The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results

Delivered Fourth Quarter Revenue In-Line with Expectations

Reduced Fourth Quarter Operating Expenses by 49%

Recently Completed Additional Cost-Reduction Initiatives to Further Streamline the Business

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, 2022.

“We were pleased to deliver another quarter of solid progress of our One-Brand strategy as we continue to focus our efforts to improve profitability and expand our total addressable market,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “While 2022 was a challenging year in many ways, I am proud of our team’s efforts to continue delivering incredibly effective fitness and nutrition solutions to millions of people, while dramatically reducing costs. As we move into 2023, I am excited for the unprecedented long-term opportunities ahead of us as we expand the positioning of our platform and simplify the business for our Partners. We remain committed to improving our profitability, returning to growth, and maximizing shareholder value all while helping people achieve their goals to lead healthy fulfilling lives.”

Fourth Quarter 2022 Results

  • Total revenue decreased 31% to $148.2 million compared to the prior year period.
    • Digital revenue decreased 16% to $68.7 million and digital subscriptions decreased 23% to 2.0 million.
    • Nutrition and Other revenue decreased 23% to $74.7 million and nutritional subscriptions decreased by 27% to 0.22 million.
    • Connected Fitness revenue decreased 87% to $4.8 million and approximately 3,700 bikes were delivered in the fourth quarter.
  • Operating loss improved by $115.7 million to $48.1 million compared to an operating loss of $163.8 in the prior year period.
  • Net loss was $44.9 million compared to a net loss of $146.0 million in the prior year period.
  • Adjusted EBITDA1 was $3.5 million compared to ($26.6) million in the prior year period.
  • Cash used in operating activities was ($10.3) million compared to ($75.9) million in the prior year period, and cash used in investing activities was ($3.3) million compared to ($16.9) million in the prior year period. Total cash used in operating and investing activities was ($13.6) million compared to ($92.8) million in the prior year period.

Full Year 2022 Results

  • Total revenue decreased 21% to $692.2 million compared to 2021.
    • Digital revenue decreased 18% to $300.7 million.
    • Nutrition and Other revenue decreased 24% to $353.3 million.
    • Connected Fitness revenue decreased 11% to $38.2 million.
  • Operating loss improved by $94.1 million to $203.2 million compared to an operating loss of $297.3 million in 2021.
  • Net loss was $194.2 million compared to a net loss of $228.4 million in 2021.
  • Adjusted EBITDA1 was ($23.3) million compared to ($86.1) million in 2021.
  • Cash used in operating activities was ($47.2) million compared to ($215.2) million in 2021, and cash used in investing activities was ($26.5) million compared to ($125.2) million in 2021. Total cash used in operating and investing activities was ($73.7) million compared to ($340.4) million in 2021.
  • Cash and cash equivalents decreased 23% to $80.1 million compared to the prior year period.
Key Operational and Business Metrics
For the Three Months Ended December 31, For the Year Ended December 31,

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)

1.95

2.54

(23.2%)

 

1.69

15.4%

 

1.95

2.54

(23.2%)

 

1.69

15.4%

Nutritional Subscriptions (in millions)

0.22

0.30

(26.7%)

 

0.31

(29.0%)

 

0.22

0.30

(26.7%)

 

0.31

(29.0%)

Total Subscriptions

2.17

2.84

(23.6%)

 

2.00

8.5%

 

2.17

2.84

(23.6%)

 

2.00

8.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Digital Retention

96.8%

96.5%

30bps

 

95.6%

120bps

 

95.9%

95.7%

20bps

 

95.3%

60bps

Total Streams (in millions)

23.8

30.8

(22.7%)

 

25.4

(6.3%)

 

120.5

167.1

(27.9%)

 

103.8

16.1%

DAU/MAU

29.0%

28.9%

10bps

 

29.0%

0bps

 

30.1%

31.4%

-130bps

 

29.2%

90bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Fitness Units Delivered (in thousands)

3.7

29.7

(87.5%)

 

0.0

NM

 

31.5

36.7

(14.2%)

 

0.0

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital

$68.7

$81.9

(16.1%)

 

$57.9

18.7%

 

$300.7

$365.4

(17.7%)

 

$250.8

19.9%

Nutrition & Other

$74.7

$97.6

(23.5%)

 

$107.2

(30.3%)

 

