The Beachbody Company - Q4 2025
March 10, 2026
Transcript
Operator (participant)
Good afternoon. Thank you for attending today's Beachbody Company, Inc Fourth Quarter 2025 Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Bruce Williams, Managing Director of ICR. You may proceed, Bruce.
Bruce Williams (Managing Director)
Welcome, everyone, and thank you for joining us for our fourth quarter earnings call. With me on the call today are Mark Goldston, Executive Chairman of Beachbody Company, Carl Daikeler, Co-Founder and Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Officer. Following the 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. 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 by 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, net cash, and free cash flow. 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 Mark.
Mark Goldston (Executive Chairman)
Thanks very much, Bruce, and good afternoon, everyone, and welcome to the BODi Q4 2025 Earnings Call. 2025 was an important transitional year for BODi as we started on January 1st, 2025 as a brand new company which had extinguished our former multi-level marketing business model in favor of a five-pronged omni-channel model featuring direct-to-consumer, Amazon and marketplaces, retail distribution for the first time ever later this year, and a single-level affiliate program, and a totally revamped customer win-back program for our former customers, which count more than 8 million, and that covers former digital fitness and nutritional customers. As a result of the dramatic shift in our business model, year-over-year comparisons are not really relevant from a revenue perspective because we're no longer utilizing the tens of thousands of former MLM sellers in the 2025 and beyond business model.
In fact, we continually expressed over the last 12 months, as you know, that the first time investors can actually make a direct year-over-year quarterly revenue comparison with clean results reflecting the new business model in both years will be the Q3 2026 earnings release. As a result of our outstanding financial performance in 2025, in early January 2026, we were able to secure some substantial improvements to certain financial covenants with our lenders, Tiger Finance and SG Credit Partners. In the new agreement, as long as BODi maintains a cash balance of more than $4.6 million above the outstanding debt level, there will be no testing of the key covenants by our lenders. These covenants will only be tested if our cash balance dips below the $4.6 million cushion above the outstanding debt level.
I'm very pleased to report that as of December 31st, 2025, our cash balance was $39 million against an outstanding debt level of only $25 million, giving us a $14 million cash cushion versus the $4.6 million cash cushion we are required to maintain in order to not have the covenants tested. As we indicated on the Q3 2025 earnings call, extremely pleased with the dramatic turnaround of our financial performance in the two and a half years since I joined as Executive Chairman to conduct a major turnaround of Beachbody. Our financial turnaround, which we previously defined as achieving quarterly and then full-year positive operating income and net income, is one year ahead of the original articulated goal of achieving the milestone by December 31st, 2026.
In fact, we achieved positive net income in Q3 2025, and today we're reporting that we achieved positive net income in Q4 of 2025, and we've achieved positive adjusted net income for the full year 2025. We also achieved positive operating income in both Q4 and for the full year of 2025. This marks the first time since 2021 that we had both positive operating income and adjusted net income for the full year. To put this impressive milestone achievement in perspective, we had the second consecutive quarter of operating income in Q4 2025 at $8.2 million for the quarter, which was a $41.1 million improvement in operating income versus the same quarter, which was Q4 of 2024, when we recorded an operating loss of $32.9 million.
From a net income perspective, we recorded positive net income for the second quarter in a row in Q4 of 2025 of $5.2 million, which was $39.8 million better than the $34.6 million net loss in Q4 of 2024. In addition, we've continued to demonstrate our financial discipline since I joined 10 quarters ago in June of 2023 by posting our ninth consecutive quarter of positive adjusted EBITDA in Q4 2025 at $12.9 million, which was a 48% increase over the $8.7 million in Q4 of 2024.
You know, as we've stated on previous earnings calls, because of the accelerated pace of the BODi financial turnaround and the fact that we're a full year ahead of schedule, we've designated 2026 as the year when we unleash the first elements of our fertile innovation pipeline. The innovations kicked off in December 2025 with the launch of a revolutionary concept designed to address the 185 million American adults who are overweight and/or have issues with blood pressure, cholesterol, blood sugar, sleep apnea, and frankly, don't have the time, the knowledge, or even the inclination to participate in a full-fledged 45- to 90-minute exercise program.
This innovative program, called the 10 Minute BODi, is a 400 video program covering a whole range of exercises and body part movements, and it's fun, easy, effective, and can all be accomplished in just 10 minutes a day and for just $10 a month. Next, we launched the P90X Generation Next program last month, marking the first time in 15 years where we've introduced a new version of the legendary P90X program, the number one selling extreme fitness program of all time with many millions of users. Carl's gonna speak more about the digital fitness innovations for 2026 in a minute. One of the major themes of our innovation pipeline and revised focus within our business is the development of the nutritional side of the business. The nutritional supplement category globally is $164 billion.
That's more than 12 times the size of the global digital fitness category and was always a critical element of Beachbody Company revenue base, often exceeding the digital fitness revenue by two to one in the most successful years of the company. We're gonna enter the retail market of grocery, drugstores, mass merchants, and club stores for the first time ever in Q2 of this year with our new P90X line of nutritional supplements, a new seven-serve, $34.99 form factor of our Shakeology brand, which by the way, has sold $3.4 billion cumulatively and had over 1 billion servings as a 30-serve, $129 product. This product, Shakeology, has never been sold at retail. We will also have a Southern California test market in late Q2, early Q3, featuring uniquely formulated energy drinks under the P90X and Insanity label.
We will then have Insanity nutritional supplement line coming out in late Q3, early Q4. We're developing a ready-to-drink Shakeology superfood protein drink in Q3 and Q4. It requires no mixing. We'll have innovative new protein bars from P90X and Shakeology as well, hopefully in Q4 of 2026. We're also considering a complete revamp of the existing line of Beachbody supplement products, putting them under the new BODi brand name and in new packaging in late 2026 or early 2027. The pipeline is fertile, it's full, there's a lot of new nutritional elements in there, and we're really excited about it.
