The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2021 Financial Results and Strategic Realignment Initiatives

Fourth Quarter Results Exceed Guidance and Reflect Strong Execution

Solid Two-Year Growth in Total Digital and Nutritional Subscriptions +42%, Average Digital Retention +90BPS, Total Streams +21%, Reflecting Positive Secular Trends

Announces Strategy to Accelerate Path to Profitability, Reduce Cash Use from Operations by Approximately $110 Million, and Strengthen Competitive Position

EL SEGUNDO, Calif.--()--The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its fourth quarter and full year ended December 31, 2021.

“Our performance in the fourth quarter reflects disciplined execution against the plan we laid out in November to prioritize the highest return marketing opportunities, which in conjunction with a strong portfolio of new product offerings, enabled us to exceed our previous guidance,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “Our content-driven model, powerful flywheel of fitness combined with nutrition and unique coach network, provides an incredibly strong foundation unlike any other in the industry. We are capitalizing on the strengths we’ve built to adjust our business back to the profitable playbook that has served us well for more than two decades: narrowing our focus to the strongest elements of our business, investing in the highest return, lowest risk opportunities, and maintaining an unwavering commitment to disciplined cost management and capital efficiency. We believe these efforts best position us to deliver positive earnings and cash flow in 2023.”

Fourth Quarter 2021 Results

  • Total revenue was $216.3 million, a 4% decrease compared to 2020 and a 31% increase compared to 2019
  • Digital revenue was $81.9 million, a 14% decrease compared to 2020 and a 41% increase compared to 2019
    • Digital subscriptions were 2.54 million, a 3% decrease compared to 2020 and a 50% increase compared to 2019
    • 96.5% month-over-month average digital retention, a 90-basis point increase compared to 2020 and a 90-basis point increase compared to 2019
    • 30.8 million total streams, a 27% decrease compared to 2020, and a 21% increase compared to 2019
    • 28.9% DAU/MAU, a 240-basis point decrease compared to 2020, and a 10-basis point decrease compared to 2019
  • Connected Fitness revenue was $36.8 million, compared to none in 2020, which preceded the Myx Fitness acquisition
    • Approximately 23,900 bikes sold in the fourth quarter, with a bikes-delivered to sales ratio of 124%
    • On a pre-merger basis, Connected Fitness revenue was $17.6 million in Q4 2020, with approximately 12,300 bikes sold and a bikes-delivered to sales ratio of 114% in the quarter
  • Nutrition and Other revenue was $97.6 million, a 25% decrease compared to 2020 and a 9% decrease compared to 2019
    • Nutritional subscriptions were 0.30 million, compared to 0.39 million in 2020 and 0.31 million in 2019
  • Net loss was $146.0 million, compared to a net loss of $16.9 million in 2020 and net income of $1.8 million in 2019
  • Adjusted EBITDA was ($26.6) million, compared to $16.5 million in 2020 and $19.2 million in 2019
  • We recorded goodwill and intangibles impairment charges of $94.9 million in the fourth quarter. These impairment charges are non-cash and excluded from net loss in our Adjusted EBITDA calculation

Full Year 2021 Results

  • Total revenue was $873.6 million, a 1% increase compared to 2020 and a 16% increase compared to 2019
  • Digital revenue was $365.4 million, a 9% increase compared to 2020 and a 46% increase compared to 2019
  • Connected Fitness revenue was $42.7 million, following the Myx Fitness acquisition in June 2021
  • Nutrition and Other revenue was $465.5 million, a 12% decrease compared to 2020 and an 8% decrease compared to 2019
  • Net loss was $228.4 million, compared to a net loss of $21.4 million in 2020 and net income of $32.3 million in 2019
  • Adjusted EBITDA was ($86.1) million, compared to $51.5 million in 2020 and $78.4 million in 2019
Key Operational and Business Metrics
 
 
For the Three Months Ended December 31, For the Year Ended December 31,

2021

 

2020

 

Change v 2020

2019

 

