Q1 2025 Beachbody Co Inc Earnings Call

May 14, 2025

Operator: Good afternoon. Thank you for attending today's The Beachbody Company, Inc. Q1 2025 Earnings Conference Call. My name is Victoria, I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with the opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Bruce Williams, Managing Director, ICR. You may proceed, Bruce.

[music].

Good afternoon.

Victoria: Thank you for attending today's Beachbody Company Inc. first quarter 2025 earnings conference call. My name is Victoria and I will be your moderator for today's call.

Victoria: You for attending today's Beach body Company, Inc. First quarter 'twenty 25 earnings Conference call. My name is Victoria and I'll be your moderator for today's call.

Victoria: All lines will be muted during the presentation portion of the call with the opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad.

Speaker Change: All lines will be muted during the presentation portion of the call, but the opportunity for questions and answers at the end if you'd like to ask a question. Please press star followed by one on your telephone keypad I would now like to pass the conference over to your host Bruce Williams, Many managing director of ICR You May proceed Bruce.

Bruce Williams: I would now like to pass the conference over to your host, Bruce Williams, Managing Director of ICR. You may proceed, Bruce. Welcome, everyone, and thank you for joining us for our first quarter.

Bruce Williams: Welcome, everyone, and thank you for joining us for our Q1 earnings call. With me on the call today are Mark Goldston, Executive Chairman of The Beachbody Company, Carl Daikeler, Co-founder and Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Officer. Following the prepared remarks, we'll open the call up for questions. Before we get started, I would like to remind you of the company's safe harbor language. 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 by 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.

Speaker Change: Welcome everyone and thank you for joining us for our first quarter earnings call with me on the call today are Mark Goldston Executive Chairman at the Beach body company called Eichler, Co founder and Chief Executive Officer, and Brad Ramberg interim Chief Financial Officer. Following their prepared remarks, we will open the call up for questions.

Bruce Williams: With me on the call today are Mark Goldston, Executive Chairman of The Beachbody Company, Karl Deichler, Co-Founder and Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Following the prepared remarks, we'll open the call up for questions. Before we get started, I would like to remind you of the company's safe harbor. statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the purpose of the conference Form Act of 1995.

Speaker Change: Before we get started I would like to remind you of the company's safe Harbor language 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.

Bruce Williams: Actual future results may differ materially from those suggested by 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 Today's call will include references to non-GAAP financial measures, such as adjusted EBITDA, net cash, and free cash flow. and a reconciliation of these nine gap financial measures to the most comparable is available within there.

Speaker Change: Actual future results may differ materially from those suggested by such statements due to a number of risks and uncertainties all of which are described in the company's filings with U S. C, which includes today's press release.

Bruce Williams: Today's call will include references to non-GAAP financial measures such as adjusted EBITDA, net cash, and free cash flow. 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 Mark.

Speaker Change: Today's call will include references to non-GAAP financial measures such as adjusted EBITDA net cash and free cash flow.

Speaker Change: 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.

Speaker: I don't know.

Speaker: Now, I would like to turn the call over. Thank you.

Mark Goldston: Now I would like to turn the call over to Mark.

Mark Goldston: Thank you. I'd like to welcome all of you to the BODi Q1 2025 earnings call. As we've stated previously, Q1 2025 marked our first quarter operating under a completely revamped business model, one that is fundamentally different from the old MLM model that the company employed over the last decade. I joined The Beachbody Company, now called BODi, as Executive Chairman almost two years ago in June 2023 with a clear mandate: develop a roadmap for executing a major turnaround.

Mark Goldston: Thank you I'd like to welcome all of you to the body skew one in 2020 five earnings call.

Mark Goldston: I'd like to welcome all of you to the BODi Q1 2025 earnings call. As we stated previously, Q1 2025 marked our first quarter operating under a completely revamped business model. fundamentally different from the old MLM model that the company employed over the last decade. I joined the Beachbody Company, now called BODi, as Executive Chairman almost two years ago in June of 2023, with a clear mandate, develop a roadmap for executing a major turnaround. Having spent a great deal of my career conducting corporate turnarounds and having written a book on the subject called The Turnaround Prescription, this was a challenge I was excited about because of my deep belief in the phenomenal digital library of more than 135 titles, the highly efficacious nutritional supplement products in the BODi portfolio of brands, and the vision of the company's co-founder, Karl Deichler, who was the pioneer of bringing home fitness programs to the masses.

Mark Goldston: As we stated previously.

Mark Goldston: 1025 marked our first quarter operating under a completely revamped business model. One that is fundamentally different from the old MLM model that the company employed over the last decade.

Speaker Change: I joined the Beach body company now called body.