Importantly, now that we no longer have the constraints of the incredibly high 40%-50% sales commission structure of the former MLM model, we can now price our nutritional products at very affordable price points that are dramatically lower than our previous nutritional products were priced at. With brand names like P90X, Insanity, and Shakeology, we will walk in the door of retail with very high aided brand awareness levels, given that millions of people have been exposed to or been part of those brands previously. We now have the ability to price our products at much lower price points, which represents a huge opportunity not only at retail, but in our DTC business as well at BODi.com. Our intention is to introduce P90X supplements and the new seven-serve $34.99 Shakeology form factor in April 2026 on our new Shopify website.
The retail rollout of these products in brick-and-mortar will follow beginning in May 2026 with some exciting news when Shakeology will debut in Sprouts Farmers Market in the seven-serve $34.99 bag. There will be many other retail accounts who will carry the Shakeology and the P90X supplement lines as well, and our retail selling partner, Advantage Solutions, is in the process of presenting those lines and securing confirmation and orders over the next four to eight weeks.
With the impressive financial turnaround at BODi, the highlights of which include recording positive operating income for the full year of 2025, positive adjusted net income for the full year of 2025, nine consecutive quarters of positive adjusted EBITDA, a cash balance of $39 million at December 31st, 2025, which is 56% above our outstanding debt level of $25 million in Tiger Finance, a 44% reduction in interest charges versus our previous Blue Torch debt. Massive operating leverage being built into the P&L as a result of a lowering of the EBITDA breakeven level from over $900 million prior to my arrival down to a $180 million breakeven level today. Lastly, achieving the financial aspect of the turnaround a year ahead of our original schedule.
Combined with the 2026 debut of the new products and programs within our impressive innovation pipeline, BODi is poised to complete the total turnaround of the company by the end of 2026, a full year ahead of schedule. We're looking forward to the second half of 2026 when the first clean year-over-year top line comparisons can be made as the legacy business model elements from the MLM will have burned off by then, and we can clearly describe how the new products and programs that we're introducing throughout 2026 are doing and whether or not they're contributing to our number one goal of returning to year-over-year top line revenue growth to match the impressive year-over-year financial turnaround performance. With that, I'd now like to turn the mic over to our Co-Founder and CEO, Carl Daikeler. Carl.
Carl Daikeler (Co-Founder and CEO)
Thanks, Mark, and thank you all for joining us today. Our Q4 results, which Mark introduced and Brad will detail shortly, demonstrate the operational momentum we've been building throughout 2025. The progress we've made with the financial turnaround has created an extremely efficient business, which is now in such a good position to accelerate into this exciting pipeline of new offers that we can maximize in multiple sales channels. As we said in our last earnings call, the end-of-year offers we launched going into Black Friday and Cyber Monday and the holidays, and then into the first quarter of 2026, were well stacked to maximize the new model. We saw productive demand for the new Shaun T lifting program called DIG IN, bundled with the special holiday and new year subscription offer.
We also launched our high volume, low price tier of over 400 microdose fitness workouts that are 10 minutes or less to serve the over 185 million people in the U.S. who are overweight or obese or who just don't have time or the inclination to do longer workout sessions or who are intimidated by the gym. That tier, which we call 10 Minute BODi, is driven by a free 10-day trial and a very compelling $10 a month price point. The 10 Minute BODi launch has shown instant popularity of microdose fitness programming, with about 8% of our viewership already choosing these shorter formats in the last couple of months. Looking ahead, our restructured performance marketing and creative teams are prepared to support our most exciting launch from our innovation pipeline, P90X Generation Next.
After this last year of restructuring in 2025, we now have the people, the agencies, the strategies in place to maximize this launch and the rest of our plans for the year. In fact, we launched the new P90X program in early February to a packed house of media and influencers in New York City, which will carry that launch momentum into the second quarter as we debut the P90X branded supplement line, both direct-to-consumer and at retail. Here's what's most meaningful about this supplement launch. Our supplement strategy represents a significant business model shift. What many people never realized about the company is that historically, in our peak year of $1.2 billion in annual revenue, fitness accounted for only 34% of that revenue or about $400 million, while other revenue, driven primarily by supplements, accounted for $783 million.
Our MLM model at that time required a network compensation structure that limited margin and pricing flexibility to really scale. Now, without that obstacle, we'll soon offer our highly effective supplements under the P90X and Shakeology brands at $15-$35 price points with healthy margins. That's unprecedented for us and significantly changes our economics and potential to really scale into the mass market. This shift in affordability fits well into our proven model of what we call the Total-Solution Pack that people need for healthy lifestyle change, which includes both fitness and nutrition. This approach to the Total-Solution Pack is one of the reasons our customers have always gotten such amazing healthy results at BODi. We've definitely seen that our best years were driven by this combination of effective supplements and fitness.
Our data and analytics team has recently seen a growing trend where cost of customer acquisition offering digital fitness first has steadily increased, while customer acquisition cost when offering nutrition first has actually decreased. It makes sense, too, because the nutrition supplement business has swelled to over 12 times the market size of digital fitness. We're taking all those observations built on the foundation of the power of the Total-Solution Pack of bundled fitness and nutrition, and now starting to leverage three of our most famous and successful brand names into this proven premise, starting with this combination of the new P90X Generation Next program and the new line of P90X supplements and beverages.
