The Beachbody Company, Inc. (BODI) 8 Aug 232023 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. And welcome to The Beachbody Company Second Quarter Earnings Call. Currently, all participants are in listen mode only.

Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at the time at the start the queue up for questions. Instructions] [Operator

of to I this call would Bruce Managing like being call over everyone Williams, And Relations. recorded. now Director remind would conference that is to I Investor ICR turn the

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

the open call for the prepared will Following we up remarks, questions.

Before statements Litigation like statements of XXXX. the forward-looking be we Reform Act are to remind company’s Safe may started, I Securities constitute get would this within which you the Harbor contained call, facts, to of language. conference meaning historical The of not deemed Private in the

may company’s those of SEC, uncertainties, with and such Actual suggested of a the materially all which to today’s future release. from in in filings number described results due statements press risks includes the which are differ

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

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

beside and experience, turnaround to we’re have the of a company seasoned in eager addition joined an and Goldston last the Hello run stock. today. announced team BODi products, work at public personally experience Thank Executive performance for exciting several and and consumer achieve joining our for changes having me signals place fitness time with an to Mark Mark’s On all valuable for to profitability as call, Mark our us afternoon. particularly of good you our taking announced Internet recently executive the is the we the and This that decades. as leader Chairman. companies opportunity most for

management to how vision would few public opportunity with shared growth arrangement to his team. can that that When running this things member, to take Mark, let reiterate discovered And incredible company we with I common me Board a companies a first for our BODi. about let the add introduced on we share see to drive experience Kevin Mayer, perspective his the value Mark’s Mark I on XX me days key BODi. his want But to first. long-term

Board focus the the a a member executive the more and of in an with role management As actively officer Chairman, Mark and on decision-making transformational Executive has the participating processes is company initiatives.

stock take value times turn common was company of this many of I transaction of around Mark’s to dilution Driven by million with his all the equity of performance. stock who grant to my compensation determination that the has done turnaround my which important an I so chose BODi, based and in X own the kind majority personally in the shares shareholders. forfeited his of this rest for underlying he of And executive enthusiasm partnering before. belief best equity minimize options, to to on to the

role his other already consumer turn the and executives to deep I senior is closely flow possible. Building on are as working as us with and along experience, positive Mark’s are digital materializing. together benefits and cash soon help Mark

to to I over insightful me Mark and Now be can shareholders his our let turn it which Mark? share perspective, think to investors.

the to to success and to and range warm contribute use delighted I’m welcome I to team. the company. be Carl, exciting appreciate experience much, BODi very really of my the part story this of so you of broad Thank the

them have time in Carl team really and and by him, assembled I’ve with with considerable the past he’s Carl in I’ve and two started the a I team Board and executive months. closely impressed been the back talking had in time. and of that mid-May very enjoyed the working amount

public value, wrote been intrinsic I infrastructure has on ago, re-architecting restructuring unlocking focused I’ve on The many called their to corporate their dating to a run book focused Prescription turnarounds, expertise profitability. many revenue back and actually while years Turnaround companies. my and repositioning drive which XXXX companies and increases in

Many people with have given a at And what was learned asked BODi market agree $XXX about million, time. of not a the I company. my at BODi why this join answer was I trading would that the could truly roughly cap $X.XX to I believe share

an company of this world. people. has work of the valuable nutritional with got and and believe it comprehensive It’s has assets extremely library the as to a broadest I incredibly finest, in arguably got lineup products fitness valuable most team digital great

only the very but products, can stable million than powerful database, very tremendous a nutritional of customers, digital containing equity brand have it and and profitably some company more does XX whom the customer Not easily grow business. with be is programs former aggressive valuable to of activated win-back also this with

in customer database revenue e-mail of very million acquisition for company XX has existence. existing most a this customers, its or of historical billions which CAC former historical of BODi company’s dollars years was profitable driver of the the principal people, being consider cost, BODi you excess are of years generated and XX of XX If customer behind

cost the to cost database, do amass If attempt reach nutrition customer fitness it given that in has a on BODi to the people the today. many this competitive size and take literally would acquisition database XX current million of years BODi the similar and industry, the to we billions company, database, dollars

