The Beachbody Company (BODY) Q3 2024 earnings summary

Executive summary

• Completed a major business model transformation, eliminating the MLM structure in favor of a single-level affiliate model effective November 1, 2024, to improve agility, reduce costs, and remove negative stigma, with a 33% workforce reduction in Q4 2024.

• Q3 2024 revenue was $102.2M, down 20% year-over-year but in line with guidance; net loss narrowed to $12.0M from $32.7M in Q3 2023, including $9.2M in restructuring charges.

• Adjusted EBITDA improved to $10.1M in Q3 2024 from a $5.8M loss in Q3 2023, marking the fourth consecutive quarter of positive Adjusted EBITDA.

• Operating expenses decreased 21% year-over-year, reflecting significant cost control and restructuring.

• The company is positioned for top-line growth and increased operating leverage as it enters the next phase of its turnaround.

Financial highlights

• Q3 2024 revenue: $102.2M (down 20% YoY); gross margin improved 880 basis points to 67.3%, within the long-term target range.

• Adjusted EBITDA was $10.1M, exceeding guidance; net loss was $12.0M, including $9.2M in restructuring charges.

• Year-to-date positive free cash flow of $5.3M, a $25.4M improvement from the prior year.

• Cash and cash equivalents at September 30, 2024: $32.3M; net cash position was $10.6M.

• Operating expenses fell to $81.8M from $104.0M YoY; operating loss improved to $13.0M from $29.0M YoY.

Outlook and guidance

• Q4 2024 revenue expected between $77M–$87M, reflecting seasonality and transition to the affiliate model.

• Q4 net loss projected at $21M–$17M, including $9M in pivot-related charges; Adjusted EBITDA expected between $2M–$6M.

• Q4 includes $8.1M in accelerated depreciation related to the business model pivot.

• The Pivot is expected to result in $18.4M in restructuring costs, with $9.2M recorded in Q3 and the remainder in Q4 2024.

• Management expects further cost reductions in 2025 due to lower headcount and event expenses.