
0.0
NM
39.1
0.0
NM
0.0
NM
Connected Fitness Units Delivered (in thousands)
29.7
0.0
NM
0.0
NM
36.2
0.0
NM
0.0
NM
Bikes Delivered to Sales Ratio
124%
93%
Digital Subscriptions (in millions)
2.54
2.63
(3%)
1.69
50%
2.54
2.63
(3%)
1.69
50%
Nutritional Subscriptions (in millions)
0.30
0.39
(23%)
0.31
(3%)
0.30
0.39
(23%)
0.31
(3%)
Total Subscriptions
2.84
3.02
(6%)
2.00
42%
2.84
3.02
(6%)
2.00
42%
Average Digital Retention
96.5%
95.6%
90bps
95.6%
90bps
95.7%
95.5%
20bps
95.3%
40bps
Total Streams (in millions)
30.8
42.4
(27%)
25.4
21%
167.1
179.6
(7%)
103.8
61%
DAU/MAU
28.9%
31.3%
(240bps)
29.0%
(10bps)
31.4%
31.6%
(20bps)
29.2%
220bps
Connected Fitness
$36.8
$0.0
NM
$0.0
NM
$42.7
$0.0
NM
$0.0
NM
Digital
$81.9
$94.8
(14%)
$57.9
41%
$365.4
$334.8
9%
$250.8
46%
Nutrition & other
$97.6
$129.4
(25%)
$107.2
(9%)
$465.5
$528.8
(12%)
$505.0
(8%)
Revenue (in millions)
$216.3
$224.3
(4%)
$165.1
31%
$873.6
$863.6
1%
$755.8
16%
Net Income/(Loss) (in millions)
($146.0)
($16.9)
(764%)
$1.8
(8,211%)
($228.4)
($21.4)
(967%)
$32.3
(807%)
Adjusted EBITDA (in millions)
($26.6)
$16.5
(261%)
$19.2
(239%)
($86.1)
$51.5
(267%)
$78.4
(210%)
Strategy to Accelerate Path to Profitability and Enhance
Competitive Position
The Company also announced today that it is moving swiftly to
streamline its business model, accelerate its path to profitability
and ensure it is positioned to deliver profits and cash flow in a
variety of demand environments, and return to positive earnings and
cash flow in 2023 through the following initiatives:
- Implementing a “One Brand” strategy: The Company will
consolidate its streaming fitness and nutrition offerings into a
single platform, Beachbody On Demand (BOD), and market its
connected fitness bike under the Beachbody brand. This
consolidation will increase the strength of BOD’s platform with the
addition of Openfit products and talent to BOD’s already extensive
on-demand library, enhance the Company’s value proposition to its
customers and partners, and simplify its go-to-market
strategy.
- Enhancing marketing ROI: Building on the performance in
the fourth quarter, the Company will target historically
high-return media and narrow its focus to pursue only performance
marketing opportunities that are immediately profitable and
accretive to cash flow. Additionally, the Company will further
leverage its coach micro-influencer network, which continues to
serve as a competitive advantage that consistently delivers the
most profitable and productive subscribers.
- Improving lifecycle management: Leveraging its database
of over 2.8 million subscriptions and insights from its data and
analytics team, the Company has identified significant
opportunities to increase lifetime value by reducing friction in
the ecommerce purchasing funnel and maximizing the ROI on new
content releases and nutritional supplements.
- Increasing capital efficiency: As a result of the “One
Brand” strategy and post-merger technology integration efforts
completed in 2021, the Company reduced headcount by approximately
10% in the first quarter of 2022. Additionally, in conjunction with
AlixPartners, the Company is undertaking a thorough review of its
organization to further streamline operations and reduce its
expense profile to match various demand environments.
2022 Financial Outlook 1
As a result of the actions outlined above, during fiscal 2022,
the Company expects to reduce its cash use from operating
activities by approximately $110 million as compared to 2021 and
meaningfully reduce its full year net loss and Adjusted EBITDA
loss.
