The Beachbody Company, Inc. (BODI) 14 Mar 232022 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to The Beachbody Company's Fourth Quarter and Full-Year 2022 Earnings Call. At this time, all participants are in 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. Instructions]. [Operator to this like being call everyone recorded. remind would conference that is I

now call Relations. over host I turn And will the Managing of ahead. Bruce Director over ICR go Investor Please Williams, your to

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

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

Before Actual started, of would contained to the within which may like Company's conference statements meaning statements forward-looking facts, are the this materially Securities we release. today's The uncertainties, and be Company's of in I get of constitute Private remind may statements deemed not filings historical results Safe you SEC, Harbor such in in with Act to described call, from includes language. suggested of to the Reform a press of differ due the the which are Litigation XXXX. number those all risks future which

as will such non-GAAP measures the comparable available can which financial include to earnings A be non-GAAP the EBITDA. measures release, financial within references website. most GAAP of measures, on found to our is call financial reconciliation Today's these adjusted

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

and afternoon Bruce, everyone. good you, Thank

in the Okay, our for XXXX. the first, with pursue for our innovation we quarter plans fourth let's while bringing line expectations get all caught our and costs up. to On strategic call, our last dynamic presented earnings significant we plan environment, continue

our achieved challenging earnings EBITDA of and was a expectations we what during guidance. demanding one call. proud delivered fourth year, adjusted economic well or I'm announced QX our in ago XXXX executed exactly a our exceeded backdrop industry. revenue that our year quarter and four we line XXXX, say team of we headwinds the pleased with our all was on in our despite strategy to ahead guidance I'm and of and that brand quarters faced met But XXXX by the we

put highlights of what in perspective, we this me the Actually, would step actions all let executed to in we we and do XXXX. said through the

As you technology, one centralize business and might content the to to into and platform decision allocation made all consolidate focus capital we marketing remember, the our investment.

we BODi July, began but content and engineering the migration initiated subscribers extremely the together the the subscription, subscription In Beachbody of one create Beachbody of consolidation and to simplified, platform our compelling openfit premium on-demand the with into on-demand platform, offer.

we're just completed proud brand. couple on I'm of a was under platform budget weeks first under time health ago. the report that world's BODi to and the work complete And now esteem launching

programs digital fitness business every and content our a over eating recipes, greatest with sizes. the about plus With two A section and in incredibly new stream subscribers popular nutrition healthy mindset of feel full all and XXXX new shapes brand month. help positive the to themselves its in catalog compelling channel great

and to our focusing formulating More roadmap on a problems profitability minute. was means business of that to and and all wants customers thorough taking fundamental this out a in by But what all a needs. approach biggest their on the costs activity clear to

down streamlining Packs nutrition simplifying production of to the known process SKUs the and plan and the completed technology reduced a and key business. from spend XXX Solution Total with headcount, as Further business We aligning five. configurations our bundle and variations

And them that don't year. raise, with debt and We're improved earlier million, confident prospects. Team in XXXX partners offer of BODi CapEx the of EBITDA additional we're This we are the XXXX, path array our any that's $XXX In consolidation their by we to consistent partners. network BODi ahead what now to QX the EBITDA simplified options we on simplified call Coaches, compelling. target offer. of million changes adjusted of these partners Beachbody our call we of need foresee $XXX drastically The capital. for the This We profitability promised by XXXX. business them implications consolidation used

field focus engage more BODi and opportunity, up less turn the which spend helping time be to platform. people training income can the dramatically their now with should their more So attract teams people to increases partners. in That on sign

rethinking the And introduced reposition leaders last behind to to who've our Health and category of void left that legacy We We're the category. market. On a spent We're call, best we the the Esteem fill people the major we significant the expanding serve size brand addressable TAM company by XXXX plan the our how end, and do. to fitness doing industry. what to been diet in of industry. also launched

me Let vision over this before on I to Marc. it elaborate turn

So context get of as you you from expansion the the specific have KPIs this quarter. into

is the positioned rejecting the aren't are we're I prospects business majority growth. well lose that enough pack. Because until or especially Fitness they learned, convincing think but consumers pandemic, the extremely weight premise runs the you'll Legacy and year, six of Nutrition they for see that really good that we've the playbook last get since of a what the

legacy engaged so of how way. This appreciate because along industry is their have declined XX increased. and the people by that versus sense them has In focuses today we they discovered Week Gut rates be focus to do us, which on the failing how Fire INSANITY lifestyle is at complemented the programs could surpassed that focusing while and business the obesity and our our launched, clear represents and the PXXX the opportunity a this. significant significantly the and two fact, programs an happiness that surprises well-being ongoing both while years, we achieve of data Overall, that you process gap us model plan results stay year. two this last had the Protocol expectations transformation you at we became when on you for Of It end. feel, Flow in the last on over of feel X clear diseases

