The Beachbody Company, Inc. (BODI) 9 Aug 222022 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to The Beachbody Company’s Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. like recorded. everyone would call this I being is Instructions] to that remind conference [Operator will turn Relations. I Group And now Vice Plank, to President Beachbody’s Eddie of Investor the conference over

us Officer. Welcome thank Marc Beachbody earnings With Chief Daikeler, on everyone. me Company; Executive Suidan, Carl second call are Chairman you joining and call. today And the Co-Founder, quarter for for Officer XXXX Financial our Chief and The of

call Carl’s and remarks, prepared for Following we'll open up questions. the Marc's

within in today's of will number I the are with the started, such of which filings of to Company's in The contained those references which get statements Before non-GAAP include Litigation suggested to the in meaning future website. of Securities release. A may to statements all press release, references materially Private financial like non-GAAP adjusted within can earnings the Reform on call, we measures you XXXX. will to due of measures, facts, constitute would is risks Safe remind conference from deemed historical these forward-looking Harbor such statements described to uncertainties, to Act GAAP and reconciliation non-GAAP available are a the of be results Company's financial include includes Today's which EBITDA. which found SEC, call be language. most not the as the comparable Actual may differ our measures this financial

Now, over Carl. I to would like turn to call the

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is and XXXX. The market. a to market fitness Specifically, in and supplements X a more grow $XX.X global Marc of And we're alignment additions XXXX, to still billion finally, has our at made as home team With to fitness a focused CFO working real becomes penetrated in from We've to what strategic more suite digital, integrated operating X.X% be In collaborative XXXX provided compelling, large are our a CAGR to His our was nutrition and to CAGR thought X.X%. opportunities the in the generate million given one organization. which few anything scale strategic our emerging continue team model, is in significant, can with expected dietary only who recently, Suidan, on expand is by Marc our simplicity than states. management not quickly of playbook. on the in a his at and nutrition finance significant additional unique objectives a platform operational the products. served $XXX.X joined billion on ago. fitness me, global of CFO, model under subscriptions, and including to we health supported clear identified our have particularly to the demand else and at-home to quarter content expected is fitness category and content-driven future is is proposition confident all segment. insight, already leader with as invaluable delivering and community powered strong value pivot We're to And allows several the but and And perspective we to need from and and of and also place our same trends is the the in as goals. enhance in of to efficiency as proving by and partner unlike And that us market. experience capitalize months a first XXXX

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pleased Marc quarter. it more our with second performance on I'm So, to very in to for that, detail the over turn

is Thanks, today my pleasure first It the join Carl, Company. and for my as good earnings to afternoon, The call Beachbody CFO of everyone.

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are two examples. Here preliminary

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turning of the the details quarter. Now, to

helpful. comparison ongoing due Total would comparing from is a to subscriptions other the that million, quarter revenue of consumer sales on to years have was and XX% mind Digital last line Digital shift deliberate industry the out to reflects with into XXXX shift, revenue revenue last nutrition was that business strong profitable service it's and which also in our our This was experiencing. as of X%. keep Please decline also revenue. decreased from and digital growth would've to for in $XX height of the priorities Adjusting $XXX.X pandemic. our addition in where XX% to through digital Similar decline preferred year, focus been in was of reclassification In two our last business partially guidance. second acquisition. we customer fees the results reference I a cycled million, year-over-year, this of declined by we quarter, which year. had customers the

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million $XX.X and respect to and the said, With negative was significant I ending balance quarter in sheet, cash we no in our burn the per $X.XX cash unrestricted or balance debt. loss net and $XX.X diluted QX basic million made as of an Our share. improvements with

our also our QX. expenses the to to In Brand we our expenditures through reduced inventory addition capital strategy, operating compared QX lowering and One in position

additional significantly cost Looking with includes This cash discipline a rate. position cost approach. we strict cash opportunities burn maintain and identifying savings a will improved cash solid ahead, and

our make long-term continuing in select in cash our critical are confident business to flow our We are to the supporting operating manage investments platform success. through to strategic that ability while technology

that enter also mentioned, debt million, position However, $XX with deliberate flexibility. in a as transaction we for and with have facility. Carl the announced The agreement access with taken we $XX million financing step Torch enhances us provides liquidity to into Blue Capital our additional