That’s stock than I in of just the trades alone, where For the I basis today. believe no in on company those because this reason vastly as component together. major parts XXX% be shareholders, you, options. strongly aligned cash, intrinsic comp want reasons, the to the value navigate totally is the received take with all my this of of I journey I we stock greater to decided

which if these setting incredible a stage nutritional additional since We spent the We’ve and this the analysis, identified assets been from I to two generation initiatives. day ago, and monetizing almost lever building moves, We’ve digital, turnaround company joined revenue-generating the months profitable. virtually database every cash turn plan. prioritizing created company needed,

at costs. profitable all that, With not is revenue, goal our to growth prioritize

companies the today, of issue streams margins bottom scale company. to one What the healthy fitness this we largest not the to that need revenue increase quality for generate line. As higher primary contribution develop are is digital

Our flow primary flow on cash be focus to will focus incremental generation profitability. creating generate which ability and and their on opportunities, cash revenue instantly through

execution the help company. way profitable, We’ve we constructed list move turnaround in transform cash-rich for be a will our and powerful plan and through we very focus the our to a priority into vigilant BODi as company,

be of few next period months a transformation. The will and positive deliberate

please about to streams, going patient tap we new ahead. at the I’m that audiences profitable utilized. marketing and not successful with for that into revenue as has prospects new a growth I us be company the I’m great to turnaround you BODi So and looking feel previously new ask forward tactics

Carl. the let call to you, over back that, me With turn

Mark. Thanks, totally agree. I

Let’s continue our our level on Officer, Chief now and with Then Financial and QX Marc additional overview financial a will results second results detail Suidan, of quarter provide guidance high QX. operational highlights. for

were thank our second I hard For for the EBITDA transformation. our the in quarter, want within guidance to range driving our team continued our work and revenues and

to subscription QX. XX% QX of new While decreased to XXXX, overall grew by premium QX $XXX,XXX subscribers our our BODi subscriber over million XX% from $X.XX digital count digital in by QX in

our a cost fitness, adjusting with plan about invigorating into briefly me digital structure. three transformation. talk new our for simplifying one set year, solution, and and customer personal our Last we let platforms acquisition; components; development; our sales nutrition major Now complete including marketing and

schedule our new earnings call, we is quarter on renewals. that’s discussed under customer demonstrated and call, our exceeding we what consolidated as launched last on our was expectations As by subscription and product, budget digital second BODi

continues approximately to into with have this $XXX, Beachbody an which BODi to tells BODi us premium programming. prior on-demand beat our to expectations, that $XX are our price compared Our subscription. at to the formats existing XX% responding new and block customers renew largely annual renewal customers basic This well the of monthly customers continued subscription rate

tactics. half in the an by In addition, retention our saw retention nutrition the year, for we new driven uptake first content-based of

existing retention, also opportunity by increase remains increased a still pleased a we’re our priority. that have nutrition subscriber and penetration the the into digital While to of nutrition we significant base

strategies rate. working We are take on increase that aggressively to

in confident on direction, opportunities. sales product marketing also our we’ve keenly to strategic focused strategies been we’re optimize and our While

on Let me take last you earnings about initiatives discussed and strategic our call some then through I’ll talk we some that of our strategies. new

First, our activation. and network coach partner

we event esteem to bundles quarter, had We category. about and partners Partner the the on our solution, attended BODi breakthrough of our train During new to Summit, premium XX,XXX this was reinforce new and which coaches the health by our held our partners. Leadership

sales a in to key launched to teams. also leaders to action new leaders. QX, We them and our in will teach help partners to a in-person September, in various hold a we collaborate training deployed tool top and academies leadership sales continue develop sales new July, leaders plan this In markets new how incentive

you and intensely on see, and network. training activating can coach our partner As focused we’re

