The Beachbody Company Inc. Q1 2023 Earnings Call
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Good afternoon, ladies and gentlemen, welcome to the Beach body company first quarter earnings call.
At this time all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session.
<unk> will be provided at the time for you to queue up for questions.
If anyone has any difficulty hearing the conference. Please press star zero for operator assistance at any time.
Like to remind everyone that this conference call is being recorded.
I will now turn the conference over to your host Bruce Williams, managing director of ICR Investor Relations.
Welcome everyone and thank you for joining us for our first quarter 2023 earnings call.
With me on the call today I'll call declare co founder Chairman and Chief Executive Officer of the Beach body Company embark Sudan, Chief Financial Officer following call in Mark's prepared remarks, we will open the call up for questions.
Before we get started I would like to remind you of the company's safe Harbor language. The statements contained in this conference call, which are not historical facts may be deemed to constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties all of which are described in the company's filings with the SEC, which includes today's press release todays call will include references to non-GAAP financial measures such as adjusted EBITDA.
A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on our website now I would like to turn the call over to Carl.
Good afternoon, everyone as we communicated in our last earnings call. This first quarter marked a major transition for the company. We completed the preparation and engineering of a significant upgrade to our subscription platform and on a parallel path simplified our business model.
We evolved from a business model built on expensive and more complex program launches to a more economical and customer friendly tempo of constant new monthly content organized into three week blocks around genre and objectives and based on almost nine months of successful pilots and tests in March we made the full transition to.
A single subscription we call bot that is felt.
Aligned with the company rebranding from beach body to body.
And we introduced a new content channel integrating mental health into our total solution formula.
In doing this we became the first comprehensive health Athene platform synthesizing a holistic approach to living at healthy flexible lifestyle, including the proven body block fitness format sensible healthy nutrition programs and positive mindset master classes to help people navigate the obstacles that day to day life.
And improve their mental health.
Thank the team for their perseverance and skill, creating this incredible new subscription product and in the midst of this major launch for the sixth quarter in a row, we have exceeded our guidance in both revenue and adjusted EBITDA for the quarter.
But there is so much more for us to accomplish.
When we're scaling innovation, we operate a test and learn process. This is the process. We successfully executed multiple times over the last two decades, we did it when we launched <unk> effectively doubling our price per unit and when we launched shake allergy into the network moving from a $40 a month multi vitamin subscription.
Two $130 subscription for the world's first superfood dessert shape and in 2016, moving the business model from a single onetime purchase of Dvds to the beach body on demand annual subscription as the company scaled through these transition each time, we reached the $1 billion revenue milestone faster than the last.
And we believe the expanded and repositioned body subscription is our biggest and most important innovation since we launched the company.
I am confident that this will be our next multibillion dollar opportunity to drive long term sustainable growth. We're in the early stages of promoting this new premium subscription, but I can report that we are already seeing promising customer demand based on the engagement and renewals of existing customers.
Body surpassed 500000 subscriptions as of April 30, that's roughly double since the end of Q4, 2022, primarily driven by digital renewals and upgrades that are exceeding forecast.
The early strength in renewals demonstrates customers are recognizing that our pricing represents tremendous value associated with our risk catalog of over 120 programs I mean.
I know, there's been IDEXX insanity in 'twenty, one they fit but also our new body programming and the monthly releases of new body blocks for general fitness consistency and help our bike customers get the incredible results that our company is known for likewise nutritious subscription retention is ahead of our internal forecasts.
With March seeing the strongest retention rate and over 12 months. We also see a healthier nutrition that attach rate with the new body subscription platform.
This aligns to our vision of increasing our customer LTV by focusing on these loyal and highly engaged subscribers.
In terms of engagement, our first quarter 2023 screens were 25% above the fourth quarter 2022, while seasonality was a factor with consumers refocusing on their health at the start of a new year or sequential growth accelerated relative to 2022, which is a very healthy sign of consumer engagement.
And a testament to the loyalty of our subscriber base and the consist and popularity of our content.
While the home fitness industry continues to normalize from the gains during Covid. We are seeing signs that our health is deemed category is attracting significant interest as searches for the term body again that searches for our spelling Bee ODI on Google Google search is up 287% in the first quarter over the.
The prior year.
And since the repositioning to body just in March web traffic to our sites increased by 20% over February .