Now, to our I'd of a take outlook remainder like the discuss moment for to XXXX.

of As about a post-pandemic patterns, high it's and in to weigh consumer on increasing beginning persists the And all is of the back year, with the which are environment recession trends. fears to of demand mindset the variability and the we consumer be inflationary clear pressure that preferring outside half think people spending travel.

to slower and a expect remain the under pressure top-line in we result, start off As got anticipated, to than QX near-term. a the

returning As plan cost for cash EBITDA will free over flow stemming gradually we and With cash navigate time. and to flow, we our and calls our on respect hyper-focused to the management. demand environment, softer positive cash adjusted burn remain profits

to don't be linear in as our we quarter, improvements quarter-over-quarter. However, profitability last expect said we

our position we'll in to into incur account, are for an compensation of I That expenses show million. in the of for reduction hires, employee tech meaningful we $X the $XXX we outlined, growth follows: when investments Carl reflects the this guiding July. million the back merit-based million as of event adjusted all remainder $XXX XXXX. loss the expect addition our the third $XX instance, million, and also new just to to quarter for in compared factors, revenue of that a referred in QX to to. year Taking losses business annual half to to said, for coach that Please note For expenses increases in summit $XX EBITDA million Total GAAP related and XXXX, to the guidance incremental

EBITDA improvement versus and million $XXX $XXX we to up. realize in to year. of reduction expect Finally, combined wrap CapEx now To a XXXX approximately last million adjusted

focus Although, positive of the environment open action taking remains more growth organization. drive for return to believe on and value. flow, growth, half to cash future back and questions. a the it challenging, the we profitable our We operator, term year create leaner, committed profitability up long through this management aggressive to cost please With set as that, will agile up business are for

comes first Our Instructions] with Partners. question John Guggenheim Heinbockel [Operator from

wanted little gross So, you the I -- Carl. digital at to change, subs bit. sub and right? Hey, a of drop net digital sort look start continue the to when off with

bulk So of continue dropping curious. right? is new that You I people out, subscribers. add the assume, I'm to

thousand, So, drop do seeing getting adding subs end? are much think run, you that, you're price, if And a as the you're year of on and know the maybe pushback down a XXX,XXX you more because that short at part bit not then taking, and actions pricing XXX,XXX,XXX,XXX, more now couple then off? least I between than hundred the little of drop of in you're off

John. Thanks,

to of in these You're -- fitness so the we our space be just for our on for And in We're an of of why the it's as increase impact has had through fact conversion. patterns. But, pleased the price I the demand are would cadence we're subscribers. lapping space. we bringing right, you're remarks, the is in particularly an uncertain uncertainty a I than where see the to the pursue were our or it's Does growth. little forecast continue are profitable. year bit in dramatic different in steady instead difference back increased we spear goes. as XXXX served into cost in manage we we've half scheduled for the fitness to quarter, And so tip likewise, in we be that I demand model, really the two since that in-home new that any of say way has variable -- I cash is and of that's, with were that last cost to sense? that the not don't first optics. what's very think free general flow Company important And launches can't a really creating like right. -- stopped way the reaching it we'll discussed the the acquisition, pandemic going any our opening she and swell which And subscriber The expect sort as that except make spending with acquisition decades. well structure of seeing now back expect That's

maybe subs, out Yes. were as guess to digital membership in that, And follow-up on floor the a to trying revenue, X.X ‘XX. and they XQ figure I so, million

levels, side. fine. revenue? nutrition similarly So, you and the all to here? the acquisition on How about back now tracking we some the the customer we that's I likely digital permanent do are would digital go guess subs will largely And way that's not here comfortable revenue back not And on ‘XX are there's But below but that floor think go you guess, revenue, I ‘XX. XXXX to

Yes.