their this adults industry efforts is legacy of has XXX That's are and There program. been day convincing physical of just are one, its what's the prospects over solution that faults happiness million buy that organize this overweight U.S. missing on it's quick The treadmill and adults, that that a results comprehensive solution of to who motivate over, obese. buy retraining climbing. delivers saw happiness. concentrated of same the one or And primarily category from the with the esteem. not of the we join This that move end market, to new is the platform trying and a Once in from XX% we next, in were to to life, model to people to find -- gym. that number on cohort real gap serve to fits health at the them expand or

more that's love. enemy existing help improve with most new take and bold in they What and deprived we one? enjoy new foods while days they products. eat anxiety their We Bread, category, surfaced they encourage feel adults to to actually get to the enjoy looking reduce love. people a to training when are for to this become is food or as the self-esteem. we're we category Like, whole dessert, don't still for the lives, people freedom be want better, today off to In healthy, People way from food moving their support of discovered did the the a number of fact, instance. into

category category in Superfood we since and pandemic we're of Back Health we health the market the when when content. taking observations last by fitness and from saw our growth new we expanding the now opening a to we of holistic it category Beachbody, decades of the period everything defined and this the learned Then created XXXX, founded home with we Shakes, our dramatic esteem. two

significant You'll five see ways. this materialize in

BODi. First, as consolidated we bundle, into I we simplified tiers and call our subscription of one complete said, BOD BODi it

$XX access the annual of we're subscription over services videos to an price library and month around of business is programs, known our for for the demand which our of X,XXX revenue best model model. or that or $XXX, on foundation fitness XXX For

of of a each series each are our three bike for workout overall four subscribers. fitness, Blocks. called BODi plan new general Monday lifting Second, plans month programs month, beginners, an week we've first connected every month and launched new the specific starting ongoing These serving

to but just example, off plans a Block gym personal and layer that's month. the BODi are for flexibility the during our efficient take effective joining the with time for cost incremental appeal audience not the a project to The looking customers to oriented or a PXXX trainer to alternative hiring like

old Our partners is of new trend wave subscribers of to of launched, that a model. month, only use new start Blocks than program the a our BODi when every new rather was monthly which cadence

changer game Master Third, to we've Positive for Mindset and a classes platform, retention. our it's added

content content These This overcome help platform anxiety objectives. reduce work and offering Master to monthly obstacles BODi while they lifestyle in their fitness, subscription. so the overall makes nutrition manage they one people complete classes their and only achieve their mindset mindset

instance, This Petra we're called for Happiness bestselling introducing Master author Kolber. Habits a with month, class

churn. other out downs figure and members services higher it consistent expect life's or obviously fitness gyms and to just stay navigate see You and to leads ups unrealistic which just is

high about physically Master feeling saw with two improves and tools self-esteem, content good when less themselves, value to subscribers launches a good they're last has mindset their the Feel that Classes feel start year, we people to churn. Mindset incredibly likely experience enhances those give that their are Our from as positive good people and to and

and the the Shakeology not alternative the incredible recipes benefits. Okay. advantage the traditional Shakeology variety desserts, to line. that has smart the positioning Shake, also product you hundreds be of it also Nutrition a with Superfood first of Dessert, delicious Fourth, will, only but The health if we're of incredible world's flavor is dessert, expanding to first Superfood product take of

perfectly to for absolutely actually a the $XX tens for makes eating them swapping opportunity Dessert and are the choice esteemed fitness will great. take category be their of desserts one or of There our massive but first millions into normal people billion lose dessert that who not Superfood feel may of logical weight start fit plans, BODi. helps who new health them a and ready represent market step Healthy of

BODi And mission our name from Beachbody network feel of from catalyst by to powerful that of and poorly commitment is this name our aligned strongly driven back them the the with our market. Beachbody expanding their who finally, demonstrating the of the holding all to was changing platform

add our the confidently initiatives, points, positive price mindset can simplicity, enthusiastic platform. about BODi the of addition the especially name the and the that change, extremely partners these including to are I content

as the engaged experience payment PayPal reducing by and They're X clicks XXXX, been There such operational promoting also some such alternative adding to aggressively improvements our checkout forward other Pay. at we launch. have digital later important Apple in March look since simplifying and are this as options year, and

are ecosystem. These is our fitness But based our on they enhancing all grateful which And the on we whenever changes approach extremely our on observations nutrition business so within innovate who I'm powerful delivered consistently successful board. and an our in productivity timeline incredibly budget. a the to that proven of been this are tight model, to model that has our initiative on this mission teams passionately believe they're mission clear. and

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Now quarter let and of our the the Mark? over Marc details me CFO, XXXX with the results. full-year it Suidan turn to

good Thanks, everyone. and afternoon, Carl,

results results, substantial guidance. are the of We pleased midpoint end exceeded high million, expectations. the a quarter our our we the attaining compared in and Adjusted towards came a million goal of new the actions reduction. which our a XXXX. a with initiatives, loss nutrition fourth prior-year Notably, on growth. Fourth improvement adjusted quarter our EBITDA $XX.X basis of fourth in $X.X was quarter period. coupled initiatives of revenue sustainable of at our our generating discussed the healthless recurring by to are set On cost for stage our to pricing, that call, XXXX, profitable The relating quarter strategic team with EBITDA third revenue we end quarterly in implemented

as the adjusted Let We from BODi we just subscribe only these an the initiatives. on XXXX. regards September Carl and to introduced to in me and Premium building app month, you $XXX BODi renew BODi what three this or on With Premium update on shared, the give app. new annually $XXX pricing pricing, can of

As programs a of basic majority all existing only are our of at reminder, the our library $XXX. the subscribers involved

September, our healthy in the BODi subscriber growing Since new BODi been a file we in launched pricing size has way.

