BODI — The Beachbody Company, Inc.

Summary of The Beachbody Company, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $59.9 million, down 6.3% sequentially and 41.4% year-over-year, aligning with expectations due to the transition from an MLM model.
• Net Income: $3.6 million, marking the first positive net income since going public in 2021, compared to a net loss of $12 million in the prior year.
• Adjusted EBITDA: $9.5 million, up from $4.6 million in Q2 2025 and down slightly from $10.1 million year-over-year.
• Free Cash Flow: $13.1 million year-to-date, with $9 million generated in Q3 alone.
• Gross Margins: Consolidated gross margin at 74.6%, up 230 basis points from the prior quarter and 730 basis points year-over-year.
• Digital Revenue: $36.4 million, down 8.3% from Q2 and 32.2% year-over-year.
• Nutrition Revenue: $23.5 million, down 2.8% sequentially and 50.4% year-over-year.

2. Strategic Updates and Business Highlights

• The company has achieved eight consecutive quarters of positive adjusted EBITDA and significantly reduced its revenue breakeven point from $900 million in 2022 to $180 million.
• A shift from a multi-level marketing (MLM) model to an omnichannel approach is underway, focusing on direct-to-consumer and retail initiatives.
• New product launches planned for 2026 include Shakeology in retail, a P90X nutritional supplements line, and a new P90X fitness program.
• The company is leveraging its established brands and expanding into new market segments, targeting the 185 million overweight Americans who do not currently engage in regular fitness routines.
• The transition to Shopify Plus is expected to enhance order conversion and average order value.

3. Forward Guidance and Outlook

• Q4 revenue is expected to range from $50 million to $57 million, with net income projected between negative $1 million and positive $3 million, and adjusted EBITDA between $5 million and $9 million.
• The company anticipates a revenue split of approximately 61% digital and 39% nutrition moving forward.
• Long-term gross margin targets remain at 70% to 75% for total gross margin, with specific targets for digital and nutrition segments.

4. Bad News, Challenges, or Points of Concern

• Revenue decline continues due to the strategic transition away from the MLM model, impacting subscription counts and overall sales.
• Digital subscriptions decreased by 4.3% sequentially and 18.9% year-over-year, reflecting ongoing challenges in customer retention.
• Nutrition subscriptions remained flat sequentially but fell 46.2% year-over-year, indicating difficulties in transitioning customers to the new model.
• The company faces the challenge of establishing traction in new retail channels, with a lengthy process for product placement in stores.

5. Notable Q&A Insights

• Customer demographics remain consistent, primarily targeting individuals seeking convenient home workout solutions.
• The new unbundled super trainer subscription has attracted both existing and new customers, with some upgrading to full subscriptions.
• Future product launches are expected to be more competitively priced due to the absence of MLM-related costs, enhancing market appeal.
• Marketing spend is expected to remain disciplined, with no cuts to consumer advertising despite the reduction in legacy MLM costs.
• Retail product launches are anticipated to begin in Q1 2026, with revenue from retail expected to materialize in Q2 and Q3.

This earnings call indicates a significant transition for The Beachbody Company, with promising financial improvements and strategic initiatives aimed at long-term growth, despite ongoing challenges in revenue and customer retention during the transition phase.