I -- which I frankly, of particularly bright terms think BOD seeing of subscription and added that's what the portfolio, the think we're engagement is the in got terms to retention. that Interactive we've spot right, in because you've

see the of interactive that addition that do growth to layer continued with area. So, in expect I one live

the in very and our direct a on signal want that network recruiting we many place believe send activities, I based -- our stable within think can't identify cases that frankly, we're coach in but floor, very can which strong to a said, I have don't outperformed the metrics I expectations. I marketing -- I performance our of I our Now, like

some a from think So, we've said the go. job and to stabilized that like good place is I I ahead, goal it. be. John. do I to And current my to the that think reliable I think Go grow And is Finish. it got would -- the characterize Obviously levers of my with is fairly state here. And there. you way work business is things

Finish. ahead. go No,

we from in But structure, where say, the you in the of needed In difference bit for supplement were digital meal which planning revenue variety simpler All perhaps and you decisions. in files obviously is the customization. right. had people nutritional looking I approach choice said, what a actually trends and is following little of domain we is Well, something what we XXXX, coming a the like found for offer we the more fitness the more category sort to would give and are that address. people prescriptive enemy

make are Protocol are Gut the the X as simplifying the effect the also we a subscriber. will year what We're very very some we're its that in And taken as it to and recommendation. choice year. of our specific the of Protocol half that of recommendations that have part launch clear believe recommendations. making of a repeating we also So, learned out we've we half first and the second what more friction we is Week in of the favorable on Week taking regrowing This successful funnel, nutritional the specific with X files, Gut

some a you and is outsource a one, to but more I’ll in -- off P&L, right? that getting of connected that, isn't? -- lot or and then leave. the I of last one of there and the asked capital just one of how can fitness the sheet in balance inventory the just there -- you know way and thoughts terms on do Any off balance this quick And last I the de-risk time, terms you And

more very position because and the inventory, we're got -- great actually position sort has got We've inventory. don't have support in a great a purchase are the And good we're into We've retaining the pivot inventory. who we is that The on in what not us. the model. experience. enjoying we're and this factories millions inventory passed are are Well, of and the to we of storm subscribers -- well selling John, a doing focusing is customers and have having inventory content. that with business the we've very already What done, content the creating to

But, do the we the sheet. have the in time a obviously because that problem. market, with bring focus, out price we subscription inventory our bike. to pressure benefits get a bike balance we open when And sell said, our don't more we a to that's into a We as if there. cost pockets to trying you we're That's inventory like have sits chase over. to every acquisition So, go of into don't start the

sort and consumers the it the business make as a of job our So, of satisfy goes. we It's super make she great to business in the is good content have database. connected fitness steady and already out who

question. your for you Thank

comes D.A. Our Linda Davidson. Weiser Bolton from next question with

Yes. Hi.

just you Marc, CapEx the Has for that in would make? EBITDA minus it CapEx. that minus it clarify, and Because I EBITDA was content, it. that definition? minus can guidance It changing expecting to the says making here, before spent you're you improve changed? Are cash looks kind on of definition you're improvement So, of that terms the thought like XXXX statement

So, it looks like different. it's

clarify So guidance statement? can kind of you that just

reduction. spent will Yes, same, versus look XXXX, creation. million how less the be was spend at as million absolutely, as XXXX content we Linda. The what definition $XXX for in well much in will remains to so $XXX we technology CapEx When EBITDA there

Okay.

release, So, in on improvement. $XXX I the outlook think press million actually the improved the call to and last you last had

bit this of I a back. little a, So, guess, step maybe is a

second the improvement on you in cash is is a little cautious more element that particular for there little a a of make maybe changed of to So, caution of that just over the that a spend the year? or result has some of macro half, the kind environment bit