The P90X brand already has an incredible 62% aided awareness score in consumer surveys, which gives us a massive competitive advantage in launching this nutrition line in all our sales channels, especially retail. Likewise, we'll be advertising Shakeology direct to consumers, which as we've mentioned in prior calls and as Mark said, Shakeology has already sold over 1 billion servings without ever being offered at retail. The enthusiasm from major retailers for our second quarter Shakeology launch is confirming that this product is ready to scale past its legacy in the MLM. In late Q2 or early Q3 2026, we'll be launching an irreverent energy beverage line under the Insanity brand, targeting a younger, more male-oriented demographic. We'll also be launching a science-backed performance energy beverage line to serve a broader male and female target customer under the P90X brand, both in a Southern California market test.
Our goal is to read the performance of those new products in the test market, make any necessary modifications, and be ready for a national rollout of the Insanity and P90X energy drinks in 2027. In terms of marketing support, this is where it gets really interesting. Our D2C marketing model, which we've refined over nearly 30 years, is designed to be self-liquidating, meaning the advertising basically pays for itself through sales generated. Now that marketing spend for our nutritional lines will not only drive profitable direct sales, it will also drive traffic across retail, Amazon, affiliate channels, and through our customer database, which is already showing very promising signs of productivity with new supplement offerings.
Every one of those customers who enter the ecosystem with a nutrition purchase will get a free trial offer to join the fitness platform, which is a major value add and a competitive advantage in the supplement space. This rising tide of supplement promotion with the value add of digital fitness will give us efficiencies that will float all ships in all channels. Again, the power of the Total-Solution Pack, which has driven customer results for almost 30 years, is alive and well. We're just attenuating that relationship of nutrition and fitness to take advantage of current tailwinds. As I mentioned last quarter, all of this will be supported by our transition to the Shopify e-commerce platform and its ease of checkout and high conversion metrics to maximize all this traffic starting in late March.
We're in a very strong position with the agility of a startup, thanks to our new operating efficiencies, combined with our portfolio of proven, well-known brands and a customer database that took decades to build, all running on an incredibly efficient structure. With nine quarters of positive EBITDA and our second consecutive quarter of positive net income since we went public in 2021, it's clear this turnaround now has some stability. As we execute our first full year with this completely new business model, the team is invigorated and hustling to maximize our momentum, responsibly deploying capital in the first half of 2026 and gradually ramping up into 2027. Okay, so let's get the details on Q4 results and the 2025 full year performance from our CFO, Brad Ramberg. Brad?
Brad Ramberg (Interim CFO)
Thank you, Carl, and thank you everyone for joining the call today. I will review our Q4 results and provide our outlook for the first quarter of 2026. We continue to make significant progress on our transformation and have successfully re-architected our cost structure to drive operating leverage. For the quarter, we exceeded our guidance for net income and adjusted EBITDA while producing revenues that were above the midpoint of guidance. Before I get into the details of the quarter, I want to note that the quarter includes a $2.2 million benefit from the reversal of a bonus accrual made in Q3, of which $1.9 million benefited operating expenses and $300,000 benefited the cost of revenue, and the elimination of an additional planned $2.2 million bonus accrual in Q4 that was included in our guidance.
We generated our second consecutive quarter of net income and our ninth consecutive quarter of positive adjusted EBITDA. For the full year, we are proud that we generated operating income and adjusted net income both for the first time since going public in 2021, while also driving positive free cash flow. Now I'd like to provide more details about the quarter. Total revenues of $55.5 million declined 7.3% sequentially and declined 35.7% year-over-year in line with our expectations as we continue our strategic transformation. Revenues continue to be impacted in the near term by our shift from a multi-level marketing platform to the omni-channel model. Consolidated Q4 gross margins were 74.5%, reflecting a decrease of 10 basis points sequentially, but an increase of 400 basis points compared to the prior year.
We are pleased to report the consolidated gross margin remained at the high end of our target, underscoring our strong operational execution. Moving to Digital and Nutrition & Other revenues. It should be noted that the year-over-year decline is heavily influenced by remnant revenue from the former MLM legacy business, which was shut down December 31, 2024. Therefore, there's a component of the MLM legacy Digital and Nutrition revenue in the 2025 numbers, which prevents us from having a direct year-on-year comparison to what we are forecasting for Q1 2026. Digital revenue decreased 5.8% sequentially to $34.3 million and 31.9% year-over-year. Digital revenues reflect continued pressure on our Digital Subscriptions, which decreased 3.3% quarter-over-quarter to approximately 870,000 and declined 18.7% compared to the same period a year ago.
Nutrition & Other revenue decreased 9.6% from the prior quarter to $21.2 million and decreased 39% year-over-year. Nutrition subscriptions increased 14.3% sequentially to approximately 80,000 and fell 11.1% year-over-year. Digital gross margin was 87.3%, decreasing 80 basis points sequentially, but up 140 basis points from prior year. Our Digital gross margin was in line with our target. The continued strength in year-over-year gross margin was primarily due to a decrease in digital content amortization and depreciation due to more disciplined production and fixed asset spending. Nutrition & Other gross margin was 53.7%, flat sequentially and up 140 basis points versus last year. Nutrition gross margins exceeded our target.
Excluding certain one-time benefits, the gross margin would have been 50.5%. Operating expenses for the quarter declined 16.4% sequentially and 64.6% year-over-year to $33.2 million. Note, the prior year included a $20 million impairment of goodwill. Selling and marketing expense as a percent of revenue increased 40 basis points over the prior quarter, but declined a significant 1,280 basis points year-over-year to 32.3%. This significant improvement over the prior year stems from eliminating partner compensation following our December 31, 2024 exit from the multi-level marketing channel.