And calls second, of about database. reactivating spoken the churn couple on database our our initiative, customer last we’ve on reactivation large

offers team Now past are paying we us churn successfully in kicked the customers end most are in several marketing win-back with campaigns aggressive current and which campaigns the place, the right showing July subscribers. converting of off at the into effective

this the and fourth quarter. leaning third in quarter strategy We’re at scale into

on Third, performance marketing.

the higher digital greater the price QX and Our premium subscriber enhancements of QX resulted BODi in tier. in over at starts

visitors of to subscribers QX, by QX landing driven and in XX% pages. ratio conversion over digital audience increased our fact, by messaging targeting, In in improvements

funnel our to monitor manage and continue We to the ensure improve. to conversion closely continues very order

a additional third piloting new We’re tier new late also including preview scaling the launching Amazon on free and strategies, in quarter.

Amazon, our to set QX our actively In to XXXX, across plan categories. nutrition we plan broader marketing regard start a there. launch expand is With of and portfolio to of

we the large of opportunity variety a without latest is products channels. And haven’t While prioritizing our channel. on other sales a Amazon, we tests been undermining indicate currently growth our this have small

help an process of drive proven us capabilities best with will on So we’re in with experienced best-in-class Amazon growth that practices. partner selecting the

digital most database free paying samples subscribing. with and activation This Next, extensive library consider digital content to subscribers our team visitors preview to convert popular while our content, funnels. of to enable of creating a we’re visitors prospects sophisticated engage our for conversion will layer with of supplement

to our echo provide be initiatives as turnaround. time launched through, take couple the on just coming but we revenues quarters. it we progress these the navigate this defined, of to revenue, all been As in We’ll initiatives our prioritized but see already and Mark’s Mark have updates transformation. will to significant higher while comments, cost structure our this they’ll I over in making said, weeks, continue margin manage contribution we’re shifting and expanded last

walk I’ll will Suidan, quarter the that, turn detail. results more who it through Marc? for with And CFO, the over Marc to in

and guidance EBITDA second quarter revenue, and good second our have flows our results Carl, the cash We met will you, our on achieved seventh Thank guidance. everybody. I for quarter, that is KPIs our the exceeded and for consecutive This third in afternoon, the quarter. we the guidance discuss quarter. or

We are more with that profitable recently us to turnaround accelerating company to implement supports Capital plan. we covenants with of with and our Torch Financing that credit them aligned Torch shared our Blue agreement, to to revenues, strategy. lower our amended to our associated revenue Blue to flexibility Blue We thereby agree transition with our providing positive. Agreement. our more Torch agreed process becoming We approach flow business the plan covenants cash the worked on announced our

to of as agreed our result a a our interest business and million. to profitable we path principal million $XX strategy cash the lower reduced debt, with of and $XX on align our building will outstanding down and development our higher is sustainable positive positive generation. Given approximately to annualized cash pay revenues, the expense amendments focus net debt flow which The margin

to the results second Moving quarter. the on of

guidance with million, the This were seasonality which below consistent is of above with Let was Revenues the of me the prior start quarter. revenues. X% midpoint industry. $XXX.X fitness and

product elaborate now will our on of each three lines. I

was revenue on $XX.X Given up QX. all Digital changes in $XX.X revenue from the sequential in my comments focus I performance. the million million, will year, past

down in million, the $X.XX overall $X.XX first from subscriber quarter. digital Our is million XX% count

XXX,XXX. is and platform one premium However, now subscriber which describe could size, only increased our by to you from our to XX% the quarter file BODi the prior

questions XX%. exceed at expectations that am were previous our customer renewing propensity call are we I customers to earnings $XX from $XXX. There the about to our happy in and renew

both our We are will is revenues. deferred which moving increased QX, value the and increased customers that quarters. drive This profitable revenues, in in LTV, more our which QX over past higher reflected to two digital over in

will result reactivations Those a customer class costs acquisition customers. We healthy very are looking contribution in to number reactivate margins. have of large and minimal cash

down million revenue the million, Nutrition quarter. $XX.X prior $XX.X was XX% from in

more was from file Nutrition down than size revenue to higher $XXX,XXX, The count of allocations is and the sold prior the decrease, nutrition pronounced quarter. X% subscriber subscriber decrease in Nutrition results which revenue because digital $XXX,XXX in Our more we bundles, digital.

