# Beachbody Company, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Beachbody Company, Inc.](/companies/bodi.md) (CIK 1826889)
- Form: 10-Q
- Filed: 2025-05-15
- Accepted by EDGAR: May 15, 2025, 16:06 ET
- Period: 2025-03-31
- Accession: 0000950170-25-072601
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1826889/000095017025072601/body-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1826889/000095017025072601/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $72.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $20.8m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $51.5m | us-gaap:GrossProfit |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$3.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $1.6m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $45.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$5.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.84 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.84 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 6,882,988 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $2.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $694.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $18.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $61.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $152.5m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $118.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $128.5m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $0 | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $16.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $24.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,401 characters.

*The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) as well as our financial statements and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2023 (our "Form 10-K"). Unless otherwise indicated, the terms “BODi,” “we,” “us,” or “our” refer to The Beachbody Company, Inc., a Delaware corporation, together with its consolidated subsidiaries.*

### Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements about the financial condition, results of operations, earnings outlook and prospects of the Company. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on our current expectations as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to the following:

- our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in selling and marketing, general and administrative, and enterprise technology and development expenses (including any components of the foregoing), Adjusted EBITDA (as defined below) and our ability to achieve and maintain future profitability;
- disruptions related to the Pivot (as defined below) and our ability to implement the proposed restructuring of our core business model;
- our anticipated market opportunity;
- our liquidity and ability to raise financing;
- our ability to comply with the financial covenants in our ABL Facility (as defined below);
- our success in retaining or recruiting, or changes required in, officers, key employees or directors;
- other than the pre-funded warrants, our warrants are accounted for as liabilities and changes in the value of such warrants could have a material effect on our financial results;
- our ability to effectively compete in the fitness and nutrition industries;
- our ability to successfully acquire and integrate new operations;
- our reliance on a few key products;
- market conditions and global and economic factors beyond our control;
- the impact of tariffs and global trade disruptions on us, our suppliers, and our customers
- intense competition and competitive pressures from other companies worldwide in the industries in which we will operate;
- litigation and the ability to adequately protect our intellectual property rights; and
- other risk and uncertainties under the heading “*Risk Factors”* set forth in this Report as well as our most recent Form 10-K.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by management prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

You should not place undue reliance upon our forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

### Overview

BODi is a leading fitness and nutrition company. We focus primarily on digital content, supplements, connected fitness, and consumer health and fitness. Our goal is to continue to provide holistic health and fitness content, subscription-based solutions and digital program sales. We are the creator of some of the world’s most popular fitness programs, including P90X®, Insanity®, and 21 Day Fix®, which transformed the at-home fitness market and disrupted the global fitness industry by making it accessible for people to get results—anytime, anywhere. Our comprehensive nutrition-first programs, Portion Fix® and 2B Mindset®, teach healthy eating habits and promote healthy, sustainable weight loss. These fitness and nutrition programs are available through our BODi streaming service.

We offer nutritional products such as Shakeology® nutrition shakes, Beachbody Performance supplements and BEACHBAR® snack bars.

Our revenue is generated primarily through our direct response advertising, affiliates, social media marketing channels and ecommerce market places like Amazon. In addition, prior to the Pivot (as defined below), an additional primary source of revenue was our network of Partners. Components of revenue include recurring digital subscription revenue, digital program sales and revenue from the sale of nutritional and other products. In addition to selling individual products on a one-time basis, we bundle digital and nutritional products together at discounted prices.

On September 30, 2024, the Company announced a restructuring of its network business (the “Pivot”) which converted the Company’s multi-level marketing model (“MLM”) to a single level affiliate model and reduced the Company's headcount by approximately 170 employees (33% of the Company’s workforce on that date) in the fourth quarter of 2024.