QX are additionally, overall much a is BODi that in growing, while nutritional higher subscribers we digital rate. So have finding attach BODi our base contracted subscriber

more measures fitness, entire These mindset. vision validate higher engaged customer nutrition a across our creating value and is of that our including platform,

will We generate lifetime customer the pricing. to we due will be expect that higher first, ARPU value a initial because higher

Second, will enabled fitness we attach engagement have experience by higher subscription will customers lower the given rates. we programming. and And churn the BODi mindset expect nutritional that third, higher new

nutrition, expect to we realize our lowers excess requirements. to inventory as capital and reduced to Moving we benefits working to higher to and management. gross mix write-offs margin shift products product This margin continue leads enhance

high extension Healthy Our largest a Dessert is initiative and gross product most Superfood of alternative. the our margin into important Shakeology nutrition strategic

not long-term nutrition no with product, on is Gourmet a and of existing growth. prepare product product additional it will This costs. proportion expands Desserts. there are Simply be increase put, the this our development this TAM complemented to of new recipes accelerate Shakeology's BODi Superfood and meaning is clear, revenue To mix extension hundreds product

We are monetizing the of still early this opportunity. in process

We terms search of just of engine and optimization will our partners to we network creative media presence improve started assets. online our in and train

fitness, those positions a the traffic very app, seeking at This our our towards When more engagement. see well. enter generate all will nutrition you it website first and As now top. mindset you step, nutrition

through to relates cost to it we As simplification gain our are initiatives. structure, continuing efficiencies our

sized the the to have right rate size our We structure current of run business. cost

January since XX% we result, have to employees As our by XXX XXXX. headcount over a reduced

some key through stand. initiatives walk they where of me Let our and

more our first cloud. the phase have of reduced XX%. servers We ERP than of per We by episode completed production cost the our migrating to

to resulting reduction partners past further restructuring completed commission payback, Our focus we costs in SKU a continues rationalization on customer spend efforts January, strict variable acquisition for a are or Marketing on and track. in quick force. this

to cost savings capture continue management, and practices through cost additional will We best disciplined improvements. process

evidenced payables, and also Our be by our expenditures. in lower lower year-over-year reduction spend can capital accrued expenses

In XXXX, $XX million a XXXX, XX% versus was representing CapEx million $XXX in reduction.

to platform will expect we did same consolidated the XXXX it Our and as simplification level dramatically due one CapEx our library in we our CapEx production XXXX. declined continue technology to as at initiatives, in one

XX% at end versus fourth $XX was Turning to to revenue was last XX%, quarter, midpoint was year-over-year. the Digital million, X% at million $XX down our was million, the were improved total million, year. year-over-year in retention than revenue higher results our for the of line $X.XX the subscriptions was by levels $XXX Digital year-over-year. XX% of which with guidance. quarter basis prior-year while declining DAU/MAU XX points revenue XX.X%. down Nutrition XX%

were offering including Healthy contraction, this simplifications new XXXX. focus Superfood improve we with recently business Nutritional in should implemented, the and disappointed Dessert, actions on we While our our packaging sizes that

with approximately fitness Connected million, $X was X,XXX revenue delivered. bikes

popular the our a $XX for most and be skew. Our month the continues bundle bike, BODi to bike subscription

margin this year. offering. more view users Starting bike While will largely to of revenue for this the it easier to the offering Gross great making revenue driven BODi mix, subscribers create to still shifted options, month, to we fitness in The this was the transition compared XX% fitness awareness a more those market deal, to app, is fourth XXXX. which workout margin need it connected as XX% was them. to improvement quarter, revenue connected less last gross of by

was size. through compared walk The XX% the subscriber to product smaller me was by gross Let in period. drivers for the prior a primarily line. XX% gross quarter, to year key related Digital margin file decline margin the

margin. of revenue XXXX costs both As larger the resulting will Nutrition spread and production XX% over higher margin quarter in scale, gross we be fourth was XXXX. regain gross the base, in a

managing exposure which in XXXX. are reduce forecast, to write-offs excess should inventory We aggressively to our

over Shakeology the this & quarter. fitness and to our via with one-time With The focus Hustle flowing continues on charges fourth negative nutrition healthy Packaging, improve be through gross dessert the Shake connected gross should margin margin some time.

studio in bike bike wars. of that customer This ensures We without remains bundle are sales positive. leveraging the LTV to our the drive price competing

rate. much reduction data million churn aggressive are excluding reflecting our QX very lower cost was year-over-year, shows and impairment charges now. that operating declining the a XXXX to X, in from headcount have engaged Importantly, our workouts and XX% XX% Total January in $XXX bike customers management expenses,

of decreased of as marketing XX% to and XX% XX from Selling revenue points a the revenue by percentage year. percentage for

that Our selling earn costs commissions marketing they purely by which and are and partner based on primarily driven transactions are They bonuses, funds these variable. generate.