For the first quarter of 2022 the Company expects:
- Total revenue of $170 million to $180 million
- Adjusted EBITDA loss of $20 million to $25 million
1 Net loss guidance is not reasonably available due to 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 Tuesday,
March 1, 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: 653651. 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 March 8, 2022 by
dialing (866) 813-9403 (U.S & Canada), or (929) 458-6194 (all
other locations). The replay passcode is 665771.
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 platforms Beachbody On Demand Interactive (BODi) and
Openfit, and the Beachbody Bike by MYX, 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 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 1, 2022, 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)
As of December 31,
2021
2020
Assets Current assets: Cash and cash equivalents
$104,054
$56,827
Restricted cash
3,000
—
Inventory, net
132,730
65,354
Prepaid expenses
15,861
8,650
Other current assets
43,727
38,219
Total current assets
299,372
169,050
Property and equipment, net
113,098
80,169
Content assets, net
39,347
19,437
Goodwill and intangible assets, net
171,533
40,101
Right-of-use assets, net
6,613
33,272
Other assets
7,649
14,224
Total assets
$637,612
$356,253
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable
$48,379
$28,981
Accrued expenses
74,525
79,955
Deferred revenue
107,095
97,504
Current portion of lease liabilities
2,307
10,371
Other current liabilities
3,926
3,106
Total current liabilities
236,232
219,917
Long-term lease liabilities, net
4,823
31,252
Deferred tax liabilities
3,165
3,729
Other liabilities
8,007
2,097
Total liabilities
252,227
256,995
Commitments and contingencies (Note 14) Stockholders' equity:
Preferred stock, $0.0001 par value; 100,000,000 sharesauthorized,
none issued and outstanding as of December 31,2021 and 2020
—
—
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: 168,333,463 and 101,762,614 shares issued andoutstanding
at December 31, 2021 and 2020, respectively;
17
10
Class X: 141,250,310 shares issued and outstanding atDecember 31,
2021 and 2020, respectively;
14
14
Class C: no shares issued and outstanding atDecember 31, 2021 and
2020
—
—
Additional paid-in capital
610,418
96,097
Accumulated other comprehensive loss
(21
)
(202
)
Retained earnings (accumulated deficit)
(225,043
)
3,339
Total stockholders’ equity
385,385
99,258
Total liabilities and stockholders' equity
$637,612
$356,253
The Beachbody Company, Inc. Consolidated
Statements of Operations (in thousands, except
per share data)
Three Months Ended December
31,
Years Ended December
31,
2021
2020
2021
2020
Revenue: Digital
$81,865
$94,840
$365,412
$334,804
Connected fitness
36,801
—
42,738
—
Nutrition and other
97,600
129,443
465,495
528,778
Total revenue
216,266
224,283
873,645
863,582
Cost of revenue: Digital
13,454
10,778
48,312
38,285
Connected fitness
56,626
—
67,043
—
Nutrition and other
48,628
59,768
213,307
211,422
Total cost of revenue
118,708
70,546
328,662
249,707
Gross profit
97,558
153,737
544,983
613,875
Operating expenses: Selling and marketing
109,458
111,128
548,130
464,000
Enterprise technology and development
36,197
25,478
119,915
93,036
General and administrative
21,159
18,589
79,682
64,818
Restructuring gain
(320
)
—
(320
)
(1,677
)
Impairment of goodwill and intangible assets
94,894
—
94,894
—
Total operating expenses
261,388
155,195
842,301
620,177
Operating loss
(163,830
)
(1,458
)
(297,318
)
(6,302
)
Other income (expense) Change in fair value of warrant liabilities
15,065
—
50,729
—
Interest expense
(46
)
(95
)
(536
)
(527
)
Other income, net
49
111
3,204
666
Loss before income taxes
(148,762
)
(1,442
)
(243,921
)
(6,163
)
Income tax benefit (provision)
2,800
(15,430
)
15,539
(15,269
)
Net loss
($145,962
)
($16,872
)
($228,382
)
($21,432
)
Net loss per common share, basic
($0.48
)
($0.07
)
($0.83
)
($0.09
)
Net loss per common share, diluted
($0.48
)
($0.07
)
($0.83
