The Beachbody Company, Inc. Announces Third Quarter 2023 Financial Results
Delivered Third Quarter Revenue and Cash Used in Operations Ahead of the Midpoint of Guidance
Reduced Our Cash Used in Operations to $0.2 Million from $6.5 Million in the Second Quarter
Turnaround Plan Underway
The Beachbody Company, Inc. (NYSE:BODY) ("BODi" or the "Company"), a leading subscription health and wellness company, today announced financial results for its third quarter ended September 30, 2023.
"We are pleased with our third quarter results, with revenue, Adjusted EBITDA and cash used in operations once again within our guidance range. We are encouraged by the advancements we have made in our company transformation, particularly in our cost reduction efforts and reinventing our digital platform," said Carl Daikeler, BODi's Co-Founder and Chief Executive Officer. "For the remainder of the year, we are intensely focused on the execution of our sales and marketing initiatives, which we believe will drive activation, engagement and increased efficiency. Our turnaround is in place and we are building towards increasing liquidity and driving revenues that are more profitable. I would like to thank the BODi team for their extremely hard work, as we continue on our transformation."
Third Quarter 2023 Results
-
Total revenue was $128.3 million compared to $166.0 million in the prior year period.
- Digital revenue was $64.3 million compared to $72.2 million in the prior year period and digital subscriptions totaled 1.38 million in the third quarter.
- Nutrition and Other revenue was $59.0 million compared to $90.4 million in the prior year period and nutritional subscriptions totaled 0.18 million in the third quarter.
- Connected Fitness revenue was $4.9 million compared to $3.3 million in the prior year period and approximately 6,500 bikes were delivered in the third quarter.
- Total operating expenses was $104.0 million compared to $140.9 million in the prior year period.
- Operating loss improved by $7.2 million to $29.0 million compared to an operating loss of $36.2 million in the prior year period.
- Net loss was $32.7 million compared to a net loss of $33.9 million in the prior year period.
- Adjusted EBITDA1 was $(5.8) million compared to $(6.2) million in the prior year period.
- Cash used in operating activities for the nine months ended September 30, 2023 was $14.6 million compared to $36.9 million in the prior year period, and cash used in investing activities was $9.7 million compared to $23.2 million in the prior year period. Total cash used in operating and investing activities was $24.3 million compared to $60.1 million in the prior year period.
Marc Suidan, Chief Financial Officer, stated: "In the quarter, our cash used in operations was $0.2 million compared to our guidance of cash used of less than $5 million. Year to date, cash used in operating and investing activities was $24 million, compared to $60 million last year and $248 million from 2021. We continue to manage our cash use and are reducing cash needs."
Key Operational and Business Metrics
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
|
||||||||||||||
|
|
2023 |
|
2022 |
|
Change v 2022 |
|
|
2023 |
|
2022 |
|
Change v 2022 |
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|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Digital Subscriptions (in millions) |
|
|
1.38 |
|
|
2.10 |
|
|
(34.3 |
%) |
|
|
1.38 |
|
|
2.10 |
|
|
(34.3 |
%) |
|
Nutritional Subscriptions (in millions) |
|
|
0.18 |
|
|
0.24 |
|
|
(25.2 |
%) |
|
|
0.18 |
|
|
0.24 |
|
|
(25.2 |
%) |
|
Total Subscriptions |
|
|
1.56 |
|
|
2.34 |
|
|
(33.4 |
%) |
|
|
1.56 |
|
|
2.34 |
|
|
(33.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Average Digital Retention |
|
|
96.2 |
% |
|
95.7 |
% |
|
50bps |
|
|
|
95.7 |
% |
|
95.6 |
% |
|
10bps |
|
|
Total Streams (in millions) |
|
|
22.9 |
|
|
27.5 |
|
