Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

The Beachbody Company, Inc. Announces Second Quarter 2022 Financial Results


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

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:

_______________

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.

 


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