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Beachbody Company, Inc. (BODI)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue was $102.2M, essentially in-line with the midpoint of guidance; gross margin reached 67% (+880 bps YoY), Adjusted EBITDA was $10.1M (fourth consecutive positive quarter), and net loss was $12.0M including $9.2M of restructuring tied to the business model pivot .
  • Management guided Q4 revenue to $77–$87M and Adjusted EBITDA to $2–$6M, with $8.1M of accelerated depreciation expected in Q4 related to the pivot; net loss guided to $(21)–$(17)M .
  • Strategic shift announced Sept 30: transitioning from MLM to a single‑level affiliate network (launch Nov 1), consolidating to a single e‑commerce platform, reducing workforce 33%, and lowering revenue break-even from <$430M to <~$225M annually .
  • Positive free cash flow year-to-date ($5.3M) and improved liquidity (net cash position $10.6M at 9/30) support the turnaround, while subscription and hardware trends remain headwinds near-term .

What Went Well and What Went Wrong

What Went Well

  • Margin and profitability: Gross margin expanded to 67% (+880 bps YoY) and Adjusted EBITDA improved to $10.1M, marking the fourth straight positive quarter .
  • Cost structure progress: Operating expenses fell to $81.8M from $104.0M YoY, improving operating loss by $16.0M to $(13.0)M .
  • Strategic pivot underway: “We are evolving our distribution model to a modern affiliate network that will broaden our market opportunities and further optimize our cost structure,” said CEO Carl Daikeler, highlighting momentum heading into new initiatives like Belle Vitale and expanded channels .

What Went Wrong

  • Top‑line pressure: Total revenue declined 20% YoY to $102.2M, with Digital down 16.5%, Nutrition & Other down 19.6%, and Connected Fitness down 78.2% .
  • User metrics softness: Digital subscriptions fell to 1.11M (from 1.38M), nutrition subs to 0.13M (from 0.18M), and total streams declined 8.9% YoY .
  • Restructuring charges/transitional friction: Q3 net loss included ~$9.2M of pivot-related costs; management also plans accelerated depreciation ($8.1M) in Q4 as assets are retired or repurposed .

Financial Results

Income Statement Snapshot (USD)

MetricQ1 2024Q2 2024Q3 2024
Revenue ($M)$120.0 $110.2 $102.2
Gross Margin %67.7% 69% 67%
Operating Loss ($M)$(10.8) $(9.5) $(13.0)
Net Loss ($M)$(14.2) $(10.9) $(12.0)
Diluted EPS ($)N/A$(1.59) $(1.75)
Adjusted EBITDA ($M)$4.6 $4.9 $10.1

Notes: Q3 net loss includes ~$9.2M pivot restructuring; Adjusted EBITDA is non‑GAAP and reconciled in the release .

Segment Revenue ($M)

SegmentQ1 2024Q2 2024Q3 2024
Digital$61.5 $58.8 $53.7
Nutrition & Other$55.5 $50.1 $47.4
Connected Fitness$3.0 $1.3 $1.1
Total$120.0 $110.2 $102.2

KPIs

KPIQ1 2024Q2 2024Q3 2024
Digital Subscriptions (M)1.22 1.15 1.11
Nutritional Subscriptions (M)~0.151 [s27.q4cdn.com/…/BODi24_Corp-IR_050724-Q1-24.pdf]0.14 0.13
Average Digital Retention96% (avg monthly) [s27.q4cdn.com/…/BODi24_Corp-IR_050724-Q1-24.pdf]96.5% 97.3%
DAU/MAU33% [s27.q4cdn.com/…/BODi24_Corp-IR_050724-Q1-24.pdf]31.9% 31.0%
Total Streams (M)26 [s27.q4cdn.com/…/BODi24_Corp-IR_050724-Q1-24.pdf]22.7 20.9
Bikes Delivered (K)N/A1.6 1.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q3 2024$97–$107 (Aug 6) Reaffirmed $97–$107 (Sep 30) Maintained
Net Loss ($M)Q3 2024$(13)–$(9) (excl. restructuring not specified then) $(9)–$(13) excluding ~$9–$11 restructuring; goodwill impairment under evaluation (Sep 30) Clarified (ex‑restructuring)
Adjusted EBITDA ($M)Q3 2024$2–$6 Reaffirmed $2–$6 (Sep 30) Maintained
Revenue ($M)Q4 2024N/A$77–$87 (Nov 12) New
Net Loss ($M)Q4 2024N/A$(21)–$(17) (includes $8.1M accelerated depreciation) New
Adjusted EBITDA ($M)Q4 2024N/A$2–$6 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2024)Current Period (Q3 2024)Trend
Distribution modelFocus on lowering breakeven, re-architecting costs; partnerships (ADA), Amazon, CAP Barbell; Australia app launch Announced pivot from MLM to single‑level affiliate; centralizing to body.com; 33% workforce reduction Major structural shift underway
Nutrition emphasisManagement leaning into nutrition TAM; high margin focus Mix steady into Q4; expect affiliate model to help over time (CFO Q&A) Sustained focus
Margin/EBITDAQ1 margin 67.7%; Q2 gross margin 69%; 3rd positive EBITDA in Q2 Gross margin 67%; 4th positive EBITDA, improved to $10.1M Improving profitability profile
Content/programsPipeline mentions incl. “4 Weeks of Focus” (Q3 launch context), broader content refining Belle Vitale program launching Dec 10 (after Q3), positioned as growth catalyst New product cycle
PartnershipsADA partnership highlighted in Q2 Truemed HSA/FSA partnership; brand amb. initiatives in Sept Expanding access

