The Beachbody Company - Q3 2022

Transcript

Operator (participant)

Good afternoon ladies and gentlemen. Welcome to The Beachbody Company's Third Quarter 2022 Earnings Call. Currently, all participants are on listen mode only. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at that time. I would like to remind everyone that this conference is being recorded and I will now turn over the conference to Eddie Plank, The Beachbody Company's Group Vice President of Investor Relations.

Eddie Plank (Group VP of Investor Relations)

Welcome everyone and thank you for joining us for our third quarter 2022 earnings call. With me on the call today are Carl Daikeler, Co-Founder, Chairman, and Chief Executive Officer of The Beachbody Company, and Marc Suidan, Chief Financial Officer. Following Carl's and Marc's prepared remarks, we'll open the call up for questions. Before we get started, I would like to remind you of the company's safe harbor language. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release.

Today's call will include references to non-GAAP financial measures such as Adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on our website. Now, I would like to turn the call over to Carl.

Carl Daikeler (Co-Founder, Chairman and CEO)

Thank you Eddie and good afternoon everyone. Our company delivered third quarter revenue and Adjusted EBITDA results that were ahead of our guidance, reflecting solid progress on our efforts to stabilize business performance as we implement strategic actions to return it to growth. At the core, we've taken steps to operate more efficiently and made adjustments to pricing and bundle strategies to improve overall performance with encouraging initial results. As part of our efforts, we're laser-focused on taking the actions necessary to return to positive cash flow. It's no secret that we're pursuing this goal amid substantial challenges facing our entire industry. As pioneers in the fitness space, we've navigated through many challenging times before and come out of each period stronger. In fact, we've emerged from every economic downturn in better shape than how we entered it, and I expect this to be no different.

We know empirically that the number of Americans who are obese or suffering from lifestyle-related diseases continues to rise despite no lack of fitness and nutrition resources intended to reverse these trends. Yet, the entire industry is facing substantial challenges in breaking through and growing their user bases. We think there's something the industry at large is missing. To serve the largest TAM, we believe what's required in this environment is simplicity and solutions that are appropriately sized and designed for a customer's goals. While I'm not going into detail today, I will say we have the resources to do just that. You're going to see it in the way we position the business and our products throughout the coming year.

We're confident this solution will be the one to break through to the tens of millions of Americans who we know wanna get healthy and feel great with the right mix of content and nutrition. As an initial step to help more people get started, we've recently launched two bundle subscription options. First, the BOD and BODi bundle for $179, and second, the BODi Bike Studio bundle, including the bike for just $50 a month, that's an incredible offer. With respect to nutrition, our recent decision to simplify how we present various offer options, coupled with the recent expansion of Shakeology from being a healthy smoothie to actually being a gourmet superfood dessert, has been very well-received.

We're excited and confident about these changes and others rolling out over the next six months, and I look forward to sharing more details as things evolve. Our commitment to help people live healthy, fulfilling lives is unwavering, and personally, as the largest shareholder in the company, that's the principal investment thesis that stands out across the industry. Today, we serve over 2 million members and leverage a vast Coach network who help drive profitable customer acquisition. Our Coach network is a major strategic advantage. Taken together, we see the opportunity to dramatically expand our market, which is key, not only to create value for shareholders, but to reverse the trend of obesity and lifestyle disease with the healthiest prescription in the world, effective fitness and nutrition solutions. While we've been at this for over 23 years, I believe this is just the beginning.

This current environment and our plans for the coming months with all these tools and our experienced management team represent an opportunity to help millions of people take the first step to improving their health with long-term success. We're making progress right now by pulling the appropriate levers to remain efficient, but also have line of sight to a more dramatic chapter of growth ahead. Okay. Now let me turn it over to our CFO, Marc Suidan, with the details of the quarter. Marc?

Marc Suidan (CFO)

Thanks Carl and good afternoon everyone. Our performance in the third quarter demonstrates the continued progress on our strategy to stabilize the top line, further reduce costs, and reposition the company for growth. We delivered top and bottom line results that were ahead of our guidance. We also enhanced our liquidity position through the previously announced debt raise, our reduced cash burn, and lower capital expenditures.

