Second Quarter Results Show Significant
Sequential Improvement in Profitability
Reduced Cash Usage by More than $30 Million
Compared to First Quarter 2022
Strong Growth Compared to 2019 Pre-COVID
Baseline: Total Digital and Nutritional Subscriptions +26%, Average
Digital Retention +40BPS, Total Streams +22%, DAU/MAU
+140BPS
Secured $50 Million in Debt
Financing
The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the
“Company”), a leading subscription health and wellness company,
today announced financial results for its second quarter ended June
30, 2022.
“Our results in the second quarter reflect continued progress on
our One Brand strategy to make the business more efficient and more
productive. With strong focus and solid execution, we reduced cash
usage by more than $30 million compared to the first quarter, drove
profitable customer acquisition through new content releases, our
highly effective proprietary sales network and disciplined
marketing, and delivered Adjusted EBITDA above our guidance,” said
Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief
Executive Officer. “While the near-term environment remains
dynamic, the actions we are taking to adapt our business model
position us to successfully navigate current market realities. We
will continue to leverage our unique business model, significant
scale and our talented and focused management team to capitalize on
the significant long-term opportunity we see in what remains a
large and massively underpenetrated market.”
Second Quarter 2022 Results
- Total revenue was $179.1 million, a 20% decrease compared to
2021 and a 3% decrease compared to 2019
- Digital revenue was $78.0 million, a 17% decrease compared to
2021
- Digital subscriptions were 2.28 million, a 16% decrease
compared to 2021 and a 35% increase compared to 2019
- 95.6% month-over-month average digital retention, a 70-basis
point increase compared to 2021 and a 40-basis point increase
compared to 2019
- 31.0 million total streams, a 30% decrease compared to 2021,
and a 22% increase compared to 2019
- 30.0% DAU/MAU, a 190-basis point decrease compared to 2021, and
a 140-basis point increase compared to 2019
- Connected Fitness revenue was $10.6 million, compared to none
in 20211
- Approximately 8,800 bikes delivered in the second quarter
- On a pre-merger basis, Connected Fitness revenue was $11.0
million in Q2 2021, with approximately 10,200 bikes delivered
- Nutrition and Other revenue was $90.5 million, a 30% decrease
compared to 2021
- Nutritional subscriptions were 0.28 million, compared to 0.42
million in 2021 and 0.34 million in 2019
- Net loss was $41.9 million, compared to a net loss of $12.4
million in 2021 and net income of $19.6 million in 2019
- Adjusted EBITDA2 was ($1.5) million, compared to ($4.4) million
in 2021 and $17.7 million in 2019
Key Operational and Business Metrics
For the
Three Months Ended June 30,
For the
Six Months Ended June 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
Connected Fitness Units Delivered (in thousands)
8.8
0.5
NM
0.0
NM
25.4
0.5
NM
0.0
NM
Digital Subscriptions (in millions)
2.28
2.72
(16%)
1.69
35%
2.28
2.72
(16%)
1.69
35%
Nutritional Subscriptions (in millions)
0.28
0.42
(33%)
0.34
(18%)
0.28
0.42
(33%)
0.34
(18%)
Total Subscriptions
2.56
3.14
(18%)
2.03
26%
2.56
3.14
(18%)
2.03
26%
Average Digital Retention
95.6%
94.9%
70bps
95.2%
40bps
95.6%
95.4%
20bps
95.1%
50bps
Total Streams (in millions)
31.0
44.5
(30%)
25.5
22%
69.2
100.4
(31%)
52.0
33%
DAU/MAU
30.0%
31.9%
(190bps)
28.6%
140bps
31.6%
33.5%
(190bps)
29.1%
250bps
Digital
$78.0
$94.3
(17%)
$58.8
33%
$159.8
$189.5
(16%)
$124.8
28%
Connected Fitness
$10.6
$0.0
NM
$0.0
NM
$30.1
$0.0
NM
$0.0
NM
Nutrition & other
$90.5
$128.8
(30%)
$124.9
(28%)
$188.2
$259.8
(28%)
$269.9
(30%)
Revenue (in millions)
$179.1
$223.1
(20%)
$183.7
(3%)
$378.1
$449.3
(16%)
$394.7
(4%)
Net Income/(Loss) (in millions)
($41.9)
($12.4)
(238%)
$19.6
(314%)
($115.4)
($42.5)
(172%)
$27.1
(526%)
Adjusted EBITDA (in millions)
($1.5)
($4.4)
66%
$17.7
(108%)
($20.6)
($16.1)
(28%)
$39.7
(152%)
Balance Sheet Update
The Company also announced that it has entered into an agreement
with Blue Torch Capital to provide $50 million in debt financing,
which will serve to enhance Beachbody’s financial flexibility. The
agreement also includes the option for Beachbody to borrow up to an
additional $25 million, subject to the terms of the credit
agreement.