to LTV be disciplined ratio. customer on a marketing media, in delivers managing As continue we acquisition spend CAC profitable so for cost, to very it our

compared expenses we we spend our QX, manage QX, XX% year. as to last last we continue by reduced by technology tightly. in year reduced For to G&A compared X% to Also

spend significantly, You has materially $XX in our our a loss on million last platform. fourth can to see has quarter All spent in of compared while been tech been how simultaneously contributed of our the This adjusted change technology to of million improved a $X.X year. transformational platform. by enabled focusing EBITDA reduced delivering one this

cost us Our the EBITDA basis structure the positions year. new on before of generate a profitable to recurring end adjusted

our QX in adjusted want our growth. be was annual Our bonuses focus settle executive with equity. as executives to aligned performance EBITDA positive, on our intentionally we profitable We

a which EBITDA the exceeded over XX% loss million Excluding minus minus a of and million, loss our would of to have this addback, comp improvement year $X a would range million equity been $X prior adjusted representing $XX have of quarter. guidance

balance net cash and the we balance of the of quarter $XX ended sheet, unrestricted $XX an respect debt. million With with to million

not negative improvement. do $XX million plan to flow we additional $XXX year-over-year by the The has which a representing $XX improved to XX% debt facility cash additional million, arrangement see need Operating on not do an previously capital. we As existing mentioned, million, raise of utilizing.

in prior million, for year, improvement. XXXX $XX by representing quarter prior since the $XX from fourth CapEx million the the and compared Net than by more XX% decreased $XX quarter Fixed has XX% to declined to a inventory was XX% million XXXX. of asset

of nutritional Also levels inventory demand discipline lower level with to aligning rationalization our a exposure in excess and write-offs. slow resulted items. side our our both purchases Our forecast of turning reduced stock in supply less SKU

the the customers, turns, we bundle attractive existing our improve gain accelerate has and conversion as cash company strategy our through work to inventory. bike allowed long-term very front, On new inventory

XXXX to fiscal With million. outlook of are I'd QX to quarter. to range to of the in be moment to revenues discuss $XXX like Now million guiding a revenue, take first for our we end regards $XXX

The first quarter our period. typically is strongest seasonally

revenues XXXX given QX for launched our we new However, offering. follow will that normal cadence not our strategy just and

expect growth throughout traction. We gain initiatives revenue our to sequential year the generate as

to guiding loss to the EBITDA, regard to quarter. first for With $X a million million adjusted we're of $X

EBITDA to we adjusted expect cost savings as revenue year, throughout see our to We begin the and leverage midyear fully gradually sequential growth. build

simplified will remain Brand and One a basis efficiencies We cost on lower FY of adjusted under model. overall incur generate end track new recurring 'XX. and sustainable quarterly the operating our to gain positive on We by EBITDA

will Next, relating color subscriber our base. digital I provide to

network. adjusting no improved. more file the pushback have As subscribed value, are customers as to The BODi price at subscription platform the grew $XXX, for to BODi customers platform our our get and the up platform, their size BOD will basic and BODi a launching subscriber customers received retention will revamped majority $XXX and our reminder, significantly before new comes of the Since renewal. transition those and our in September from we partner

our forecast from churn factored prudently internal a price the to to due higher increase. BODi level has However, of BOD

are improve our with will time. that enough year, subscription cannot for consumer customer BODi and Esteem ARPU Although higher customers on believe on higher declines platform we Health value the we over stress focused a drive retention expect stronger engagement that attracting I and

continue capital do for need to not for We manage existing will the capital and see a a business raise.

to To reemphasize like conclude, following. I would the

Brand a the creating profitability platform. We simplified significant sustainable Nutrition strategy, just and have and We Health on One in the XXXX. deployed to cost in dramatically platform, business in Fitness, are clear Esteem reductions our only new our delivering path holistic resulting Mindset

revenue this is growth. by We results, us to preliminary the the bring excited and foundation back are to

that, please questions. open With it up for operator

Instructions]. [Operator you. Thank

Our of with of go ahead. from question is Please first Zhao Joanna the line Bank America.