For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024:

- Total revenue was $72.4 million, a 40% decrease;
- Digital revenue was $42.9 million, a 30% decrease;
- Nutrition and other revenue was $28.7 million, a 48% decrease;
- Connected fitness revenue was $0.8 million, a 74% decrease;
- Operating expenses was $55.2 million, compared to $92.1 million;
- Net loss was $5.7 million, compared to a net loss of $14.2 million; and
- Adjusted EBITDA was $3.7 million, compared to $4.6 million.

See “Non-GAAP Information” below for information regarding our use of Adjusted EBITDA and a reconciliation of net loss to Adjusted EBITDA.

### Recent Developments

On May 13, 2025, (the “Asset-Based Lending Facility Effective Date”), the Company, the lenders party thereto and Tiger Finance, LLC (“Tiger”), as administrative agent, entered into a $35.0 million asset-based lending facility (the “ABL Facility”), which includes a $10 million uncommitted accordion that matures on May 13, 2028 with the potential for two one-year extensions which would need to be approved by Tiger. The Company borrowed $25.0 million on the Asset-Based Lending Facility Effective Date. The ABL Facility bears interest based on the one-month SOFR rate plus 9.00% at its inception with a reduction in the rate to the one-month SOFR rate plus 7.75% after May 13, 2026 if the Company's fixed charge coverage ratio is greater than 1.10x. The ABL Facility is secured by a first lien on substantially all of the Company’s assets and there is no required payment of principal until July 1, 2026 and thereafter the principal repayment is approximately $2.1 million per year, which is split into equal monthly payments of $177,083. The remaining unpaid principal balance of the ABL Facility will be due on May 13, 2028, unless the ABL Facility is extended pursuant to its terms. The ABL Facility has financial covenants that require the Company to maintain certain billing levels, subscription counts and liquidity levels.

The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025 (outstanding principal balance of $17.3 million as of the date of repayment) along with the repayment of the outstanding paid in kind of $0.5 million, a prepayment premium of $0.3 million and outstanding accrued interest of $0.2 million.

See Note 9, Debt, and Note 16, Subsequent Events, for additional information on the ABL Facility and the repayment of the existing Term Loan.

### Key Operational and Business Metrics

We use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.

|  | As of March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Digital subscriptions (millions) | 1.02 | 1.22 |
| Nutritional subscriptions (millions) | 0.08 | 0.15 |

|  | Three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Average digital retention | 97.0% | 95.7% |
| Total streams (millions) | 20.7 | 25.6 |
| DAU/MAU | 32.5% | 33.2% |
| Revenue (millions) | $72.4 | $120.0 |
| Gross profit (millions) | $51.5 | $81.3 |
| Gross margin | 71.2% | 67.7% |
| Net loss (millions) | $(5.7) | $(14.2) |
| Adjusted EBITDA (millions) (1) | $3.7 | $4.6 |

(1) See “Non-GAAP Information” below for a reconciliation of net loss to Adjusted EBITDA and an explanation for why we consider Adjusted EBITDA to be a helpful metric for investors.

### Digital Subscriptions

Our ability to expand the number of digital subscriptions is an indicator of our market penetration and growth. Digital subscriptions from our BODi platform include paid and free-to-pay subscriptions, with free-to-pay subscriptions representing less than 1% of total digital subscriptions on average. Digital subscriptions are inclusive of all billing plans, currently for annual, semi-annual, quarterly and monthly billing intervals. In addition, we also have promotional offers which at times include membership options for greater than one year or the ability to buy a subscription for one year and get the second year free.

### Nutritional Subscriptions

Nutritional subscriptions include monthly subscriptions for nutritional products such as Shakeology, Beachbody Performance and BEACHBAR. We also package and bundle the content experience of digital subscriptions with nutritional subscriptions to optimize customer results.

### Average Digital Retention

We use month-over-month digital subscription retention, which is defined as the average rate at which the total subscriber file is retained for the next period, to measure customer retention. For instance, a 95% average digital retention rate would correspond with retaining each month an average of 95% of digital subscribers existing at the beginning of that month. A 95% average digital retention rate would translate into a loss at the end of the quarter of approximately 15% of the subscribers existing at the beginning of the quarter. This calculation excludes new customer acquisitions or subscribers added in a specific month, so this calculation can never exceed 100%.