launching are QX in competitive bundle introductory a nutrition new a we at price. monthly Additionally, digital and

For this entry environment, consumers sacrificing profitability. will inflationary impacted by reduce the point macro the without

QX. million our X,XXX in Connected XX% partners. increase Fitness revenue during down versus promotion bikes million, XX% a We The revenue was in bikes X,XXX QX, the lower and reflects for QX from delivered $X.X increase. units in $X delivered a planned

We as a subscriber bike engagement churn. show drive customers higher as valuable LTV see sales our base continue bike lower to to lever more than across

last X,XXX period a basis year prior quarter. margin XXX margin. improvement We for achieved basis the is the below gross points gross and from quarter, of XX.X% same Moving points a the to which

gross investments points lower the higher to less XXX the period quarter, due for which from of less the customer higher lower The was gross due BOD against Digital XX% same given XXX basis service costs fixed margin BODi. margin year. margin BODi our large revenue. deleveraging is is platform digital of and quarter, customers prior to Compared gross depreciation migration than to to last basis points from recent expense was the

the gross inventory same Compared quarter, is a management year. improvement drove improvement. consistent. Nutrition was the from costs the lower Better for shipping gross the to which remained quarter, period and nutrition XX% prior margin margin XXX-basis-point last

bikes quarter, versus XXX% gross improvement minus a was Fitness inventory. reserve margin for the on fewer continue lower driven ago, Compared prior minus gross declined significant the Connected to years Connected down points. quarter, the ago. we gross sales as by generating two a and margin basis are year XX% Bike promotional purchased offerings an margins reserve for the and Fitness to charges inventory due cost wind Connected percentage bike XX quarter. sequentially to declined inventory cash during charge Fitness

last expenses operating from million a our improvement representing XX% were $XX year. $XXX period and same million, Next, a reduction the

our continue We lowering structure. to our committed expenses evaluate cost to and remain

and revenue, Let The as Annual Sales this me we walk prior quarter. sides. three Event, unique marketing OpEx held percentage XX% the was a year XX% XX,XXX participants. to in spend the higher of and compared XX% our through our which Summit year in to revenue of is as of prior QX had

QX. For competitive purposes, in XXXX, this event occurred in

technology was the of Enterprise prior compared XX% in revenue, year and to the XX% XX% in and development quarter. prior

maintained as reduced and changes have year, dollar last XX% We our spend tech time delivering our budget. but a the spend on while percentage of revenue from by below

The G&A spend from of prior revenue approximately year of and year. the XX% down last XX% in an was from revenue, the in XX% improvement quarter. dollar X% prior was

and dramatically our We expense a operating of spend to costs cut we in margin pleased Overall, continue with commitment manage we dollar G&A, gross both percentage aggressively reducing on revenue and to both our and as the our total are spend. delivered improvement.

in of $XX.X to prior loss net the compared a in $XX.X a improved million year to loss of Net prior and $XX.X the net quarter. loss million million,

a million, would compared expense million in loss excluding of $X.X was $X a the EBITDA of and in have profitable. prior $X.X million, loss a EBITDA the prior Adjusted million been of year guidance, Summit Adjusted adjusted our quarter. to $X.X EBITDA was our of ahead loss of

flows. cash and sheet balance the to Moving

decrease was improved in million in $XX by $XX $XX quarter. balance quarter. million from $X cash the Our million the XX% million, balance to to prior compared this The cash

million, quarter. Inventory $XX the from was prior in $XX down million

exposure. inventory our write-off to continue balances We to manage minimize

inventory planning, need We at reducing pretty for supply successful have commitments. been our is and which demand

breakeven operations used prior prior $X.X in and Our the used was $X.X the in in second quarter million cash quarter. year million in versus the cash

our structure, reduced recent significantly but revenue have in in offset We the cost decline has quarters. benefit that

was of Summit related this cash the it Event not used recurring most Additionally, in quarterly a is quarter second the Annual to and event.

