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Beachbody Company, Inc. (BODY)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 revenue was $128.3M, down from $166.0M YoY, with adjusted EBITDA at $(5.8)M; operating loss improved to $(29.0)M from $(36.2)M YoY .
  • Cash used in operations for the quarter was $0.2M, materially better than guidance of “less than $5M” and highlighted by management as a key turnaround execution proof point .
  • Segment mix showed continued decline in Nutrition & Other revenue YoY and sequential declines across segments, while Connected Fitness revenue grew YoY on ~6,500 bikes delivered .
  • Q4 2023 guidance calls for revenue of $105–$115M and adjusted EBITDA of $(6)M to $(1)M, signaling continued emphasis on cost control as revenue normalizes seasonally .

What Went Well and What Went Wrong

What Went Well

  • Cash discipline: “cash used in operations was $0.2 million compared to our guidance of cash used of less than $5 million” (CFO), demonstrating improved operating efficiency and liquidity preservation .
  • Cost structure progress: total operating expenses fell to $104.0M from $140.9M YoY, with operating loss improving by $7.2M YoY .
  • Strategic transformation momentum: CEO emphasized “advancements … particularly in our cost reduction efforts and reinventing our digital platform” and focus on “activation, engagement and increased efficiency” .

What Went Wrong

  • Top-line pressure: total revenue declined to $128.3M from $166.0M YoY; Nutrition & Other fell to $59.0M from $90.4M YoY, reflecting demand softness and mix headwinds .
  • Sequential deceleration: revenue decreased vs Q2 ($134.9M → $128.3M), with gross profit and adjusted EBITDA also weakening sequentially .
  • Connected Fitness costs: while CF revenue rose YoY, connected fitness cost of revenue increased YoY (Q3 2023: $10.1M vs $4.7M prior year), compressing segment profitability .

Financial Results

Sequential Performance (Q1 → Q3 2023)

MetricQ1 2023Q2 2023Q3 2023
Total Revenue ($USD Millions)$144.9 $134.9 $128.3
Gross Profit ($USD Millions)$91.3 $82.7 $75.0
Total Operating Expenses ($USD Millions)$118.8 $106.9 $104.0
Operating Loss ($USD Millions)$(27.4) $(24.2) $(29.0)
Net Loss ($USD Millions)$(29.2) $(25.7) $(32.7)
Adjusted EBITDA ($USD Millions)$(0.9) $(4.8) $(5.8)
Net Loss per Share (EPS, $USD)$(0.09) $(0.08) $(0.11)
Cash and Cash Equivalents ($USD Millions)$66.4 $58.7 $38.2

YoY Comparison (Q3 2022 vs Q3 2023)

MetricQ3 2022Q3 2023
Total Revenue ($USD Millions)$166.0 $128.3
Digital Revenue ($USD Millions)$72.2 $64.3
Nutrition & Other Revenue ($USD Millions)$90.4 $59.0
Connected Fitness Revenue ($USD Millions)$3.3 $4.9
Total Operating Expenses ($USD Millions)$140.9 $104.0
Operating Loss ($USD Millions)$(36.2) $(29.0)
Net Loss ($USD Millions)$(33.9) $(32.7)
Adjusted EBITDA ($USD Millions)$(6.2) $(5.8)
Net Loss per Share (EPS, $USD)$(0.11) $(0.11)

Segment Breakdown (Q1 → Q3 2023)

Segment Revenue ($USD Millions)Q1 2023Q2 2023Q3 2023
Digital$64.8 $65.2 $64.3
Nutrition & Other$74.1 $64.6 $59.0
Connected Fitness$6.0 $5.1 $4.9

KPIs (Q1 → Q3 2023)

KPIQ1 2023Q2 2023Q3 2023
Digital Subscriptions (Millions)1.75 1.53 1.38
Nutritional Subscriptions (Millions)0.21 0.20 0.18
Total Subscriptions (Millions)1.96 1.73 1.56
Average Digital Retention (%)95.9% 95.2% 96.2%
Total Streams (Millions)29.7 25.3 22.9
DAU/MAU (%)32.5% 31.6% 30.8%
Connected Fitness Units Delivered (Thousands)4.7 5.5 6.5