it Hey, rebranding, more. My thanks the for taking my on so to out question help congrats the question. that. and for overview Thank flesh everybody to is just a bit on much little you

as a are how revenue foresee because the understand for fitness, BODi to foresee out either today's you actually components what BODi And nutrition quo you're to also, ASP three trying from subscribers, as really as prior you that integrate trying dessert, subscription play the the And that that through also just subscription access if Just then understand I but will trying as well Superworld one can to will percentage already. into onto nutrition of renew on that also on How program. the follow-up. bike subscribers or makes driver digital but people all the connected digital status people I better to so your from side, So really get sense? have understand well? impact do

programs. the the question. basically This subscriber time, file this just Joanna. have and is Marc. fitness BODi on X,XXX launched streaming Fall you last the Thanks the 'XX plus is our workouts for hi, the week, What nutrition. streaming. new Mindset we we Right of Block, live in And XXX the recall, live now, plus if we started size, BODi what programming, library. would that had it, launched revamp say it's now when programming, and at with the And is the I also the there's we Great,

when adjusted from for back down to September, going $XXX we So $XXX. to BODi that's price the

that's growing very way. frankly in file size healthy started And a when the

with it's the reaction pretty positive. been way So has very We're happy growing. the

tracking. today our how with of pretty in it's way, we're though and BOD, a even on are say BODi customers I grown majority healthy would very has still So the happy

the ASP. And

$XXX. at the ask, annually ARPU would or assume average, the metric minimum be you As that let's a

Some people right. may is be signing to up quarterly, $XX, which

ARPU a the period. makes in So it higher only smaller

And signs as we only the what also new we're like to not for I good that. has more higher offering want a well are rate been finally, but say better is tracking well attach see of as subscription. to more engagement. a likely they engaged, All would renew, as Retention seeing

So we of well out of did since are to value launching March in attracting really and X. customers with vision the seems all working our be higher deploying that net pilots on

Thank the that, is timeline in understand to is you existing of Okay, for different renewal you from what you help terms of model you. to timeline, a margin I help Thank to or it. there that sort these would well helpful. XX% And as if And to us segments, other be Nutrition subscribers through help the to targets it's Digital you Connected way a that? really think likely you recall the to you. as got on presented Fitness my and BODi, rate us help the Nutrition switching by, can that break to us margin. is close towards mentioned hopefully know then three back Digital, I question and to understand few Connected XX%. weeks achieve provided ago is and getting even. will and Fitness. realistic you so us the Can on

asked start renewal me let the Joanna, Yes, with off you rate. about

impact, we rate much but a negative We from an experiment be $XXX, renewal to see how to $XX when BOD last was would good. it July was first increased in pretty of see So the it impacted. didn't

and price big we're say closely starts actually this people up sign to BOD now who the BODi, pretty increase, very I'll Now just a but monitoring are like may biggest obviously superficially seem which solution and And total pack of the call a right. what it's combination total $XXX, digital pack. basically to the is now was we nutrition subscription before, average solution $XXX,

at haven't any on price. pushback say would I So we the seen all

as rate as the general, And then you not because the across change. it jump from We've lower seem about forecast, deployed our that's lot asked we're the of in be prudent, guidance, be would everybody not say I margin full-year to Now, factored more in but a giving to may renewal three internal prudent why get go. more there's we areas. our a big on in is

giving So here's what I we're not would specifics But there. say.

cost now is our XXs. right We in down by Digital episode brought the high XX%. per

think So this a I scale. question really point, it's at of

on bring soon revenue the and in to mid-XXs. that picking digital more base, a as into size, starts up amortizing back it you'd the cost production So the margin I'm bigger talking as over should and the size, low be

Right the one used side, at it point, it's around low-XXs. down mid-XXs, look, now, Nutrition On it to mid-XXs. went be to

Our its back up. slowly way to work aim is

As a improve our you to warehouse. know, of West done chain, We're managing things like inventory. we've closing lot supply aggressively Coast

you customer. that'll the you down on by But low more as product tell, beneficiary importantly, can the to margin and that of As psychology for the half more reducing is it to that margin game pushing closer mix most year. XX% it's then the by than products, get Bikes, the be biggest know, to and bikes nutrition look the lifetime value

sale bike. to on to we're aim be profitable first So the the from not going

at is a not much up aim where money losing front gaining by a too customers to attract point we're Our customer.

that so And the that workouts committed and relationship and the positive. they're of lifetime our shows customer most that of in renewals data terms healthy is value

Got it.

that of on all, delivered. that means your people to as a we'll an is see fitness so connected as anybody get BODi, sort who the is it have the which on it bike is of My BODi Okay, part do for And clarify just will to on super optional program helpful. this subscription of get brand new to the is or that's Nutrition dessert? to optional question units also, get well that last the access all of on Nutrition/superworld uplift

Certainly, few is expectation. the This way. from There's a Carl, again. that's levers the by there. Good you to hear

this three now, content. synthesized into four have a down plans the there, based have about consolidated this comes the equate visibility first one offering. to you'd to beautiful this can imagine We've is, or the putting of fitness, mindset First to the out what for time one the subscription, eating which content and we're subscribers biking positive of apps But And you're off, what's number have month. right. to you about apps bulk to on the into $XX our

because before was it it see couldn't different behind paywall. They a locked

connected again, the strategy database. the selling fitness into about now, it was So important

we So it into super That got trainers Marc demand of rides, described, more Dessert. is offering concept with that now visibility this favorite that be doing eat their they've have seen these and this that new will for dessert. likewise, Superfood And same thing expect incremental.