cash from flow to We continue we structure so can adjust generate operations. will our cost

$X.X from quarter was PP&E $X.X of the year million in for significant and this million CapEx a this $X.X first quarter, last in year. quarter cash Our of second million the the reduction

from quarter, year. It the $X.X quarter was million substantial content the year $X.X this for million million first CapEx in cash in this quarter. a Our was prior improvement $X.X of

QX $X.X approximate rate in the been run total driven consolidation. cash and be improvement by The was quarters. in our that CapEx our technology platform million digital So should has CapEx coming and

Turning to our outlook for the third quarter.

a journey. As our is where in guidance based reminder, stand we on transformation our

expect in usage. the of million and $XXX to to a For million million, EBITDA cash range the be we our we to adjusted expect improvements third in be of loss the revenue million quarter, expect in $X continued to range we $X $XXX

Importantly, in operations. to of at cash in loss we if less lower in EBITDA our cash of would of come we higher would $X the million, of used end EBITDA our million, cash $X the guidance in we from guidance zero used be a tacking, were come end if than at operations million. the have Whereas loss $X

are summarize, the To about and excited journey ahead we BODi.

the and been focus consumer have profitability cash adjusting environment with drive a to long-term We to flows. free

like some Now to call concluding remarks. turn Carl would back over for I to the

Marc. Thanks,

structure. Over model, the subscription platform reduced months, simplified last business strategic We cost upgraded delivered and dramatically our our XX we’ve objectives. our against our

ARPU of firmly our mining outside and fourth, our that customers third, valuable focusing on progress cash to efforts most or to customer past to revenue acquisition building on and the subscribers; finally, aggressively generation minimal from focusing company; incremental first, flow. for base, reflect cost; and five cash user; key our at we’re the people channels average our years that Now XX million decisions utilizing targeting we’re transitioning elements; acquire six more will the maximize activities per we’re a churn on subscriber second, by over we’ve base more established database profitable aggressively the

open questions. Okay. any see there’s With Operator, it if and up let’s that,

first [Operator is Instructions] Bolton-Weiser Davidson. Linda with Our question D.A. from

is line open. now Your

Yes. Hello.

quarter I’m expense the EBITDA negative third that of in understood is that So main sure quarter convention the EBITDA reason negativity What’s the the $X for the not the I in reason the and in be key the in million there guidance? if then why third was quarter. will for

Hi, Linda. occurred the expenses not was QX, QX. be expense in in will occurred in It year, It’s so QX, in QX. so event Marc. in Last year, the event the QX. This the

So in be recurring will year. quarters not million this that $X subsequent

Right.

quite sequentially EBITDA sequentially. So the then negative EBITDA bit it the wouldn’t the make $X that improve Wouldn’t second improved million by versus like go a quarter. in

it driven million it rest as revenue that the improve $X Sequentially, Yeah. to will the relates Yeah. of factor, obviously, by outlook.

So loss that’s why we million $X million of EBITDA $X guidance to QX. gave in

Okay.

So, well, all right.

the So was EBITDA quarter. in million the negative $X

be $X would million, it $X So million. million, $XX positive so

So that that there’s to the the about is offsetting negative think factors that offsetting I other in it? swing, guess are quarter, third way

mean, QX. guidance we based I that of million $XXX million the $XXX on in actuals just versus revenue Yeah. gave we reported it’s the to

Okay.