Third quarter revenue of $166 million exceeded the midpoint of our guidance by 7%, primarily due to the nutrition business, which remained at the same level as Q2. Adjusted EBITDA loss was $6 million, which included expenses related to our annual Coach Summit event in July. This annual event was attended by 15,000 of our most influential coaches. These brand ambassadors are a subset of a much larger coach network. Like Carl said, they are a massive competitive advantage for us, especially in this dynamic landscape. In addition to revenue outperformance, adjusted EBITDA also exceeded the midpoint guidance by more than $11 million. This has been achieved through continued aggressive cost management, resulting in an improvement of more than $37 million compared to last year.

This progress gives us increased confidence in our goal of returning to positive free cash flow as we remain disciplined with our cost and capital. We have numerous initiatives underway to better leverage our collection of high-quality assets. This will help us enhance LTV and retention across our subscriber file. Let me walk through some of these key initiatives in pricing, nutrition, and cost reduction. Starting with pricing, we expect to deliver significant value at our recently launched bundles. First, as Carl said, we adjusted the BOD and BODi bundle to $179 per year from $298. BODi is our premium interactive digital platform that was launched last fall. While we see significantly more engagement from users in BODi versus BOD, the penetration within our subscriber file has been relatively low.

That's due to the initial pricing, which created a more significant barrier to entry. We adjusted the price to $179 and have seen more of our customers add BODi as part of their BOD annual renewal. We expect this pricing to support accelerated adoption over time. Second, we launched a BODi Bike Studio bundle for $50 per month. It's quite a powerful offer that includes the bike, three years of BODi subscription, weights, and other accessories to give the user a complete home workout studio. We are encouraged by the initial response and believe this bundle will drive increased demand and LTV within our subscriber file. Importantly, the BODi Bike Studio also represents a significant lever for cash generation as we are fulfilling bike orders from existing inventory.

We will receive the cash up front for a complete three-year bundle through a buy now, pay later arrangement with a firm. This bundle has been well-received and is already our top-selling bike SKU. In nutrition, we're streamlining our offering and plan to reduce our SKU count by 15% in the coming quarters. In addition, we're driving improved attach rates as we simplify the number of offerings that we are presenting to our customers. We expect this will lead to a more attractive margin profile as we enhance inventory management, reduce excess write-offs, and improve working capital. We're also taking steps to reinvigorate nutrition revenue. For example, we are continuing to remove friction in the purchase funnel to streamline the digital purchase experience, which should positively impact nutrition sales.

In response to the analysis of customer behavior and at the request of our coach network, we are launching a new bundle of 20 servings of Shakeology and Energize, historically sold separately as 30 servings. We expect the new 20-day packaging to drive more consistent repurchases across both products as we reduce pantry stocking and simplify the purchase process. Another nutritional initiative underway is the gourmet superfood campaign Carl mentioned earlier. It has been well-received, and we plan to launch our first-ever gifting program to drive incremental sales in the holiday period. Finally, we are continuing to enhance our cost structure. Work is already underway to migrate our ERP to cloud-based servers. We've secured lower shipping rates and have optimized our distribution network, allowing us to move forward with closing our West Coast warehouse without impacting the customer experience.

We expect these initiatives will have minimal impact in Q4, but will ramp up quickly as we move through 2023. We continue to identify incremental opportunities. For instance, we're looking at the terms of our contracts that drive 80% of our spend and are making sure they're on Beachbody-friendly terms. If not, we'll rebid out these contracts. We've also launched a pilot program to test a nearshore strategy in Mexico and are evaluating avenues to enhance automation. We're also constantly refining our approach to content development and production with an eye to enhancing the customer experience with more content while reducing costs. We're excited by the initial outcomes of these efforts. When looking at our successful and long-standing experience, it is in our nature to be agile and quickly respond to any demand environment. Which brings me to the details of the quarter.

Total revenue was $166 million, which was 7% higher than the midpoint of our guidance. Digital revenue was $72 million, down 23% versus last year. As a reminder, we started to reclassify the preferred customer fees out of digital and into nutrition last year. Incorporating that reclassification, digital revenue declined 15%. Digital subscriptions were 2.1 million at the end of the quarter, declining 20% year-over-year. When compared to our pre-pandemic baseline, subscriptions increased 24% compared to Q3 of 2019. Down now was in line with prior levels of 30%, while retention improved year-over-year by 10 basis points. Nutrition and other revenue was $90 million, down 16% year-over-year. Adjusted for the preferred customer fees I just mentioned, nutrition and other revenue declined 24%.