|
(16.6 |
%) |
|
|
77.9 |
|
|
96.7 |
|
|
(19.4 |
%) |
|
DAU/MAU |
|
|
30.8 |
% |
|
29.5 |
% |
|
130bps |
|
|
|
31.6 |
% |
|
30.4 |
% |
|
120bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Connected Fitness Units Delivered (in thousands) |
|
|
6.5 |
|
|
2.3 |
|
|
182.7 |
% |
|
|
16.7 |
|
|
27.7 |
|
|
(39.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Digital |
|
$ |
64.3 |
|
$ |
72.2 |
|
|
(10.9 |
%) |
|
$ |
194.3 |
|
$ |
232.0 |
|
|
(16.2 |
%) |
|
Nutrition & Other |
|
$ |
59.0 |
|
$ |
90.4 |
|
|
(34.8 |
%) |
|
$ |
197.7 |
|
$ |
278.6 |
|
|
(29.0 |
%) |
|
Connected Fitness |
|
$ |
4.9 |
|
$ |
3.3 |
|
|
48.0 |
% |
|
$ |
16.0 |
|
$ |
33.4 |
|
|
(52.0 |
%) |
|
Revenue (in millions) |
|
$ |
128.3 |
|
$ |
166.0 |
|
|
(22.7 |
%) |
|
$ |
408.1 |
|
$ |
544.0 |
|
|
(25.0 |
%) |
|
Net Income/(Loss) (in millions) |
|
$ |
(32.7 |
) |
$ |
(33.9 |
) |
|
3.5 |
% |
|
$ |
(87.6 |
) |
$ |
(149.3 |
) |
|
41.3 |
% |
|
Adjusted EBITDA (in millions) |
|
$ |
(5.8 |
) |
$ |
(6.2 |
) |
|
6.5 |
% |
|
$ |
(11.5 |
) |
$ |
(26.8 |
) |
|
57.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Outlook for The Fourth Quarter of 2023
|
|
Outlook For Quarter Ending December 31, 2023 |
|
|
||||
(in millions) |
|
|
|
|
|
|
||
Revenue |
|
$ |
105 |
|
$ |
115 |
|
|
|
|
|
|
|
|
|
||
Net Loss |
|
$ |
(30 |
) |
$ |
(25 |
) |
|
|
|
|
|
|
|
|
||
Adjustments: |
|
|
|
|
|
|
||
Depreciation and Amortization |
|
$ |
8 |
|
$ |
8 |
|
|
Amortization of Content Assets |
|
$ |
5 |
|
$ |
5 |
|
|
Interest Expense |
|
$ |
2 |
|
$ |
2 |
|
|
Equity-Based Compensation |
|
$ |
5 |
|
$ |
5 |
|
|
Other Adjustment Items |
|
$ |
4 |
|
$ |
4 |
|
|
Total Adjustments |
|
$ |
24 |
|
$ |
24 |
|
|
|
|
|
|
|
|
|
||
Adjusted EBITDA |
|
$ |
(6 |
) |
$ |
(1 |
) |
|
|
|
|
|
|
|
|
||
1 A definition of Adjusted EBITDA and reconciliation to net loss is at the end of this release. |
Conference Call and Webcast Information
BODi will host a conference call at 5:00pm ET on Tuesday, November 7, 2023, to discuss its financial results and matters other than past results, such as guidance. To participate in the live call, please dial (833) 470-1428 (U.S. & Canada), or +1 (929) 526-1599 (all other locations) and provide the conference identification number: 617252. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/.
A replay of the call will be available until November 14, 2023, by dialing (866) 813-9403 (U.S & Canada), or + 44 (204) 525-0658 (all other locations). The replay passcode is 696320.
After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for one year.
About BODi and The Beachbody Company, Inc.
Known as Beachbody for 24 years with such innovations such as P90X, Insanity, 21-Day Fix and Shakeology, the Company recently began referring to itself as BODi, which stands for Beachbody On Demand Interactive. The Company is headquartered in El Segundo, California. BODi is a leading company in the Health Esteem category, which combines digital fitness, nutrition, and mindset content with exceptional nutritional supplements. The BODi community represents millions of people supporting each other in their pursuit of a better life through weight loss, fitness, nutrition, and an improved mindset. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com.
Safe Harbor Statement
This press release of The Beachbody Company, Inc. ("we," "us," "our," and similar terms) contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results for the second quarter and full year, our business strategy, our plans, and our objectives and future operations.
Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: 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; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as "believe", "plans", "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 16, 2023 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov.
All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements.