Speaker Change: As executive Chairman almost two years ago in June of 2023, with a clear mandate develop a roadmap for executing a major turnaround.

Mark Goldston: Having spent a great deal of my career conducting corporate turnarounds and having written a book on the subject, called The Turnaround Prescription, this was a challenge I was excited about because of my deep belief in the phenomenal digital library of more than 135 titles, the highly efficacious nutritional supplement products in the BODi portfolio of brands, and the vision of the company's co-founder, Carl Daikeler, who was the pioneer of bringing home fitness programs to the masses. To put the scale of this turnaround in context, since going public in 2021, the company had not recorded positive EBITDA in any quarter through Q3 of 2023.

Speaker Change: Having spent a great deal of my career conducting corporate turnarounds and having written a book on the subject called the turnaround prescription.

Speaker Change: The challenge I was excited about because of my belief.

Speaker Change: The nominal digital library of more than 135 titles.

Speaker Change: Efficacious nutritional supplement products into body portfolio of brands.

Speaker Change: And the vision of the Companys co founder called Eichler, who was the pioneer of bringing home fitness programs to the masses.

Mark Goldston: To put the scale of this turnaround in context, since going public in 2021, the company had not recorded positive EBITDA in any quarter through Q3 of 2023. The company had a $900 million plus cash break-even level in 2022, $50 million of debt. and gross margins and a legacy MLM model that, like many others, struggled to motivate an independent group of salespeople who largely viewed their work as part-time. Since my arrival in June 2023, we've conducted a dramatic turnaround of the company's financial fortunes. We generated positive adjusted EBITDA for the first time since the 2021 IPO in Q4 of 2023.

Speaker Change: To put the scale of this turnaround in context since going public in 2021.

Speaker Change: Company had not recorded positive EBITDA in any quarter through Q3 of 2023, the company had a $900 million plus cash breakeven level in 2022.

Mark Goldston: The company had a $900 million-plus cash break-even level in 2022, $50 million of debt, declining gross margins, and a legacy MLM model that, like many others, struggled to motivate an independent group of salespeople who largely viewed their work as part-time. Since my arrival in June 2023, we've conducted a dramatic turnaround of the company's financial fortunes. We generated positive adjusted EBITDA for the first time since the 2021 IPO in Q4 of 2023, and we've now registered 6 consecutive quarters of positive adjusted EBITDA, delivering a healthy guidance-beating $3.7 million of adjusted EBITDA in Q1 of 2025 and bringing the 6 consecutive quarter cumulative adjusted EBITDA total to an impressive $34.8 million. In addition, we've cut the debt by more than 50% to $18 million.

Speaker Change: $8 million of debt declining gross margin and a legacy MLM model that like many others struggled to motivate an independent group of salespeople, who largely viewed their work as part time.

Speaker Change: Since my arrival in June 2023, we've conducted a dramatic turnaround of the company's financial fortunate.

Speaker Change: We generated positive adjusted EBITDA for the first time.

Speaker Change: It's $1 21 IPO.

Speaker Change: Q4 of 2023, and we have now registered six consecutive quarters of positive adjusted EBITDA, delivering a healthy guidance, beating $3 $7 million of adjusted EBITDA in Q1 of 2025, and bringing the sixth consecutive quarter cumulative.

Mark Goldston: And we've now registered six consecutive quarters of positive adjusted EBITDA delivering a healthy guidance-beating $3.7 million of adjusted EBITDA in Q1 of 2025 and bringing the six consecutive quarter cumulative adjusted EBITDA total to an impressive $34.8 million. In addition, we've cut the debt by more than 50% to $18 million. We've improved gross margins and reduced the cash break-even level of the company from more than $900 million in 2022 to $440 million in 2023. That's a $675 million reduction in the cash breakeven level during the 2022 to 2025 period.

Speaker Change: Adjusted EBITDA total to an impressive $34 $8 million. In addition, we took the debt by more than 50% to $18 million, we've improved gross margins and reduce the cash breakeven level of the company for more than $900 million in 2022 before.

Mark Goldston: We've improved gross margins and reduced the cash break-even level of the company from more than $900 million in 2022 to $440 million in 2023. Today, the company has a cash break-even level of just under $225 million. That's a $675 million reduction in the cash break-even level during the 2022 to 2025 period. In addition to this, we're thrilled to announce that we've entered into a new lending agreement with Tiger Finance for a $25 million 3-year loan facility that allows us to retire the $17.3 million of outstanding debt as of the repayment date of 13 May 2025, with Blue Torch Capital and ahead of the February 2026 maturity date of that loan.

Speaker Change: And $40 million in 2023 and today the company has a cash breakeven level of just under $225 million.

Speaker Change: That's a $675 million reduction in the cash breakeven level during the 2022 and 2025 period.