But bit imagine, former, going from the reduced more contribution revenue I forward managing standpoint outlook with prudent we've the burn. really We're our Linda. It’s aggressively. just impact can as a cost a could cash our mean, you more being margin. dramatically

that. think it's for accounting I just So,

Has a your but has specific given in projection I general, the last you spent creation, your lower that changed really haven't versus quarter? -- of on previous outlook Is higher your than has projection? know content lot or numbers, cash for

It's actually slightly. coming down

-- the baseline this cadence Carl a way. have We the is for by

we Interactive which product seeing at savings coming matured. cadence a have in live We content BOD of as But, below generally slightly budget. has is launches, the are that some

there the certain creation realize the which ongoing live half where we those of refine we to system. are efficiencies we year, of some savings seen the got of can that back as we activities, up, that So, launched. pick it content from expect and We've in are

we So, it's as to subscriber understand what's of to important. and what's that important business getting not -- the as part the better start

And which think remaining how you those year. being then, on far fewer second in last occurred there in half? XXXX then off, to major are the like of many still launches occur call half? the so ones about tick have the maybe first last And Can seven in I had you versus talked many seven

Yes.

launch we are right in the middle a So, now. of

Fire which So, say, did had of was I will an job XB anxiety year. right which nutritional we we've exceptionally middle a LIIFT We was X microbiome relaxation niche the which that MORE first And top performed its program said, called launch. four -- went Then, had year, the program program. I the at companion a with time everybody And fitness program a so put Jacobs. weeks well. Jennifer spring, Protocol, gut got far one, launch, anxiety program in you was day, sort we and this of the an other we're into every the this of we've the reducing Flow Pregnant, Week with intense that with in Then, for program. like Gut improvement

largest with content July. And trainer called in drop that loving allowed we is, with Thing. Her will our program effectively. from the subscribers then, ever, announced I’m but on not actually value we Sure the platform with are in to Beachbody -- Andrea most our of July, have is what Rogers the name cardio got count library and it Openfit. we that in it had It's no, another additional Beachbody -- We October. cost the dance also called We first launch rides program as we a while Then which December, coming over our program content new no that we have the popular drops, one say which Openfit live all content aerobics in announced already of have the -- did it. well, they move into was the doesn't and all additional

nutritional we primary focusing complemented our offerings. the also I transaction that nutritional first said, Now, like within into people that customer And the results we with are program. the that have got with

the recommending the pre-workout program, called and lifting we're a is post-workout. So, which which performance LIIFT is MORE, what for the includes instance, stack, on a

right bar, with then the second the the seasonal combination be two a prescriptive is chai. also flavor have Shakeology prescriptive about brownie we bar, will that, half pre-workout. of and Sculpt a So, from and XB one which we we're chocolate of coming a for And Shakeology is Shakeology chocolate have year, what's very and beach Sweat the program mint in called and Rogers, flavors other vanilla about is October then Andrea caramel beach this

about So, a in things definitely year, normally than to of in lot stay do a that lot active one of the we on channels. coming their half year. social back the And coaches launches media our more stuff of it's gives

I was revenue fourth Okay. than And that is understanding usually think the quarter. higher then, can you whole -- just for quarter say my seasonally company third

it say $XXX So, fourth million projecting $XXX third than is in fair if that will be one quarter, you're that? to million to quarter that lower

marketing we with speaking, outside, Linda, diligent fourth people just yes, yet what be get say quarter situation, giving I quarter, paybacks. would generally given very being strong immediate on usually guidance But is that demand in whole so a wanting it we're the environment. but also this spend not post-pandemic to is the our we're

at will But… So, QX that's way. QX stage. this guiding I why don't materially this different think be than we're

of -- One the sorry, reasons Marc.

into of biggest happens we the go One year is us of launches new one December, in year. for of reasons as the traditionally, the the for that

which is what the nutritional this our October, launch. the the event, new So, fourth couple leadership call for coaches and benefit happens event a then we that big big get happen in of of in there's we our that quarter, launches