### Total Streams

We use total streams to quantify the number of fitness, nutrition and mindset programs viewed, which is an indicator of customer engagement and retention. While the measure of a digital stream may vary across companies, to qualify as a stream on any of our digital platforms, a program must be viewed for a minimum of 25% of the total running time.

### Daily Active Users to Monthly Active Users (DAU/MAU)

We use the ratio of daily active users to monthly active users to measure how frequently digital subscribers are utilizing our service in a given month. We define a daily active user as a unique user streaming content on our platform in a given day. We define a monthly active user as a unique user streaming content on our platform in that same month.

### Non-GAAP Information

We use Adjusted EBITDA, which is a non-GAAP performance measure, to supplement our results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We believe Adjusted EBITDA is useful in evaluating our operating performance, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate Adjusted EBITDA as net income (loss) adjusted for depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision, equity-based compensation, restructuring costs, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.

We include this non-GAAP financial measure because it is used by management to evaluate BODi’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because they are non-cash (for example, in the case of depreciation and amortization and equity-based compensation) or are not related to our underlying business performance (for example, in the case of restructuring costs, interest income and expense).

The table below presents our Adjusted EBITDA reconciled to our net loss, the closest GAAP measure, for the periods indicated:

*(in thousands)*

|  | Three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net loss | $(5,748) | $(14,216) |
| Adjusted for: |  |  |
| Loss on partial debt extinguishment (1) | — | 1,209 |
| Depreciation and amortization | 2,888 | 5,378 |
| Amortization of capitalized cloud computing implementation costs | 37 | 37 |
| Amortization of content assets | 2,729 | 4,540 |
| Interest expense | 1,565 | 1,875 |
| Income tax provision | 45 | 62 |
| Equity-based compensation (2) | 1,726 | 4,365 |
| Restructuring and platform consolidation costs (3) | — | 1,644 |
| Change in fair value of warrant liabilities | 689 | 724 |
| Gain on sale of property and equipment | — | (784) |
| Non-operating (4) | (218) | (280) |
| Adjusted EBITDA | $3,713 | $4,554 |

(1) Represents the loss related to the $1.0 million and $5.5 million partial debt prepayments that the Company made on January 9, 2024 and February 29, 2024, respectively.

(2) Includes benefits due to the modification of stock awards of $0.9 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively.

(3) Includes restructuring expense and personnel costs associated with key initiatives of $1.6 million during the three months ended March 31, 2024.

(4) Primarily includes interest income.

### Results of Operations

The Company has one operating segment. The following discussion of our results and operations is on a consolidated basis.

*(in thousands)*

| Revenue: | Three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Digital | $42,911 | $61,506 |
| Nutrition and other | 28,653 | 55,512 |
| Connected fitness | 799 | 3,028 |
| Total revenue | 72,363 | 120,046 |
| Cost of revenue: |  |  |
| Digital | 6,211 | 12,862 |
| Nutrition and other | 13,451 | 22,284 |
| Connected fitness | 1,152 | 3,618 |
| Total cost of revenue | 20,814 | 38,764 |
| Gross profit | 51,549 | 81,282 |
| Operating expenses: |  |  |
| Selling and marketing | 30,970 | 59,261 |
| Enterprise technology and development | 12,596 | 17,717 |
| General and administrative | 11,657 | 13,483 |
| Restructuring | — | 1,644 |
| Total operating expenses | 55,223 | 92,105 |
| Operating loss | (3,674) | (10,823) |
| Other income (expense) |  |  |
| Loss on partial debt extinguishment | — | (1,209) |
| Change in fair value of warrant liabilities | (689) | (724) |
| Interest expense | (1,565) | (1,875) |
| Other income, net | 225 | 477 |
| Loss before income taxes | (5,703) | (14,154) |
| Income tax provision | (45) | (62) |
| Net loss | $(5,748) | $(14,216) |