Mark Goldston: In addition to this, we're thrilled to announce that we've entered into a new lending agreement with Tiger Finance. $25 million three-year loan facility that allows us to retire the $17.3 million of outstanding debt as of the repayment date of May 13, 2025, with BlueTorch capital and ahead of the February 2026 maturity date of that loan. And it gives us approximately $5 million of additional capital on the balance sheet after paying off the BlueTorch loan. We're grateful for the partnership we had with BlueTorch, and we're very excited about our new partner, Tiger Finance, and their conviction in the BODi business plan over the next three years.

Speaker Change: In addition to this work.

Thrilled to announce that we've entered into a new lending agreement with Tiger finance breaks $25 million three year loan facility.

Speaker Change: How's us to retire the $17 3 million of outstanding debt as of the repayment date of May 13, 2025 with blue towards capital and ahead of the February 2026 maturity date of that loan and it gives us approximately $5 million of additional capital on the balance sheet. After.

Mark Goldston: It gives us approximately $5 million of additional capital on the balance sheet after paying off the Blue Torch loan. We're grateful for the partnership we had with Blue Torch, and we're very excited about our new partner, Tiger Finance, and their conviction in the BODi business plan over the next 3 years. We've massively rearchitected this company. We've eliminated the MLM business model. We transitioned to a multi-channel approach featuring a greater emphasis on direct-to-consumer retail distribution channels and the use of an affiliate model featuring independent sellers who are not part of an organization, do not recruit new sellers, and keep 100% of the commissions they earn. In the next phase of our turnaround plan, we've implemented what we call a cut and grow strategy.

Speaker Change: Hang on I believe towards alone we're grateful for the partnership we had with Blue Torch and we're very excited about our new partner Tiger finance and their conviction in the body business plan over the next three years.

Mark Goldston: We've massively re-architected this company. We've eliminated the MLM business model. We transitioned to a multi-channel approach featuring a greater emphasis on direct-to-consumer, retail distribution channels, and the use of an affiliate model featuring independent sellers who are not part of an organization, do not recruit new sellers, and keep 100% of the commissions they earn. In the next phase of our turnaround plan, we've implemented what we call a cut and grow strategy. This will result in a temporary reduction in revenue in 2025 due to the dismantling of the MLM model with its tens of thousands of former independent sellers before we begin to see the growth we anticipate in the direct-to-consumer sector.

Speaker Change: We've massively re Architected. This company we've eliminated the MLM business model, we transitioned to a multichannel approach featuring a greater emphasis on direct to consumer retail distribution channels and the use of an affiliate model featuring independent sellers, who are not part of an organization.

Speaker Change: We will not breakthrough new sellers and keep 100% of the commission. They are in the next phase of our turnaround plan. We are implementing what we call a cut and grow strategy.

Mark Goldston: This will result in a temporary reduction in revenue in 2025 due to the dismantling of the MLM model with its tens of thousands of former independent sellers before we begin to see the growth we anticipate in the direct-to-consumer business. In addition, we expect to anticipate growth as we build out major new retail distribution strategies featuring the launch of nutritional products from some of the most prominent, well-known brand names in the fitness and nutrition industry, our own P90X, INSANITY, and Shakeology. I have a long history as a top executive at major consumer product companies, and I'm applying that experience to bear here in spearheading this retail initiative.

Speaker Change: This will result in a temporary reduction in revenue in 2025 due to the dismantling of the MLM model with its tens of thousands of former independent sellers before we begin to see the growth we anticipate in the direct to consumer business.

Mark Goldston: Thank you. In addition, we expect to anticipate growth as we build out major new retail distribution strategies featuring the launch of nutritional products from some of the most prominent, well-known brand names in the fitness and nutrition industry, our own P90X, Insanity, and Shakeology. I have a long history as a top executive at major consumer product companies and I'm applying that experience to bear here in spearheading this retail initiative. The retail rollout into the food, drug, mass merchandiser, club store, and convenience store channels is anticipated to begin very late in Q4 of 2025 with our initial retail launch of Shakeology, a brand that has cumulative sales in excess of four billion dollars.

Speaker Change: In addition, we expect to anticipate growth as we build out major new retail distribution strategy featuring the launch of nutritional products for some of the most prominent well known brand names in the fitness and nutrition industry, our own P 90, ex insanity and shake allergy.

Speaker Change: I have a long history as a top executive at major consumer product companies and I'm applying that experience to bear here is spearheading this retail initiative.

