Executive Summary

Revenue of $119.0M beat the high end of prior Q4 guidance ($105–$115M) and topped external consensus ($112.4M), while GAAP net loss widened due to $43.1M non-cash impairments; Adjusted EBITDA was positive at $2.8M .
Management guided for positive cash flow from operating activities and free cash flow in Q1 2024, underpinned by fixed cost and capex savings expected to reach ~$200M in 2024 vs. 2021 .
Strategic focus centers on simplifying the digital platform, reshaping the nutrition business, and launching program purchase/download options (late March), with early signs of improved conversion from free sign-ups; digital subscriptions ended Q4 at 1.31M and DAU/MAU at 30.3% .
Narrative catalyst: a revenue beat and return to positive Adjusted EBITDA, paired with near-term FCF positivity guidance, supports turnaround credibility despite GAAP losses driven by non-cash impairments .

What Went Well and What Went Wrong

What Went Well

Exceeded the high end of Q4 revenue guidance ($119.0M vs. $105–$115M) and delivered positive Adjusted EBITDA ($2.8M) with gross margin ~62% (73.972/119.010), reflecting cost structure progress .
Management expects positive cash flow from operating activities and free cash flow in Q1 2024; CFO reiterated fixed cost and capex savings of ~$200M in 2024 vs. 2021, lowering breakeven .
Digital platform simplification and new monetization (program purchase/download) aim to improve conversion and profitable revenue streams; “conversion is exceeding our expectations” on free sign-ups channel (late March rollout) .

What Went Wrong

GAAP operating loss increased YoY due to non-cash impairments: total op ex $134.3M included $43.1M impairments, pushing net loss to $65.0M (vs. $44.9M YoY) despite cost reductions .
Nutrition & Other revenue fell to $51.8M (vs. $74.7M YoY), and total subscriptions declined to 1.47M (vs. 2.17M YoY), reflecting demand pressure and the ongoing transition in the nutrition business .
Connected Fitness remains small ($3.2M revenue; ~4.1k bikes), with YoY declines and prior market disruption still weighing on category performance .

Financial Results

Summary Financials (GAAP and Adjusted)

Metric	Q4 2022	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD Millions)	$148.166	$134.948	$128.250	$119.010
Gross Profit ($USD Millions)	$84.621	$82.744	$75.031	$73.972
Gross Margin %	57.1%	61.3%	58.5%	62.1%
Net Loss ($USD Millions)	$(44.933)	$(25.748)	$(32.666)	$(65.039)
Net Loss per Share ($)	$(7.28)	$(0.08)	$(0.11)	$(10.31)
Adjusted EBITDA ($USD Millions)	$3.543	$(4.774)	$(5.833)	$2.797

Note: EPS comparability is affected by changes in share count; weighted-average shares were 6,307 in Q4 2023 vs. 308,931 in Q3 2023 .

Segment and KPI Breakdown

Metric	Q4 2022	Q3 2023	Q4 2023
Digital Revenue ($USD Millions)	$68.685	$64.339	$64.044
Nutrition & Other Revenue ($USD Millions)	$74.735	$58.981	$51.781
Connected Fitness Revenue ($USD Millions)	$4.746	$4.930	$3.185
Digital Subscriptions (Millions)	1.95	1.38	1.31
Nutritional Subscriptions (Millions)	0.22	0.18	0.16
Total Subscriptions (Millions)	2.17	1.56	1.47
Average Digital Retention (%)	96.8%	96.2%	96.9%
DAU/MAU (%)	29.0%	30.8%	30.3%
Total Streams (Millions)	23.8	22.9	20.4
Connected Fitness Units Delivered (Thousands)	3.7	6.5	4.1

Actual vs. External Consensus (Q4 2023)

Metric	Consensus	Actual
Revenue ($USD Millions)	$112.40	$119.01
EPS ($)	$(2.25)	$(10.31)