2022 Financial Outlook 3
During fiscal 2022, the Company now expects to realize a
combined Adjusted EBITDA loss improvement and capital expenditure
reduction of approximately $110 million to $120 million, compared
to 2021.
For the third quarter of 2022 the Company expects:
- Total revenue of $150 million to $160 million
- Adjusted EBITDA loss of $15 million to $20 million
_______________
1 Q2 2021 only included 5 days of results
for Connected Fitness.
2 A definition of Adjusted EBITDA and
reconciliation to net loss is at the end of this release.
3 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 Monday,
August 8, 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: 440786. 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 August 15, 2022 by
dialing (866) 813-9403 (U.S & Canada), or (929) 458-6194 (all
other locations). The replay passcode is 669965.
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 share and per share
data)
June 30, December 31,
2022
2021
(unaudited) Assets Current assets: Cash and cash
equivalents
$57,060
$104,054
Restricted cash
—
3,000
Inventory, net
72,271
132,730
Prepaid expenses
10,317
15,861
Other current assets
44,828
43,727
Total current assets
184,476
299,372
Property and equipment, net
92,301
113,098
Content assets, net
38,098
39,347
Goodwill and intangible assets, net
162,361
171,533
Other assets
12,803
14,262
Total assets
$490,039
$637,612
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable
$22,676
$48,379
Accrued expenses
62,349
74,525
Deferred revenue
107,282
107,095
Other current liabilities
4,564
6,233
Total current liabilities
196,871
236,232
Deferred tax liabilities
2,031
3,165
Other liabilities
10,981
12,830
Total liabilities
209,883
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 June 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: 170,263,772 and 168,333,463 shares issued and
outstanding at June 30, 2022 and December 31, 2021, respectively;
17
17
Class X: 141,250,310 shares issued and outstanding at June 30, 2022
and December 31, 2021, respectively;
14
14
Class C: no shares issued and outstanding at June 30, 2022 and
December 31, 2021
—
—
Additional paid-in capital
620,643
610,418
Accumulated other comprehensive loss
(75
)
(21
)
Accumulated deficit
(340,443
)
(225,043
)
Total stockholders’ equity
280,156
385,385
Total liabilities and stockholders’ equity
$490,039
$637,612
The Beachbody Company, Inc.
Unaudited Condensed Consolidated
Statements of Operations
(in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June
30,
2022
2021
2022
2021
Revenue: Digital
$78,015
$94,325
$159,760
$189,475
Connected fitness
10,605
10
30,118
10
Nutrition and other
90,516
128,773
188,180
259,842
Total revenue
179,136
223,108
378,058
449,327
Cost of revenue: Digital
18,406
11,612
34,831
22,734
Connected fitness
31,459
156
76,165
156
Nutrition and other
42,002
57,002
86,776
113,997
Total cost of revenue
91,867
68,770
197,772
136,887
Gross profit
87,269
154,338
180,286
312,440
Operating expenses: Selling and marketing
86,624
140,194
193,068
284,890
Enterprise technology and development
24,133
26,949
57,830
54,038
General and administrative
19,584
17,231
39,657
35,177
Restructuring
1,332
—
8,555
—
Total operating expenses
131,673
184,374
299,110
374,105
Operating loss
(44,404
)
(30,036
)
(118,824
)
(61,665
)
Other income (expense): Change in fair value of warrant liabilities
2,070
5,390
2,334
5,390
Interest expense
(3
)
(305
)
(22
)
(428
)
Other income, net
189
1,654
125
2,953
Loss before income taxes
(42,148
)
(23,297
)
(116,387
)
(53,750
)
Income tax benefit
281
10,857
987
11,252
Net loss
($41,867
)
($12,440
)
($115,400
)
($42,498
)
Net loss per common share, basic and diluted
($0.14
)
($0.05
)
($0.38
)
($0.17
)
Weighted-average common shares outstanding, basic and
diluted
307,205
247,062
306,786
245,049
The Beachbody Company, Inc.