We are strategically increasing the LTV of our customers and are already seeing the benefits of the subscription as our digital LTV was up 13% in March versus February .
Moving onto driving customer acquisition now that the product has been completely introduced we're focused on the execution of our go to market strategy. As a reminder, our three sales channels are our proprietary network of partners previously called Coach's direct media acquisition through advertising and search optimization and <unk>.
Rail into our significant database.
This is the time to go on offense. So let me share how we plan to achieve growth.
Our partner network forms the majority of our sales generation. In addition to significant ongoing training, we've implemented new incentives to align our partners with our goal to drive digital body and nutrition subscription.
This June we're hosting our annual partner summit, which is typically attended by around 10000 partners.
This will be an immersive training of our network to align them with our strategy and sales tactics to serve the massive Tam of over 150 million people, who are overweight or obese and the U S alone and to whom that helped us being platform is uniquely designed to help achieve long term health and happiness.
With the help of our team body partners, we intend to create the largest health and fitness community in the world and I'm highly encouraged by the enthusiastic response of our partner network. Although we do see that it's going to take some time to fully optimize and train the partners to leverage this significant transition, but based on their enthusiasm and engagement with the platform.
I'm confident that we'll be successful, it's only a matter of time and execution.
On the direct media acquisition front, we just started the test and learn process to acquire new subscribers into the body platform and our online and offline media advertising. We're also working with an extremely experienced social media and marketing agency to expand the reach of our message in the Tic Toc and Youtube.
Through our test and learn approach our ROE as or return on AD spend continues to improve allowing us to gradually expand customer acquisition, while maintaining our LTV to CAC ratio. Thanks to the improved economics of this new body subscription.
On the customer database activation front, we see more significant opportunities to drive re engagement as well as cross sell and we're expanding our efforts in CRM and database marketing to offer this new subscription to our massive database of customers both past and present.
In April we launched technology to communicate with customers within our app and through text messages expanding our customer engagement as well as building more targeted and sophisticated E mail marketing campaigns.
Finally, we also began testing the expansion of our psychology supplement into the category of Super food deserts in Q1, our marketing has just begun to leverage this category and again early signs are that this campaign will resonate well retention and expand the total addressable market over time.
In summary, the first quarter performed generally as expected given the transition to the expanded business model.
We have experienced with this level of content transformation and we understand what levers we need to pull to navigate the transition.
I believe that this chapter of growth will be the biggest opportunity in the company's history with two months of data points. We are encouraged by the green shoots of demand and customer renewals and based on what we're hearing from the industry. Our pivot is not only the right strategy for these times, but we have a significant head start however, I do want to.
Reiterate that it will take some time to fully train our partner network about the benefits of our comprehensive health Athene platform for them to drive significant new subscribers and as such we're taking a more conservative view of our Q2 outlook, but remain confident in achieving EBITDA profitability on a quarterly basis by the end of the year.
Now for more specifics on the quarter I'll pass it over to Mark our CFO to detail our financial results for the quarter Mark.
Thank you Carl and good afternoon everybody.
As Carl mentioned, we posted financial results ahead of our first quarter guidance for both revenue and adjusted EBITDA.
I'd like to spend time discussing the impact of our body launch on our financials.
Our quarterly results and then provide our outlook for the upcoming quarter.
So let me start with sharing our learnings from the body launch in early March.
Such a large transformation has three major milestones.
First a product launch second the existing customer reaction and third launching new sales and marketing efforts.
The product was launched on time under budget and with all the scope and features that we planned on.
This is a significant success in milestone in achieving our transformation.
As it relates to the reaction of the existing customer base. We are pleased with the response and how it has been received.
Let me provide some color on how we are delivering on the strategy of increasing LTV per customer.
First pricing.
As a reminder, the body price was adjusted down from to $198 to $179 annually.
Yeah.
As of March 2023, you can only renew on body as we move to a single subscription platform.
As a result of these changes our digital LTV increased by 13%.
Second engagement and renewals, while early the new and enhanced programming is driving more user engagement as measured by streams, which Karl mentioned.
Engagement leads to more renewals and we're seeing renewals above our forecast, which improved our March revenues, while we factored in more churn for customer renewals given the price increase we are encouraged by our renewal rate as customers are realizing the value of our new program.