So would I end a remember the said think while the year, by had quite I but be back, that EBITDA can’t consistently positive quarter-by-quarter. of when, you you

still fourth thinking you’re means that EBITDA I still guess target a bit? you would or that that. to a thinking quarter of that have are be Is positive. that So has changed

listen, implemented mean, I that’s turnaround hasn’t for results we’ve Since happened, Yeah. the the our we first to months, sequential improvement this obviously finalized see why year. wanted that plan. we’ve now six that

when transformation are we year, happen. So things to launched -- said last we going three our we

and great did, dramatically for back new to a going improvement. sequential we which reception, launch we we’re to platform, costs, going having cut aiming did revenue which We’re digital we’re our

that’s prudent. implemented about. Since plan Carl coming that that’s we the about, talked all hasn’t of essence would initiatives that that more that why be happened, With it the turnaround in

the EBITDA. guidance We’re on gave QX previously -- pushing out that we

does to debt? is Okay. the then, cash of cash the I -- where the sorry money, this, come where the from missed repay million if is where $XX And but

QX. balance is Yeah. going in the $XX just the did much Linda, our to cash it say the coming as we from, be since spend came line when have cash with million and sheet. we the not you When quarter in where raised we as cash we last well, burning year, in we’re on debt pretty finished

comes we we So guidance come we loss And million we’re of it’s cash break more $X that’s in a cost at some million. would said, well, drag flow the why we’ll also cash, at burn which $X in being and of operations And on $X as range, if from if out bikes, generates but in EBITDA the gave even. cash we max as come million, frankly of inventory. EBITDA, while we selling it

of where came part we So pretty to pay pay based we comfortable, revenue we down terms turnaround be more that and them could the revenues higher and of that negotiated Torch, down Linda, in debt plans our could generating our million debt. new agreement that coming feel contribution on that margin that the will with to with covenants, we $XX we Blue cash

million So, guess, the I second in correct? didn’t It The quarter. in sorry, I misunderstood. third the Is happen quarter. down pay is $XX that

correct. is July. after in did it We That

Oh! I got you.

Okay. All right.

are Coaches you usually conflict do you It to the selling Are sell start Okay. guess to And to then products. problem. the going different with or SKUs final Amazon potential. be about question you risk a your in Amazon selling channel just sellers intend direct how manage it’s on a when channel and potential? the really is conflict products I on same slightly my my causes trying big always experience,

we’re Carl. And very available to Linda. that’s Hi, It’s if we’ve which got of obviously recall, Yeah. conflict. we line you the sensitive have supplement the -- to sensitive sports latter supplements, the us is of we’re to. channel which effect and Obviously, something extremely is that line,

network. us to of days eager the multi-sales if a interesting and all the from we ships, However, in rising leadership were visibility I visibility all floats channel our the return will. a And is, they all tide of got see partners marketing multichannel, the very channels, drive call off like what’s and to company a to you with higher yesterday channels are benefit early

is channels the all broad there so while have gets most that So that the all to and leverage. so conflict the our that sensitivities partners available. out TAM benefit the channel and The the of thing story so important important, is are

to are the attention but pay to going than we’re it, we feel like the greater competition. So synergies

That’s Okay. me. for it Thanks.

Linda. Thanks,

with question next Our is from Baird. Jonathan Komp

Your is now open. line

afternoon. Thank just that previously maybe see I you. I Yeah. thinking changed for back things Can the you follow ask just further revenue, that total on improvement Marc, the know now in what’s can up Hi. revenue you there. Good outlook could I half? and in outlook. changed mentioned sequential

think, mentioned in increase costs sequential the drive previously, improvement. I you your substantial would subscription a

So just going any and how what’s you’re more on the thoughts here? business forward planning changed

I to as we renewals adjusted Yeah. Jon, gross it. deploy, think, said, we structure right? is fixed loving having the had dramatically, three The cost are platform or changes margin. We new major great the customers

Our -- at picked new new acquisitions has sales pace like. not up acquisition we’d the customer

all about think you launching, quite our a few at Carl we initiatives, drive if should talk cash higher revenues of mentioned that them, margin. about contribution So these

delays our just in we’ve EBITDA done commitment it the QX So that past.

it and But focused we’re all where higher changing from we frankly, coming contribution it and feel on, pretty are these because good that margin are really cash cash driving they about about, north that changes balance is.