Enterprise technology and development expense was 15.7% of revenue, down 170 basis points sequentially and 990 basis points year-over-year, driven primarily by lower depreciation due to lower tech spend necessary to support our new business model. G&A was 11.8% of revenue, decreasing 510 basis points sequentially and 160 basis points from the prior year. The sequential improvement reflects reduced personnel expenses from prior restructurings and lower professional fees. This disciplined expense management delivered strong profitability. Operating income for the quarter was $8.2 million compared to a loss of $32.9 million in the prior year, marking our second consecutive quarter of operating income.
Q4 2025 net income was $5.2 million, our second consecutive quarter of net income compared to a net loss of $34.6 million last year. For the full year, net loss was $2.9 million versus a $71.6 million net loss a year ago. Adjusted net income was $7.2 million for the quarter versus a $4.7 million adjusted net loss in the prior year. For the full year, adjusted net income was $3.5 million compared to a $31.2 million adjusted net loss last year. Adjusted EBITDA was $12.9 million compared to $9.5 million sequentially and $8.7 million in the prior year, marking our ninth consecutive quarter of positive adjusted EBITDA.
For the full year, adjusted EBITDA was $30.8 million versus $28.3 million in the prior year. As Mark discussed, in early January of 2026, we executed an amendment for our ABL facility which modified our covenants. Most importantly, as long as our cash balance exceeds our extending debt principal by $4.6 million, our key covenants are not subject to testing. Our cash balance was $39 million compared to $33.9 million in the prior quarter and $20.2 million last year. Our net cash position is $15.4 million. Cash generated from operations for the full year was $21.8 million compared to $2.6 million in the prior year, while free cash flow was $17.4 million compared to -$2 million in the prior year. Now turning to our first quarter guidance.
While we are pleased with the execution of our transformation, I want to reiterate that we just completed the first year of our pivot away from the MLM model to our multi-channel marketing and distribution model. Please keep in mind that this guidance should not be compared to Q1 2025 because Q1 2025 still had significant revenue recognized from the legacy MLM model. As discussed, we significantly lowered expenses in our revenue break-even point. This shift has opened new growth channels that we could not previously access, and we're very excited about the opportunities ahead. We now have a stronger balance sheet and a more viable long-term business model. As with companies that are undergoing a transformation, it will take time to develop traction in these new lines of business.
As the tail of our legacy business winds down. We expect that the first time we'll be able to do a year-over-year comparison of our new business model will be comparing Q3 2026 to Q3 2025. We expect first quarter revenues to be in the range of $49 million-$54 million, net income to be in the range of -$2 million to $1 million, and adjusted EBITDA to be in the range of $4 million-$7 million. The outlook for net income does not include the change in fair value of warrant liabilities as it is significantly impacted by the change in the company's stock price, which cannot be estimated. We continue to transition to our new business model. We want to provide additional updates to help you contextualize changes in our new financial model.
For the quarter, we anticipate revenues to approximate 63% Digital and 37% Nutrition & Other. However, in line with the strategies we articulated on this call, we currently expect a notable shift by the end of 2026 to a much larger percentage of our business being in Nutrition & Other, and the attendant margins that come along with it. For the quarter, our Digital gross margin target is expected to be in the range of 86%-88%. Our Nutrition & Other gross margin target is forecasted to be in the 44%-50% range, which is in line with our volume expectations and certain promotional efforts planned. Our total gross margin target is expected to be in the 69%-73% range. Over the last two years, we've made considerable progress against our business transformation.
We've significantly lowered our break-even point and strengthened our financial position, putting us on a solid financial foundation to execute against our growth initiatives that will drive long-term shareholder value. I look forward to updating you on our progress in our next earnings call. I'll now turn the call back over to Mark for closing remarks.
Mark Goldston (Executive Chairman)
Thanks very much, Brad, and thanks for everybody for attending today. Tamia will open it up now to questions. There should be some people in the queue. She will take the questions as they appear, and then at the conclusion of the questions, I'll come back on for some closing remarks.
Operator (participant)
Thank you. We will now begin with the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. The first question comes from Susan Anderson with Canaccord Genuity. You may proceed.
Alec Legg (VP of Equity Research)
Hi, good afternoon. Alec Legg on for Susan. Thanks for taking our question. You guys have done a great job lowering the break-even point over the last few years. I guess what's next for management's priorities, if you had to kind of rank them? Is it still a focus on driving profitability or maybe starting to shift some of that towards returning to growth through all of the new launches and innovations planned for this year and into 2027? Thank you.
Mark Goldston (Executive Chairman)
Alec, great question. This is Mark. You know, listen, we've worked so hard to rearchitect the company to be focused on profitability that's just not something we're probably ever gonna take out of our primary focus. That being said, this innovation pipeline, which we articulated is pretty fertile. The beauty is a lot of what you're gonna see, I believe, at this point is a reallocation of the marketing spend to the newer shiny new initiatives. Rather than making a large increase in the amount of the marketing spend, we're just gonna basically redeploy that capital into what we believe is the highest and best use. You'll see an increased focus, as Carl alluded to, on nutrition. Typically with us, nutrition has a much lower customer acquisition cost and gives us a great yield.
It also gives us a migration path over to the digital fitness business. I think that the takeaway is financial discipline will never go away. People are enjoying the fruits of our efforts in terms of watching what's happened to this company financially, so people wanna stay on that. It's kind of like getting yourself fit. You know, you don't want, you don't wanna lose your newfound fitness. We have a lot of exciting things that we can invest in. Look, if we see green shoots and the profitability allows for it, would we do additional investment spending? Sure. For right now, we think we've got an ample media budget that if we allocate it against the right news will bear fruit.
Alec Legg (VP of Equity Research)
Thanks, Mark. Just to follow up, I know it's still, it's about a month in, but I guess any early reads on the P90X launch, has it brought in new customers to the platform, reactivated old ones? I know you talked about the reactivation campaign or maybe a good mix of both.