As such the body subscriber phyla has nearly doubled in size to 500000 since the beginning of the year.
Third cross selling we are pleased with the hiring attrition attach rates from our bodies subscribers, which are driven by digital and nutritional bundled pricing.
As it relates to wrapping up our sales and marketing efforts Carl elaborate on the strategies that we're deploying.
To summarize we have successfully launched our new product and have received a positive response from our existing customers.
We have executed on two of the three critical milestones of our strategy and are now focused on the third one which is the selling and marketing efforts that will drive new customer acquisitions.
Turning to the financials of the quarter given all the changes in the past year I'll focus my comments on a quarter over quarter performance for revenue.
Revenue was $144 9 million, which was ahead of our guidance and two 2% below the prior quarter that is the smallest quarter over quarter contraction since Q4 2021.
Digital revenue was $64 8 million versus $68 7 million in the prior quarter.
Digital subscribers were $1 $75 million, which decreased 10% quarter over quarter.
The changes were largely attributable to the repositioning of our partner network and a new body solution, which impacted their productivity.
Nutrition revenue was $74 million in line with the prior quarter.
The number of subscriptions was 210000, which decreased 5% from the prior quarter.
We saw subscriptions bottom out in February and as we launched a new body solution, we delivered more nutritional retention in March.
Connected fitness revenue was $6 million, a 27% increase from the prior quarter.
The increase was mainly driven by new year's marketing campaign.
Gross margin was 63% compared to 47% in the prior year and 57% in the prior quarter.
The improvement was driven by improved nutrition gross margins and a product mix composed of more digital and nutrition revenues.
Let me walk through each product line.
<unk> gross margin was 77% compared to 80% in the prior year.
And in line with the prior quarter the year over year reduction is mainly due to less scale given the decline in year over year revenues.
As digital revenues grow with the new body solution. We are confident the digital gross margin will improve.
Attrition gross margin was 58% versus 54% in the prior year and 50% in the prior quarter.
The nutrition gross margin benefited from an improved product mix lower supply chain costs and improve inventory management.
Connected fitness gross margin was minus 26%.
First is minus 129% in the prior year and minus the 122% in the prior quarter.
The improvements were from pricing stability and stabilization the noncash accounting charges.
Moving to our operating expenses.
Excluding restructuring and impairment charges, our operating expenses were $113 million, which represented 29% improvement from the prior year and is largely in line with the prior quarter. The improvement is a direct result of the cost stretch information that we have been referencing for several quarters.
Selling and marketing was 53% of revenue compared to 54% in the prior year and 50% in the prior quarter.
As a reminder, the largest portion of selling and marketing costs as variable compensation for our partners our gig workforce that earned commissions and bonuses when they sell our product.
Our direct media acquisition continues to be disciplined with in Europe , payback and attractive rollout targets.
We are focused on driving higher LTV, which in turn generates more marketing dollars for us to capture more customer acquisitions.
As mentioned earlier, we have seen our digital LTV increase which is exactly what we want to achieve with our new strategy.
Enterprise Technology development was 13% of revenue improving from 17% in the prior year and 14% in the prior quarter.
That is a 43% reduction in year over year dollar spent.
That is driven by the simplification of our technology stack.
G&A was 12% of revenue up from 10% of revenue in the prior year and down from 13% in the prior quarter.
The year over year increases from G&A deleveraging.
While G&A is mainly fixed it was down by 12% from last year in dollar spend.
We continue to be aggressive in managing our expenses and ensuring our vendor spend is on beach body friendly terms. Our recent rfps have successfully reduced year over year spend despite rising inflation.
Net loss was $29 2 million compared to a net loss of $73 5 million in the prior year and a net loss of $44 9 million in the prior quarter.
Adjusted EBITDA was a loss of $1 million.
Compared to a loss of $19 million in the prior year and a profit of $3 5 million in the prior quarter.
Adjusted EBITDA was ahead of our guidance and a 95% improvement from the prior year.
We have designed our cost structure to break even at this level and all of the growth from our new body platform will drive profitable EBITDA.
Moving onto the balance sheet.
Our cash balance was $66 million compared to $80 million in the prior quarter.
We are in a strong liquidity position and our cash use will improve in the coming quarters.
Q1 had some nonrecurring payments, including restructuring severance costs in 2022 bonuses.
Inventory was $48 million down.