29

### Revenue

Revenue includes digital subscriptions, digital program sales, nutritional supplement subscriptions, one-time nutritional sales, connected fitness products, access to our online Partner business management platform (prior to November 1, 2024), preferred customer program memberships (prior to November 1, 2024), and other fitness-related products. We often sell bundled products that combine digital subscriptions, nutritional products, and/or other fitness products. We consider these sales to be revenue arrangements with multiple performance obligations and allocate the transaction price to each performance obligation based on its relative stand-alone selling price. We defer revenue when we receive payments in advance of delivery of products or the performance of services. Digital subscription revenue is recognized ratably over the subscription period of up to 38 months.

*(dollars in thousands)*

| Revenue | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Digital | $42,911 | $61,506 | $(18,595) | (30%) |
| Nutrition and other | 28,653 | 55,512 | (26,859) | (48%) |
| Connected fitness | 799 | 3,028 | (2,229) | (74%) |
| Total revenue | $72,363 | $120,046 | $(47,683) | (40%) |

The decrease in digital revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily attributable to a $13.8 million decrease in revenue from our digital streaming services due to 17% fewer subscriptions in the current quarter as compared to the prior year on lower demand, a decrease of $3.1 million in fees from Partners due to the Pivot (there are no fees from Partners after November 1, 2024) and a decrease in digital program sales of $1.4 million.

The decrease in nutrition and other revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily attributable to an $18.1 million decrease in revenue from nutritional products due to 48% fewer nutritional subscriptions in the current quarter as compared to the prior year on lower demand, a $4.4 million decrease in revenue generated from our preferred customer fees due to the Pivot (there are no preferred customer fees after November 1, 2024) and a $1.9 million decrease in event ticket sales (there were no events in the three months ended March 31, 2025 due to the Pivot).

The decrease in connected fitness revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to management's determination that it would no longer sell connected fitness inventory beginning in early 2025, which resulted in an approximate 57% decrease in number of bikes delivered from approximately 3,500 for the three months ended March 31, 2024 to approximately 1,500 for the three months ended March 31, 2025 and an approximate 39% decrease in the average sales price for a bike.

### Cost of Revenue

#### Digital Cost of Revenue

Digital cost of revenue includes costs associated with digital content creation including amortization and revision of content assets, depreciation of streaming platforms and digital streaming costs. It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses.

#### Nutrition and Other Cost of Revenue

Nutrition and other cost of revenue includes product costs, shipping, logistics, fulfillment and warehousing, customer service, and payment processing fees. It also includes depreciation of nutrition-related e-commerce websites and social commerce platforms, and related personnel expenses.

#### Connected Fitness Cost of Revenue

Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping, fulfillment, warehousing and logistics costs, costs associated with service calls and repairs of products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.

*(dollars in thousands)*

| Cost of revenue | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Digital | $6,211 | $12,862 | $(6,651) | (52%) |
| Nutrition and other | 13,451 | 22,284 | (8,833) | (40%) |
| Connected fitness | 1,152 | 3,618 | (2,466) | (68%) |
| Total cost of revenue | $20,814 | $38,764 | $(17,950) | (46%) |
| Gross profit |  |  |  |  |
| Digital | $36,700 | $48,644 | $(11,944) | (25%) |
| Nutrition and other | 15,202 | 33,228 | (18,026) | (54%) |
| Connected fitness | (353) | (590) | 237 | 40% |
| Total gross profit | $51,549 | $81,282 | $(29,733) | (37%) |
| Gross margin |  |  |  |  |
| Digital | 85.5% | 79.1% |  |  |
| Nutrition and other | 53.1% | 59.9% |  |  |
| Connected fitness | (44.2%) | (19.5%) |  |  |
| Total gross margin | 71.2% | 67.7% |  |  |

The decrease in digital cost of revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $1.8 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past year, a $1.8 million decrease in the digital content amortization as the result of lower production spend, a $1.0 million decrease in customer service expenses due to a decrease in the volume of contacts related to digital revenue and a $0.8 million decrease in digital content revisions. The increase in digital gross margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily as a result of the decrease in expenses as noted above.