Mark Goldston (Executive Chairman)
Carl?
Carl Daikeler (Co-Founder and CEO)
Yeah. We're very pleased with the reaction from our customers and subscribers to the release. It's obviously a brand-new program that is paying homage to the legacy that was created 15 years ago when we launched the original P90X. We did this big activation in New York and we've had millions of impressions both in earned media and paid media. We're seeing solid uptake within our subscriber base of the program, but we're also, quite honestly, just a month into the release of it. This first wave of customers who are doing it, they're gonna be like the next wave of proof. We'll be surfing this launch for probably the next 12 months.
As we continue to gather success stories and demonstrate to both our current subscribers and new prospective subscribers that this program works, that people, not just extreme athletes or extreme fitness people can do it, but beginners can do it with a modifier and, people who are just trying to get back their athletic body from when they were in high school and college. The initial indications are good, but it's also early days, and this next wave of success stories are what sort of propel the momentum of a new program like this.
Alec Legg (VP of Equity Research)
Thanks, Carl. I'll turn it back.
Carl Daikeler (Co-Founder and CEO)
Thanks, Alec.
Mark Goldston (Executive Chairman)
Thanks, Alec.
Operator (participant)
Thank you. The next question comes from Eric Des Lauriers with Craig-Hallum. You may proceed.
Eric Des Lauriers (Senior Research Analyst)
All right. Thanks for taking my questions, and congrats on another very impressive quarter and impressive year here.
Carl Daikeler (Co-Founder and CEO)
Thank you, Eric.
Eric Des Lauriers (Senior Research Analyst)
My first question is just a, you know, just a bit of a follow-up to the early read on P90X. Just, I wonder if you have an early read on the 10 Minute BODi, you know, consumer response thus far. On this note, if you could just kinda clarify. I heard you mention 8%, I think, of your customers are essentially doing this sort of, I think you call it microdose, you know, kinda ten-minute fitness programs on your platform. Was that all 10 Minute BODi, or are there other sort of microdose fitness programs that you have on your platform as well?
Carl Daikeler (Co-Founder and CEO)
Thanks for the question, Eric. Yeah. Very pleased with the response to 10 Minute BODi. Again, these things, they start to grow, right? You start to learn what channels work best, what media platforms work best, what creative messaging works best. Yes, it's actually not 8% of our subscribers are using it, but 8% of the viewership for the entire platform is coming from ten-minute or less microdose fitness workouts. So we've got five-minute workouts, eight-minute workouts, and that's all part of this 10 Minute BODi subscription, which as you recall, the exciting thing about the subscription is it gives us the lever that, you know, we saw Planet Fitness do so well with, and that's high volume, low price.
We're advertising 10 days free trial of our full micro dose fitness catalog, which then rolls into a $10 a month subscription. However, people coming in to subscribe or take that 10-day free trial also then get offered the $19 full subscription. The thing I'm most pleased about, I won't get too specific, but I will say I'm quite pleased with what the conversion is of people who come in with the intent to buy the $10 a month subscription who actually then level up to the full subscription, which is a similar model that we've seen offline that grew Planet Fitness so well, and we're starting to see that same dynamic in this virtual fitness environment.
Again, still early days, just launched it around Christmas time, but we're seeing strong uptake, and it's frankly helping us do exactly what we said. That is reach the 185 million people who are overweight or obese, not inclined to do a full program, definitely not gonna join a gym to do a 10-minute workout program, but are just looking for a way to fit it in their schedule. We think this really has some great running room, particularly in conjunction with the focus on nutrition. That combination is gonna be a Total-Solution Pack that helps us reach this huge TAM. Good signs, and we think good runway ahead of us.
Mark Goldston (Executive Chairman)
You know, Eric, it's
Eric Des Lauriers (Senior Research Analyst)
Thanks.
Mark Goldston (Executive Chairman)
This is Mark. What's interesting is, especially on the 10 Minute BODi, because we are going after the 185 million people who largely don't exercise. Really the first thing you have to do is build awareness, then you gotta build reception, then you have to build exploration into the program, and then build conversion. Very different when you're marketing a fitness program to a fitness audience. When you're marketing a fitness program to an audience that does not partake in fitness, your gestation period is longer and normally would be, because they have to first be aware of it, then they gotta look into it, decide if they wanna do it, and then convert. We've known that all the way through.
This is a long-term play by the company to make sure that we've got a product offering to this massive TAM of people who have previously exhibited behavior that would say they don't wanna do 45-90-minute workouts. That's for the people who are already in the fitness business.
Eric Des Lauriers (Senior Research Analyst)
That's all very helpful and sounds like you guys have done a great job thus far on this sort of different or new marketing approach. I mean, it sounds like you have very great uptake already. Congrats on the initial success and excited to see what's to come. My next question is on the nutritional brick-and-mortar rollout. First, I mean, a huge congrats on announcing Sprouts. I mean, you know, what an excellent first customer.
Carl Daikeler (Co-Founder and CEO)
Yeah
Eric Des Lauriers (Senior Research Analyst)
Just wondering if you could delve in a bit deeper to the extent that you're able to share how the conversations between other retailers and Advantage Solutions are going thus far, and if we should think of, you know, any other help in terms of channel penetration, like should we continue to think of grocery as being the initial channel that we should look for for these early wins? Or I guess just how broad are these, you know, early conversations going with retailers? Thank you.
