The Beachbody Company, Inc., in its first report since going public, reported a loss in the third quarter ended September 30. Sales declined 17 percent due to a drop in new health and wellness subscriptions.

“While we continued to execute on our strategy to drive growth, the third quarter proved more challenging than forecasted. Our results reflect a confluence of external factors, including softer at-home fitness demand as consumers grew tired of social distancing, and a challenging media environment that did not meet our disciplined ROI requirements, coupled with a short delay in product launches from September to October. Although our digital subscriber base remains strong and engaged with high levels of retention, we did not acquire new subscribers at the rate we expected,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and CEO. “We maintained disciplined cost control in the quarter, and we are taking immediate steps to improve customer acquisition and lifetime value, getting back on course to driving profitable growth. As both the CEO and the single largest shareholder, I am laser-focused on driving revenue growth, creating value for shareholders, and delivering on our mission.”

Third Quarter 2021 Results

  • Total revenue was $208.1 million, a 17 percent decrease compared to 2020 and a 6 percent increase compared to 2019. Digital revenue was $94.1 million, a 5 percent decrease compared to 2020 and a 38 percent increase compared to 2019.
    • Digital subscriptions were 2.64 million, a 1 percent increase compared to 2020 and a 55 percent increase compared to 2019;
    • 95.6 percent month-over-month average digital retention, a 50-basis point increase compared to 2020 and a 40-basis point increase compared to 2019;
    • 35.9 million total streams, a 26 percent decrease compared to 2020, and a 35 percent increase compared to 2019;
    • 29.6 percent DAU/MAU, a 250-basis point decrease compared to 2020, and a 20-basis point increase compared to 2019.
  • Connected Fitness revenue was $5.9 million, compared to none in 2020, which preceded the Myx Fitness acquisition.
    • There were approximately 14,700 bikes sold in the third quarter. However, only 44 percent of bikes were delivered to customers, which determines when revenue can be recognized;
    • On a pro-forma basis, Connected Fitness revenue was $8.9 million in Q3 2020, with roughly 8,600 bikes sold and 118 percent of bikes sold delivered in the quarter.
  • Nutrition and Other revenue was $108.1 million, a 29 percent decrease compared to 2020 and a 16 percent decrease compared to 2019.
    • Nutritional subscriptions were 0.34 million, compared to 0.44 million in 2020 and 0.34 million in 2019.
  • Net loss was $39.9 million, compared to net income of $13.8 million in 2020 and net income of $3.4 million in 2019.
  • Adjusted EBITDA was ($43.4) million, compared to $31.4 million in 2020 and $19.5 million in 2019.

Key Operational and Business Metrics | Near-Term Actions to Optimize Performance
The company implemented immediate action to optimize near-term performance while advancing its long-term growth strategies. Actions include:

  • Sharpening marketing focus by adjusting media investment to maximize ROI;
  • Prioritizing the highest return growth opportunities leveraging BODi to drive acquisition and value and continue to scale its connected fitness business across its Beachbody on Demand and Openfit platforms;
  • Maximizing the micro-influencer coach network through the return of in-person live events and new product introductions;
  • Maintaining cost discipline, including a transition to a work-from-anywhere environment with the lease of its Santa Monica office;
  • Strengthening its leadership team focused on revenue growth and long-term strategy, with appointments including:
    • Jon Congdon, Beachbody’s co-founder and CEO, Openfit, was appointed as company vice chairman in a newly created role focused on long-term strategy and business development effective November 15, 2021
    • Jean-Michel Fournier was appointed as president, Global Partnerships and Corporate Development effective November 1, 2021;
    • Christina Cartwright appointed as senior vice president, Nutrition, effective October 28, 2021; and
    • Blake Bilstad appointed as chief legal officer and Corporate Secretary, effective October 28, 2021.

2021 Guidance
While the company remains confident in long-term opportunities in the health and wellness space, the third quarter results, delayed product launches, media spend reassessment, COVID-related consumer behavior, and market uncertainty resulted in a conservative view for 2021 revenue compared to previous guidance. Accordingly, for the fiscal year ended December 31, 2021 the company now expects total revenue to be between $820.0 million and $830.0 million, and Adjusted EBITDA to be between ($110.0) million and ($100.0) million, consistent with previous expectations.