On a sequential basis, revenue was in line with Q2, and we expect to build on this performance over time as we strategically focus on retention and win-back campaigns. As I mentioned earlier, the nutrition revenue reinvigoration entails introducing new marketing initiatives and enhancing cross-sell and upsell efforts using our consumer data insights. We expect these efforts will improve nutritional demand and revenue. Connected Fitness revenue was $3 million with approximately 2,300 bikes delivered, reflecting a strategic pause on external marketing and anticipation of the BODi Bike Studio bundle. As I mentioned earlier, response to the bundle has been very positive and we believe this will support growth in bike sales going forward. Gross margin was 63.1% of revenue in the third quarter, compared to 64.9% last year. Let me walk through the gross margin drivers by key product lines.

Digital gross margin was 77.7% compared to 87.1% in the prior year period. The decline was primarily related to the preferred customer fee reclassification mentioned earlier, as well as program amortization and depreciation related to BODi. As BODi continues to scale over time, we expect gross margin to improve as we recognize the benefits of these costs over a larger revenue base. As I mentioned earlier, we are reducing production costs while simultaneously increasing the volume of new content. Nutrition and other gross margin was 55.2% compared to 53.1% in Q3 2021. The improvement was driven by the preferred customer fee reclassification from digital to nutrition and from lower customer service costs.

Looking forward, we expect to see further improvement in the cost profile through our SKU reduction efforts, allowing us to better manage our inventory and pricing. Connected Fitness gross margin was -42.4% compared to -73.1% in the third quarter of 2021. The lower product cost improvement was driven by the reduced value of the inventory compared to the prior year quarter, partially offset by higher fulfillment costs. Going forward, as we focus our value proposition of unparalleled content on a commercial-grade bike, we continue to see bike sales as a valuable lever to drive LTV across our subscriber base. Total operating expense was $141 million, declining 32% year-over-year, reflecting our aggressive cost management, including a 29% reduction in headcounts in September of last year.

As a percent of revenue, sales and marketing decreased by 18 percentage points. As a reminder, our routes to markets include our coach network, which is a variable comp model, direct customer acquisition, where we look for in-quarter payback, and monetizing our own customer base and social media following of more than 20 million. Year-over-year, we also reduced G&A by 16% and technology spend by 13%. The sequential increase in total operating expenses versus the second quarter was largely attributed to the annual Coach Summit expense. As I mentioned earlier, we continue to tightly manage expenses while identifying incremental efficiency enhancements with a solid pipeline of initiatives that will begin delivering further improvements in the first half of 2023.

All of this contributed to a materially improved Adjusted EBITDA loss of $6 million compared to a loss of $43 million in the third quarter of last year. Interest expense was $1 million. With respect to the balance sheet, we ended the quarter with an unrestricted cash balance of $94 million and approximately $41 million of debt. Let me walk you through our free cash flow improvements. Operating cash flow improved by almost $110 million year-over-year to -$4 million, which includes $4 million of capitalized content. Technology CapEx in the quarter was $4 million compared to $34 million in the prior year. This resulted in free cash flow of -$8 million compared to negative free cash flow of $148 million in Q3 of last year.

Net inventory decreased by 6% to $68 million from the prior quarter and decreased by more than 52% since Q3 of 2021. We continue to manage our inventory tightly to minimize excess write-offs, and the purchase commitments in the notes are largely related to the normal course of our nutrition business. We remain confident in our ability to manage the business through a combination of cash on hand and operating cash flow. Now, I'd like to take a moment to discuss our outlook for the fourth quarter. The environment remains challenging across the industry. Also, Q4 traditionally represents a seasonal demand low point versus Q1, which is typically the high demand quarter for fitness.