Mark Goldston: The retail rollout into the food, drug, mass merchandiser, club store, and convenience store channels is anticipated to begin very late in Q4 of 2025 with our initial retail launch of Shakeology, a brand that has cumulative sales in excess of $4 billion. It has more than 1 billion servings since inception and a customer base in the millions since its launch as the first superfood plus protein shake. We will follow the Shakeology retail rollout with the launch of the P90X nutritional line in the first half of 2026, capitalizing on the massive brand awareness of P90X and utilizing innovative formulations and dynamic packaging to tell a compelling story.

Speaker Change: The retail rollout into the food drug mass merchandiser.

Speaker Change: <unk> and convenience store channels.

Speaker Change: Anticipated to begin very late in Q4 of 2025 with our initial retail launch of shake allergy a brand that has cumulative sales in excess of $4 billion. It has more than 1 billion servings since inception.

Mark Goldston: It has more than one billion servings since inception. and a customer base in the millions since its launch as the first superfood plus protein shake. We will follow the Shakeology retail rollout with the launch of the P90X nutritional line in the first half of 2026, capitalizing on the massive brand awareness of P90X and utilizing innovative formulations and dynamic packaging to tell a compelling story. later in 2026 and then into 2027, we will take our monster brand name, Insanity. in its history with more than 40 million qualified views and huge brand and introduce a nutritional line into the retail channels I just mentioned using eye-catching packaging, highly efficacious formulations, and the irreverent attitude of the Insanity brand name to clearly differentiate our product line.

Speaker Change: Customer base and the millions since its launch as the first super food cost protein shape.

Speaker Change: We will follow the shake allergy retail rollout with the launch of the <unk> nutritional line in the first half of 2026 capitalizing on the massive brand awareness of <unk> and utilizing innovative formulations and dynamic packaging to tell a compelling story.

Mark Goldston: Later in 2026 and then into 2027, we will take our monster brand name, INSANITY, and its history with more than 40 million qualified views and huge brand awareness, and introduce a nutritional line into the retail channels I just mentioned, using eye-catching packaging, highly efficacious formulations, and the irreverent attitude of the INSANITY brand name to clearly differentiate our product lines. In addition, we're going to create a brand-new P90X digital fitness program, and we'll also be creating a new INSANITY program after that. When the P90X and INSANITY nutritional products are launched into the retail network of food, drug, mass merchandiser, club, and convenience stores, we will simultaneously launch the new P90X and then INSANITY fitness programs, along with some other clever and compelling cross-marketing between the nutritional products and their namesake fitness programs.

Speaker Change: Later in 2026, and then into 2027, we will take our monster brand name insanity.

Speaker Change: In its history with more than 40 million qualified views and huge brand awareness and introduce the nutritional line into the retail channels I just mentioned using eyecatching packaging finally, efficacious formulations and the irreverent attitude of the incentive the brand name to clearly differentiate our product.

Speaker Change: Lines in.

Mark Goldston: In addition, we're going to create a brand-new P90X digital fitness program, and we'll also be creating a new Insanity program after that. So when the P90X and Insanity nutritional products are launched into the retail network of food, drug, mass merchandiser, club, and convenience stores, we will simultaneously launch the new P90X and then Insanity fitness programs, along with some other clever and compelling cross-marketing between the nutritional products and their namesake fitness program. The opportunity to market our new P90X and Insanity nutritional product. new digital fitness programs that will be coming out under those brand names. through our more than 12 million current and former customers, along with all of the people we will be exposing the brands to in the retail channels, should be a major revenue and profit growth opportunity for our company.

Speaker Change: <unk>, we're going to create a brand new team that IDEXX digital fitness program and will also be creating a new insanity program. After that so when the PID accident insanity and nutritional products are launched into the retail network of food drug mass Merchandiser club and convenience stores, we will simultaneously.

Speaker Change: As we launch the new P 90 X and then insanity fitness programs, along with some other clever and compelling cross marketing between the nutritional products and their namesake fitness programs the.

Mark Goldston: The opportunity to market our new P90X and INSANITY nutritional products and the new digital fitness programs that will be coming out under those brand names to our more than 12 million current and former customers, along with all of the people we will be exposing the brands to in the retail channels, should be a major revenue and profit growth opportunity for our company. Q1 2025 was the first full quarter executing our new business model. However, it's important to emphasize turnarounds are like a long, winding road with new things unveiled around every turn. They require intense discipline, total alignment, and buy-in by management and the employee base, creative thinking, masterful execution, tenacity, and most importantly, patience. We have all of that at BODi, and it's rooted in the strong belief in our people, our plan, and our performance to date.

Speaker Change: The opportunity to market, our new <unk> standard in nutritional products and the new digital fitness programs that will be coming out under those brand names to our more than 12 million current and former customers along with all of the people, we will be exposing the brand or the retail channels should be made.

Speaker Change: Your revenue and profit growth opportunity for our company.