Down from $64 million in the prior quarter, we continue to exercise discipline in demand and supply chain management, resulting in a favorable 11% of inventory balance reduction.
In fact, our inventory balance has been coming down for seven consecutive quarters, the inventory levels should start to level off from here on.
Moving onto cash flows our cash flow from operations was minus $8 million down from minus $33 million in the first quarter of the prior year.
Factoring out severance costs in 2022 bonus payments, we would have had positive cash flow from operation.
Our capex for PP&E was $3 $4 million.
Essential reduction from the $12 4 million in the first quarter of last year.
Our content Capex was $2 2 million down from $6 4 million in the first quarter of last year.
So combined capex was $6 million down from $19 million, a 70% improvement from the prior year.
This should be our new capex run rate.
In terms of capital needs, we have access to an additional credit facility of $25 million, but we continue to run the business without needing new capital.
Now turning to our outlook for Q2.
I'm encouraged by the Green shoots that we're seeing in response to our strategy.
We are seeing improvements in renewals engagement and nutrition attach rates.
Our guidance is based on where we stand in our transformation journey.
We have successfully launched our new body platform, our existing customers are reacting very well and now we are ramping up our sales and marketing efforts in line with our objectives of EBITDA profitability.
With that we're guiding the upcoming quarter as follows.
Revenues of $125 million to $140 million.
Adjusted EBITDA loss of minus five to minus $10 million.
This EBIT reflects the annual summit event, where the expenses recognized in the quarter of occurrence, but the cash outlay was insured over several quarters, leading up to the EBIT. This is different from last year, where summit occurred in Q3.
Our cash used in Q2 will be below $10 million.
Also I've been asked by a few investors about our New York stock Exchange Delisting notice.
I just wonder if you confirm the New York Stock Exchange has approved our plans to remediate. This so we will not be delisted.
With that operator, we can open it up for questions.
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We'll pause here briefly as questions are registered.
The first question comes from the line of Joanna Zhao of Bank of America. You May proceed.
Hi, Thanks for taking my question, great quarter and congrats on that.
My question is focused.
After the question trying to understand the term annual renewal rate a little bit better.
Can you please help us understand.
Yes out of the remaining subscribers understand there are 500 case, where the thought I got out of the remaining.
<unk>.
That's right.
Percentage of them are still on the $289 premium tier and <unk>.
What percentage it found that $119 tier and then can you. Please help us understand what are you seeing on renewal rate and then turn after is that annual price change for both cohort premium for both tier $2 89 and 119.
And also are you seeing any revenue uplift from the subscriber that offset that trend subscriber loss because of the price change and are you seeing a net.
Net positive for the business.
Can just comment on any of the signals, we're seeing some early data that would be helpful.
Hi, Joanna this is mark let me start off by commenting.
Overall, we're very pleased with the churn rate.
Because right now the people if you think about the cohort, it's what I'd call. The $99 cohort that was that people, who signed up to board at $99 a year ago. They are right now renewing onto body at the same rate that they were renewing a year ago from box to box. So so we're very happy with.
Our renewal rate, we have factored more chart, but it's not materializing. It's a great sign I think people are engaging in the platform, we're seeing more streams more activity, which all signals that they are appreciating it and they're seeing the value equation for them.
So that's really good news there.
When we said the file size doubled since.
January one so it's around 500000, now which means we would have been half of that January one.
There is very little of those people renewing now because those people would have primarily signed up.
In the past six months and frankly most of them in the second half of that.
So overall pretty pretty favorable change in terms of of those people, it's not yet at the point on an LTV versus fiber basis. It is we're seeing the digital the LTV being higher.
And as our new sale, FERC and new customer acquisition ramps up that's when it starts offsetting.
The decline in subscriber base.
Does that answer your question.
Sure.
Yeah, Yeah. Thank you so much.
Follow up on the LTV to CAC. If you can just comment on like how you are rebranding strategy on price change has really impact your latest LTV to CAC ratio and how are you thinking about that ratio as you plan for the marketing spend.
For the remainder of this year or next year to acquire new customers and what is kind of your new long term LTV CAC ratio expectation after the price change.
Yes, John I would I would say is.
A reminder, that in our sales and marketing, which is running around that 50% of revenue now the majority of that is variable sales compensation for our network of coaches and partners and then as it relates to advertising spend.