The decrease in nutrition and other cost of revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $4.4 million decrease in product costs due to a decrease in volume of products sold and a $2.5 million decrease in fulfillment, freight and shipping expenses related to the decrease in nutrition and other revenue, a $0.9 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past year, and a $0.9 million decrease in customer service expense due to a decrease in the volume of contacts related to nutrition and other revenue. The decrease in nutrition and other gross margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily as a result of a buy one get one free program in the current quarter as well as the elimination of preferred customer fees in the current quarter.

The decrease in connected fitness cost of revenue for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was driven by lower inventory adjustments of $1.0 million, a $0.6 million decrease in freight and fulfillment expenses and a $0.4 million decrease in product costs, as the result of an approximate 57% decrease in the number of bikes delivered. The change in connected fitness gross margin for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily as a result of fixed expenses on lower connected fitness revenue.

### Operating Expenses

### Selling and Marketing

Selling and marketing expenses primarily include the cost of Partner compensation, affiliate expenses (which began on November 1, 2024), advertising, royalties, promotions and events, and third-party sales commissions as well as the personnel expenses for employees and consultants who support these areas. Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue, timing of new content and nutritional product launches, and the timing of our media investments to build awareness around launch activity.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Selling and marketing | $30,970 | $59,261 | $(28,291) | (48%) |
| As a percentage of total revenue | 42.8% | 49.4% |  |  |

The decrease in selling and marketing expense for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $21.9 million decrease in Partner compensation due to the Pivot (as we no longer have Partner compensation on new sales after November 1, 2024 and the Partner compensation recorded in the current quarter was the amortization of Partner compensation that was deferred in prior periods), a $7.1 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past year and a $2.5 million decrease in event expenses due primarily to no events in the three months ended March 31, 2025 due to the Pivot, partially offset by a $3.8 million increase in media expenses due to increased advertising spend with the Pivot transition and a $0.9 million increase in affiliate compensation, which did not exist in the prior year period. With the Pivot and the transition from the MLM model to an affiliate model, the Company expects a significant decrease in Partner compensation in 2025 and does not expect to record any Partner compensation in 2025 other than the amortization of deferred Partner compensation. In addition, the Company will significantly reduce the number and length of events for Partners and these event expenses are expected to be reduced significantly in 2025. The Company recorded approximately $2.4 million of event expenses for the three months ended March 31, 2024.

Selling and marketing expense as a percentage of total revenue decreased by 660 basis points ("bps") primarily due to the Pivot and the transition from the MLM model to an affiliate model which significantly reduced Partner compensation.

### Enterprise Technology and Development

Enterprise technology and development expenses primarily include personnel-related expenses for employees and professional fees paid to consultants to maintain the Company’s enterprise resource planning system, which is the core of our accounting, procurement, supply chain and other business support systems and primarily relate to enterprise systems applications, hardware, and software that serve as the technology infrastructure for the Company and are not directly related to services provided or tangible goods sold. Enterprise technology and development expenses also includes reporting and business analytics tools, security systems such as identity management and payment card industry compliance, office productivity software, research and development tracking tools, and other non-customer facing applications. Enterprise technology and development expenses also include payroll and related costs for employees involved in the research and development of new and existing products, depreciation of enterprise technology-related assets, software licenses, and technology equipment leases.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Enterprise technology and development | $12,596 | $17,717 | $(5,121) | (29%) |
| As a percentage of total revenue | 17.4% | 14.8% |  |  |

The decrease in enterprise technology and development expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $3.1 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past year and due to a $2.0 million decrease in depreciation expense as a result of certain long-lived assets that were fully depreciated as of December 31, 2024 due to the Pivot. With the Pivot and the transition from the MLM model to an affiliate model, the Company expects a decrease in personnel-related expenses in 2025, due to the headcount reductions associated with the Pivot, and a significant decrease in depreciation expense in 2025 due to the long-lived assets impacted by the Pivot which were fully depreciated as of December 31, 2024.