)
($0.09
)
Weighted-average common sharesoutstanding, basic
305,750
243,013
275,359
239,540
Weighted-average common sharesoutstanding, diluted
305,750
243,013
275,359
239,540
The Beachbody Company, Inc. Consolidated
Statements of Cash Flows (in thousands)
Years Ended December
31,
2021
2020
Cash flows from operating activities: Net loss
($228,382
)
($21,432
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Impairment of goodwill and intangible assets
94,894
—
Depreciation and amortization expense
59,597
44,257
Amortization of content assets
14,838
7,485
Provision for excess and obsolete inventory
17,488
2,759
Realized losses on hedging derivative financial instruments
550
92
Gain on investment in convertible instrument
(3,114
)
(288
)
Change in fair value of warrant liabilities
(50,729
)
—
Gain on lease assignment
(6,500
)
—
Equity-based compensation
16,413
5,398
Deferred income taxes
(15,862
)
15,595
Other non-cash items
—
93
Changes in operating assets and liabilities: Inventory
(74,257
)
(27,754
)
Content assets
(31,349
)
(15,555
)
Prepaid expenses
(6,761
)
5,732
Other assets
(2,023
)
(1,772
)
Accounts payable
8,307
10,619
Accrued expenses
(11,273
)
21,804
Deferred revenue
7,435
24,770
Other liabilities
(4,521
)
(10,373
)
Net cash provided by (used in) operating activities
(215,249
)
61,430
Cash flows from investing activities: Purchase of property
and equipment
(77,911
)
(37,933
)
Investment in convertible instrument
(5,000
)
(10,000
)
Other investment
(5,000
)
—
Cash paid for acquisition, net of cash acquired
(37,280
)
1,247
Net cash used in investing activities
(125,191
)
(46,686
)
Cash flows from financing activities: Proceeds from exercise
of stock options
4,680
—
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
—
Deferred financing costs
—
(240
)
Holdings downstream merger
—
405
Net cash provided by financing activities
390,651
165
Effect of exchange rates on cash
16
354
Net increase in cash and cash equivalents
50,227
15,263
Cash, cash equivalents and restricted cash, beginning of year
56,827
41,564
Cash, cash equivalents and restricted cash, end of year
$107,054
$56,827
Supplemental disclosure of cash flow information: Cash paid
during the year for interest
$466
$206
Cash paid during the year for income taxes, net
$385
$333
Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for
$9,657
$5,614
Common shares issued in connection with acquisition
$162,558
$27,889
Supplemental disclosure of noncash financing activities: Tax
asset contribution
—
($135
)
Deferred financing costs, accrued but not paid
—
$1,593
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, transaction costs, restructuring gain,
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 December
31,
Years ended December
31,
2021
2020
2021
2020
Net loss
($145,962
)
($16,872
)
($228,382
)
($21,432
)
Adjusted for: Impairment of goodwill and intangible assets
94,894
-
94,894
-
Depreciation and amortization
19,040
12,376
59,597
44,257
Amortization of capitalized cloud computing implementation costs
168
186
672
186
Amortization of content assets
4,830
2,382
14,838
7,485
Interest expense
46
95
536
527
Income tax provision (benefit)
(2,800
)
15,430
(15,539
)
15,269
Equity- based compensation
5,574
2,229
16,413
5,398
Net realizable value adjustment
10,082
-
10,082
-
Transaction costs
209
855
3,028
1,467
Restructuring gain
(320
)
—
(320
)
(1,677
)
Change in fair value of warrant liabilities
(15,065
)
—
(50,729
)
—
Other adjustment items (1)
2,619
-
11,701
—
Non-operating (2)
118
(151
)
(2,899
)
(20
)
Adjusted EBITDA
($26,567
)
$16,530
($86,108
)
$51,460
(1) Other adjustment items include incremental costs associated
with COVID-19.
(2) Non-operating primarily includes interest income and gain on
investment on the Myx convertible instrument.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220301005954/en/
Media Madeleine O'Hagan madeleine.ohagan@teneo.com
Investor Relations Edward Plank eplank@beachbody.com
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