Mark Goldston (Executive Chairman)
Yeah. We have sent out, I mean, dozens of what are called sample sets, which is when the brokers go and present this to the buyers, if the buyers have interest. They request what's called the sample set, so they can actually see the product. Then the way that works is they then take that to a buying committee, which then makes a decision, puts it into a planogram, and gives you a target date to get in the store. We right now, through Advantage Solutions, have a lot of these sets out to people who are going through the quote review process. Yes, a lot of the initial will be in the grocery channel. Shakeology going into Sprouts Farmers Market, a big deal.
We just heard today, I can't share it because I don't have anything in writing yet, but we did hear today from our nutrition division that there is a multi-hundred store chain, I can't say the trade class, who wants to put in the entire Shakeology line, all SKUs. Again, this is gonna be a momentum that's gonna build throughout, you know, Q2, as we talked about. We will be in store in Sprouts, it looks like in May, which is great. As we get into Q3, these buying committees that receive these sample sets who hopefully will have made positive decisions to put the product in for both P90X and Shakeology will start to bear fruit.
Remember, though, we're launching the new Shopify platform in a couple weeks for BODi.com, and that's when the new P90X and the new Shakeology form factor will be available direct to consumer, both to our current users in our database, our former users, and people show up at the site. The DTC business for P90X supplements and Shakeology will lead the brick-and-mortar rollout just from a timing standpoint. Then we'll start marketing it using our various influencer media tools at the end of April and into May.
Eric Des Lauriers (Senior Research Analyst)
That's all very helpful and, very encouraging. Congrats again on all the progress so far. Thanks.
Mark Goldston (Executive Chairman)
Thanks, Eric. Appreciate it.
Operator (participant)
Thank you. The following comes from Michael Kupinski with Noble Capital Markets. You may proceed.
Michael Kupinski (Director of Research and Managing Director of Media and Entertainment)
Thank you for taking my questions, and congratulations on an excellent print. Yes, I just wanna follow up. Exciting news on the Shakeology and the Sprouts supermarkets. I was just wondering how many stores will that include? Is it all 484 stores beginning in May?
Mark Goldston (Executive Chairman)
No, it won't. It'll be a component, a meaningful component, but it'll be a component of that.
Michael Kupinski (Director of Research and Managing Director of Media and Entertainment)
Gotcha. In terms of the fact that your implication in terms of Q3 kind of showing revenue growth, can you kind of just break out for us in terms of your thoughts of what you anticipate that you will achieve by then? I mean, are you anticipating that-
Mark Goldston (Executive Chairman)
Yeah
Michael Kupinski (Director of Research and Managing Director of Media and Entertainment)
Like for instance, will you be in all 484 stores with the Shakeology? You know, just kind of lay out the timeline maybe of what you anticipate to kind of see in delivering the revenue growth.
Mark Goldston (Executive Chairman)
Yeah. Just to be clear, when Brad talked about this, he talked about that Q3 of 2026 will be the first quarter where you can do a clean year-on-year comparison, and then hopefully we can then report on the progress of the traction of the items from our innovation pipeline. He did not say and did not make a projection that we will grow in that quarter because that would be giving guidance beyond the quarter in front of us, which of course we don't do. Not to say that it won't grow, but we're not making a projection about growth for Q3. Logically for Sprouts, it's unlikely that you will be in those stores and then three months later go to the whole chain. It probably doesn't work that way.
You're gonna read the component of stores that you're in, which is a meaningful number, and then at some point, yes, you will probably go chain wide. It usually doesn't happen in a two- or three-month period. Then the other retailers, we believe, Michael, will have started to show that we're in the store on the shelf with both P90X and Shakeology by Q3, and we'll start to be able to read, one, how much incremental business are we doing DTC because of the advent of these new products. Two, are we getting a better penetration rate with our digital subscriber base? 'Cause right now, as you know, Michael, it's less than 10% of our digital fitness subscribers also use our nutrition. There's no way that only 10% of those people are using anyone's nutrition, but they're only using ours.
That's largely because we were so formerly hamstrung by the pricing strata of the MLM that we were selling $50-$130 products in nutrition. Today, the P90X line is $15-$35, and the new Shakeology form factor is $35, $34.99. We're in a whole different ballgame in terms of trying to get cross-pollination, trying to get new people who land at the site, and trying to get the 8 million former BODi members, probably $1 billion-$1.5 billion of former nutritional revenue is in there to try to get them to now look at these new products.
We think the confluence of all of these spokes on the wheel will start to show in Q3 and into Q4, and if that were to be successful, then that would put us in a position where you're comparing us clean to clean year-on-year, and hopefully, that would show some green shoots, which would be great.
Michael Kupinski (Director of Research and Managing Director of Media and Entertainment)
Thanks for that clarification and the color. I'm asking this next question because I get this from shareholders. How relevant is the Beachbody brand to the younger fitness consumers today, and especially as you plan to roll out new products targeting the younger demo, just kind of give us some clarification there?
Mark Goldston (Executive Chairman)
I mean, listen, it's a great question. The reality of it is Beachbody and now BODi are authenticity brand names. So they're not primary destination brand names, they're authenticity brand names. So the Shakeology carries the day, the P90X carries the day, the Insanity carries the day. What we have done historically is use the Beachbody name because of its history to provide an aura of efficacy that we now have with BODi, because we think BODi is more suited to the current world and the current environment that we're in, one. Two, as we wanna branch out into nutrition and as we wanna branch out into the people who don't heavily exercise, having a company called BODi with a fresh perspective is a far better tool than communicating that everybody who uses our products is after six-pack abs and big biceps.
Not that we don't have those products, but our TAM is far greater with the broader Body name. You're gonna see we're working on a concept I mentioned in my prepared remarks, where we may take a lot of our existing nutritional products, not P90X, not Shakeology, and put them under a Body brand name umbrella with dynamic packaging, et cetera, that we could then launch and further entrench the Body brand name and take advantage of the history of the company. Carl, do you have anything to add to that?