Enterprise technology and development expense as a percentage of total revenue increased by 260 bps due to a decrease in revenue at a faster pace than the reduction in enterprise technology and development expenses.

### General and Administrative

General and administrative expenses includes personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal and human resources functions. General and administrative expenses also includes fees for professional services principally comprised of legal, audit, tax, and insurance.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| General and administrative | $11,657 | $13,483 | $(1,826) | (14%) |
| As a percentage of total revenue | 16.1% | 11.2% |  |  |

The decrease in general and administrative expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily due to a $2.7 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that have occurred in the past year partially offset by a $0.8 million gain on the sale of the Van Nuys facility in the prior year period which was recorded as a reduction of general and administrative expenses in the three months ended March 31, 2024. With the Pivot and the transition from the MLM model to an affiliate model, the Company expects a decrease in personnel-related expenses in 2025.

General and administrative expenses as a percentage of total revenue increased by 490 bps due to a decrease in revenue at a faster pace than the reduction in general and administrative expenses.

### Restructuring

In 2024, restructuring charges primarily relate to the Company's key initiatives. The charges incurred primarily consist of employee termination costs.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | --- |
| Restructuring | $— | $1,644 | $(1,644) | NM |

### Other Income (Expense)

The change in fair value of warrant liabilities consists of the fair value changes of the public, private placement, Term Loan and Common Stock warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt discount and issuance costs for our Term Loan (as defined below). Other income, net, consists of interest income earned on investments and gains (losses) on foreign currency.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Loss on partial debt extinguishment | $— | $(1,209) | $1,209 | (100%) |
| Change in fair value of warrant liabilities | (689) | (724) | 35 | (5%) |
| Interest expense | (1,565) | (1,875) | 310 | (17%) |
| Other income, net | 225 | 477 | (252) | (53%) |

33

The loss on partial debt extinguishment for the three months ended March 31, 2024 was due to the partial prepayment of $6.5 million on the Term Loan for the three months ended March 31, 2024. The decrease in interest expense was primarily due to principal prepayments of $13.7 million on the outstanding Term Loan balance from January 1, 2024 to March 31, 2025.

### Income Tax Provision

Income tax provision consists of income taxes related to U.S. federal and state jurisdictions as well as those foreign jurisdictions where we have business operations.

*(dollars in thousands)*

|  | Three months ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income tax provision | $(45) | $(62) | $17 | (27%) |

The income tax provision decrease for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily driven by changes in our valuation allowance and a decrease in the net expense from discrete events.

### Liquidity and Capital Resources

#### ABL Facility and Repayment of Term Loan

On May 13, 2025, the Company, the lenders party thereto and Tiger, as administrative agent, entered into a $35.0 million ABL Facility, which includes a $10 million uncommitted accordion that matures on May 13, 2028 with the potential for two one-year extensions which would need to be approved by Tiger. The Company borrowed $25.0 million on the Asset-Based Lending Facility Effective Date. The ABL Facility bears interest based on the one-month SOFR rate plus 9.00% at its inception with a reduction in the rate to the one-month SOFR rate plus 7.75% after May 13, 2026 if the Company's fixed charge coverage ratio is greater than 1.10x. The ABL Facility is secured by a first lien on substantially all of the Company’s assets and there is no required payment of principal until July 1, 2026 and thereafter the principal repayment is approximately $2.1 million per year, which is split into equal monthly payments of $177,083. The remaining unpaid principal balance of the ABL Facility will be due on May 13, 2028, unless the ABL Facility is extended pursuant to its terms. The ABL Facility has financial covenants that require the Company to maintain certain billing levels, subscription counts and liquidity levels.