Management Commentary

  • “Our third quarter results demonstrated the continued successful execution of the first phase of our turnaround plan, with significant improvements in adjusted EBITDA and positive free cash flow generation.” — Carl Daikeler, CEO .
  • “On September 30, 2024, we announced a major change in our business model from a multi-level marketing to a single-level affiliate network… [to] remove legacy barriers and allow us to fully capitalize on the significant market opportunity” .
  • “We recognize that… the multi-level marketing distribution model is outdated and unsustainable. The evolution to the affiliate model offers a simpler, more modern approach to customer acquisition and will directly reward the seller for their effort.” — Mark Goldston, Executive Chairman .

Q&A Highlights

  • Q4 revenue step-down and mix: Seasonality plus transition effects; mix between digital and nutrition expected to remain steady near-term (Interim CFO Brad Ramb) .
  • Affiliate program ramp: Incentivizing former network partners in November; leveraging Impact.com with aggressive commission structure (CEO) .
  • Belle Vitale details: Three‑month program with bundled content, nutrition plan, breathwork app access, and proprietary supplements; Dec 10 launch (CEO) .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue could not be retrieved due to data access limits at query time; as a result, explicit “vs consensus” comparisons are unavailable in this report. Values retrieved from S&P Global were unavailable due to API limit at time of request.
  • Management characterized Q3 revenue as in-line with guidance midpoint and net loss as in-line with guidance, which serves as the reference for expectations this quarter .

Key Takeaways for Investors

  • The strategic pivot to a single‑level affiliate model and platform consolidation is the key medium‑term thesis driver; it compresses breakeven and simplifies go‑to‑market, but introduces near‑term revenue transition risk .
  • Profitability traction is real: four straight quarters of positive Adjusted EBITDA and structurally lower OpEx underpin improved liquidity and free cash flow potential, even on a lower revenue base .
  • Q4 guide embeds transitional headwinds and concentrated non‑cash depreciation; focus on underlying run‑rate EBITDA as a cleaner lens on operating progress .
  • Core KPIs (subs, streams) are still declining; successful affiliate onboarding and content/campaign execution (e.g., Belle Vitale) are central to stabilizing engagement and reaccelerating Nutrition & Other .
  • Watch updates on affiliate traction, channel mix (DTC, Amazon, partnerships), and retention (already strong) as early indicators of pivot effectiveness .
  • Liquidity improved (net cash position $10.6M at 9/30) with positive YTD free cash flow; continued discipline on working capital and capex is crucial while revenue transitions .

Appendix: Balance Sheet and Cash Flow Highlights

  • Cash and equivalents $32.3M; total debt (term loan) $21.7M; net cash position $10.6M at 9/30/24 .
  • YTD (9M) operating cash flow $9.3M; free cash flow $5.3M; Q3 reconciling items include $2.9M accelerated depreciation tied to the pivot .

Sources and Citations:

  • Q3 2024 8‑K and Exhibit 99.1 press release, financial statements, outlook, and reconciliations .
  • Q3 2024 standalone press release replication .
  • Q2 2024 press release and metrics .
  • Pivot press release (Sept 30, 2024) .
  • Q1 2024 Business Wire press release and supporting coverage .
  • Q1 2024 earnings call transcript (for gross margin detail) .
  • Q3 2024 earnings call highlights/Q&A references .
  • Program/product updates: Belle Vitale launch press release (Dec 10, 2024) .
  • Additional partnerships/press during Q3 window .