Beachbody Reduces Staff by 10 Percent, Reports 4 Percent Q4 2021 Revenue Decrease

As Beachbody Company Inc., El Segundo, California, reported its fourth quarter 2021 revenue decreased compared to fourth quarter 2020, it also announced it was streamlining the business, which involved layoffs in first quarter 2022.

The subscription health and wellness company’s fourth quarter 2021 revenue was $216.3 million, a four percent decrease compared to 2020 but a 31 percent increase compared to 2019.

Its 2021 total revenue of $873.6 million was an increase of 1 percent over 2020 and an increase of 16 percent compared to 2019.

To accelerate profitability, reduce cash use from operations by approximately $110 million, and strengthen its competitive position, the company, which went public in June 2021 after a three-way merger, is implementing a “One Brand” strategy that, along with its post-merger technology integration efforts completed in 2021, allowed the company to reduce headcount by approximately 10 percent in first quarter 2022. Beachbody is continuing to review its organization to further streamline operations and reduce its expense profile to match various demand environments, according to the announcement by the company.

The One Brand strategy consolidates the company’s streaming fitness and nutrition offerings into a single platform, Beachbody On Demand (BOD), and markets its connected fitness bike under the Beachbody brand. This consolidation will increase the strength of BOD’s platform with the addition of Openfit products and talent to BOD’s on-demand library, enhance the company’s value proposition to its customers and partners, and simplify its go-to-market strategy, the company said.

Beachbody is also implementing other strategies to increase profitability, including enhancing its marketing return on investment. As part of this strategy, the company will target historically high-return media and narrow its focus to pursue only performance marketing opportunities that are immediately profitable and accretive to cash flow. Additionally, Beachbody will further leverage its coach micro-influencer network, which continues to serve as a competitive advantage that consistently delivers the most profitable and productive subscribers.

Leveraging its database of more than 2.8 million subscriptions and insights from its data and analytics team, Beachbody has identified opportunities to increase lifetime value by reducing friction in the ecommerce purchasing funnel and maximizing the ROI on new content releases and nutritional supplements.

Fourth Quarter Results

The public company not only reported a decrease in total revenue in fourth quarter 2021 but its digital revenue of $81.9 million was a 14 percent decrease in digital revenue compared to 2020 but a 41 percent increase compared to 2019.

Digital subscriptions were 2.54 million, a 3 percent decrease compared to 2020 and a 50 percent increase compared to 2019. It reported 96.5 percent month-over-month average digital retention, a 90-basis point increase compared to 2020 and a 90-basis point increase compared to 2019. Its 30.8 million total streams in the quarter constituted a 27 percent decrease compared to 2020, and a 21 percent increase compared to 2019.

The company’s connected fitness fourth quarter revenue was $36.8 million, compared to none in 2020, which preceded the Myx Fitness acquisition.

Beachbody sold approximately 23,900 bikes in the fourth quarter, with a bikes-delivered to sales ratio of 124 percent. On a pre-merger basis, connected fitness revenue was $17.6 million in fourth quarter 2020, with approximately 12,300 bikes sold and a bikes-delivered to sales ratio of 114 percent in the quarter.

Nutrition and other revenue was $97.6 million, a 25 percent decrease compared to 2020 and a 9 percent decrease compared to 2019. Nutritional subscriptions were 0.30 million, compared to 0.39 million in 2020 and 0.31 million in 2019.

Net loss for the quarter was $146 million, compared to a net loss of $16.9 million in 2020 and net income of $1.8 million in 2019.

Adjusted EBITDA was ($26.6) million, compared to $16.5 million in 2020 and $19.2 million in 2019

Full Year 2021 Results

The one percent increase in full-year 2021 revenue of $873.6 million breaks down as follows:

  • Digital revenue of $365.4 million, a 9 percent increase compared to 2020 and a 46 percent increase compared to 2019
  • Connected fitness revenue of $42.7 million, following the Myx Fitness acquisition in June 2021
  • Nutrition and other revenue of $465.5 million, a 12 percent decrease compared to 2020 and an 8 percent decrease compared to 2019
  • Net loss of $228.4 million, compared to a net loss of $21.4 million in 2020 and net income of $32.3 million in 2019
  • Adjusted EBITDA of ($86.1) million, compared to $51.5 million in 2020 and $78.4 million in 2019

2022 Financial Outlook

As a result of the actions outlined above, during fiscal 2022, Beachbody expects to reduce its cash use from operating activities by approximately $110 million as compared to 2021 and meaningfully reduce its full-year net loss and adjusted EBITDA loss.

For the first quarter of 2022 the company expects total revenue of $170 million to $180 million and adjusted EBITDA loss of $20 million to $25 million.