$353.3

$465.5

(24.1%)

 

$505.0

(30.0%)

Connected Fitness

$4.8

$36.8

(87.0%)

 

$0.0

NM

 

$38.2

$42.7

(10.5%)

 

$0.0

NM

Revenue (in millions)

$148.2

$216.3

(31.5%)

 

$165.1

(10.2%)

 

$692.2

$873.6

(20.8%)

 

$755.8

(8.4%)

Net Income/(Loss) (in millions)

($44.9)

($146.0)

69.2%

 

$1.8

(2594.4%)

 

($194.2)

($228.4)

15.0%

 

$32.3

(701.2%)

Adjusted EBITDA (in millions)

$3.5

($26.6)

113.2%

 

$19.2

(81.8%)

 

($23.3)

($86.1)

72.9%

 

$78.4

(129.7%)

 
 

Outlook

For the first quarter of 2023 the Company expects:

  • Total revenue of $135.0 million to $140.0 million
  • Adjusted EBITDA loss of $3.0 million to $6.0 million

In reliance on the unreasonable efforts exception provided under Regulation S-K, a reconciliation of the Company’s Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including net income (loss) and adjustments that are made for interest expense, income tax expense (benefit), depreciation and amortization, equity-based compensation and employee incentives, impairment, inventory net realizable value, transaction costs, restructuring costs, change in fair value of warrant liabilities, non-operating items including interest income and gain on investment, and other adjustments reflected in the Company’s reconciliation of historical Adjusted EBITDA. The variability of the amounts of these items could have an unpredictable, and potentially significant, impact on the Company’s future GAAP financial results.

Recent Events

In January 2023, the Company executed cost-reduction initiatives intended to further streamline the business, while focusing on key growth priorities.

On March 9, 2023, the Company announced a rebrand from Beachbody to BODi and the launch of an updated version of its premium digital platform, BODi. The changes support the Company’s mission to serve its millions of customers with highly effective fitness and nutrition solutions while enhancing its value proposition with the addition of a new monthly Mindset content to support the positive psychology and self-motivation of its subscribers.

Additional details with regards to the launch are available on the “News” section of the Company’s website at

https://investors.thebeachbodycompany.com/news/news-details/2023/Beachbody-Changes-Name-to-BODi-on-its-Mission-to-Build-the-Health-Esteem-Category/default.aspx

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

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

Conference Call and Webcast Information

Beachbody will host a conference call at 5:00pm ET on Tuesday, March 14, 2023, to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (929) 526-1599 (all other locations) and provide the conference identification number: 592668. 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 21, 2023, by dialing (866) 813-9403 (U.S & Canada), or +44 (204) 525-0658 (all other locations). The replay passcode is 129200.

After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year.

About BODi and The Beachbody Company, Inc.

Headquartered in Southern California, BODi is a leading digital fitness, nutrition, and mindset subscription company with over two decades of creating innovative content and nutritional supplements designed to support and enrich strong Health Esteem. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com.

Safe Harbor Statement

This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) 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 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, 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,

 

2022

 

 

2021

 

Assets
Current assets:
Cash and cash equivalents

$

80,091

 

$

104,054

 

Restricted cash

 

 

 

3,000

 

Inventory, net

 

54,060

 

 

132,730

 

Prepaid expenses

 

13,055

 

 

15,861

 

Other current assets

 

39,248

 

 

43,727

 

Total current assets

 

186,454

 

 

299,372

 

Property and equipment, net

 

74,147

 

 

113,098

 

Content assets, net

 

34,888

 

 

39,347

 

Goodwill and intangible assets, net

 

133,370

 

 

171,533

 

Right-of-use assets, net

 

5,030

 

 

6,613

 

Other assets

 

9,506

 

 

7,649

 

Total assets

$

443,395

 

$

637,612

 

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$

17,940

 

$

48,379

 

Accrued expenses

 

64,430

 

 

74,525

 

Deferred revenue

 

95,587

 

 

107,095

 

Current portion of lease liabilities

 

2,150

 

 

2,307

 

Current portion of Term Loan

 

1,250

 

 

 

Other current liabilities

 

3,283

 

 

3,926

 

Total current liabilities

 

184,640

 

 

236,232

 

Term Loan

 

39,735

 

 

 

Long-term lease liabilities, net

 

3,318

 

 

4,823

 