Carl Daikeler (Co-Founder and CEO)
I'll add one little side anecdotal proof point that the underlying brands are really what attract the customer. At this activation event for the launch of P90X Generation Next, I was shocked at the number of twenty-something influencers who came up to me and told me that they watched their parents succeed and maybe had the best results and be in the best shape of their adult lives while these kids were growing up. They're in grade school. Now this was their chance to participate in an extreme fitness program that they can do at home. The trainer, Waz Ashayer, appeals to this 20-something, 30-something year old who's looking for extreme results that are very convenient right at home.
On the other side of that, we just got finished shooting some workouts, 10-minute BODi workouts, that are designed for people who are 50, 60+. We get to attract the demographic under the overarching brand, the brand that stands for holistic fitness and health. We get to attract the demographic based on the content and the nutritional solution that we pair it with. That's what gives the company incredible flexibility. That's the beauty of content, is we can morph the target based on what we create rather than perhaps an equipment or brick-and-mortar type of strategy, and that gives us great flexibility and breadth.
Mark Goldston (Executive Chairman)
You'll see us, Michael, going forward. You'll see us using the BODi brand name more in an authentication vein to help build its awareness of these high-awareness products that we're marketing. We're definitely going to make a transitional focus to make sure that the BODi brand name raises its awareness and can take advantage of the legacy of the prior Beachbody Company in terms of being an expert coming to the marketplace.
Michael Kupinski (Director of Research and Managing Director of Media and Entertainment)
Terrific. That was extremely helpful. Thank you very much.
Mark Goldston (Executive Chairman)
Thank you, Michael.
Operator (participant)
Thank you. Next question comes from George Kelly with Roth Capital Partners. You may proceed.
George Kelly (Managing Director and Senior Research Analyst)
Hey, everyone. Thanks for taking my questions. First, just an accounting question on Q4. Brad, I think I just wanted to make sure I had it right. There was a $2.2 million reversal that benefited the OpEx lines you gave. I guess there was a small component in COGS as well. There was an additional $2.2 million that was baked into guidance. Effectively, it was a $4.4 million benefit to guidance. Did I just repeat that correctly?
Brad Ramberg (Interim CFO)
Hi, George. Yes, this is Brad. You did repeat that correctly. That is right.
George Kelly (Managing Director and Senior Research Analyst)
Okay, excellent. Thank you. Second question. There was a lot of discussion in the prepared remarks just about you having an opportunity to sort of adjust pricing, and you went through the new P90X pricing stuff in Shakeology at the different form factor. Within Shake, you know, on a per serving basis Shakeology, like, the pricing is still pretty elevated. I'm wondering if there's a point over the next year or so where you would contemplate just lowering, you know, once maybe your retail business is developed or I'm not sure what it would take, but might you do more of a per serving pricing shift at Shakeology?
Mark Goldston (Executive Chairman)
That's a great question, George. I would say the following. Our per serving price today on the seven serve is about $4.99, something around just under $5. We are positioned, as you know, because we've got these 100 different ingredients and all the superfood ingredients in addition to protein, we're positioned as a premium product because we give you all of these extra benefits initially. We wanna be priced at the upper end within that marketplace, whereas the pure solo protein powders are priced less. That's not our direct competitor because we're a superfood with adaptogens and all of the other things that we've got in the Shakeology product. If we were just a protein powder, it might be a different ballgame, one. Two, we're gonna see how this performs in the retail market.
You'd always like to take the superior product, which we have, and go out with a more premium positioning because that margin flexibility gives you the ability to do more marketing, more sampling, more trial, more local, participation events. You've got the margin to be able to do that. That's been our strategy. Certainly, we have the opportunity both at retail and direct-to-consumer, as opposed to lowering the absolute price to use a promotional well where there are points at which we can put this thing on promotional pricing, and will give us the ability to make a value statement because our regular retail price would be $34.99. Now yours for, I'm making this up, for $29.99. Whereas if you just lower the absolute price of the product, then you're just an EDLP, which is everyday low price versus a high-low strategy.
As you know, grocery follows two pricing strata. Some people are EDLP, some people are high-low, and I think the high-low gives you more flexibility. My strong preference would be to keep our premium positioning and then if we need to promote off of that.
Carl Daikeler (Co-Founder and CEO)
I'll just add that the reason this product has sold over 1 billion servings is people can tell the substance of this formulation. We've always had pressure internally and externally to perhaps tweak the formula to lower the price and have the optics of a lower price formula. We've held the quality and potency because it is so distinct. That's our unique proposition, is that you can feel the difference. That's why we think it's gonna be a good decision for retailers to put it on the shelf because this one stands out because of the resilience of this formulation. You really can tell the difference.
Mark Goldston (Executive Chairman)
I'll send it back. I mean, we're selling, you know, a tub of whey protein on P90X for the same price that we're selling a seven-serve in Shakeology because the additional ingredients in Shakeology is what makes it a premium product. I mean, at $129.95, which is what the company sold it for the last umpteen years, you were at about $4.33 per serving. Normally, as you know, George, when you come down in form factor, you go up in price per serving. Our price per serving on the seven-serve is $4.99, on the 30-serve, it's like $4.33. We're in the same zip code.
George Kelly (Managing Director and Senior Research Analyst)
Okay. Last question I have for you, like I said, two-parter. Before the Sprouts launch, have you done any kind of testing in store at Sprouts? Second question is, do you have any additional retail distribution secured after Sprouts? That's all I had. Thank you.