We continue to aim for.
The LTV to CAC ratio, we haven't shared in the past, but we aim for a healthy one and we're currently aiming for in Europe payback.
From a rollout standpoint, and everything afterwards, when we think about the lifetime value of that customer becomes a great profit margin.
I will just add there mark that.
We are because of the higher price point of the body subscription at 179.
And the strong.
Take rate of annual that obviously lends itself to a higher media allowable for our customer acquisition. So that can benefit marketing as we're in this test and learn phase.
As we rollout the new product.
Great. Thanks for the answer.
Just two more if I can so.
Next question is on the recession risk. So if you look at research that's done but alright. Thank you ask fitness industry declined by about low double digit percentage in membership during the last recession in 2008 and 2009, how do you think reopening and macro challenges will impact each body. This year.
Versus prior years, obviously, given that we're heading into recession.
The assumption, though and then also your Q2 guide implies a down 32, 22% of your revenue and do you foresee a similar trend will go into the second half of this year given that assuming we're heading into the recession and how does <unk> plan to navigate through this recession, maybe just help put all of that in context Brad.
It's a great question and I think we're uniquely positioned Joanne for.
Actually the great recession, we did quite well.
We are a very cost effective alternative to the gyms when it comes to people wanting to continue their fitness and nutrition protocols when.
It might be.
Looking at the household budget. So we saw an uptake uptick in 2008 2009.
And we think we're well positioned for that with our holistic approach to fitness nutrition and now.
Positive mindset Masterclasses I'll also add that since our primary.
Sales channel is our network of partners.
In this tight labor market, it's actually difficult to for a household to get a second or in some cases, a third job to add a supplemental income to the house. So they need to monetize something that theyre doing anyway, and that's where the opportunity to earn an income by referring people into.
The ecosystem.
There is an opportunity for them to earn extra money and it's again.
This is the kind of thing that people are realizing is not an optional expense. It's certainly a part of their lifestyle and we think that's a.
Those two things those two factors.
Give us the opportunity to really excel through both the back half of this year and into the beginning of 2024.
Yes.
I'll add to the second part.
You asked about the second half of the year, what I would say is as our business model change.
Completes its implementation the momentum buildup.
And our view would lead the second half to be.
More favorable than the first half which is different than the classic seasonality factors of this industry.
Got it Okay. That's helpful and my last question is just to help US do that that will give you. All can you just explain what do you think is the most misunderstood by investors at this point about your company or attack.
I would say that.
People people look at whats happening in the way the market works now they are looking on a quarterly basis.
And I think that can sometimes be a little bit my app myopic. When we are looking at such a dramatic season of change.
But this is a company that's been around for 24 years, and if you look around the industry of nutrition and fitness solutions. There aren't a lot of companies that have managed to have that kind of stamina and innovate over and over again and this literally this launch of the health of steam category in the body subscription this will be.
Our fifth.
Big innovation as a company and we've run this playbook before and.
The thing that we've always operated on is very clear approach to preserving cash flow, while we are keeping an eye toward growth.
And with our incredible assets of the deepest catalog in.
Home fitness.
And this new business model, which is engaging consumers in such a compelling way I think the company is really well set up to both.
To grow in this environment and particularly in environment that now has weight loss prescriptions.
We are the holistic fitness nutrition and positive mindset resource for people, who need to change their lifestyle at the same time that they contemplate <unk>.
Prescription medications. So we're really in this like ideal position that it feels like everything that we've done for the last 24 years has led up to this moment. So we feel very good about where we are and we hope that the market.
Recognizes the value of the company.
Our approach in that we really are in a good position going forward.
Yes.
John .
Yeah, Let me, let me add to that like if you think about it.
This track record, we've adjusted our cost structure for the level were at so you can see that our adjusted EBITDA was a profit in Q4 was a minus $1 million loss in this past quarter. So we are we definitely kind of move very aggressive on the cost side of the equation improve the gross margin. We just came in at 63%.
Gross margins, so very healthy gross margins getting better from here.
And like I said in the in.
In the comments, our cash burn will go down from here on so now is the while.
While others may be talking about implementing changes like as Karl just said, we just implemented a major change in March and it should all tenants start flowing in.
The revenue upside benefits should all fall down.
Turning to profits to the bottom line.
Got it okay. Thank you so much I appreciate all of your answers and that's all my questions.