Given these factors, we remain focused on ways to reduce our expense profile while simultaneously positioning the company to return to growth through some of the consumer demand and TAM insights that Carl mentioned. Despite the macro uncertainty, the affordable and accessible nature of our holistic fitness and nutrition offering reinforces our confidence in the strength of our position relative to others. We feel confident in the demand on the horizon, but in this current environment, we are taking a conservative approach to guidance since the economy and consumer sentiment remains unpredictable. Taking all that into consideration, for the fourth quarter of 2022, we are guiding as follows: Total GAAP revenue of $140 million-$150 million with a mix of revenue components similar to what we saw in Q3. An adjusted EBITDA loss of $9 million-$14 million.

We expect interest expense as well as investments in content and technology to be generally in line with Q3 levels. To wrap up, our third quarter performance demonstrated continued progress on our strategy. While we are encouraged by our third quarter results, we are staying disciplined as we tightly manage our cost structure and cash flow, remaining laser-focused as we drive towards profitability and free cash flow generation. At the same time, this is a company with significant assets and growth prospects, and we are investing strategically to capitalize on the massive opportunity before us in a large and incredibly under-penetrated market. Although we have more work to do to reach our potential, I have the utmost confidence that we will deliver. With that, operator please open it up for questions.

Operator (participant)

If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. Our first question comes from John Heinbockel with Guggenheim. Your line is now open.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

Carl, on the BOD plus BODi bundle, right? Basically you're pricing BODi at $5 a month in this new structure. Is that? You know, which is pretty compelling. How do you get that message across? Then when you think about the potential there, right, do you think that will create more new subscribers or you're gonna migrate BOD subscribers into that new bundle? Which one is gonna be more impactful over the next 12-18 months?

Carl Daikeler (Co-Founder, Chairman and CEO)

By the way, good to talk to you John. I think strategically, the business is moving toward that combination. We've got very strong customer engagement in the BODi active subscription tier, and that 179 price point, which comes down to $15 a month, is extremely compelling when you consider it in the perspective of the competition out there. One of the benefits that we get from that is it gives visibility to all of the content to every subscriber who's a part of that subscription tier. That's the focus and the, as Marc mentioned, the simplicity that we're looking for from the model by combining those two subscriptions into one, is going to give our most valuable asset, our coach network, a much easier time in their subscriber acquisition efforts.

Marc Suidan (CFO)

Yeah. You know John, this is Marc. Great to talk to you.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

Yeah.

Marc Suidan (CFO)

You know what I'll add to that is, you know, we're trying by increasing the simplicity of the programming while adding more content, it enables the coaches to acquire more customers, so we improve acquisitions. As Carl mentioned, the engagement is much higher on BODi, so we're seeing churn go down, especially at this new price point, big improvements there. It's all upside for us, right? Because we had such a low penetration of BODi. As we migrate both the existing customer base as well as acquiring new ones, it's we see it all as upside across all dimensions of the LTV to CAC ratio.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

Right. One other point on if I look at nutrition revenue this quarter per subscriber right? 'Cause the subscriber base went down a little bit right? The revenue per subscriber is up. Is that more spending from subscribers or does that have something to do with the preferred revenue piece?

Marc Suidan (CFO)

Listen, nutrition did stay pretty stable from Q2 to Q3, which is great news and we're building on the momentum. I think the reason why you're seeing higher per subscription cost is 'cause the mix of subscription versus the seasonal launches may have been, we may have had more of the seasonal launches that have done really well. We're looking into that in terms of, you know, should we make those permanent or not. Those were very well received. The other thing that fits into that, to that number John, is not just the preferred customer fee that was in there in Q2 as well. It is rather the ticket sales from the annual Coach Summit in Q3. I'd say it's about 2% of that amount. Overall, I think we're very happy to see that nutrition stability from Q2 to Q3.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

All right. I guess you would argue. Is it fair to say that Q2 is more representative of nutrition revenue per subscriber than Q3 for the reasons you mentioned, at least, you know, going forward.

Marc Suidan (CFO)

Yeah. I mean, I think you're looking at it purely from a per subscriber basis. I think that's fair.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

Got it.

Marc Suidan (CFO)

Yes.

John Heinbockel (Senior Managing Director and Equity Research Analyst)

Okay, thank you.

Operator (participant)

Our next question comes from Joanna Zhou with Bank of America. Your line is now open.

