Executive Summary

Q1 revenue of $120.0M declined 17.2% YoY but marked the first sequential quarterly revenue growth since 2021 and exceeded the midpoint of guidance; adjusted EBITDA was $4.6M and free cash flow was positive for the first time since 2020, reflecting tangible progress on the turnaround plan .
Gross margin improved to 67.7% (from 62.2% in Q4’23 and 63.0% in Q1’23), driven by lower content amortization and better pricing/inventory management; digital gross margin reached ~79% and nutrition gross margin rose to ~60%, per management commentary on the call .
Liquidity strengthened: net cash position rose to $14.4M from $3.9M in Q4’23; CFO highlighted aggressive cost actions and liquidity initiatives, including sale-leaseback and a non-core divestiture, supporting the improved balance sheet and cash generation .
Q2’24 guidance introduced: revenue $103–$113M and adjusted EBITDA -$3M to +$3M; management continues to prioritize profitable revenue and sustainable FCF while working through connected fitness inventory and customer reactivation initiatives .

What Went Well and What Went Wrong

What Went Well

Positive free cash flow ($7.4M) and operating cash flow ($9.1M) for the first time since 2020; revenue exceeded guidance midpoint, and adjusted EBITDA beat guidance midpoint, underscoring improved operating leverage and cost discipline .
Material gross margin expansion: company gross margin 67.7% (+550 bps q/q; +470 bps y/y), with digital gross margin ~79% and nutrition ~60% as content amortization moderated and pricing/inventory were managed more tightly (management on call) .
Liquidity progress: net cash position improved to $14.4M from $3.9M in Q4’23; CFO emphasized “on track to achieve approximately $250 million in cash cost savings in 2024” supporting improved liquidity and profitability trajectory .

What Went Wrong

Total revenue -17.2% YoY to $120.0M; digital -5% YoY, nutrition -25% YoY, connected fitness -50% YoY, reflecting ongoing demand reset and the de-emphasis of less profitable revenue streams .
Continued GAAP losses: operating loss improved but remained ($10.8M); net loss ($14.2M); connected fitness gross margin remained negative as the company focuses on selling on-hand inventory to generate cash .
Customer base metrics remain pressured YoY: total subscriptions down ~30%, digital subscriptions 1.22M vs 1.75M, nutrition subscriptions 0.15M vs 0.21M; management noted reactivation of former/prospective customers is taking longer than anticipated .

Financial Results

Income Statement Summary (USD millions, except per-share)

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue	$128.25	$119.01	$120.05
Gross Profit	$75.03	$73.97	$81.28
Gross Margin %	58.5% (calc from )	62.1% (calc from )	67.7% (calc from )
Operating Loss	($29.00)	($60.37)	($10.82)
Net Loss	($32.67)	($65.04)	($14.22)
Diluted EPS	($0.11)	($10.31)	($2.10)

Note: EPS comparability across Q3’23 vs Q4’23/Q1’24 is affected by share count changes reported in filings .

Segment Revenue (USD millions)

Segment	Q3 2023	Q4 2023	Q1 2024
Digital	$64.34	$64.04	$61.51
Nutrition & Other	$58.98	$51.78	$55.51
Connected Fitness	$4.93	$3.19	$3.03
Total Revenue	$128.25	$119.01	$120.05

Key KPIs

KPI	Q3 2023	Q4 2023	Q1 2024
Digital Subscriptions (M)	1.38	1.31	1.22
Nutritional Subscriptions (M)	0.18	0.16	0.15
Total Subscriptions (M)	1.56	1.47	1.37
Avg Digital Retention	96.2%	96.9%	95.7%
Total Streams (M)	22.9	20.4	25.6
DAU/MAU	30.8%	30.3%	33.2%
Connected Fitness Units Delivered (K)	6.5	~4.1	~3.5

Actual vs Guidance and Estimates – Q1 2024

Metric	Prior Guidance (Q4’23 release)	Actual Q1 2024	Comparison
Revenue	$113–$121M	$120.05M	Above midpoint (company noted beat)
Net Loss	($15M) – ($10M)	($14.22M)	In range
Adjusted EBITDA	~$0 – $5M (table shows “— to $5”)	$4.55M	Above midpoint (company noted beat)

