Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Beachbody Co Inc (BODI, Financial) reported revenue ahead of the midpoint of guidance, indicating strong financial performance.
- The company achieved its lowest net loss since going public and reported positive adjusted EBITDA for the third consecutive quarter.
- Gross margins improved significantly, with an overall gross margin of 69% and digital fitness gross margin reaching 81%, the highest since 2021.
- The company successfully reduced its debt by half and lowered its revenue breakeven point by over $400 million.
- The Beachbody Co Inc (BODI) is expanding its nutrition business, which represents a major growth opportunity, with plans to tap into the $164 billion nutritional supplement market.
Negative Points
- Revenues declined 8% compared to the prior quarter and 18% year-over-year, indicating challenges in maintaining revenue growth.
- Digital revenue decreased 4% from the prior quarter and 10% year-over-year, with a decline in digital subscriber count.
- Nutrition revenue decreased 10% from the prior quarter and 22% year-over-year, highlighting difficulties in the nutrition segment.
- The company is still in the early stages of reinvigorating its nutrition business, which may take time to grow sustainably.
- Cash balance decreased from $39 million in the prior quarter to $32 million, with negative free cash flow of $2 million for the quarter.
Q & A Highlights
Q: Can you elaborate on the bullish outlook for the Nutrition segment and the status of the DTC site for online purchases?
A: Carl Daikeler, CEO, explained that they recently launched the Energize product on thebody.com and plan to add more SKUs monthly. They are also expanding on Amazon, seeing growth there. Mark Goldston, President & CEO, highlighted the $164 billion TAM for nutrition and the potential outside their current network, noting past success with nutrition being a significant revenue driver.
Q: What is the progress and conversion rate of the win-back campaign targeting the 14 million database?
A: Carl Daikeler, CEO, mentioned that the CRM campaign is gradually gaining traction. They are organizing the database by cohorts to build relationships rather than just offering promotions. The BODi LAVA launch was successful due to this approach, and they are refining their strategy for better conversion rates.
Q: How has the partner network trended since the commission changes?
A: Mark Goldston, President & CEO, stated that the changes were accepted better than expected, with no significant negative impact. However, the overall market remains challenging, and they are focusing on training and leveraging products to support the network.
Q: How is the nutrition business performing outside the partner network, and what are the plans for marketing spend?
A: Carl Daikeler, CEO, noted that the nutrition products are now more accessible, especially on Amazon, and they plan to start direct response marketing for nutrition, which is new for them. They will use metrics like ROAS and LTV to CAC to ensure profitable customer acquisition.
Q: What are the future plans for nutrition innovation and market awareness?
A: Marc Suidan, CFO, mentioned a major nutrition innovation in the pipeline for 2025, which is expected to have high awareness due to its nature. They aim to build external awareness outside the network to capitalize on the nutrition segment's potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