additional will are currently give application people to not own to within who Shakeology subscribed database an our Shakeology. As

do superfoods third ice and Shakeology to An well additional of all life. a cream, you ice you're reason improve you about fibers, cream protein, of might going a a as your bowl to good the at stuff have that for it, of have how you higher feel if calories, bowl

our these And of who what are better do to more in call we -- inclined ecosystem how all more of super they're we consumers having experience. So the focus to attract as is buy a things spend incremental. are

be people the who at the fitness, our for want for same come in do superfood But time, come do who plans, just just great we will and expect in or to just in for rides. they the the just there eating ride some who bike the come dessert,

Everything carte menu. So as menu Sun the is the Ala available Under as the well

But upsell to Got it. That's or super helpful. facilitate programs. It optional. the just basically is an cross it your sell helps

Super much. Okay, Thank helpful. so very good. you

you. Thank

comes the line Thank question Gajrawala you. [Operator from Kaumil Credit of ahead. Instructions]. go Suisse. with Please The next

of you ask that launch want for controlling great. I quarter for the afternoon good And for a this evening first a of profitability guess starting costs. I the guys. for But I couple balance of bit the A with and in between big to loss. is context guide Good new a maybe Hey, guess EBITDA quarter guys. me. questions,

launch amount my new fade that highest the then on XQ So we wrong? year can and costs managing just something -- balance in of And first maybe walk me about am I sort should is launching the costs? that as go thinking you and of through through layering between thinking or it

XXXX. X. Well, are launch to covered happened and frankly, cost operating the in it March in The this just build on the business. We costs daily it launched really prepare

customers business, it the running running efficiently strong into it's now So LTV. and a acquiring efficiently

very a strong don't out proof seen that kind in model in of led isn't configuration, in again movie. of putting back that that structure we've we're in that today. and business. costs we test started September March, again we another seen and really, a the concept, had from November launch this have it So the when testing This June, then a is pricing like hits benefits to we've incremental we've business launch This

So dramatic QX. to quarters change. be I think there's a giving be budget I or like launch big without don't to a It's ahead. a change necessarily going don't think guidance were going in digesting there's we CapEx to not

Yes, and…

Okay.

Sorry Marc. go ahead,

marketing right? simplification all been our to cutting So production has that's dramatically and and having ourselves, all one Yes, technology is what able costs. we've library. for incredible delivered results one consolidating revamp by down transform one I'll budget, of spend, us, relaunch add that platforms enabled And while

actually less, So we're where this massive a way able right, all in cost reduction should deliver beneficial. to was more, be very done not which

delivering all So the our for run current current of this by these And all profits from the starts cost rate business. the structure growth is up changes, deploying thereafter. then here, totally set

down cutting you'll now efficient, some it's as Is you follow-up continue just they between still this being is but of a efficiency. bringing big 'XX just Okay, make spends, to go? focus is I to on guess say run be? after talked on there G&A, And to I of maybe rate that -- the more it? technology still and clear, to costs sure bringing we the where the now or more heavy everything various think Would on the there are you I with down get that difference cost great. should lifting. are that, that's and about we do? Obviously, complete on And now recognize

still I the profile want. of CapEx spend to from to to likely realizing Yes, close we our the through force driving the flow mean, 'XX of the more for And benefits. the few in There's part, say last reduction efficiency the CapEx things did the 'XX get see largely right. spend that's forward. most pretty we've to going all I you cutting January. complete, and done a could it's we're be in benefits in would was But we our versus

some create all driving run there. we that, size. set the at QX incur this about and much in say the profitability had business able we're is be I'd up We to will But to we've and cost from thus the new started And then severance. making changes once the all to the enforce pretty reduction one-time to exiting model leverage growth, due the

you. great. Okay, Thank

Thank you.

line Komp comes question Jonathan the go next of Our from ahead. with Baird. Please

hi, afternoon. you. Thank good Yes,

to First you more that key question bit forecast insight end that? What's the balance I want metrics performance just more to ask if cash share to including you're that you're a you could specific. and could be the year a targeting, little

largely in that Yes, one-time said a I to then to I business size, Jon, this we've costs. not more cash. in What question, like And would up is bit quarter afterwards, incur is, previous cost the more say at burn this set Marc. we have just this for

So flow to start net drive from avoid below debt positive this we're our balance way and we our there. where plans trying a generating is cash in going

higher all critical be of be bit think the see having changes watch netting plan to our value despite this out. the revenue side, KPI, out thing out to that the line a more most is we're digital to net will on is Because I we're going for subscribers. less And right? critical to revenue, terms if given done to favorably the customer shifting in we've

the product that to share on to you changes data expect on? making, last you the core test bit insight you're subscriber base any understand if Okay, to of effectively play comment and assumptions specific you price out, here. had, I have of significant guess more I'm the XX%, and business very the the base model more how raising given your could little a And by you trying the revenue if just to

mainly coaches subscription. incredibly nutrition We've a of I XXX, I'd data, remember, on -- in plenty to of what have which they supportive surveyed and we off solution and BOD is They're saying because reaction off a the why they price we extensively. September, by price and Jon. the we the bring on we Yes, mainly the in when total from brought start BODi increase them pack, very our that's partner call out. customers, What network July that's start positive. was XXX then was digital When did test what test to saying both And earlier. that

going that's to from then normal up average, On And the average it to of $XXX. up nutrition $XXX goes going right? an subscription. by It's $XX,