The Beachbody Company, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) |
||||||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
|
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
38,191 |
|
|
$ |
80,091 |
|
Restricted short-term investments |
|
|
4,250 |
|
|
|
— |
|
Inventory, net |
|
|
31,747 |
|
|
|
54,060 |
|
Prepaid expenses |
|
|
8,753 |
|
|
|
13,055 |
|
Other current assets |
|
|
47,733 |
|
|
|
39,248 |
|
Total current assets |
|
|
130,674 |
|
|
|
186,454 |
|
Property and equipment, net |
|
|
50,328 |
|
|
|
74,147 |
|
Content assets, net |
|
|
26,605 |
|
|
|
34,888 |
|
Goodwill |
|
|
125,166 |
|
|
|
125,166 |
|
Intangible assets, net |
|
|
4,370 |
|
|
|
8,204 |
|
Right-of-use assets, net |
|
|
3,541 |
|
|
|
5,030 |
|
Other assets |
|
|
6,640 |
|
|
|
9,506 |
|
Total assets |
|
$ |
347,324 |
|
|
$ |
443,395 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
16,116 |
|
|
$ |
17,940 |
|
Accrued expenses |
|
|
46,190 |
|
|
|
64,430 |
|
Deferred revenue |
|
|
101,812 |
|
|
|
95,587 |
|
Current portion of lease liabilities |
|
|
2,089 |
|
|
|
2,150 |
|
Current portion of Term Loan |
|
|
1,250 |
|
|
|
1,250 |
|
Other current liabilities |
|
|
5,307 |
|
|
|
3,283 |
|
Total current liabilities |
|
|
172,764 |
|
|
|
184,640 |
|
Term Loan |
|
|
27,742 |
|
|
|
39,735 |
|
Long-term lease liabilities, net |
|
|
1,698 |
|
|
|
3,318 |
|
Deferred tax liabilities |
|
|
60 |
|
|
|
181 |
|
Other liabilities |
|
|
3,989 |
|
|
|
3,979 |
|
Total liabilities |
|
|
206,253 |
|
|
|
231,853 |
|
Stockholders' equity: |
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 1,900,000,000 shares authorized (1,600,000,000 Class A, 200,000,000 Class X and 100,000,000 Class C); |
|
|
|
|
|
|
||
Class A: 176,264,868 and 170,911,819 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively; |
|
|
18 |
|
|
|
17 |
|
Class X: 136,450,256 and 141,250,310 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively; |
|
|
14 |
|
|
|
14 |
|
Class C: no shares issued and outstanding at September 30, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
648,071 |
|
|
|
630,709 |
|
Accumulated deficit |
|
|
(506,837 |
) |
|
|
(419,235 |
) |
Accumulated other comprehensive income (loss) |
|
|
(195 |
) |
|
|
37 |
|
Total stockholders' equity |
|
|
141,071 |
|
|
|
211,542 |
|
Total liabilities and stockholders' equity |
|
$ |
347,324 |
|
|
$ |
443,395 |
|
The Beachbody Company, Inc. Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share data) |
||||||||||||||||
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Digital |
|
$ |
64,339 |
|
|
$ |
72,228 |
|
|
$ |
194,326 |
|
|
$ |
231,988 |
|
Nutrition and other |
|
|
58,981 |
|
|
|
90,416 |
|
|
|
197,729 |
|
|
|
278,596 |
|
Connected fitness |
|
|
4,930 |
|
|
|
3,331 |
|
|
|
16,044 |
|
|
|
33,449 |
|
Total revenue |
|
|
128,250 |
|
|
|
165,975 |
|
|
|
408,099 |
|
|
|
544,033 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Digital |
|
|
16,429 |
|
|
|
16,078 |
|
|
|
47,732 |
|
|
|
50,909 |
|
Nutrition and other |
|
|
26,699 |
|
|
|
40,486 |
|
|
|
84,940 |
|
|
|
127,262 |
|
Connected fitness |
|
|
10,091 |
|
|
|
4,745 |
|
|
|
26,312 |
|
|
|
80,910 |
|
Total cost of revenue |
|
|
53,219 |
|
|
|
61,309 |
|
|
|
158,984 |
|
|
|
259,081 |
|
Gross profit |
|
|
75,031 |
|
|
|
104,666 |
|
|
|
249,115 |
|
|
|
284,952 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing |
|
|
69,127 |
|
|
|
93,145 |
|
|
|
222,195 |
|
|
|
286,213 |
|
Enterprise technology and development |
|
|
18,879 |
|
|
|
25,686 |
|
|
|
56,625 |
|
|
|
83,516 |
|
General and administrative |
|
|
14,759 |
|
|
|
19,532 |
|
|
|
44,362 |
|
|
|
59,189 |
|
Restructuring |
|
|
1,270 |
|
|
|
1,492 |
|
|
|
6,550 |
|
|
|
10,047 |
|
Impairment of intangible assets |
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
1,000 |
|
Total operating expenses |
|
|
104,035 |
|
|
|
140,855 |
|
|
|
329,732 |
|
|
|
439,965 |
|
Operating loss |
|
|
(29,004 |
) |
|
|
(36,189 |
) |
|
|
(80,617 |
) |
|
|
(155,013 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on partial debt extinguishment |
|
|
(3,168 |
) |
|
|
— |
|
|
|
(3,168 |
) |
|
|
— |
|
Change in fair value of warrant liabilities |
|
|
1,072 |
|
|
|
2,362 |
|
|
|
1,504 |
|
|
|
4,696 |
|
Interest expense |
|
|