The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025 (outstanding principal balance of $17.3 million as of the date of repayment) along with the repayment of the outstanding paid in kind of $0.5 million, a prepayment premium of $0.3 million and outstanding accrued interest of $0.2 million. After repaying in full its existing Term Loan, the ABL Facility provided the Company with approximately $5 million in additional capital on its balance sheet.

See Note 9, *Debt*, and Note 16, *Subsequent Events*, for additional information on the ABL Facility and the repayment of the existing Term Loan.

#### Cash Provided By (Used In) Operating, Investing and Financing Activities

*(in thousands)*

|  | Three months ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $2,342 | $9,134 |
| Net cash (used in) provided by investing activities | (694) | 3,901 |
| Net cash used in financing activities | (3,729) | (7,219) |

As of March 31, 2025, we had cash and cash equivalents totaling $18.1 million.

Net cash provided by operating activities was $2.3 million and $9.1 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in net cash provided by operating activities during the three months ended March 31, 2025, compared to the prior year period, was primarily due to a decrease in cash provided by deferred revenue of $12.3 million, an increase in cash used in accrued expenses of $4.2 million, a decrease in cash provided by equity based compensation of $2.6 million and a decrease in depreciation and amortization expense of $2.5 million partially offset by a decrease in net loss of $8.5 million and an increase in cash provided by other assets of $6.9 million.

Net cash (used in) provided by investing activities was $(0.7) million and $3.9 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in net cash provided by investing activities was due to proceeds received from the sale of the Van Nuys facility of $5.6 million in the three months ended March 31, 2024 partially offset by a decrease in capital expenditures of $1.0 million due to continued focus by management on capital expenditures, in particular related to technology.

Net cash used in financing activities was $3.7 million and $7.2 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in net cash used in financing activities was primarily due to a decrease in debt repayments on our Term Loan in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Term Loan.

On August 8, 2022, the Company, Beachbody, LLC, a Delaware limited liability company and wholly-owned direct subsidiary of the Company (the “Borrower”), and certain subsidiaries of the Company (together with the Company, the “Guarantors”), entered into a financing agreement (as amended, the “Financing Agreement”) with the lenders party thereto and Blue Torch Finance as administrative agent and collateral agent for such lenders, providing for a senior secured term loan facility in an initial aggregate principal amount of $50.0 million (the “Term Loan”). Obligations under the Financing Agreement are guaranteed by the Guarantors, and secured by a lien on and security interest in substantially all of the assets of the Borrower and the Guarantors (together with the Borrower, the “Loan Parties”), subject to customary exceptions. Between January 1, 2024 and March 31, 2025, the Company made partial prepayments of $13.7 million. As of March 31, 2025, the principal balance outstanding (including capitalized paid in kind interest) under the Term Loan was $18.4 million. During the three months ended March 31, 2025, the Term Loan was a secured overnight financing rate ("SOFR") loan, with an effective interest rate of 27.81% and a cash interest rate of 11.64% for the three months ended March 31, 2025.

The Financing Agreement contains financial covenants, customary representations, warranties, covenants and customary events of default. In particular, the Financing Agreement contains a minimum liquidity financial covenant of $13.0 million as of March 31, 2025 to the maturity of the Term Loan and a minimum consolidated EBITDA financial covenant of (a) $4.5 million for the six months ended March 31, 2025, (b) $6.6 million for the nine months ended June 30, 2025, (c) $11.3 million for the twelve months ended September 30, 2025 and (d) $14.6 million for the twelve months ended December 31, 2025. We were in compliance with the financial covenants as of March 31, 2025. On May 13, 2025, the Company used the proceeds from the ABL Facility to repay in full the Term Loan. See Note 9, *Debt*, and Note 16, *Subsequent Events*, to our unaudited condensed consolidated financial statements included elsewhere in this Report for additional information on the ABL Facility and the repayment of the Term Loan.