Consensus estimates (S&P Global) were unavailable for BODY due to a data mapping limitation; third-party sources reported Q1 revenue of $120.05M “beat by $4.90M” and EPS of -$1.73 “beat by $0.06,” while GAAP diluted EPS per 8-K was -$2.10 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2024	$113–$121M (given Mar 11, 2024)	Actual: $120.05M	Beat midpoint (company noted)
Net Loss	Q1 2024	($15M) – ($10M)	Actual: ($14.22M)	Within range
Adjusted EBITDA	Q1 2024	~$0 – $5M	Actual: $4.55M	Above midpoint
Revenue	Q2 2024	N/A	$103–$113M	New
Net Loss	Q2 2024	N/A	($20M) – ($14M)	New
Adjusted EBITDA	Q2 2024	N/A	($3M) – $3M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’23, Q4’23)	Current Period (Q1’24)	Trend
Cost structure and savings	Transformation and cost reduction underway; cash use reduced; restructuring/platform consolidation	On track for ~$250M 2024 cash cost savings; highest adj. EBITDA since going public	Improving
Liquidity/net cash	Managing cash use; debt repayments; improved cash from operations trajectory	Net cash position improved to $14.4M; positive free cash flow	Improving
Gross margin drivers	Mix and inventory actions; cost actions; connected fitness drags	GM to 67.7%; digital ~79%, nutrition ~60%; content amortization lower; pricing/inventory benefits	Improving
Customer reactivation/marketing	Focus on activation, engagement, efficiency	Reactivation taking longer; broadening go-to-market beyond subscriptions	Mixed
Partnerships/affiliations	Not highlighted	HSA/FSA path via Dr. B partnership to boost subscriptions; pipeline of partnerships	Emerging
Connected fitness	Selling down inventory; negative margins in segment	~3.5K bikes delivered; CF GM still negative as focus remains inventory sell-down	Ongoing headwind

Management Commentary

“We are pleased with our performance in the first quarter, beating the midpoint of our revenue and adjusted EBITDA guidance… we have achieved our first positive free cash flow quarter since 2020.” – Carl Daikeler, CEO .
“Our net cash position increased from $3.9 million at December 31, 2023 to $14.4 million at March 31, 2024.” – Marc Suidan, CFO .
“We remain on track to achieve approximately $250 million in cash cost savings in 2024… in line with our business rearchitecture plan.” – Marc Suidan, CFO (call) .
“We beat the midpoint of our revenue guidance and achieved quarter-over-quarter revenue growth for the first time since Q4 of 2021.” – Mark Goldston, Executive Chairman (call) .

Q&A Highlights

Partnerships and demand funnel: Management discussed an HSA/FSA pathway via a partnership with Dr. B to support subscription growth and referenced a broader pipeline of aligned partnerships .
Margin trajectory: CFO outlined drivers behind gross margin expansion (lower content amortization, nutrition pricing/inventory discipline) and the goal to push digital gross margins above 80% over time .
Customer reactivation: Management noted reactivation of former/prospective customers is taking longer than anticipated but remains a key focus alongside broadening the commercial aperture beyond pure subscriptions .
Connected Fitness: Continued focus on selling on-hand inventory for cash; connected fitness remains <5% of revenue and negative margin .

Estimates Context

S&P Global consensus was unavailable for BODY due to a mapping limitation; as such, comparisons to S&P Global estimates could not be provided.
Third-party sources reported Q1 revenue “beat by $4.90M” and EPS “beat by $0.06” (third-party EPS figure -$1.73 vs GAAP diluted EPS -$2.10 per 8-K), indicating a modest beat against external estimates despite a GAAP loss .

Key Takeaways for Investors

Positive free cash flow and improved net cash position signal better balance sheet resilience and execution against the turnaround plan; liquidity improvement was a focal CFO initiative .
Margin expansion (gross margin to 67.7%) demonstrates operating leverage as content amortization moderates and nutrition pricing/inventory actions take hold; watch for digital gross margin >80% target .
Q2 guidance implies sequential revenue step down vs Q1 (seasonality and ongoing portfolio reshaping), but the adjusted EBITDA range (-$3M to +$3M) brackets breakeven, sustaining profitability focus .
Subscription KPIs remain under YoY pressure; success of reactivation and broadened go-to-market (including partnerships like Dr. B’s HSA/FSA) will be critical to stabilizing the digital base .
Connected fitness remains a drag but is a small revenue contributor; ongoing sell-down supports cash generation near term .
Near-term trading set-up: Narrative is improving (positive FCF, net cash, margin gains), but visibility on durable top-line stabilization is still developing—updates on reactivation KPIs and partnership conversion could be catalysts .

Supplemental financial detail (from Q1’24 press release):

Cash from operations $9.1M; Free Cash Flow $7.4M; Adj. EBITDA $4.6M .
Balance sheet (3/31/24): Cash & equivalents $38.9M; Term Loan current $5.9M, long-term $18.7M; Net cash position $14.4M .

Beachbody Company, Inc. (BODY)·Q1 2024 Earnings Summary