S&P Global/Capital IQ consensus was unavailable for BODY at the time of retrieval; external consensus values shown for context .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q4 2023	$105–$115	Actual $119.0	Raised vs. guide (beat high end)
Net Loss ($USD Millions)	Q4 2023	$(30)–$(25)	Actual $(65.0)	Lower than guide (driven by $43.1M impairments)
Adjusted EBITDA ($USD Millions)	Q4 2023	$(6)–$(1)	Actual $2.8	Raised vs. guide (above range)
Revenue ($USD Millions)	Q1 2024	N/A	$113–$121	Initiated
Net Loss ($USD Millions)	Q1 2024	N/A	$(15)–$(10)	Initiated
Adjusted EBITDA ($USD Millions)	Q1 2024	N/A	$0–$5 (with ~$15M adjustments)	Initiated
Depreciation & Amortization ($USD Millions)	Q1 2024	N/A	~$5	Initiated
Amortization of Content Assets ($USD Millions)	Q1 2024	N/A	~$5	Initiated
Interest Expense ($USD Millions)	Q1 2024	N/A	~$2	Initiated
Equity-Based Compensation ($USD Millions)	Q1 2024	N/A	~$5	Initiated
Other Adjustment Items ($USD Millions)	Q1 2024	N/A	~$(2)	Initiated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2023)	Trend
Digital platform simplification	“Reinventing our digital platform,” cost reduction; Q3 turnaround underway	Launching digital program purchase/download in late March; improved conversion from free sign-ups channel	Accelerating product monetization and funnel conversion
Nutrition business strategy	General focus on margins/costs in Q2; no specific nutrition overhaul articulated	“Renewed focus on reshaping our nutrition business” to drive profitable revenue streams	Increased emphasis on profitable nutrition
Cost structure and savings	OpEx improved YoY; debt repaid $15M; plan to use < $5M operating cash in Q3	~ $200M fixed/capex savings in 2024 vs. 2021; breakeven lowered	Savings ramping; structural breakeven reduced
Cash flow and liquidity	Operating cash used $14.4M YTD through Q2; improving	Expect positive operating cash flow and free cash flow in Q1 2024	Turning positive near term
Marketing and partnerships	Emphasis on execution of sales/marketing in Q3	Scaling free channel via YouTube, new partnerships to boost visibility and conversion	Expanding top-of-funnel reach

Management Commentary

CEO: “2023 was a transformational year at BODi… lowering our breakeven point and enhancing our liquidity… Our objective is fostering more profitable revenue streams and sustainable free cash flows… We expect to have positive cash flow from operating activities and free cash flow in the first quarter” .
CFO: “We should have positive free cash flow in the first quarter of 2024… projecting approximately $200 million in fixed costs and capital expenditure savings in 2024 over 2021” .
Prepared remarks: The company will make programs available for digital purchase and download in late March, allowing streaming without a subscription, and is seeing stronger conversion from free sign-ups as visibility grows (e.g., YouTube) .

Q&A Highlights

Monetization and funnel conversion: Management noted “conversion is exceeding our expectations” for free sign-ups and highlighted the late-March launch of program purchase/download to broaden monetization pathways .
Marketing reach and partnerships: Discussion on leveraging YouTube/free channel and new partnerships to capture traffic and expand visibility, supporting subscriber growth and conversion .
Cost structure and cash flow: Clarified that the new cost base supports positive operating cash flow and free cash flow in Q1 2024, with substantial fixed/capex savings vs. 2021 .

Estimates Context

S&P Global/Capital IQ consensus was unavailable for BODY at the time of retrieval; external consensus indicated revenue of $112.4M and EPS of $(2.25) for Q4 2023, vs. actual revenue $119.01M and EPS $(10.31). Revenue was a significant beat; EPS was a miss, largely impacted by non-cash impairments and changes in share count affecting comparability .

Key Takeaways for Investors

The quarter demonstrated operational progress: revenue beat guidance high end, positive Adjusted EBITDA, and strong gross margins, validating cost structure improvements .
Near-term cash inflection: management guides to positive operating cash flow and free cash flow in Q1 2024—an important turnaround milestone and potential stock catalyst .
Non-GAAP vs. GAAP optics: GAAP losses widened due to $43.1M non-cash impairments; focus on Adjusted EBITDA and cash metrics to assess operating trajectory .
Strategic execution: digital platform simplification, program purchase/download launch, and nutrition business reshape aim to drive more profitable revenue streams and better LTV/CAC .
Cost savings durability: ~$200M fixed/capex savings vs. 2021 lowers breakeven and supports sustained FCF potential as revenue stabilizes .
Subscription base pressure persists (1.47M total subs vs. 2.17M YoY); monitor conversion and retention metrics (DAU/MAU, streams) and nutrition trajectory for signs of stabilization .
Trading setup: watch Q1 2024 execution against revenue ($113–$121M) and FCF guidance; a confirmed positive FCF print could re-rate turnaround expectations despite GAAP noise from non-cash items .

Beachbody Company, Inc. (BODY)·Q4 2023 Earnings Summary