Yeah.
Thank you.
Our next question comes from Linda Bolton Weiser.
Davidson. Please proceed.
Yes, Hello, well I was curious if.
If you could quantify the non recurring cash payments that occurred in the first quarter, but I assume impacted operating cash flow. I guess, you said that was severance and bonuses could you quantify those.
Yeah.
Yes.
Sure.
I would say the 'twenty two cash bonus <unk>.
Combined with the severance cost would be in that $10 million to $15 million range. That's why I said, if you factor those out we would have been cash flow positive from operations in Q1.
So why don't you talk to their cash bonuses to be nonrecurring I'm, assuming that you will pay cash bonuses every year correct.
Okay.
Well it depends we self fund their bonus right we've set ourselves.
An aggressive target and we self funded so as long as we need.
Whats against our plan, that's how we fund it.
Okay.
And then.
You know I guess I can kind of work through the model here, but at what point of digital.
Out sequentially.
Well that occurred this year or not until 2024.
Yes, I would say Linda.
Second half of this year is one that should bottom out.
Mainly because we are cycling through the basic bought file now.
While it is kind of well it takes a year to cycle through it.
The body filed size increases.
The increase is due that sorts of offsetting the smaller base of decline in the <unk> file.
Okay.
Okay.
That's all I had thank you very much.
Thank you. The next question comes from the line of Darrin Tuttle singular research. Please proceed.
Yeah, So great quarter, guys. I think you are almost right in line there with being EBITDA positive.
For the for the quarter so congrats on that.
I just had a question on the deferred revenue so looking at the deferred revenue of around $53 million for this quarter.
Hey.
Understanding that in this transitional period is that something.
With the billing and everybody on the new premium subscription model. It is there going to be.
I would expect a change in the deferred revenue or do you think that.
That guidance is it's kind of pretty solid going forward.
Yes Darrin.
As we're signing people up more on the 179 price point.
It's a higher <unk>.
And.
I'd say most sign ups on over 12 month period, So that's where you will see.
That benefits cash upfront from a billing standpoint, but we deferred the.
What comes later, so given we're increasing the LTV and the RFP for customer.
It will it will favorably increase.
The deferred revenue.
Okay got it yeah, that's what I was expecting as well and then.
In terms of the.
If we just look at the.
The inventory levels right and if we look at that towards the digital marketing spend.
Carl had mentioned.
New platforms potentially pick toxic things like that.
As Pik talk maybe potentially getting band in the U S would that be a significant risk for your revenue guidance going forward.
And then on the back end of that for the digital marketing expenses.
How much of that is advertising and directly with the platform and then how much of that is variable compensation to say partners on tick tock.
Thank you.
Yeah. So.
Our exposure to Tictoc is exactly zero right now.
Because we really don't do any business, it's a channel of expansion to the extent that it exists.
We do probably most of our digital advertising between meta and Google.
Google at this point, so that's not an exposure at all I'll, let mark speak to.
The ratio between media spend in.
Variable expense to the network.
Yes look we drive it so pretty much everything is variable from our side right now the network side those drive the majority of it.
So in our notes to the financial we do.
We do list how much we spend on advertising spend.
So for this past quarter was $90 million. So if you back that out from that.
Selling and marketing.
Balance would be all variable sales compensation.
And for the $9 million.
We don't do brand, we really focus it on clicks per allowable. So we're we really drive it and the variable way, so it's driving new customer acquisitions.
Got it. Thank you. Thank you so much.
Okay.
Thank you there are currently no additional questions registered at this time, so I will pass the conference back over to the management team for any closing remarks.
Okay well.
Thanks, So much everybody I'll just wrap today's call up I just want to thank our shareholders for your enthusiasm and our mission and support for our direction as much as we've had incredible success and are proud of our accomplishments over the last two decades, our aspirations are to help.
Tens of millions of people achieve their goals and lead healthy fulfilling lives.
And Thats.
That those aspirations that ambition has led us exactly to this moment in time and this frankly exciting new chapter for this company. So.
We're excited about what's ahead of us.
And proud to have you aboard so I look forward to our next update after the second quarter and hope everybody has a good night take care everybody.
And with that we will conclude today's call. Thank you for participating you may now disconnect your lines.
Yeah.
Okay.
And with that.
Yeah.