that big we’ve Hi, turnaround But an got can’t a to exists be component highly testing we what the it’s in this done we just it our big getting overestimate team very That cost activity, is, now because obviously, which Carl. opportunity efforts. database cash The our feel and on that’s because going those started. have but is July, that efforts, is of customers. based that a can low the that activation accretive we built it important Jon. we’re we’ve minimal, The lever, of already is acquisition, obviously, be --

you’ve I If for follow could successfully this and there, business I many Carl. substantial a run had know up and database years. operate

the past what and costs are implementing new done cut what you you’ve do have you dramatically, as challenges now new to strategies why in teams successfully? the the today maybe haven’t and So that opportunity and building

with it’s Yeah. been the I’ll a the simplified gift to because the the the Frankly, business. cutting cost operation of part. real business overall start last has

rather had. we’ve one across that that the subscription marketing openfit platform different So got platform every the bit benefits little and apply tiers of that spread we than or sales be leverage other we three to

got had year leverage we’ve So we much on SG&A ago. more than a even just

direct other of couple we’ve a there’s time But quite each infomercial business was how the long a of us. be that understand and -- known relationship direct taken It is for the expensive in name the database. can some value areas -- marketing of that you in for marketing it’s a and and business know, time, that to the productive as the customer takes acquisition that, and rebuild

mass quite I if as regret, with it’s sophisticated couple anything there’s dollars the get build frankly, acquire literally to that said a his value of I in the to slow understanding database. was critical Marc And take billion and in team to technologically opening would database, it we us that that the how have comments, of that

marketing the has to ongoing for database So be lifetime and frankly, leverage before, now reactivation. that that on talent we team have able and done who found creative offer executive the the and expertise, we brilliant found just this value a to

creative premium flexibility us leverage was subscription one or database. And with have And to structure that that the say reactivate at the we $XXX. attract that be the gives to offer didn’t of before, new thing that the I’ll this tier

simplified already model understands it’s us the message bring how has the that opportunity. fitness, of have churned offers database to team and to a help the overall that So a at business that now nutrition mindset who it compelling to only team maximize and cohort total solution with point point to the and has we that clear to message matured that offer that

the on I we’ve For the to got like this feel execute first plan. time, sophistication

at where may revenue last forecast number then And run you cash a insight the this you eventually one that level flow can Thank around that of revenue just for you on level And if subscribers $XXX me, what the Is of roughly positive, rate, and if need? million could I not, any digital The you. subscribers, digital to bottom? business third could. quarter share annually. be

Jon, just the of to second question. I make your part got sure

what that I Did we You be right? cash flow can positive? catch level asked

right. That’s Yeah.

Okay.

our -- at our say, look profit I but X% at Jon, XX% revenue, did Yeah. only came -- our right, our look I down gross mean, down come year-over-year, you Okay. if you would they year-over-year. if

So profit gross really on we’ve diligent been side. the

our margin, on And done do. still continue some the still think enhance. time, over to got So think, we will to a gross but -- we’ve I lot, then side, I OpEx we

think, biggest sales revenue little benefit customers that get All have that when say, by of is the that costs. I free-to-view the I’ll is subscribers reactivating that talk very to, we the Carl those new part tier and about creating talking OpEx, past about or upsell these to we marketing streams then

I So marketing think, at revenue that’s positive a will at. us improve sales cash flow to of percentage we’re and that, size get help our going what’s the and as

I positive at think get well it where could cash So this really size. we we’ve run flow

of rate. not when subscriber very terms definitely, base, But guidance a subscriber at questions this that on XX% to quarter-over-quarter. I giving it’s but obviously, But of growing think base, it’s going not healthy BODi In up front. at you on we’re your at increase. percentage the it’s I mean, look the rate continue

is the then as on-demand could And Beachbody BOD, basic how of left. calculus the to do you many subscriber base

half the some a cycled but through we than lot them through cycle the subscription. So year part more March, through to as second front obviously, of year be those, we said, the the skewed we they’re BODi previously and will pure of

say I’d Mark this -- Goldston. is And

million recapture database program CRM. through You also to have people the $XX the

in quarter-on-quarter [ph] at Wynwood not about, Jon, have bottom, you sub this if level. XXX So the the XX% only great you decline think

have got worrying to people of huge the the what’s as customer not but have best to been that it and So you’ve database expiration compensation help XX XX modest the over we’re of the about these when offers almost network going this million pinpointed zero to will literally costs, out subbase. cost fortify which there, acquisition certainly put you have the work you you and long-term cohort,