Joanna Zhou (Analyts)

Hi. Thanks for taking my question. One, I have a question on the mix of bike margins. I see that mixed bike margin has improved quite a bit this quarter. It's around -40%, so great job on that. My question is, what is the long-term expectation of this bike margin? I believe, you know, pre-acquisition, it was possible to get the margin to -10% to -15% per sue comments a few quarters ago. Is that still your long-term expectation, or is it possible to get that margin close to breakeven? What really needs to happen to get that margin to breakeven or back into a positive territory? Thank you. What is the timeline, rough timeline on that?

Marc Suidan (CFO)

Hey Joanna Zhou, good to talk to you. Look, the way we see the bike business is really that whole is the lifetime value of the customer. Right now, with this new SKU we're pushing, which is they're buying the bike and the three-year subscription, and we get all that money upfront, that's what we're seeing as being profitable. 'Cause the bike on a standalone basis, I mean, as you know, it's a very challenging market in the at-home fitness market. It's hard to predict how that price will behave over time. At least from that long-term value, we're pretty excited about how that new bundle with the three-year subscription is going, right? 'Cause that LTV value is very high for us that's definitely more profitable than just selling bikes on a standalone basis.

Carl Daikeler (Co-Founder, Chairman and CEO)

And we're also—

Joanna Zhou (Analyts)

Got it. Okay

Carl Daikeler (Co-Founder, Chairman and CEO)

focusing on the sale into the database. That obviously doesn't come with the same cost of acquisition that you would have if you're out in the direct marketing space. Likewise, one of the benefits that we get is you've got a longer retention when somebody's got the piece of equipment in their living room. That also gives us more opportunity then to offer them our nutritional offerings, and particularly with the new Shake & Hustle pack that Marc mentioned with the combination of Shakeology and Energize. All these things, simplifying the business into an appropriate price point, quite compelling, but with great long-term value prospects.

Joanna Zhou (Analyts)

Got it. Okay, that's helpful. My next question is on just the growth and retention on the digital subs front. On the digital subs, I realize that net adds have been down quarter-over-quarter for the last several quarters. Understanding there are some macro headwinds involved, but it seems that the churn subscribers are actually greater than the growth net adds. I'm just trying to understand, you know, what's on your mind in terms of growth initiatives to get that net adds to the positive territory in terms of growth?

I understand that you launched about seven programs year to date, which are absolutely amazing, and there are other bundles that you're trying to work through, such as the BODi and new bike and $60 per month, and that is also great to keep an eye out for. What are your thinking, you know, around getting the net adds to a growth, positive growth territory, but also just help us to think through this macro and reopening headwind. How are you thinking about the kind of reopening and macro challenges being different for this year or the rest of this year and next year versus the future years? Just to maybe put that, all of that in context for us will be helpful.

Carl Daikeler (Co-Founder, Chairman and CEO)

Sure. Well, there's a lot there. First, you know, we are still seeing the what I would call the passing of the 2020 surge in some of that renewal. As we've all seen, people, once they got through the pandemic, were eager to get out and about and either stop working out or go back to the gym. Although we do think that there's a hybrid opportunity and more people seeing that working out at home is incredibly efficient and in particular, one of the changes that we made, you know, close to, I guess, the beginning of the year, was to stop chasing after subscriber growth and what we would consider to be bad revenue. We're not overpaying for subscribers anymore.

We got our CAC to LTV back in line, which means that as we're adding subscribers now, they're profitable on a CAC to LTV ratio, but we're not trying to keep up with the attrition of the swell that came through in 2020. For a little bit longer, there's a disparity as we see 2020 swell sort of rolling off. At the same time, our coach network is exceptionally revitalized. We had two big events. One was Summit this summer the other one was our with our top leaders at Leadership in October. They're extremely invigorated for a couple of reasons.

One, because of some of the simplifications to the business model that Marc and I described, but also, what we've seen literally every time there's been an economic downturn, our coach network is extra motivated to earn that extra income during those tough times. In fact, we've come out of every downturn ahead of where we were. We think that the prospects for us in the current environment are pretty strong, particularly going into first quarter of 2023. We have to be realists with the signals that we're getting from competitors in the environment, so we're guiding with a realistic or a more conservative view just to make sure that we don't get out over our skis.

Joanna Zhou (Analyts)

Okay. Got it, thank you that's helpful.

Operator (participant)

Our next question comes from Linda Bolton Weiser with D.A. Davidson. Your line is now open.