Deferred tax liabilities

 

181

 

 

3,165

 

Other liabilities

 

3,979

 

 

8,007

 

Total liabilities

 

231,853

 

 

252,227

 

Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 shares

authorized, none issued and outstanding as of December 31,

2022 and 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 December 31, 2022 and 2021, respectively;

 

17

 

 

17

 

Class X: 141,250,310 shares issued and outstanding at

December 31, 2022 and 2021, respectively;

 

14

 

 

14

 

Class C: no shares issued and outstanding at

December 31, 2022 and 2021

 

 

 

 

Additional paid-in capital

 

630,709

 

 

610,418

 

Accumulated deficit

 

(419,235

)

 

(225,043

)

Accumulated other comprehensive income (loss)

 

37

 

 

(21

)

Total stockholders’ equity

 

211,542

 

 

385,385

 

Total liabilities and stockholders’ equity

$

443,395

 

$

637,612

 

 

The Beachbody Company, Inc.

Consolidated Statements of Operations

 
(in thousands, except per share data)
Three Months Ended December 31, Year Ended December 31,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:
Digital

$

68,685

 

$

81,865

 

$

300,673

 

$

365,412

 

Nutrition and other

 

74,735

 

 

97,600

 

 

353,331

 

$

465,495

 

Connected fitness

 

4,746

 

 

36,801

 

 

38,195

 

 

42,738

 

Total revenue

 

148,166

 

 

216,266

 

 

692,199

 

 

873,645

 

Cost of revenue:
Digital

 

15,510

 

 

13,454

 

 

66,419

 

 

48,312

 

Nutrition and other

 

37,491

 

 

48,628

 

 

164,753

 

 

213,307

 

Connected fitness

 

10,544

 

 

56,626

 

 

91,454

 

 

67,043

 

Total cost of revenue

 

63,545

 

 

118,708

 

 

322,626

 

 

328,662

 

Gross profit

 

84,621

 

 

97,558

 

 

369,573

 

 

544,983

 

Operating expenses:
Selling and marketing

 

73,774

 

 

109,458

 

 

359,987

 

 

548,130

 

Enterprise technology and development

 

20,847

 

 

36,197

 

 

104,363

 

 

119,915

 

General and administrative

 

19,237

 

 

21,159

 

 

78,426

 

 

79,682

 

Restructuring

 

 

 

(320

)

 

10,047

 

 

(320

)

Impairment of goodwill and intangible assets

 

18,907

 

 

94,894

 

 

19,907

 

 

94,894

 

Total operating expenses

 

132,765

 

 

261,388

 

 

572,730

 

 

842,301

 

Operating loss

 

(48,144

)

 

(163,830

)

 

(203,157

)

 

(297,318

)

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

 

3,626

 

 

15,065

 

 

8,322

 

 

50,729

 

Interest expense

 

(2,194

)

 

(46

)

 

(3,368

)

 

(536

)

Other income, net

 

262

 

 

49

 

 

958

 

 

3,204

 

Loss before income taxes

 

(46,450

)

 

(148,762

)

 

(197,245

)

 

(243,921

)

Income tax benefit

 

1,517

 

 

2,800

 

 

3,053

 

 

15,539

 

Net loss

$

(44,933

)

$

(145,962

)

$

(194,192

)

$

(228,382

)

 
Net loss per common share, basic and diluted

$

(0.15

)

$

(0.48

)

$

(0.63

)

$

(0.83

)

Weighted-average common shares outstanding, basic and diluted

 

308,412

 

 

305,750

 

 

307,489

 

 

275,359

 

 
The Beachbody Company, Inc.
Consolidated Statements of Cash Flows
 
 

Year Ended December 31,

(in thousands)

 

2022

 

 

2021

 

Cash flows from operating activities:
Net loss

$

(194,192

)

$

(228,382

)

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

 

19,907

 

 

94,894

 

Depreciation and amortization expense

 

74,848

 

 

59,597

 

Amortization of content assets

 

24,276

 

 

14,838

 

Provision for inventory and inventory purchase commitments

 

39,757

 

 

17,488

 

Realized losses on hedging derivative financial instruments

 

108

 

 

332

 

Gain on investment in convertible instrument

 

 

 

(3,114

)

Change in fair value of warrant liabilities

 

(8,322

)

 

(50,729

)