That's the of say generally quarter. the fourth seem half shaped So, the been back same the of the sort be because of that I to strength our two of experience way. will

then, that the that? so And is Okay. this sheet? put finally, And will what so Is that debt is you of new if my actually on rate interest balance at financing that terms understanding debt correct? in

Linda. Yes,

So will we'll then to the not and balance access immediately the the is to put there's million, on subject There's $XX facility sheet, the on be then components. and two additional the sheet. balance that terms put additional

On could operations is we all is and confident interest the is that pick SOFR balance about and liquidity plus is rate million, And the The first our cash X%. through -- and this $XX what This our sheet. precaution X.XX% existing flows. say remain This and we comfortable I a on component cash cash would about pick. creating liquidity fund all is of is management. just the

you're So, essentially rate interest saying SOFR is plus X%ish. the

pick. SOFR the cash plus if add you XX.XX, the and component

it. Got

-- Weight Okay. has they're ask membership whereas has retention and retention finding And haven't order Watchers has of Metafit. off, have want mean, membership don't not month been [ph] the loss well just They're to as Weight good because second gaining any fallen food. you Metafit, can either, they weight and companies, different problems. I other so they been the Watchers I doing people

membership a they're little in retention color. more Like, So, maybe terms us us seeing? and Is it what of what is or a had of more maybe could you it kind -- more little you're if on you suffering? your like that's the new to bit how behaving, consumer growth characterize business color the give give

really a Yes. a I would it's good question. -- say that it's really

this has of we These is we're put every their trying social by -- And you're we've current should as that's that to made, you've sales supplement year Week complex where gave the to feel program more -- on hey, got as that what people who people use? a the real suite more prescriptive force. And direct-to-consumer people primarily then those offering. well, offering facing just what X effectively. and any what which with together. Because program do its once the Company what I inspire back are -- what which trying come -- Gut sort nutritional and activity just a we're ones more force prescriptive. the again, other sales the And Protocol we're issue this And from to, like, think just down network saw so like, we complexity really improving. isn't group the we into people consumer They're relying when volunteer that doing. exacerbated are of offerings specific that gotten this a on and like their a a and fixing about environment, is get it They from were little they we much, our regular that like me, strides. broader get to XXXX. not that so workouts that media the the would what in, had to we our merchandising so company hit then do is employees, just to what product and be this on I'd more really in of They're of workout that's comes I have, half sophisticated headwinds got they're offering diverse --

the traveling. we're are this would relationship said, that as people bit environment say of I in, of it's -- a So, Marc

don't be Now's long be you friction pursuing on to not cleaning to you're to the be and up. hand, or the of about, going and in body some how necessarily able weakness time know other that merchandising transformation out the because we're

with question comes from Suisse. Our Kaumil Gajrawala next Credit

you first with -- guess, back a there future? with six you at think timeline CapEx are are and question now the we're the to -- there guess, your liquidity, I on in a increased funding, cash Is and your left or liquidity. come you there's you months changes market I burn in this have of now do if some perhaps past to the, of XX the or liquidity months where about is rate, is near point sufficient, looking thinking

we we say that would cash, making we're the is to business. didn't Yes. Kaumil, what changes make need already felt look, cash the in I additional

million to it you this down for really look make materially our quarter, from a controlled to past burn our more So, reduce position to forward at platform, when how part is to we our growth. changes the cash lot increment going $X

debt operations, this with and out to changes facility actually existing that spend funding and our we've the not all making. there it liquidity we're created operations. this so, We're all get is And fund through

more honestly needing going foresee think don't net, it's and capital. so a just I So, any we safety out

general Can might you're year have talk And a look on there? bit getting you're Is ago? particularly like about the getting just like launch, then, the the seeing you a acquisition looked of does more maybe middle just it you're you and efficient? sense a a what versus costs such environment this giving what kind what on more maybe in it large of us expensive? bit seeing can they customer this is about in Just trends talk

cost You mean of the acquisition?