As of March 31, 2025, we have $13.9 million of lease obligations and purchase commitments associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. See Note 8, *Commitments and Contingencies*, for discussion of our contractual commitments that are primarily due within the next year.

Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth and overall economic conditions. We continue to assess and efficiently manage our working capital and expect to generate additional liquidity through continued cost control initiatives. We believe that existing cash and cash equivalents and cost control initiatives will provide the Company with sufficient liquidity to meet our anticipated cash needs, including debt service requirements, for the next twelve months as well as for the longer-term (i.e., beyond the next twelve months).

We may explore additional debt or equity financing to supplement our anticipated working capital balances and further strengthen our financial position, but do not at this time know which form it will take or what the terms will be. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financial covenants that would restrict our operations. The sale of additional equity would result in additional dilution to our shareholders. There can be no assurances that we will be able to raise additional capital in amounts or on terms acceptable to us.

### Critical Accounting Estimates

There have been no material changes to the Company's critical accounting estimates discussed in the 2024 Annual Report on Form 10-K in Item 7 under the heading *Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates.*

### Recent Accounting Pronouncements

See Note 1, *Description of Business and Summary of Significant Accounting Policies*, of the notes to our unaudited condensed consolidated financial statements included elsewhere in this Report for recently adopted accounting pronouncements.

## Market risk

As filed, 2,876 characters.

### Foreign Currency Risk

We are exposed to foreign currency exchange risk related to transactions in currencies other than the U.S. Dollar, which is our functional currency. Our foreign subsidiaries, sales, certain inventory purchases and operating expenses expose us to foreign currency exchange risk. For the three months ended March 31, 2025 and 2024, approximately 8% and 11% of our revenue was in foreign currencies, respectively. These sales were primarily denominated in Canadian dollars and British pounds.

We may use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on our net cash flows. We primarily enter into option contracts to hedge forecasted payments, typically for up to 12 months, for cost of revenue, selling and marketing expenses, general and administrative expenses and intercompany transactions not denominated in the local currencies of our foreign operations. We designate some of these instruments as cash flow hedges and record them at fair value as either assets or liabilities within the consolidated balance sheets. Some of these instruments are freestanding derivatives for which hedge accounting does not apply.

In the year ended December 31, 2023, management made a determination to cease entering into any further foreign exchange options at this time, which resulted in a decrease in the notional amount of the Company's outstanding foreign exchange options to zero at March 31, 2024 as all of the foreign exchange options expired prior to March 31, 2024. As part of the Pivot, the Company has decided to exit the sale of nutritional and other physical products in the United Kingdom (the "UK") and France. Nutrition and other revenue in the UK and France is not significant.

Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income (loss) until the hedged forecasted transaction affects earnings. Deferred gains and losses associated with cash flow hedges of third-party payments are recognized in cost of revenue, selling and marketing or general and administrative expenses, as applicable, during the period when the hedged underlying transaction affects earnings. Changes in the fair value of certain derivatives for which hedge accounting does not apply are immediately recognized directly in earnings to cost of revenue.

A hypothetical 10% change in exchange rates, with the U.S. dollar as the functional and reporting currency, would result in an approximate $1.7 million increase or decrease in cost of revenue and operating expenses. The higher exposure to changes in foreign currency from previous periods was due to management's decision to cease entering into foreign exchange options at this time.

The aggregate notional amount of foreign exchange derivative instruments at March 31, 2025 and year ended December 31, 2024 was zero.

## Controls and procedures

As filed, 1,406 characters.

### Management’s Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

### Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

## Risk factors

As filed, 549 characters.

There have been no material developments with respect to the information previously reported under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. These risk factors describe some of the assumptions, risks, uncertainties and other factors that could adversely affect our business or that could otherwise result in changes that differ materially from our expectations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Filed May 15, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-072601. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.