(2,074 |
) |
|
|
(1,152 |
) |
|
|
(6,773 |
) |
|
|
(1,174 |
) |
Other income, net |
|
|
571 |
|
|
|
571 |
|
|
|
1,551 |
|
|
|
696 |
|
Loss before income taxes |
|
|
(32,603 |
) |
|
|
(34,408 |
) |
|
|
(87,503 |
) |
|
|
(150,795 |
) |
Income tax (provision) benefit |
|
|
(63 |
) |
|
|
549 |
|
|
|
(99 |
) |
|
|
1,536 |
|
Net loss |
|
$ |
(32,666 |
) |
|
$ |
(33,859 |
) |
|
$ |
(87,602 |
) |
|
$ |
(149,259 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per common share, basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.49 |
) |
Weighted-average common shares outstanding, basic and diluted |
|
|
308,931 |
|
|
|
307,949 |
|
|
|
310,794 |
|
|
|
307,178 |
|
The Beachbody Company, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) |
||||||||
|
|
Nine months ended September 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
|
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(87,602 |
) |
|
$ |
(149,259 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Impairment of intangible assets |
|
|
— |
|
|
|
1,000 |
|
Depreciation and amortization expense |
|
|
31,395 |
|
|
|
58,858 |
|
Amortization of content assets |
|
|
16,487 |
|
|
|
18,673 |
|
Provision for inventory and inventory purchase commitments |
|
|
9,370 |
|
|
|
35,195 |
|
Realized (gains) losses on hedging derivative financial instruments |
|
|
131 |
|
|
|
141 |
|
Change in fair value of warrant liabilities |
|
|
(1,504 |
) |
|
|
(4,696 |
) |
Equity-based compensation |
|
|
19,152 |
|
|
|
13,166 |
|
Deferred income taxes |
|
|
(166 |
) |
|
|
(1,754 |
) |
Amortization of debt issuance costs |
|
|
1,288 |
|
|
|
262 |
|
Paid-in-kind interest expense |
|
|
1,042 |
|
|
|
221 |
|
Non-cash component of loss on partial debt extinguishment |
|
|
2,418 |
|
|
|
— |
|
Other non-cash items |
|
|
— |
|
|
|
311 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Inventory |
|
|
11,884 |
|
|
|
31,676 |
|
Content assets |
|
|
(8,201 |
) |
|
|
(16,111 |
) |
Prepaid expenses |
|
|
4,302 |
|
|
|
8,681 |
|
Other assets |
|
|
(4,531 |
) |
|
|
4,496 |
|
Accounts payable |
|
|
(1,471 |
) |
|
|
(30,379 |
) |
Accrued expenses |
|
|
(15,809 |
) |
|
|
(209 |
) |
Deferred revenue |
|
|
6,995 |
|
|
|
(3,690 |
) |
Other liabilities |
|
|
237 |
|
|
|
(3,525 |
) |
Net cash used in operating activities |
|
|
(14,583 |
) |
|
|
(36,943 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
(5,499 |
) |
|
|
(23,236 |
) |
Investment in restricted short-term investments |
|
|
(4,250 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(9,749 |
) |
|
|
(23,236 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
— |
|
|
|
3,162 |
|
Remittance of taxes withheld from employee stock awards |
|
|
— |
|
|
|
(308 |
) |
Debt borrowings |
|
|
— |
|
|
|
50,000 |
|
Debt repayments |
|
|
(15,938 |
) |
|
|
(313 |
) |
Proceeds from issuance of common shares in the Employee Stock Purchase Plan |
|
|
384 |
|
|
|
— |
|
Tax withholding payments for vesting of restricted stock |
|
|
(2,173 |
) |
|
|
(183 |
) |
Payment of debt issuance costs |
|
|
— |
|
|
|
(4,075 |
) |
Net cash (used in) provided by financing activities |
|
|
(17,727 |
) |
|
|
48,283 |
|
Effect of exchange rates on cash and cash equivalents |
|
|
159 |
|
|
|
(1,095 |
) |
Net decrease in cash and cash equivalents |
|
|
(41,900 |
) |
|
|
(12,991 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
80,091 |
|
|
|
107,054 |
|
Cash and cash equivalents, end of period |
|
$ |
38,191 |
|
|
$ |
94,063 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid during the period for interest |
|
$ |
4,177 |
|
|
$ |
738 |
|
Cash (received) paid during the period for income taxes, net |
|
|
(10 |
) |
|
|
365 |
|
Supplemental disclosure of noncash investing activities: |
|
|
|
|
|
|
||
Property and equipment acquired but not yet paid for |
|
$ |
267 |
|
|
$ |
789 |
|
Supplemental disclosure of noncash financing activities: |
|
|
|
|
|
|
||
Warrants issued in relation to Term Loan |
|
$ |
— |
|
|
$ |
5,236 |
|
Change in fair value of Term Loan warrants due to amended exercise price |
|
|
802 |
|
|
|
— |
|
Debt issuance costs, accrued but not paid |
|
|
— |
|
|
|
136 |
|
Paid-in-kind fee recorded as incremental debt issuance cost |
|
|
488 |
|
|
|
— |
|
The Beachbody Company, Inc.