Customer sorry. acquisition, Yes.

eight a week In program. costs steady those that primary is LIIFT of driver coach of And honestly. The people of this together don't we does, experience groups go through remained meaning all of are it's unless acquisition coaches. That put has sale And what in direct, case, the is great bring put That that love to is in Yes. cost create not they primary together driver the content. we hands the an network MORE the made. program. the quite business. content people business flywheel Beachbody they're the The who is called is our

most a took people to wouldn't So the fitness we is with that -- of really our and sequel. lean here. question the you to normally to X summer one being LIIFT follow into programs season. we're as pleased it's how weight with as LIIFT loss The the this, very the X is, love the with And of concept LIIFT MORE It's this sufficient. demand sequel because popular approach only peak this think called doing of who on been is not

female. of is network coaches Our primarily

doing been are also see to that So, it this appealing program is and couples to particular great together. men it's

sell. program was cost pretty So, continues launched much it's the because that in create terms half acquisition, transactional. first actually July, week -- to the in we in as are August It that of it how we so. of to is We're but of see pleased and continues the or last here fixed demand, to of

year revenue our a to Kaumil, it went and I'll of to XX% compare XX%. add And, that, from selling what to down ago, you if expense marketing and

a referring our of route there's component if And refining payback. the in obviously And because market million we're because database you right working too the -- into very, spend the do I been that and aggressive room So, disciplined. media there, aggressive we've space been we've around what that third customers. in say, And lot network. variable is is X we’ll then, evaluate on Carl's now. very improving, to I'd we're highly that there cross-selling that say our have and own very coach we would diligent in to balance That to and honestly, it better we're then

Street's Okay, we're great. then trying every trying of And company the to recession. with out, to a -- work would what implications the be

few what bit for respect than when last the would've today business You a past just you've recessionary seen about I while. talk can your in been during little environment? the you you're a But been around a guys that in it maybe is cycles. have different

about this find perhaps fortunate need on who been don't And more know they're number environment in if over times. going as yes, we've CEO proud $XXX move And Likewise, great downturns. first, tightening fitness when this helping because membership. higher I what demand But a Yes. what at are a you do spending I'm any got a month offset cost-effective more be been they decades -- one responsible them, people enough gets that monthly never to perhaps after them a by in solution. recessions, That's started granted we any belts of this inflation, has looking I'm bit. hand, a trying productivity income as their is about patterns a benefited contraction a their because been little three -- that or prices aggressive little in the two I would take coach bit company, primary recessionary to of how get get also there's household through our the people have membership? network Well, a and recession. might One, for those to going, more in digital productive $XXX to And from in a have other for three are of in actually Beachbody say might might motivating thing of opportunity do, reasons. moving, -- you've we've but they're their that's to going one of be how we you're to is this they that couple with in-home going to requirement

smart happens bit then. sort any XXXX, experienced get economics look can for to, growth recession. we that we to this where we of the back like environment. we're little if the So, benefactors of possibly reason the XXXX, to a tailwind economic don't I not back see double a because actually But And us sit in be digit of of we of

Our next Komp Jon with question Baird. comes from

follow-up just then Just on given start, to cash the guidance, one adjusted clarify you're piece, the Marc, that be to the expecting the just guidance? within usage piece you've willing would for loss what you for comments and the EBITDA

time. expense cash say $X usage Look, absolutely, importantly, I Jon. that coach Yes, stated, That's adjusted million likely a one. QX to like have in would that's number EBITDA. two, say one, that be comparable one the our I'll relates we most do the -- Number to summit, I would

platform lot would controlled likely of spoke I usage So, cash I like to the a are as of investment that about in relate, would we're our And but that's deliberate making said, and frankly, this -- -- things say, well. probably some comparable. those changes be Carl two does our and

for full-year It was you what should I that maybe for what $XX the year the to break first like -- follow-up, that number property could. just two and comparable million? if to further and attributed in million equipment Maybe down Could the the looks then one quarters. that's be cash $XX outlay about

we year-over-year, you there's component more Jon, reduction component. what definitely there's specifics, technology Look, the is the because tell Yes. programming substantial and a could I there's dive could but into and -- then

give So, could let's you run the time details of through up visibility. that the numbers set and we you

