The Beachbody Company, Inc. reported fourth-quarter results exceeded guidance, marked by a 42 percent two-year growth in total digital and nutritional subscriptions and a 21 percent gain in total streams versus 2019.

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

Fourth Quarter 2021 Results

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

Full Year 2021 Results

  • Total revenue was $873.6 million, a 1 percent increase compared to 2020 and a 16 percent increase compared to 2019;
  • Digital revenue was $365.4 million, a 9 percent increase compared to 2020 and a 46 percent increase compared to 2019
  • Connected Fitness revenue was $42.7 million, following the Myx Fitness acquisition in June 2021;
  • Nutrition and Other revenue was $465.5 million, a 12 percent decrease compared to 2020 and an 8 percent decrease compared to 2019;
  • Net loss was $228.4 million, compared to a net loss of $21.4 million in 2020 and net income of $32.3 million in 2019; and
  • Adjusted EBITDA was ($86.1) million, compared to $51.5 million in 2020 and $78.4 million in 2019.

Strategy To Accelerate Path To Profitability and Enhance Competitive Position
The company also announced today that it is moving to streamline its business model, accelerate its path to profitability and ensure it is positioned to deliver profits and cash flow in a variety of demand environments and return to positive earnings and cash flow in 2023 through the following initiatives:

  • Consolidate its streaming fitness and nutrition offerings into one platform, Beachbody On Demand (BOD), and market its connected fitness bike under the Beachbody brand to increase the strength of BOD’s platform with the addition of Openfit products and BOD’s on-demand library, enhance the company’s value proposition to its customers and partners and simplify its go-to-market strategy.
  • Building on the performance in the fourth quarter, the company will target historically high-return media and narrow its focus to pursuing only performance marketing opportunities that are immediately profitable and accretive to cash flow. The company will also further leverage its coach micro-influencer network, which continues to serve as a competitive advantage that delivers its most profitable and productive subscribers.
  • Leveraging its database from its data and analytics team, the company identified opportunities to increase lifetime value by reducing friction in the e-commerce purchasing funnel and maximizing the ROI on new content releases and nutritional supplements.
  • As a result of the “One Brand” strategy and post-merger technology integration efforts completed in 2021, the company reduced headcount by approximately 10 percent in Q122. And in conjunction with AlixPartners, the company is undertaking a review of its organization to further streamline operations and reduce expenses.

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

For the first quarter of 2022 the company expects total revenue of $170 million to $180 million and an adjusted EBITDA loss of $20 million to $25 million.

Photo courtesy Beachbody Company