Adjusted EBITDA
In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance.
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 taxes, equity-based compensation, inventory net realizable value adjustments, restructuring, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company's business.
The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net income (loss) can be found below:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(32,666 |
) |
|
$ |
(33,859 |
) |
|
$ |
(87,602 |
) |
|
$ |
(149,259 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impairment of intangible assets |
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
1,000 |
|
Loss on partial debt extinguishment (1) |
|
|
3,168 |
|
|
|
— |
|
|
|
3,168 |
|
|
|
— |
|
Depreciation and amortization |
|
|
9,763 |
|
|
|
17,306 |
|
|
|
31,395 |
|
|
|
58,858 |
|
Amortization of capitalized cloud computing implementation costs |
|
|
41 |
|
|
|
126 |
|
|
|
122 |
|
|
|
462 |
|
Amortization of content assets |
|
|
5,467 |
|
|
|
5,493 |
|
|
|
16,487 |
|
|
|
18,673 |
|
Interest expense |
|
|
2,074 |
|
|
|
1,152 |
|
|
|
6,773 |
|
|
|
1,174 |
|
Income tax provision (benefit) |
|
|
63 |
|
|
|
(549 |
) |
|
|
99 |
|
|
|
(1,536 |
) |
Equity-based compensation |
|
|
6,436 |
|
|
|
5,601 |
|
|
|
19,152 |
|
|
|
13,166 |
|
Employee incentives, expected to be settled in equity (2) |
|
|
— |
|
|
|
— |
|
|
|
(5,466 |
) |
|
|
— |
|
Inventory net realizable value adjustment (3) |
|
|
— |
|
|
|
(1,867 |
) |
|
|
— |
|
|
|
23,569 |
|
Restructuring and platform consolidation costs (4) |
|
|
1,270 |
|
|
|
1,745 |
|
|
|
7,222 |
|
|
|
11,718 |
|
Change in fair value of warrant liabilities |
|
|
(1,072 |
) |
|
|
(2,362 |
) |
|
|
(1,504 |
) |
|
|
(4,696 |
) |
Non-operating (5) |
|
|
(377 |
) |
|
|
(15 |
) |
|
|
(1,340 |
) |
|
|
63 |
|
Adjusted EBITDA |
|
$ |
(5,833 |
) |
|
$ |
(6,229 |
) |
|
$ |
(11,494 |
) |
|
$ |
(26,808 |
) |
1 Represents the loss related to the $15.0 million partial debt prepayment that the Company made on July 24, 2023.
2 The non-cash charge for employee incentives which were expected to be settled in equity was recorded and included in the Adjusted EBITDA calculation during the year ended December 31, 2022. During the three months ended March 31, 2023, we reclassified the non-cash charge from employee incentives expected to be settled in equity to equity-based compensation because we settled certain employee incentives with RSU awards during the period.
3 Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment was included during the three and nine months ended September 30, 2022, because of its unusual magnitude due to disruptions in the connected fitness market.
4 Includes restructuring expense and personnel costs associated with executing our key growth priorities during the three and nine months ended September 30, 2023, and with the consolidation of our digital platforms during the three and nine months ended September 30, 2022.
5 Primarily includes interest income.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231107266487/en/