Mark Goldston: Q1 2025 was the first full quarter executing our new business model. However, it's important to emphasize turnarounds are like a long winding road with new things unveiled around every turn. They require intense discipline, total alignment and buy-in by management and the employee base, creative thinking, masterful execution, tenacity, and most importantly, patience. We have all of that at BODi, and it's rooted in the strong belief in our people, our plan, and our performance today. Look, we've stated repeatedly over the last 24 months since my arrival that we've got to get our financial house in order before we can successfully grow the business with all the new products that we discussed today.

Speaker Change: Q1, 2025 was the first full quarter executing our new business model. However, it's important to emphasize turnarounds or like a long winding road with new things unveiled around every turn.

Speaker Change: They require intense discipline total alignment and buying by management and the employee base creative thinking master full execution.

Speaker Change: <unk> and most importantly patients.

Speaker Change: We have all of that at body and its rooted in our strong belief in our people our plan and our performance to date.

Mark Goldston: Look, we've stated repeatedly over the last 24 months since my arrival that we've got to get our financial house in order before we can successfully grow the business with all the new products that we discussed today. With our sixth consecutive quarter of positive adjusted EBITDA, a massively reduced cost infrastructure, we're now poised to enter the growth phase of the turnaround towards the end of 2025 and into 2026. I'd now like to turn the mic over to our Co-founder and CEO, Carl Daikeler.

Speaker Change: Look we've stated repeatedly over the last 24 months since my arrival that we've got to get our financial house in order before we can successfully grow the business with all the new products that we discussed today.

Mark Goldston: With our sixth consecutive quarter of positive adjusted EBITDA, a massively reduced cost infrastructure, we're now poised to enter the growth phase of the turnaround towards the end of 2025 and into 2022.

Speaker Change: With our sixth consecutive quarter of positive adjusted EBITDA.

Speaker Change: Massively reduced cost infrastructure.

Speaker Change: We're now poised to enter the growth phase of the turnaround towards the end of 'twenty five and <unk>.

Speaker Change: 2026.

Karl Deichler: I'd now like to turn the mic over to our co-founder and CEO, Carl Dykstra. Thanks, Mark. In our last earnings call, we outlined several key initiatives aimed at refining our business model and enhancing customer engagement, including the transition from the MLM to an affiliate model, addressing the women's hormone health market, as well as the GLP-1 weight loss drug market, optimizing ad spending for profitability and fast return on ad spend, and leaning into our total solution bundle, combining our digital subscription with a monthly subscription to Shakeology.

Carl Diaper: I'd now like to turn the mic over to our co founder and CEO Carl Diaper.

Carl Daikeler: Thanks, Mark Goldston. In our last earnings call, we outlined several key initiatives aimed at refining our business model and enhancing customer engagement, including the transition from the MLM to an affiliate model, addressing the women's hormone health market, as well as the GLP-1 weight loss drug market, optimizing ad spending for profitability and fast return on ad spend, and leaning into our Total Solution Bundle, combining our digital subscription with a monthly subscription to Shakeology. I'm pleased to report that we've made real progress in Q1. We completed the transition to our new affiliate model on 31 December 2024, which completed what was a productive chapter of our business model. For creating our next chapter of scale and helping the most people possible, we removed the MLM stigma from our overall business model.

Carl Diaper: Thanks, Mark in our last earnings call, we outlined several key initiatives aimed at refining our business model and enhancing customer engagement, including the transition from the MLM to an affiliate model addressing the women's hormone health market as well as the <unk> weight loss drug market optimizing AD spending for profitability.

Carl Diaper: And fast return on AD spend and leaning into our total solution bundle combining our digital subscription with a monthly subscription to shake allergy and I am pleased to report that we've made real progress in the first quarter.

Karl Deichler: And I'm pleased to report that we've made real progress in the first quarter. We completed the transition to our new affiliate model on December 31, 2024, which completed what was a productive chapter of our business model, but for creating our next chapter of scale and helping the most people possible, we removed the MLM stigma from our overall business model. We're now focused on helping as many people as possible get healthy and fit, and on expanding the opportunity to increase our addressable market. This change has improved profitability, and as we hoped, we retained our most enthusiastic subscribers, many of whom are truly committed to helping people get healthy results.

Carl Diaper: We completed the transition to our new affiliate model on December 31, 2024, which completed what was a productive chapter of our business model, but for creating our next chapter of scale and helping the most people possible we removed the MLM stigma from our overall business model. We're now focused on helping as many people as possible.

