The Beachbody Company (BODY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $110.2M, surpassing the midpoint of guidance, with net loss and Adjusted EBITDA both better than guidance.

• Achieved the lowest net loss since going public and third consecutive quarter of positive Adjusted EBITDA.

• Gross margin reached 69%, the highest since 2021, with digital fitness gross margin at 81% and nutrition at 61%.

• Revenue declined 18% year-over-year, with digital, nutrition, and connected fitness segments all down; digital subscriptions fell to 1.15M and nutrition to 0.14M.

• Strategic focus is shifting to the nutrition market, leveraging historical strength and high margins.

Financial highlights

• Q2 2024 revenue was $110.2M, down 18% year-over-year; digital revenue was $58.8M (down 10%), nutrition $50.1M (down 22%), connected fitness $1.3M (down 74%).

• Gross profit was $76.4M, with overall gross margin at 69.3%, up from 61.3% prior year.

• Net loss was $10.9M, improved from $25.7M a year ago; Adjusted EBITDA was $4.9M, up from a $4.8M loss.

• Operating expenses for Q2 were $85.9M, down from $106.9M prior year.

• Cash and cash equivalents at June 30, 2024 were $32.3M; net cash position was $10.9M.

Outlook and guidance

• Q3 2024 revenue expected between $97M and $107M.

• Net loss guidance for Q3 is $13M to $9M; Adjusted EBITDA expected between $2M and $15M.

• Management expects to remain in compliance with financial covenants, but cushion for minimum revenue covenants is expected to narrow.

• Continued focus on innovation pipeline and returning to revenue growth in late 2024 and 2025.