I’m profit. if believe I sorry, adjusted And follow you year, up your I last Mark, once could more. gross

profit my the lower the point, real have reconcile Can is, price given X%. that down So sequential maybe adjusted gross higher quarter. question. I more would you than and sorry, And the question last than just the looks maybe that’s the margin gross first

Yeah.

it we a a ago, quarter-over-quarter, because was bit said. why On as it year the substantially lower, gross margin, was you’re more asking than

same the the nutrition was it On versus in QX side, QX.

support. we because that people to BODi, in results migration side, BOD a large digital the customer of On more have calling obviously,

So that it we where capitalize that’s of QX. that started increased in platform expense. bit also amortizing And the we preparation expense, a the

QX And did partners, -- did then We in partner promotion Fitness. got a our run we Connected network. for our

Connected in up, So side, that the that’s went revenue cash, inventory when stabilizes, to see I right? you’ll an business. see volume on the a the that’s driving frankly, and translates bikes margin that’s why overall but as you of of bit And went think that the eventually all about Fitness then then improvement down the inventory could gross

again Thanks for questions. Okay. the all taking

Jon. Thanks,

Jon. Thanks,

Singular Tuttle Darin Our is from next Research. with question

Your now is open. line

for Thanks Thanks. Yeah. on having me here.

XXXX purchase of to that the six commitment million for mentioned, next Does So scheduled are and the couple had about you. second, the purchase agreement less or you just kind focusing the is XXXX. tabs last the the Are out inventory inventory a service this next close just you on $XX just the of to because for that If six I’ve -- of Thank months? keeping I obligations to recently still going be then agreements million $XX based on going to that back months look there around the out is quarters. of that it out agreements right the some and trouble year. I’m service pay is sound over down to on on end at that a than

for Yeah. that our goes commitments Darin, as COGS. of relate our to of majority purchases business inventory those into nutrition business course the normal

beyond So and I’ve above commitments I been these course that normal business. before, question of asked know are

do part, most normal the just purchases we are these on the side. nutrition for Now

to be So it’s going nothing taxing way. overly that’s in any

So need can we inventory driving we demand and our manage them continues balance our quarter-over-quarter keep really then you to decline our business. as to supply nutrition filing And and well. see inventory

Okay.

levels would of line I be being revenue and nutrition topline the so And with maybe separated the the in inventory think would that’s something drawdown Fitness? as guidance be these it kind between similar Thanks. about or Connected should expectation or to

a I nutrition got and think think inventory approaching it keep think there. our we’re level I inventory to relates separately, retooling because healthy it business, about it’s as that of good to you to

know, commercial as bikes, are you I They think bike expire. I business, these the don’t on mean, bikes. grade

selling through that inventory. We’re

any anytime soon. planning purchases we’re So not

will quarters. level inventory that in decrease continue to the coming So

Okay. Yeah. No Thank you. more questions.

no are questions. more There

closing call the pass I’ll So Carl to for back remarks. over

of and for Thanks the you This our team. occur and we’re excited third Thanks. hope joining partners everyone appreciate some we our again Obviously, turnaround, over successes bring to right. All by us that news today’s for we course of the call. our it our stakeholders, corporate quarter. subscribers,

remain fiduciaries I us people of the and supports important as help healthy build customers of good on in our the and to goals appreciate to goals, next committed forward stakeholders their our stakeholders on everyone quarter. health to this being an to is again our who achieve organization, lives determination and that our more a I serve lead fulfilling us category and important behalf near-term in and and long-term everybody. and determined and behalf look achieving the esteem Our work of updating to goals as you Thanks, company, we

conference the for Thank concludes your participation. That you call.

may lines. You your now disconnect