Unaudited Condensed Consolidated
Statements of Cash Flows
(in thousands)
Six Months Ended June
30,
2022
2021
Cash flows from operating activities: Net loss
($115,400
)
($42,498
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization expense
41,552
25,941
Amortization of content assets
13,180
6,119
Provision for inventory and net realizable value adjustment
32,019
2,791
Realized losses on hedging derivative financial instruments
143
339
Gain on investment in convertible instrument
—
(3,114
)
Change in fair value of warrant liabilities
(2,334
)
(5,390
)
Equity-based compensation
7,565
5,095
Deferred income taxes
(1,143
)
(11,349
)
Other non-cash items
311
—
Changes in operating assets and liabilities: Inventory
28,400
(194
)
Content assets
(11,940
)
(14,237
)
Prepaid expenses
5,545
(1,789
)
Other assets
167
(5,774
)
Accounts payable
(22,753
)
6,656
Accrued expenses
(7,739
)
(461
)
Deferred revenue
1,000
16,547
Other liabilities
(1,829
)
(4,169
)
Net cash used in operating activities
(33,256
)
(25,487
)
Cash flows from investing activities: Purchase of property
and equipment
(19,222
)
(27,200
)
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
(19,222
)
(74,480
)
Cash flows from financing activities: Proceeds from exercise
of stock options
2,968
—
Remittance of taxes withheld from employee stock awards
(308
)
—
Borrowings under Credit Facility
—
42,000
Repayments under Credit Facility
—
(42,000
)
Business combination, net of issuance costs paid
—
389,775
Net cash provided by financing activities
2,660
389,775
Effect of exchange rates on cash
(176
)
594
Net (decrease) increase in cash and cash equivalents
(49,994
)
290,402
Cash, cash equivalents and restricted cash, beginning of period
107,054
56,827
Cash and cash equivalents, end of period
$57,060
$347,229
Supplemental disclosure of cash flow information: Cash paid
during the year for interest
$17
$283
Cash paid during the year for income taxes, net
310
198
Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for
$2,330
$15,322
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:
Deferred financing costs, accrued but not paid
—
—
Business Combination transaction costs, accrued but not paid
—
650
Net assets assumed in the Business Combination
—
293
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, net realizable value adjustment, transaction costs,
restructuring expense, 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 loss can be found below:
(in thousands)
Three Months Ended June
30,
Six Months ended June
30,
2022
2021
2022
2021
Net loss
($41,867
)
($12,440
)
($115,400
)
($42,498
)
Adjusted for: Depreciation and amortization
19,965
12,215
41,552
25,941
Amortization of capitalized cloud computing implementation costs
168
168
336
336
Amortization of content assets
7,016
3,302
13,180
6,119
Interest expense
3
305
22
428
Income tax benefit
(281
)
(10,857
)
(987
)
(11,252
)
Equity-based compensation
3,001
2,522
7,565
5,095
Inventory net realizable value adjustment (1)
10,502
—
25,436
—
Transaction costs
—
1,509
2
2,142
Restructuring and platform consolidation costs (2)
2,086
—
9,973
—
Change in fair value of warrant liabilities
(2,070
)
(5,390
)
(2,334
)
(5,390
)
Other adjustment items (3)
—
6,038
—
6,038
Non-operating (4)
5
(1,757
)
76
(3,088
)
Adjusted EBITDA
($1,472
)
($4,385
)
($20,579
)
($16,129
)
(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 with the consolidation of
our digital platforms.
(3) Incremental costs associated with
COVID-19.
(4) Includes interest income, and during
the three and six months ended June 30, 2021, also includes the
gain on investment on the Myx convertible instrument.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005508/en/
Media Jill Murray Jillian.Murray@teneo.com
Investor Relations Edward Plank eplank@beachbody.com
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