Okay.

need you the you expect that to of sort then, one for cash of back it the until could expressed question. if going you at supporting when cash quarters the you cash like have comment your current trajectory But on Maybe look wouldn't and you you out as just what business, that just confidence see question good. broader today, your sort what's positive generation Sounds you would many business? are how confidence? necessarily, And

Yes.

just our Jon, said, one at that $XX it cost cash and how quarter, just -- in to been our from so So, comment, demonstrates the reduced I Carl we $X cost has said million structure, earlier, we control in as burn ability of XX% the variablized. structure looking have our right? my And to

So could that mind, deliberate down -- we want, them with we're the we if investments making, slow when in right.

kick those about all all nutrition, ‘XX. additional So, I then, things. that the in initiatives skew And around distribution at we the us of flexibility benefits about cloud, the would spoke if network, spoke looking give our need. I processes pricing, all rationalization, these moving to

said pretty could I comfortable why through business cash the existing feel that money, borrow through that's makes So, that we we flows, not borrowed the if sense. fund

run the piece business the much could enough rate, to to of a get if you're trended closer that or flexibility that applying? just top perspective, line be revenue And how would just be sense I'm where comment, revenue million adjust to XXX a trying for basis your profitable, from of cost that to you

still will of the growth still term, say the recession, in we're right? -- Yes. pandemic There's headwinds upcoming this you, this healthy is some short-term of market. in the we're out term tell let's Look, I growing obviously John, the market, coming a -- believers but long long

through, So, level. that we're come we our cost control But at to position Company definitely a profitability to growth. structure deliver that still for investing if could the doesn't yes,

Okay, appreciate all comments. the

you Marc. would I'm you numbers of I past color kind is maybe last coaches and business how of a changes? changed in share headwind changes that's of quarters, you. of one, within what anniversary seen if sort Any Just or coaching there of the until be the few natural Thank the and curious, network? don't the just helpful. just to some Carl the or network some have the know there you growing can over

we don't couple know I but the number, will healthy very Yes. that the were things have coach which say a published business. happened, for of I

buying their splitting of to coaches, health intent versus concept fact, a preferred definition In customer, monetize the coach, of out fitness discount a by really and on the who's a a into the product. person with the

and got I view this this for of came for Likewise, of them. about people clear we're believe on. that them in looking having coach. what what who people split network they're intend don't up can didn't we opportunity myself to designation, that And train what so actually to working coaches in be terms XXXX. That them, dynamic. now, didn't for that's maximize the for. excited we're of So, of But coaches, looking need a what actually and that we yourself. they're -- on of number preferred intention and health that listen to community will them the fitness more and any by I -- achieve the business taking appropriately mission customers better for care accelerated the be way people, want going get other that have coach to that simplify help who in accelerated we've we be have us to of a ahead with to involved isolate of helping this get will and the has we've our the And

signal sale. the at environment operating as for easy of that in how generate from a it's time the can coaches, at granted can consumer So, but the stronger take we they're time, same beginning, it And not a to said, I us. all the same be like

we're why taking we are. view So, that that's the

comes Zhao of with Bank Joanna Our from next America. question

million for $XXX Thank really understand one the QX $XXX million my guidance taking the Hello. you to first trying revenue is My of on the to side. questions.