Change v 2019

 

2021

 

2020

 

Change v 2020

2019

 

Change v 2019

Connected Fitness Units Sold (in thousands)

23.9

 

0.0

 

NM

0.0

 

NM

 

39.1

 

0.0

 

NM

0.0

 

NM

Connected Fitness Units Delivered (in thousands)

29.7

 

0.0

 

NM

0.0

 

NM

 

36.2

 

0.0

 

NM

0.0

 

NM

Bikes Delivered to Sales Ratio

124%

 

 

 

 

 

 

 

 

93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Subscriptions (in millions)

2.54

 

2.63

 

(3%)

1.69

 

50%

 

2.54

 

2.63

 

(3%)

1.69

 

50%

Nutritional Subscriptions (in millions)

0.30

 

0.39

 

(23%)

0.31

 

(3%)

 

0.30

 

0.39

 

(23%)

0.31

 

(3%)

Total Subscriptions

2.84

 

3.02

 

(6%)

2.00

 

42%

 

2.84

 

3.02

 

(6%)

2.00

 

42%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Digital Retention

96.5%

 

95.6%

 

90bps

95.6%

 

90bps

 

95.7%

 

95.5%

 

20bps

95.3%

 

40bps

Total Streams (in millions)

30.8

 

42.4

 

(27%)

25.4

 

21%

 

167.1

 

179.6

 

(7%)

103.8

 

61%

DAU/MAU

28.9%

 

31.3%

 

(240bps)

29.0%

 

(10bps)

 

31.4%

 

31.6%

 

(20bps)

29.2%

 

220bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Connected Fitness

$36.8

 

$0.0

 

NM

$0.0

 

NM

 

$42.7

 

$0.0

 

NM

$0.0

 

NM

Digital

$81.9

 

$94.8

 

(14%)

$57.9

 

41%

 

$365.4

 

$334.8

 

9%

$250.8

 

46%

Nutrition & other

$97.6

 

$129.4

 

(25%)

$107.2

 

(9%)

 

$465.5

 

$528.8

 

(12%)

$505.0

 

(8%)

Revenue (in millions)

$216.3

 

$224.3

 

(4%)

$165.1

 

31%

 

$873.6

 

$863.6

 

1%

$755.8

 

16%

Net Income/(Loss) (in millions)

($146.0)

 

($16.9)

 

(764%)

$1.8

 

(8,211%)

 

($228.4)

 

($21.4)

 

(967%)

$32.3

 

(807%)

Adjusted EBITDA (in millions)

($26.6)

 

$16.5

 

(261%)

$19.2

 

(239%)

 

($86.1)

 

$51.5

 

(267%)

$78.4

 

(210%)

 

Strategy to Accelerate Path to Profitability and Enhance Competitive Position

The Company also announced today that it is moving swiftly to streamline its business model, accelerate its path to profitability and ensure it is positioned to deliver profits and cash flow in a variety of demand environments, and return to positive earnings and cash flow in 2023 through the following initiatives:

  1. Implementing a “One Brand” strategy: The Company will consolidate its streaming fitness and nutrition offerings into a single platform, Beachbody On Demand (BOD), and market its connected fitness bike under the Beachbody brand. This consolidation will increase the strength of BOD’s platform with the addition of Openfit products and talent to BOD’s already extensive on-demand library, enhance the Company’s value proposition to its customers and partners, and simplify its go-to-market strategy.
  2. Enhancing marketing ROI: Building on the performance in the fourth quarter, the Company will target historically high-return media and narrow its focus to pursue only performance marketing opportunities that are immediately profitable and accretive to cash flow. Additionally, the Company will further leverage its coach micro-influencer network, which continues to serve as a competitive advantage that consistently delivers the most profitable and productive subscribers.
  3. Improving lifecycle management: Leveraging its database of over 2.8 million subscriptions and insights from its data and analytics team, the Company has identified significant opportunities to increase lifetime value by reducing friction in the ecommerce purchasing funnel and maximizing the ROI on new content releases and nutritional supplements.
  4. Increasing capital efficiency: As a result of the “One Brand” strategy and post-merger technology integration efforts completed in 2021, the Company reduced headcount by approximately 10% in the first quarter of 2022. Additionally, in conjunction with AlixPartners, the Company is undertaking a thorough review of its organization to further streamline operations and reduce its expense profile to match various demand environments.