Linda Bolton Weiser (Managing Director)

Hi. Yes, thank you. You know, in the other weight loss kind of related companies that I follow, the coaches or from the clients, the companies are picking up kind of this reluctance on the part of many consumers to kind of get up off the couch and, you know, think about their health and wellness and their weight loss. There's some sort of reluctance even though people are hanging on to weight still from the pandemic. Are you seeing your coaches talking about that among the clients? In other words, is it, like, harder for them? Is there more resistance for them to kinda gather new clients?

Carl Daikeler (Co-Founder, Chairman and CEO)

I think Linda, that's certainly a component of the environment across the industry and sector, overall. And it's frankly, having done this for 23 years, it's never easy to compel somebody who sort of likes their lifestyle. Ultimately, we know the trend of obesity and lifestyle disease is going up, and people would rather not be overweight or, and rather not have type 2 diabetes or hypertension and so on, things that can be affected with fitness and better nutrition. Part of our job is to make it simpler and to meet the customer where they are.

Again, we're not going into too much detail right here, but that's one of the reasons that we've positioned Shakeology with a slightly different approach where it's a daily dose of dense nutrition, arguably the leader in the category of superfood shakes. It's also with this broad range of flavors, it's a gourmet superfood dessert. We've actually got a whole plan that we've just released, and we'll get into more detail in the coming quarters. Helping people who literally, they just want to try to offset their dessert habits. They still wanna satisfy their sweet tooth, but they wanna do it without the extra sugar, saturated fats and dense calories that's why we help them create a dessert plan.

That's a new aspect to the business that our coaches are embracing 'cause it's helping them meet people where they are, particularly as we go into November and December, when many people are waiting for January 1st to get started with the total solution.

Linda Bolton Weiser (Managing Director)

Okay. You know, I think previously, if I'm not mistaken, you had included in your press release some guidance statements about the change in cash usage for 2022 versus previous year. Have you eliminated that, or is there any way to convey some sort of guidance or something, or maybe I missed it regarding cash flow performance this fourth quarter?

Marc Suidan (CFO)

Yeah Linda, I could share, right? What was shared before is that our aim between 2022 EBITDA plus CapEx, that we would have $110 million-$120 million in savings, and we're fully on track to achieve that. This is where also we try to make it clear on our free cash flow. If we take Q3 of last year, it was -$148 million. This year, it's -$8 million in this quarter, so some dramatic improvement. Both on the metric you're used to seeing, we're on track to achieving that $120 million in Adjusted EBITDA plus CapEx reduction, as well as massive reduction in our free cash flow burn.

Linda Bolton Weiser (Managing Director)

Okay. That year-over-year like, improvement will continue in the fourth quarter is what you're expecting?

Marc Suidan (CFO)

Yes.

Linda Bolton Weiser (Managing Director)

Okay.

Marc Suidan (CFO)

Absolutely.

Linda Bolton Weiser (Managing Director)

I can't quite remember, but I thought that the objective was to maybe become EBITDA positive in 2023. Was that the belief? Do you still think that's possible in 2023?

Marc Suidan (CFO)

Yeah. Look, given the macro situation, we're not giving guidance, but I could tell you we're laser focused on getting to free cash flow positive. From the results that we've achieved, I feel like we're close. Like I said in the prepared remarks, we have quite a few initiatives that will further take out costs next year. The investments we're doing in BODi to position it for growth is on track. It's deliberate, controlled investments and time bound. Yeah, look, we believe we're gonna get there. We just don't wanna specify an exact timing, just given the macroeconomic conditions.

Linda Bolton Weiser (Managing Director)

Mm-hmm. Okay, thank you that's all for me. Thank you.

Operator (participant)

There are no more questions waiting at this time, so I'll pass the call back over to the management team for closing remarks.

Carl Daikeler (Co-Founder, Chairman and CEO)

Okay. Sure to well, I appreciate everybody for joining us today, and thanks for your interest in The Beachbody Company. I think you're going to appreciate the ongoing progress that we're planning for the business and the strategic moves ahead of us and we look forward to speaking with you again next quarter. Thanks, everybody.

Operator (participant)

That concludes the conference call. Thank you for your participation. You may now disconnect your line.