The Beachbody Company, Inc. Q3 FY2025 earnings call

• The company has delivered eight consecutive quarters of positive adjusted EBITDA and achieved net income this quarter, a key milestone. - They've reduced the revenue breakeven point from ~$900 million in 2022 to $180 million today. - In 2026, they'll launch Shakeology to retail for the first time, followed by P90X nutritional supplements and Insanity branded supplements. - Launched new subscription models like the super trainer subscription, Autumn Calabrese collection, and Shaun T collection. - Introduced new fitness programs such as Slow Burn Yoga, Track Pilates, Power of Four, and teased P90X Generation Next launching on February 3, 2026. - Transitioning to Shopify Plus with AI features in March 2026 and developing tech to be among the first fitness apps on ChatGPT in Q1 2026.

Digital revenue was $36.4 million, a decrease of 8.3% sequentially and 32.2% year over year. Digital gross margin was 88.1%, increasing 40 basis points from the prior quarter and representing an 810 basis point improvement from the prior year. Nutrition and other revenue was $23.5 million, a decrease of 2.8% sequentially and 50.4% year over year. Nutrition and other gross margin was 53.7%, representing a 230 basis point increase from the prior quarter and a 490 basis point decline year over year. Digital contributed approximately 61% of revenues, and nutrition and other contributed approximately 39%.

• Fourth-quarter revenues are expected to be in the range of $50 million to $57 million. - Net income is expected to be in the range of negative $1 million to positive $3 million. - Adjusted EBITDA is expected to be in the range of $5 million to $9 million. - Anticipate revenues to approximate 61% digital and 39% nutrition long term. - Long-term digital gross margin target is 87% to 89%, nutrition and other gross margin range is 46% to 52%, and total gross margin target is 70% to 75%.

Q: Curious about the customer base and details on unbundled super trainer subscription, if new customers or existing.

A: The demographic is similar to past customers, interested in home workouts. The super trainer subscriptions are winning back customers and seeing a percentage upgrade to full subscriptions.

Q: Talk about new product pipeline timing and P90X product.

A: In 2026, there are many nutrition product launches. P90X Generation Next launches on February 3, 2026. There's a new program teased at the end of December inspired by a conversation with the questioner.

Q: Impact of investment in new products on P&L.

A: The company is running the business responsibly with maintained economics, and the investment is baked into guidance.

Q: Nutrition side detail on drivers of sequential decline.

A: More price testing, lower price SKUs, bundle activities, new smaller form factor lower price Shakeology.

Q: Retail launch visibility for 2026.

A: Retail rollout involves planogram reset dates, expected to start appearing on shelves in Q1-Q2 2026.

Q: Selling and marketing line bridge and future costs.

A: Sequential decline due to transition away from MLM, selling and marketing expense is ~32% of sales, with seasonality and normalized spending based on volume.

Q: Restructuring of Salesforce completion and margin with retail rollouts.

A: Salesforce restructuring is mostly complete. Nutrition margin is expected to be in 46-52% range, with adjustments as they gain retail experience.

Q: Anticipated marketing spend around retail rollout of P90X.

A: Marketing spend for P90X exercise program in Q1 will be part of overall spend, with retail product marketing spend in line with wholesale orders.