2022 Financial Outlook 1

As a result of the actions outlined above, during fiscal 2022, the Company expects to reduce its cash use from operating activities by approximately $110 million as compared to 2021 and meaningfully reduce its full year net loss and Adjusted EBITDA loss.

For the first quarter of 2022 the Company expects:

  • Total revenue of $170 million to $180 million
  • Adjusted EBITDA loss of $20 million to $25 million

1 Net loss guidance is not reasonably available due to changes in matters that we cannot forecast at this time.

Conference Call and Webcast Information

Beachbody will host a conference call at 5:00pm ET on Tuesday, March 1, 2022 to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (646) 904-5544 (all other locations) and provide the conference identification number: 653651. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/.

A replay of the call will be available until March 8, 2022 by dialing (866) 813-9403 (U.S & Canada), or (929) 458-6194 (all other locations). The replay passcode is 665771.

After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year.

About The Beachbody Company, Inc.

Headquartered in Southern California, Beachbody is a worldwide leading digital fitness and nutrition subscription company with over two decades of creating innovative content and powerful brands. The Beachbody Company is the parent company of the Beachbody On Demand streaming platform (BOD), the live digital streaming platforms Beachbody On Demand Interactive (BODi) and Openfit, and the Beachbody Bike by MYX, the Company’s connected indoor bike. For more information, please visit TheBeachbodyCompany.com.

Safe Harbor Statement

This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results for the first quarter and full year, the potential impact of COVID-19 on the fitness and wellness industry in general as well as our business, our business strategy, our plans, and our objectives and future operations.

Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully acquire and integrate new operations; our reliance on a few key products; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as "believe", “plans”, "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 1, 2022, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov.

All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements.

The Beachbody Company, Inc.
 
Consolidated Balance Sheets
 
 
(in thousands, except par value and share data)

As of December 31,

2021

 

2020

 

Assets
Current assets:
Cash and cash equivalents

$104,054

 

$56,827

 

Restricted cash

3,000

 

 

Inventory, net

132,730

 

65,354

 

Prepaid expenses

15,861

 

8,650

 

Other current assets

43,727

 

38,219

 

Total current assets

299,372

 

169,050

 

Property and equipment, net

113,098

 

80,169

 

Content assets, net

39,347

 

19,437

 

Goodwill and intangible assets, net

171,533

 

40,101

 

Right-of-use assets, net

6,613

 

33,272

 

Other assets

7,649

 

14,224

 

Total assets

$637,612

 

$356,253

 

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$48,379

 

$28,981

 

Accrued expenses

74,525

 

79,955

 

Deferred revenue

107,095

 

97,504

 

Current portion of lease liabilities

2,307

 

10,371

 

Other current liabilities

3,926

 

3,106

 

Total current liabilities

236,232

 

219,917

 

Long-term lease liabilities, net

4,823

 

31,252

 

Deferred tax liabilities

3,165

 

3,729

 

Other liabilities

8,007

 

2,097

 

Total liabilities

252,227

 

256,995

 

Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, $0.0001 par value; 100,000,000 shares
authorized, none issued and outstanding as of December 31,
2021 and 2020

 

 

Common stock, $0.0001 par value, 1,900,000,000 shares
authorized (1,600,000,000 Class A, 200,000,000 Class X and
100,000,000 Class C)

 

 

Class A: 168,333,463 and 101,762,614 shares issued and
outstanding at December 31, 2021 and 2020, respectively;

17

 

10

 

Class X: 141,250,310 shares issued and outstanding at
December 31, 2021 and 2020, respectively;

14

 