Gain on lease assignment

 

 

 

(6,500

)

Equity-based compensation

 

17,620

 

 

16,413

 

Deferred income taxes

 

(2,961

)

 

(15,862

)

Amortization of debt issuance costs

 

733

 

 

 

Paid-in-kind interest

 

598

 

 

 

Other non-cash items

 

1,219

 

 

 

Changes in operating assets and liabilities:
Inventory

 

41,510

 

 

(74,257

)

Content assets

 

(19,787

)

 

(31,349

)

Prepaid expenses

 

2,806

 

 

(6,761

)

Other assets

 

4,241

 

 

(1,805

)

Accounts payable

 

(26,705

)

 

8,307

 

Accrued expenses

 

(8,673

)

 

(11,273

)

Deferred revenue

 

(9,563

)

 

7,435

 

Other liabilities

 

(4,593

)

 

(4,521

)

Net cash used in operating activities

 

(47,173

)

 

(215,249

)

Cash flows from investing activities:
Purchase of property and equipment

 

(26,493

)

 

(77,911

)

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

 

(26,493

)

 

(125,191

)

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

 

3,162

 

 

4,680

 

Remittance of taxes withheld from employee stock awards

 

(308

)

 

(3,154

)

Debt borrowings

 

50,000

 

 

42,000

 

Debt repayments

 

(625

)

 

(42,000

)

Business combination, net of issuance costs paid

 

 

 

389,125

 

Shares withheld for tax withholdings on vesting of restricted stock

 

(183

)

 

 

Payment of debt issuance costs

 

(4,485

)

 

 

Deferred financing costs

 

 

 

 

Holdings downstream merger

 

 

 

 

Net cash provided by financing activities

 

47,561

 

 

390,651

 

Effect of exchange rates on cash

 

(858

)

 

16

 

Net increase (decrease) in cash and cash equivalents

 

(26,963

)

 

50,227

 

Cash, cash equivalents and restricted cash, beginning of year

 

107,054

 

 

56,827

 

Cash, cash equivalents and restricted cash, end of year

$

80,091

 

$

107,054

 

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

$

2,082

 

$

466

 

Cash paid during the year for income taxes, net

 

389

 

 

385

 

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

$

2,025

 

$

9,657

 

Common shares issued in connection with acquisition

 

 

 

162,558

 

Supplemental disclosure of noncash financing activities:
Warrants issued in relation to Term Loan

$

5,236

 

$

 

 

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, inventory net realizable value adjustments, transaction costs, restructuring, 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,

Year ended December 31,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

$

(44,933

)

$

(145,962

)

$

(194,192

)

$

(228,382

)

Adjusted for:
Impairment of goodwill and intangible assets

 

18,907

 

 

94,894

 

 

19,907

 

 

94,894

 

Depreciation and amortization

 

15,990

 

 

19,040

 

 

74,848

 

 

59,597

 

Amortization of capitalized cloud computing implementation costs

 

30

 

 

168

 

 

492

 

 

672

 

Amortization of content assets

 

5,603

 

 

4,830

 

 

24,276

 

 

14,838

 

Interest expense

 

2,194

 

 

46

 

 

3,368

 

 

536

 

Income tax benefit

 

(1,517

)

 

(2,800

)

 

(3,053

)

 

(15,539

)

Equity- based compensation

 

4,454

 

 

5,574

 

 

17,620

 

 

16,413

 

Employee incentives, expected to be settled in equity

 

5,466

 

 

 

 

5,466

 

 

 

Inventory net realizable value adjustments (1)

 

1,295

 

 

10,082

 

 

24,864

 

 

10,082

 

Transaction costs

 

 

 

209

 

 

 

 

3,028

 

Restructuring and platform consolidation costs (2)

 

 

 

(320

)

 

11,718

 

 

(320

)

Change in fair value of warrant liabilities

 

(3,626

)

 

(15,065

)

 

(8,322

)

 

(50,729

)

Other adjustment items (3)

 

 

 

2,619

 

 

 

 

11,701

 

Non-operating (4)

 

(320

)

 

118

 

 

(257

)

 

(2,899

)

Adjusted EBITDA

$

3,543

 

$

(26,567

)

$

(23,265

)

$

(86,108

)

 

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 year ended December 31, 2021, also includes the gain on investment on the Myx convertible instrument.

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