the a implies year year growth. over XX% think I down midpoint

year, spend the component understand of And that quarter-over-quarter that you. really bit, on is of second spend? coach sales on for by kind network and marketing to to plan payout, like and the that what this of marketing macro the and is network? for your for reduction a sales by of on QX, the seen quite I've to mentioned that is as headwind is thoughts what you trying and driven marketing driven your your So, sales the Just much component what down $XX growth Thank and the the million. How balancing versus profitability? spend of any -- half is

there's There right? lot of the look, reduction QX cover I'm to -- over a questions, On all QX was try first going one, Joanna, was So, around to this. XX%.

view going quick so So, and And given marketing be get way. those prudent that that taking a that more on diligent, we to front, QX condition customer macro the the ROI to acquisitions. said sales on guidance on we're why is a continue we

our in So, things. needs. this saw in consistent around would needs quarter what feel you'll of terms versus see is with And last I percentage you say going our We investments profitability and say, of that revenue, we're really would what platform the then, revenue I offering the forward. more doing are

next Company the year. growth position into back to we So, get

investment to saying, by like, see, controlled it So, could ever we I'll we down. is down, slow it's finish what we - that's it and need if slow meaning,

I is, dynamics acquisition. bikes you're investing seeing and quarter of think the of the that was in significant third of really reality that's were were sort environment we aggressively becoming strategy when of XXXX, we here also media brand clear. year-over-year selling a and one push, And the

approach a is than and chasing much rather what buying revenue revenue. a you're more in seeing So, prudent now reduction

we acquisition Now, fundamental flow. the And built that over of since really that's free the two of been to this we media staying investing business and that know true to course what generate started it. cash decades. going And in is is company we're the

a it this at create at take and them of of positive good a good going acquisition. to with taking sell if sell we're sell we're of those have relationship CAC generating the a digital LTV. is cost bikes, we why very We're we relationship same And bike, going and to way the of, that's database. so, subscribers we And don't advantage subscribers to in into view the that we're

rate to last economics of while quarter, more slower will the third those much quarter, bike your So, compared of that third answer as this favorable. sales be help that'll a sales be question? Does

to the $XX this coach $XXX attributable much of of to then, for sales that And did you million your for million that network. out is mention was marketing million sales QX, was Yes. commissions the How related $XX to the quarter.

of Generally, it And overall into would of is pretty it Joanna, marketing we could and XX% media together. We you as a selling compensation how usually XX% did coach dive acquisition. deeper from that. nice sequentially tell revenue, is we we've don't. percentage to much you What QX, see taken disclose XX%. I by in from spend versus don't reduction then a

Okay. bike next on That's business. is My And of question the mixed segment fine. the then,

margin about what the get margin You doesn't of quarter by pushed If is bike or plan breakeven rest closer increase due even, you been year. that earnings the for to cannot last mentioned the that the to the focus to on the is your the spike potentially you breakeven has or target out? Do call to the break year And track with business? divesting mixed the plans your are in really, feel that to end thought your meeting have close business? that

look, Joanna, related $XX the reserves, substantial say of would negative the out all, $XX the million. gross portion margin, to a is of non-cash what in of Yes. first was gross I margin

acquisition upfront the our bike cost, existing of We bike market retention LTV push terms margin. and formula. think then, at the the way, negative sale. thing front, it create trying And we're make could that -- sell holistic more two, the makes to look that that negative bike as in is margin in is. it positive reduces to to view customer, is in think Number not monthly more it us look the of a So, sure good we when So, look impact trying I has we on one, what it tends where it is positive the I it higher, than participating situation, lot price their don't subscription, to sale, wars a gross the given customers, we as this a which plus customer more be the a just right? look to at on engagement about which at and

this question. for no your you at Thank time. waiting are There questions

Daikeler So, for I'll pass to Carl the over closing conference back remarks.

Well, ran and Beachbody everybody. thanks your again look in we today, but I talking little joining We Company. Thanks over, forward to for thanks a appreciate next The And everybody you interest to Okay. for bit everybody. quarter. us

Thank Company's The Beachbody concludes second for participation. earnings That you XXXX call. quarter your

You lines. may disconnect now your