So all value in, great that's we considered don't like think it's they're that take XXX, Because $XX big customers. getting. month. still everything for you on when most of and a the our It's

us done, The that seen the nutrition lot is subscription a way more haven't around. the more for we've seeing all those cohort. rates from research other We're looking we anything healthier healthier. attach and looking BODi because So are Retention worries pilots people positive engaged. the

tests through So had launch. our seeing done and we're the since in in everything we all out play vision, our we've pilots

Two questions for Okay. me. more

think you as the renewal, majority ended subscribers share X for digital insight? with. those of the of expect that you about time you year Just you're any renew, timeline than What what will Could more you the the million results are and how expecting? your and rate how react switch, of success if know to point you just different at you you -- will the would

'XX. because annual. an some quarterly, monthly, Yes, but of bit a an There's the of they means a first some which months, the towards six majority are the plan, on are flow on some are annual monthly so March through are six skewing month subscription, majority

overall, I the come way XXX through skewed that month, a through bit every the see we'll first So say through six March months. XXXX. all But

things that channels. the that advantage we're to testing long at point. through of is -- too our lower the of payback. does cash a implications -- we're that of customer us in in And the acquisition flow Subscribers" the We the that run have give Johnathan, Jon very we didn't of say, an cautiously I'll is now that the direct price midst have is -- One and because middle sensitive of "Buying $XXX

gives within much buy of capital more $XXX customer get and to us the room a return But year.

room the So sideways conservative come a take on is sideways with room renewal But acquisition LTV subscribers. on if per margin, the customer or for those we anything from, we've extra and way forecast goes that digital the to anything versus if of that on run growth where new acquisition. to a the higher margin have this extra start got can $XXX rate. in been the $XXX And us, we we've frankly, very us, room LTV we in goes higher intend the in

to right, the like way renewal So run market balance I me thing acquisition it we flow the we free again, on anything because cash positive. to run can promise from I shift goes But over business our if emphasis factors, the you these sideways. all like -- is, the

-- EBITDA as start the our running Then possible. positive in to way assure we're thing we as to for So we a but the we're sure around. need first not soon other in investing that make growth, is

in balancing we're So things some these it conservative of given at the factors play. and doing macro way, we're rational a uncertain other

Understood.

you on see that drag it's business, the you distraction LTV Just taking for so where not just the the size today? on income Fitness that currently, last it's given statement on the questions. for know all for Connected do at the a could me business, that specifics more obviously we broader And just it's the one share on how a customer? Thanks

launched, Connected we've you. Fitness the firm bundle one, Look Buy Yes, Later new The upfront, this financed on $X,XXX Now through Firm. a Pay Jon, called with thank it's

upfront. of And so we money majority get the the

very So I cash get out a Connected actually it's Honestly, there at take Bike. lot does wise, of best could our you flow think not It deal all. it's for attention beneficial. the

able bike use right. But lot won't then this our they'll it makes I And to BODi, we've easier more more demand. a BODi database, for it. drive launched could this and platform It to subscribers seeing the really, start that think so workouts, just on new to market be much us they we so now there's

company we that people innovate very just database make success. Jon, like, content a say, have visibility excited that March learn. test test a such I'm I'll And continue a lever and and what PXXX rich a you on we Fitness, by INSANITY That's started Shakeology to all thing the and to success is with that X. success the biking customer to our our good one this this it's did in and and the Yes, now having know this, they'll that of volume and Connected of learn,

way the so your the area a very content. Fitness when a skills time get creating the having creativity and is this are to use And by bike our just be March not that we're best going drags Xth I'm the absolutely cases new content they of on and use I table doing the really bring started and it's to we on where not on the business, an the at point. actually of prospect a the business get and that jump it as was excited thing We actually but jump, now in X who to that So a launched people this Connected and saw distraction, It's bike. a Monday platform getting people say, results they it. BODi great that will to the do significant both engagement to

of demand. proof So engagement good is

to as partners of not that the them our much stay to gears have of and network we partners And focused like they're coaches, subscriptions three months. call business Marc made business model our the feel consolidation good in now and a every I changing we're ability the So the efficient very position. a more said, this used just

can So, like they've person month? the is And March. simplicity of we've of what And that's here you comes I here, to can velocity. a got that helping How them. simplified be? view $XXX simple launch we How like how achieved a a say We're think make just in. with

Thank Okay. you.