Carl Daikeler: We're now focused on helping as many people as possible get healthy and fit, and on expanding the opportunity to increase our addressable market. This change has improved profitability, and as we hoped, we retained our most enthusiastic subscribers, many of whom are truly committed to helping people get healthy results. The next chapter in this transition happens in June when we launch a much simplified platform for our affiliates that will feature a central supportive community, an easier sign-up process, and improved online conversion tools. We're also introducing a refer-a-friend program to incentivize sharing and engagement for all our subscribers. Our launch into women's hormone health with the Belle Vitale Fitness and Nutrition program was affected by the transition out of the network model.

Carl Diaper: Healthy and fit and on expanding the opportunity to increase our addressable market. This change has improved profitability and as we hoped we retained our most enthusiastic subscribers many of whom are truly committed to helping people get healthy results. The next chapter in this transition happens in June.

Karl Deichler: The next chapter in this transition happens in June, when we launch a much simplified platform for our affiliates that will feature a central supportive community, an easier signup process, and improved online conversion tools. We're also introducing a Refer-a-Friend program to incentivize sharing and engagement for all our subscribers.

Carl Diaper: When we launch a much simplified platform for our affiliates that will feature a central supportive community and easier sign up process and improved online conversion tools.

Carl Diaper: We're also introducing our refer a friend program to incentivize sharing and engagement for all of our subscribers are launch into women's hormone helped with the bell to tell fitness and nutrition program was affected by the transition out of the network model. However, we're pleased that our customers are seeing better than expected results with the program and the belt.

Karl Deichler: Our launch into women's hormone health with the Belvital Fitness and Nutrition program was affected by the transition out of the network model. However, we're pleased that our customers are seeing better than expected results with the program and the Belvital program is evolving similarly to what we saw when we first launched P90X. We're in the early days of this new and emerging non-pharmaceutical women's hormone health market, which is expected to reach close to $10 billion by 2031. As with any emerging category, pioneering programs like Belvitao will take some time to gain traction as we determine the right approach to increase awareness and stimulate demand.

Carl Daikeler: However, we're pleased that our customers are seeing better than expected results with the program. The Belle Vitale program is evolving similarly to what we saw when we first launched P90X. We're in the early days of this new and emerging non-pharmaceutical women's hormone health market, which is expected to reach close to $10 billion by 2031. As with any emerging category, pioneering programs like Belle Vitale will take some time to gain traction as we determine the right approach to increase awareness and stimulate demand. However, our belief in the market size and the credibility of the program based on the encouraging results that we've received gives us hope that Belle Vitale can be a major long-term success and asset for the company.

Carl Diaper: Tau program is evolving similarly to what we saw when we first launched <unk>, yes. We're in the early days of this new and emerging non pharmaceutical women's hormone health market, which is expected to reach close to $10 billion by 2031.

Carl Diaper: With any emerging category pioneering programs like Delta Tao will take some time to gain traction as we determined the right approach to increase awareness and stimulate demand. However, our belief in the market size and the credibility of the program based on the encouraging results that we have received gives us hope that <unk> can be a major long term.

Karl Deichler: However, our belief in the market size and the credibility of the program, based on the encouraging results that we've received, gives us hope that Belvitao can be a major long-term success and asset for the company. well with our goal to have a broad spectrum of programs designed to solve common problems for everyone, from the novice to the fitness devotee who just wants the best programming for the fastest results. To that end, we've developed two new programs, the GLP-1 Fitness Formula, which is a tailored fitness solution for anyone taking a weight loss medication. This program has been well received with strong demand driven by targeted advertising, which will expand in the upcoming quarters.

Carl Diaper: Success in asset for the company.

Carl Daikeler: That aligns well with our goal to have a broad spectrum of programs designed to solve common problems for everyone, from the novice to the fitness devotee who just wants the best programming for the fastest results. To that end, we've developed two new programs, the GLP-1 Fitness Formula, which is a tailored fitness solution for anyone taking a weight loss medication. This program has been well received with strong demand driven by targeted advertising, which will expand in the upcoming quarters. In addition, we designed Walk Week in partnership with Super Trainer Lacee Green. For beginners who want to start an exercise program with body movements that will start them on their health journey, and the active aging demographic who want a safe and convenient way to stay active inside. Our next big program launch is coming in June. It's called 25 Minute Speed Train by Joel Freeman.

Speaker Change: Well with our goal to have a broad spectrum of programs designed to solve common problems for everyone from the novice to the fitness, Steve Okay, who just wants the best programming for the fastest results to that end. We've developed two new programs. The <unk> fitness formula, which is a tailored fitness solution for anyone taking.

Carl Diaper: A weight loss medication this is <unk>.

Program has been well received with strong demand driven by targeted advertising, which will expand in the upcoming quarters. In addition, we designed work week in partnership with Super trainer Lacey Green for beginners, who want to start an exercise program with body movements that will start them on their health journey and the active aging demographic who.