14

 

Class C: no shares issued and outstanding at
December 31, 2021 and 2020

 

 

Additional paid-in capital

610,418

 

96,097

 

Accumulated other comprehensive loss

(21

)

(202

)

Retained earnings (accumulated deficit)

(225,043

)

3,339

 

Total stockholders’ equity

385,385

 

99,258

 

Total liabilities and stockholders' equity

$637,612

 

$356,253

 

 
The Beachbody Company, Inc.
Consolidated Statements of Operations
 
 
(in thousands, except per share data)

Three Months Ended December 31,

 

Years Ended December 31,

2021

 

2020

 

2021

 

2020

Revenue:
Digital

$81,865

 

$94,840

 

$365,412

 

$334,804

 

Connected fitness

36,801

 

 

42,738

 

 

Nutrition and other

97,600

 

129,443

 

465,495

 

528,778

 

Total revenue

216,266

 

224,283

 

873,645

 

863,582

 

Cost of revenue:
Digital

13,454

 

10,778

 

48,312

 

38,285

 

Connected fitness

56,626

 

 

67,043

 

 

Nutrition and other

48,628

 

59,768

 

213,307

 

211,422

 

Total cost of revenue

118,708

 

70,546

 

328,662

 

249,707

 

Gross profit

97,558

 

153,737

 

544,983

 

613,875

 

Operating expenses:
Selling and marketing

109,458

 

111,128

 

548,130

 

464,000

 

Enterprise technology and development

36,197

 

25,478

 

119,915

 

93,036

 

General and administrative

21,159

 

18,589

 

79,682

 

64,818

 

Restructuring gain

(320

)

 

(320

)

(1,677

)

Impairment of goodwill and intangible assets

94,894

 

 

94,894

 

 

Total operating expenses

261,388

 

155,195

 

842,301

 

620,177

 

Operating loss

(163,830

)

(1,458

)

(297,318

)

(6,302

)

Other income (expense)
Change in fair value of warrant liabilities

15,065

 

 

50,729

 

 

Interest expense

(46

)

(95

)

(536

)

(527

)

Other income, net

49

 

111

 

3,204

 

666

 

Loss before income taxes

(148,762

)

(1,442

)

(243,921

)

(6,163

)

Income tax benefit (provision)

2,800

 

(15,430

)

15,539

 

(15,269

)

Net loss

($145,962

)

($16,872

)

($228,382

)

($21,432

)

 
Net loss per common share, basic

($0.48

)

($0.07

)

($0.83

)

($0.09

)

Net loss per common share, diluted

($0.48

)

($0.07

)

($0.83

)

($0.09

)

Weighted-average common shares
outstanding, basic

305,750

 

243,013

 

275,359

 

239,540

 

Weighted-average common shares
outstanding, diluted

305,750

 

243,013

 

275,359

 

239,540

 

 
The Beachbody Company, Inc.
Consolidated Statements of Cash Flows
 
(in thousands)

Years Ended December 31,

2021

 

2020

 

Cash flows from operating activities:
Net loss

($228,382

)

($21,432

)

Adjustments to reconcile net loss to net cash provided by operating activities:
Impairment of goodwill and intangible assets

94,894

 

 

Depreciation and amortization expense

59,597

 

44,257

 

Amortization of content assets

14,838

 

7,485

 

Provision for excess and obsolete inventory

17,488

 

2,759

 

Realized losses on hedging derivative financial instruments

550

 

92

 

Gain on investment in convertible instrument

(3,114

)

(288

)

Change in fair value of warrant liabilities

(50,729

)

 

Gain on lease assignment

(6,500

)

 

Equity-based compensation

16,413

 

5,398

 

Deferred income taxes

(15,862

)

15,595

 

Other non-cash items

 

93

 

Changes in operating assets and liabilities:
Inventory

(74,257

)

(27,754

)

Content assets

(31,349

)

(15,555

)

Prepaid expenses

(6,761

)

5,732

 

Other assets

(2,023

)