Guidance Changes

Guidance Issued

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q3 2023—$120–$130 New
Net Loss ($USD Millions)Q3 2023—$(32)–$(27) New
Adjusted EBITDA ($USD Millions)Q3 2023—$(8)–$(3) (Total adjustments $24M) New
Revenue ($USD Millions)Q4 2023—$105–$115 New
Net Loss ($USD Millions)Q4 2023—$(30)–$(25) New
Adjusted EBITDA ($USD Millions)Q4 2023—$(6)–$(1) (Total adjustments $24M) New

Actual vs Q3 Guidance

MetricQ3 GuidanceQ3 ActualResult
Revenue ($USD Millions)$120–$130 $128.3 Within range
Net Loss ($USD Millions)$(32)–$(27) $(32.7) Slight miss vs range high end
Adjusted EBITDA ($USD Millions)$(8)–$(3) $(5.8) Within range
Cash Used in Operations ($USD Millions)< $5.0 $0.2 Bold beat vs guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Company transformation & cost reductionsQ1: “transition to expanded BODi… return to profitable growth by end of year” ; Q2: “progress towards company transformation… improved Opex… debt paydown” CEO: “advancements in cost reduction… reinventing digital platform; focus on activation, engagement, efficiency” Improving execution
Liquidity & cash managementQ2: “paid down debt by $15M… reduces interest expense… flexibility” CFO: “cash used in operations $0.2M… reducing cash needs” Improving
Platform & engagement (BODi)Q1: “successfully launched BODi… renewals and upgrades ahead of expectations” Focused on “execution of sales and marketing initiatives… drive activation, engagement” Sustained focus
Nutrition attachment/retentionQ1: “higher than expected nutrition retention and healthy nutrition attachment rates” Nutrition revenue declined YoY to $59.0M ; subscriptions 0.18M Mixed: retention vs top-line
Capital structure/financingQ2: “amended Blue Torch Capital financing agreement” No new financing actions disclosed in Q3 releaseStable
Connected FitnessQ2: 5.5k bikes; rebalancing CF ;Q3: ~6.5k bikes; CF revenue up YoY to $4.9M Improving units

Management Commentary

  • CEO (Carl Daikeler): “We are encouraged by the advancements we have made in our company transformation, particularly in our cost reduction efforts and reinventing our digital platform… focused on… activation, engagement and increased efficiency… building towards increasing liquidity and driving revenues that are more profitable.”
  • CFO (Marc Suidan): “In the quarter, our cash used in operations was $0.2 million… We continue to manage our cash use and are reducing cash needs.”
  • Executive Chair appointment and financing actions (prior quarter context): “Mark Goldston has joined… we have restructured the financial covenants… paid down our debt level by $15 million… reduces our interest expense.”
  • BODi platform launch (prior quarter context): “Successfully completed the transition to our expanded BODi platform… renewals and upgrades ahead of our expectations… confidence… towards a return to profitable growth.”

Q&A Highlights

  • The Q3 2023 earnings call transcript could not be accessed from the document system; highlights are therefore derived from press release commentary rather than live Q&A .
  • Management emphasis: cost reductions, improved cash usage, activation/engagement and efficiency in sales/marketing .
  • No additional Q&A-specific guidance clarifications available via transcript access.

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2023 revenue and EPS was unavailable via tool due to missing Capital IQ mapping for BODY; therefore estimate comparisons could not be included. Values not available from S&P Global at the time of this analysis.
  • Implication: Use company-issued guidance versus actuals as near-term benchmark in lieu of consensus until mapping is resolved .

Key Takeaways for Investors

  • Cost control and liquidity improvement are the principal near-term catalysts; the $0.2M cash used in operations materially beat guidance and supports turnaround execution credibility .
  • Sequential revenue softening across segments suggests continued pressure on Nutrition & Other; focus should be on marketing efficacy to stabilize demand and mix .
  • Operating expense reduction continues to underpin adjusted EBITDA within guidance ranges; further Opex discipline remains key to narrowing losses amid lower revenue .
  • Connected Fitness is showing unit delivery improvement YoY; monitor segment economics given elevated cost of revenue dynamics .
  • Q4 guide ($105–$115M revenue; adjusted EBITDA $(6)M to $(1)M) frames expectations for continued margin work; any upside likely comes from improved activation/engagement translating to better Nutrition attachment rates .
  • Without current S&P Global consensus, anchor trading setups on guidance vs actuals and management’s cash usage trajectory; resolution of consensus availability will aid estimate-based positioning in subsequent quarters.

Notes: All figures reflect company press releases and 8-K disclosures; earnings call transcript was not retrievable for direct Q&A content. Citations provided inline.