Karl Deichler: In addition, we designed Walk Week in partnership with super trainer Lacey Green for beginners who want to start an exercise program with body movements that will start them on their health journey and the active aging demographic who want a safe and convenient way to stay active inside.

Carl Diaper: On a safe and convenient way to stay active in stock.

Karl Deichler: And our next big program launch is coming in June. It's called 25-Minute Speed Train by Joel Freeman. You might know Joel from the very popular Lift 4 and Lift More programs, which are currently two of our top streamed programs on the platform. 25-Minute Speed Train will be launched at the same time as we roll out our new simplified affiliate platform that I discussed earlier. This launch will have some compelling call-to-action offers. So I'm very optimistic that Joel will notch another winner in his string of successes this summer.

Carl Diaper: And our next Big program launch is coming in June it's called 25 minute speed trained by Joel Freeland, you might know Joel from the very popular list more and more programs, which are currently two of our top streamed programs. The platform 25 minute speed train will be launched at the same time as we rollout our new simplified affiliate plan.

Carl Daikeler: You might know Joel from the very popular LIIFT4 and LIIFT MORE programs, which are currently two of our top streamed programs on the platform. 25 Minute Speed Train will be launched at the same time as we roll out our new simplified affiliate platform that I discussed earlier. This launch will have some compelling call to action offers. I'm very optimistic that Joel will notch another winner in his string of successes this summer. On the performance marketing front, profitable customer acquisition remains our top priority. The shift in the business model from MLM has empowered our performance marketing team with more room to test compelling offers, to refine creative positioning, and to integrate campaign themes with customer onboarding. To expedite our efforts, we hired a new digital agency with strong data analytics capabilities in February.

Carl Diaper: One that I discussed earlier this launch will have some compelling call to action offer so I'm very optimistic that Joel will not another winner in a string of successes this summer on.

Karl Deichler: On the performance marketing front, profitable customer acquisition remains our top priority. The shift in the business model from MLM has empowered our performance marketing team with more room to test compelling offers, to refine creative positioning, and to integrate campaign themes with customer onboarding. To expedite our efforts, we hired a new digital agency with strong data analytics capabilities in February. We've already seen improvements with higher click-through rates on social ads, increased landing page conversions, and gains in both average order value and lifetime value following the launch of our Total Solution Bundle. And while pleased with these early results, we continue to be disciplined with our marketing spend to assure that we get profitable return on ads.

Carl Diaper: On the performance marketing front profitable customer acquisition remains our top priority the shift in the business model from MLS has empowered our performance marketing team with more room to test compelling offers to refine creative positioning and to integrate campaign themes with customer onboarding to expedite.

Carl Diaper: Our efforts, we have hired a new digital agency with strong data analytics capabilities in February we've already seen improvements with higher click through rates on social ads increased landing page conversions and gains in both average order value and lifetime value. Following the launch of our total solution bundle.

Carl Daikeler: We've already seen improvements with higher click-through rates on social ads, increased landing page conversions, and gains in both average order value and lifetime value following the launch of our Total Solution Bundle. While pleased with these early results, we continue to be disciplined with our marketing spend to assure that we get profitable return on ad spend. By concentrating ad spend on the most efficient channels and crafting creatives that address the specific needs of our target audience, I'm confident that we'll continue to see improvement in performance marketing, especially as we roll out new creative going into the summer months and with the launch of 25 Minute Speed Train. In addition, I'm excited about our recent launch of the Total Solution Bundle, which combines a digital BODi platform subscription with a Shakeology subscription.

Carl Diaper: I'm pleased with these early results, we continue to be disciplined with our marketing spend to ensure that we get profitable return on ad spend.

Karl Deichler: By concentrating ad spend on the most efficient channels and crafting creatives that address the specific needs of our target audience, I'm confident that we'll continue to see improvement in performance marketing, especially as we roll out new creative going into the summer months and with the launch of 25-minute speed training.

Carl Diaper: By concentrating AD spend on the most efficient channels and crafting creative does that address the specific needs of our target audience I'm confident that we'll continue to see improvement in performance marketing, especially as we rollout new creative going into the summer months and with the launch of 25 minutes speed training.

Karl Deichler: In addition, I'm excited about our recent launch of the Total Solution Bundle, which combines a digital BODi platform subscription with a Shakeology subscription. Customers are responding well to its compelling value. well as to the launch of smaller pack sizes for Shakeology, which was previously only really marketed in 30-day bag sizes. While early, the total solution bundle is more accessible to more people. It's an incredible value, and it's helping us rebuild our nutrition subscriber file. As we introduce the brand to more consumers, we're seeing a quick payback on our advertising and promotion spend through improved click-through and landing page conversion metrics.