(1,772

)

Accounts payable

8,307

 

10,619

 

Accrued expenses

(11,273

)

21,804

 

Deferred revenue

7,435

 

24,770

 

Other liabilities

(4,521

)

(10,373

)

Net cash provided by (used in) operating activities

(215,249

)

61,430

 

Cash flows from investing activities:
Purchase of property and equipment

(77,911

)

(37,933

)

Investment in convertible instrument

(5,000

)

(10,000

)

Other investment

(5,000

)

 

Cash paid for acquisition, net of cash acquired

(37,280

)

1,247

 

Net cash used in investing activities

(125,191

)

(46,686

)

Cash flows from financing activities:
Proceeds from exercise of stock options

4,680

 

 

Remittance of taxes withheld from employee stock awards

(3,154

)

 

Borrowings under Credit Facility

42,000

 

32,000

 

Repayments under Credit Facility

(42,000

)

(32,000

)

Business combination, net of issuance costs paid

389,125

 

 

Deferred financing costs

 

(240

)

Holdings downstream merger

 

405

 

Net cash provided by financing activities

390,651

 

165

 

Effect of exchange rates on cash

16

 

354

 

Net increase in cash and cash equivalents

50,227

 

15,263

 

Cash, cash equivalents and restricted cash, beginning of year

56,827

 

41,564

 

Cash, cash equivalents and restricted cash, end of year

$107,054

 

$56,827

 

Supplemental disclosure of cash flow information:
Cash paid during the year for interest

$466

 

$206

 

Cash paid during the year for income taxes, net

$385

 

$333

 

Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for

$9,657

 

$5,614

 

Common shares issued in connection with acquisition

$162,558

 

$27,889

 

Supplemental disclosure of noncash financing activities:
Tax asset contribution

 

($135

)

Deferred financing costs, accrued but not paid

 

$1,593

 

 

The Beachbody Company, Inc.

Adjusted EBITDA

In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance.

We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income taxes, equity-based compensation, net realizable value adjustment, transaction costs, restructuring gain, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net income (loss) can be found below:

(in thousands)

Three Months Ended December 31,

 

Years ended December 31,

2021

 

2020

 

2021

 

2020

Net loss

($145,962

)

($16,872

)

($228,382

)

($21,432

)

Adjusted for:
Impairment of goodwill and intangible assets

94,894

 

-

 

94,894

 

-

 

Depreciation and amortization

19,040

 

12,376

 

59,597

 

44,257

 

Amortization of capitalized cloud computing implementation costs

168

 

186

 

672

 

186

 

Amortization of content assets

4,830

 

2,382

 

14,838

 

7,485

 

Interest expense

46

 

95

 

536

 

527

 

Income tax provision (benefit)

(2,800

)

15,430

 

(15,539

)

15,269

 

Equity- based compensation

5,574

 

2,229

 

16,413

 

5,398

 

Net realizable value adjustment

10,082

 

-

 

10,082

 

-

 

Transaction costs

209

 

855

 

3,028

 

1,467

 

Restructuring gain

(320

)

 

(320

)

(1,677

)

Change in fair value of warrant liabilities

(15,065

)

 

(50,729

)

 

Other adjustment items (1)

2,619

 

-

 

11,701

 

 

Non-operating (2)

118

 

(151

)

(2,899

)

(20

)

Adjusted EBITDA

($26,567

)

$16,530

 

($86,108

)

$51,460

 

 

(1) Other adjustment items include incremental costs associated with COVID-19.

(2) Non-operating primarily includes interest income and gain on investment on the Myx convertible instrument.

Contacts

Media
Madeleine O'Hagan
madeleine.ohagan@teneo.com

Investor Relations
Edward Plank
eplank@beachbody.com

Release Summary

The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2021 Financial Results and Strategic Realignment Initiatives

Contacts

Media
Madeleine O'Hagan
madeleine.ohagan@teneo.com

Investor Relations
Edward Plank
eplank@beachbody.com