Thank you.

the Our go Guggenheim. Heinbockel ahead. from comes John next Please question line with of

going about start the getting And right. so then that partners positioning, what educating that? brand there And out the on lot plan is don't Hey, that, existing Carl. word a the on to do first, I new to right. extent lifting are not, heavy we think or a I opposed on want with the the prioritization months, focus that to six as more wanted when the conversion on right right, in prospecting of base you to know, them is the to the

both time. do same You at the

exactly That's right.

current media that is million the and best including leverage ambassadors, our XX with subscribers. cohorts, following focus people social we our we that's between current customers, following Our our got where us, and our corporate

job that plans surfacing of sure and every all new customers. make engagement four and plans, month these for content, obviously, to of the those renewal and two the this drop maximize eating all is are So value, to to hopefully our the that subscribers concepts, positive mindset content, the we to maximize results

month other And month. engine. a referral that's where to them so But our powerful this month. a new program month that creates are every BODi on with a get the train of same, what Block that every partners Then month so we have don't the new market now to we've call after after Monday they we got that dropping first wave construct of plans

it's But the we same construct, will velocity. create

So you got these two layers, right.

network we've that a that at great the be partner years. But the model subscriber First, for leverage priority, the that's it's second, sell more simplified experience. XX been so now efficient. the getting. subscriber really running, adds partners current through through And more can last incremental they understand And into that payout. they're the referrals the for so value guaranteed that the base maximize And business

Yes, and John, Marc. is this

to add that. just me Let

up add XX database followers, we over XX when key our social our media to million. coaches, part, super then goes or rebranding over followers is the On trainers And e-mail our it million. well

we where via going it who are spend. budgets. able our inform So existing requires to do to them not is we're marketing our mechanisms it into an to ability of people opportunity that and something We're and turn tell now

rate. All right, you attachment nutrition be about then would talked the my follow-up

the and in maybe nutrition the up out or you the a the ARPU attachment there's -- think then something parse But maybe what I ARPU, right. in like And think the past do don't bit, the Where and rate a a the I fair or it's nutrition here, goes to? in that that know hard mid-teens Does think that. down know I high. quite no? happens bundle so to right was, go to I ARPU was past go

One mark. where that I teens. that We a ARPU was it to take subscription. said we size subscription. And of now, nutrition everything John, and or want the business is do and bring where got if and it in that I CRM is the we And the XX% numbers, way. you back to be, BODi campaigns it through earlier, Right that average you're I around, other Yes, and around rate seeing products high a it favorable for attach month in nutrition, Historically, just want. very two-thirds was right. $XXX is mean, the other it say is is to file the one-offs on a they to it's third well, look, want for like to on say it's $XXX we're I growing

my will of into Yes, nutritionals, one I and of priorities, CRM top can particularly expanding Shakeology CRM top this role, is my my that are I of if the our and literally four add, John, four idea healthy dessert add of activities selling category priorities.

my of have Another one to twice a one number which our and up. maximize is top and of to my happen day. priorities afternoon me our that is It's coffee, pick supplement, through it's pre-workout Energize, my I sell morning

be, that sequences CRM And can productivity let or it the run. what traction gets that install we return sequence us you that call consultants that you we're the a once what on through five We've six entire really, and have you install what got through who been database. install sequence it and helping e-mail that and them seeing understand

got a or retention So that flavor additional sequence predictable, runs, or somebody it that now lapse changes communicates revenue additional somebody a like people in LTV. becomes cancels those or way pauses with or we've

And And in business, of So decline we've like my to a had SKU, being to I the XXX simplification we Shakeology also the our through is it QX, in the this servings fact five. This QX from from couple wait nutrition that see moved the is a traditionally which a of ways. of of priority. of Energize. we've different remarks, used new added files servings opening just a and XX configurations XX to prospects is in said

not have of not they're pantry haven't these through people burned going both month, the so get One, their it's end can a to meaning product. and of at for still be loading, product things the they holistic

So the of shipment is next on layering top that.

a Now pack sampling And Shake making cancel & then with XX Hustle just other we're the are it's configuration want taking we are of pick to got. servings. they also the It's they but seeing to call products they thing consumption, that decision two a these or that like or opportunity. their people do who than one the appropriate what do rather one

that So give going the us increase first these increases with are healthy, which half all making business that levers to the LTV. rate, is but only a we're of that the the into we've not improvements model of great year experimenting been in confidence deal back the attach of and quarter

back That concludes Daikeler to remarks. like now any the the closing question-and-answer pass Carl conference session. I would to for

from away which and take much, call, hope over that so the that went thanks cost our to speaking this added appreciate are is part Nutrition right, is everybody layer All appeal at end exciting to market like and the a to thing the behind business us. but day, I of addressed. the know bit on. accretive that we has been positioning hasn't I I compelling it's jumping profile content add We've this The the entirely stakeholders of little nothing. here, and the been most people hard Fitness and doing an see to

love where them of good they feel demand live. net resource is the is the help for majority category in and having to of creating up still health the looking a new to population that look give esteem the The without to market lifestyle

for for excited, us excited to years. in you've very we're store XXXX we're So us. by And has seen way execute what execute the going XX

to in powerful This resource world. the for no the to ultimate small a Thank a is be outcome the very rewarding business but everybody's So I healthy, appreciate involved. company you, going active for and everybody greatest everybody. lifestyle support undertaking, build and is

concludes your all and the you earnings That day. of Beachbody Company's The full-year call. enjoy hope XXXX quarter rest fourth I

You disconnect lines. now your may