Mark Goldston (Executive Chairman)
We have not done any testing there. The testing, as Carl alluded to, has been 15 years and $3.4 billion and 1 billion servings, which a lot of the buyers have said, you know, everybody knows Shakeology, thank God it's finally available at retail. That's the answer to that question. In terms of the additional retailers, as I was saying in my earlier comments, when Eric asked the question, we have, you know, dozens and dozens of sample sets out to the retail buying community that our brokers at Advantage Solutions have taken out there. They're all under review by the buyers and then ultimately the buying committee, and we're waiting for feedback, most of which will happen within the month of April and early May.
We will have, you know, hard numbers about who is taking the initial launch and when it will be on shelf. Our anticipation is we'll be in late Q2 and into Q3, we'll start getting many more retailers. Like I said, we have one I can't talk about because it was an oral, not a firm purchase order yet, which is coming, but it's a multi-hundred store chain that's planning on putting Shakeology, all flavors, all SKUs. We just learned that this morning, so hopefully that will materialize with a written purchase order, and then we can talk about it.
Operator (participant)
Thank you. The final question comes from Alex Hantman with Sidoti & Company. You may proceed.
Alex Hantman (Equity Research Analyst)
Hi, good afternoon. Thanks for taking questions.
Mark Goldston (Executive Chairman)
Sure.
Alex Hantman (Equity Research Analyst)
Give me, you know, a little bit beyond retail. I'm curious what you've learned so far from the Reebok relationship and whether that channel can become a meaningful contributor to subscriber adds, and if there's an opportunity to partner with similar brands.
Mark Goldston (Executive Chairman)
Yeah. I think it's early days, certainly on that partnership and that is a subscription model as well. We will certainly read that closely. Regardless of where that nets out, whether it's great or whether it doesn't end up being great, we just brought in somebody to head up partnerships, and our whole focus is going to be who can we align with where we become a value add to their customer base and reciprocal as they become a value add to our customer base. Because we've now got a much broader range of products, both in terms of our 10 Minute BODi, the new P90X program, now these new nutritional products, the new form factors, our more attractive overall price points. You know, we're selling $15-$34 product. We didn't have that before.
Our ability to go out and craft partnerships because of that is way more compelling now than it would have been six months ago. I'm hopeful that over the next twelve months you'll start to see some of these partnerships materialize because everybody acknowledges the power of our brands. Now that we've got some pricing power to go along with that, I think it'll bear fruit.
Alex Hantman (Equity Research Analyst)
Thanks, Mark. Great context. Just to follow up on something from the 10-K. You know, I think you mentioned GLP-1s as both a tailwind, you know, and a potential headwind. Just curious, you know, are you hearing customers talk to you about that? Is it affecting, you know, any sort of meal planning that you're doing or formulations that you guys are making?
Carl Daikeler (Co-Founder and CEO)
Well, I would say that it's actually we see it far more as an opportunity for us because every person who makes the investment in a GLP-1 weight loss pharmaceutical is gonna need to remediate the prospect of muscle loss by doing some exercise and by fueling themselves well. Shakeology is an absolute ideal, easy solution for people who are obviously looking for an easy solution. So that's been a quite productive line of communication and messaging in our marketing and advertising. But likewise, we've also produced content on the platform specifically for the GLP-1 user. Again, this is not a person who was seeking complete lifestyle change. They're looking for a bit of a biohack, a shortcut to try to get some results and get traction on a healthier lifestyle.
You can imagine how something like 10 Minute BODi and specifically content designed for a GLP-1 user to help them with resistance training and cardio in a way that's manageable and fits into their lifestyle, that that'll be quite attractive. The convenience of doing at home is just the perfect formula. We actually feel quite well aligned with the growth of the GLP-1 sector and also quite honestly offering GLP-1 type formulations into our large database of people who've already raised their hand and said, "You know, we'd like to find a way to lose weight." Perhaps they're not a current subscriber, but now they're in our database that we can make compelling offers to them so that they get access to the best solution available. We see it as a tailwind.
Mark Goldston (Executive Chairman)
If you read the research that's been published on GLP-1, what it basically says is that when you go on a normal diet without a drug and you lose 20 pounds, approximately 20%-25% of your loss is muscle, and the other 75%-80% is fat. When you lose weight on a GLP-1 drug, based on all the research that we've seen, you lose between 40%-50% of that weight in lean muscle. Your lean muscle loss, based on the research we've read, is double when you do it through a drug versus when you do it through a regular caloric restricted diet.
To Carl's point, we become the perfect adjunct to anybody on a GLP-1 drug, because otherwise, you know, you run the risk of getting what people would call skinny fat, which is you've lost the weight, but you have no musculature. If you're over 40, that is definitely not what you wanna be doing because your musculature, your musculoskeletal strength has everything to do with your balance and not having falls and fractures and things of that nature. The more that category expands and now that they're offering it in pill form, it looks like not just injection, syringe injection, I think the more relevant we become as a partner to that as opposed to you viewing them as a competitor.
Alex Hantman (Equity Research Analyst)
Great context. Thank you. That's all from us.
Carl Daikeler (Co-Founder and CEO)
Great. Thank you very much.
Operator (participant)
I'll pass that over to the team for closing remarks.
Carl Daikeler (Co-Founder and CEO)
Operator, any more questions?
Operator (participant)
No.
Carl Daikeler (Co-Founder and CEO)
Listen, this has been great. Really appreciate everybody attending today. We are obviously thrilled with our performance in 2025. It was beyond our expectations, and we're really excited about the innovation pipeline for 2026 and hopefully watching that bear fruit, especially as we get towards the second half of the year. As always, if anything comes up, please either reach out to us directly at the company through Brad Ramberg, our CFO, or through ICR. Thanks, everyone, have a great day.
Operator (participant)
That concludes today's call. Thank you for your participation, and enjoy the rest of your day.