Carl Diaper: In addition, I'm excited about our recent launch of the total solution bundle, which combines a digital body platform subscription with a <unk> subscription customers are responding well to its compelling value as.

Carl Daikeler: Customers are responding well to its compelling value. As well as to the launch of smaller pack sizes for Shakeology, which was previously only really marketed in 30-day bag sizes. While early, the Total Solution Bundle is more accessible to more people. It's an incredible value, and it's helping us rebuild our nutrition subscriber file. As we introduce the brand to more consumers, we're seeing a quick payback on our advertising and promotion spend through improved click-through and landing page conversion metrics. All this is to say that again, the business is in a very good position, with offers and configurations going into the summer launch. Moving on to our expanded omni-channel platforms, we're seeing ongoing growth of the Amazon channel. Amazon Subscribe & Save has surpassed our initial expectations, and the Subscribe & Save file continues to grow month-over-month.

Carl Diaper: As well as to the launch of smaller pack sizes for psychology, which was previously only really marketed in 30 day bag sizes. While early the toll solution bundle is more accessible to more people. It is an incredible value and it's helping us rebuild our nutrition subscriber file as we introduce the brand.

Carl Diaper: More consumers were seeing a quick payback on our advertising and promotion spend to improve click through and landing page conversion metrics. All of this is to say that again.

Karl Deichler: All this is to say that, again, the business is in a very good position with offers and configurations going into the summer launch.

Carl Diaper: Business is in a very good position with offers and configurations going into the summer launch.

Karl Deichler: Moving on to our expanded omni-channel platforms, we're seeing ongoing growth of the Amazon channel. Amazon Subscribe and Save has surpassed our initial expectations and the Subscribe and Save file continues to grow month over month. Based on those observations, we reconfigured our own Subscribe and Save offer on BODi.com with a 5% discount and free shipping to people who sign up for recurring monthly shipping.

Carl Diaper: Moving onto our expanded Omnichannel platforms, we're seeing ongoing growth of the Amazon, China, Amazon subscribe and save has surpassed our initial expectations and the subscribe and save file continues to grow month over month.

Carl Daikeler: Based on those observations, we reconfigured our own Subscribe & Save offer on bodi.com with a 5% discount and free shipping to people who sign up for recurring monthly shipments. While we expect that platform to grow slowly at first, we're already seeing promising demand and steady growth. As we mentioned last quarter, our products are now available on walmart.com as of February. As I mentioned in our last call, we continue to pursue partnerships which can enhance our reach or improve the experience for our customers. We're expanding our partnerships in the areas of HSA and FSA payment options with Dr. B and Truemed to offer HSA and FSA payment options directly at checkout, making our programs more accessible and affordable to more people.

Carl Diaper: Based on those observations, we reconfigured our own subscribe and save offer on body dot com with a 5% discount and free shipping to people who sign up for recurring monthly shipments.

Karl Deichler: As we mentioned last quarter, our products are now available on walmart.com as of February. And while we expect that platform to grow slowly at first, we're already seeing promising demand and steady growth.

Carl Diaper: As we mentioned last quarter, our products are now available on Walmart Dot com as of February and while we expect that platform to grow slowly at first we're already seeing promising demand and steady growth as I mentioned in our last call. We continue to pursue partnerships, which can enhance our reach or improve the experience for our customers we're expanding.

Karl Deichler: As I mentioned in our last call, we continue to pursue partnerships which can enhance our reach or improve the experience for our customers. We're expanding our partnerships in the areas of HSA and FSA payment options with Dr. B and TruMed to offer HSA and FSA payment options directly at checkout, making our programs more accessible and affordable to more people. And we partnered with Hello Alpha, a female-focused telehealth provider, to offer the Bell to Tal hormone health program to their subscribers, and we're offering a discount to their Hello Alpha telehealth service to our members.

Carl Diaper: Handing our partnerships in the areas of HSA and FSA payment options with doctor be improvement to offer HSA and FSA payment options directly a checkout, making our programs more accessible and affordable to more people and we partnered with Hello Alpha a female focused telehealth provider to offer the <unk>.

Carl Daikeler: We partnered with Hello Alpha, a female-focused telehealth provider, to offer the Belle Vitale Hormone Health program to their subscribers, and we're offering a discount to their Hello Alpha telehealth service to our members. As we look out over the next several quarters, we'll introduce several initiatives that we believe will improve engagement and retention for our subscribers. While we're excited about the broad opportunities that our omni-channel strategy unlocks, we remain focused and disciplined in allocating capital efficiently to drive sustainable, profitable growth. Bottom line, I think we're in a very good place to return to profitable growth in the coming quarters. Okay, now I'll turn the call over to Brad Ramberg, our interim CFO, for a detailed financial overview of the quarter. Brad?

Carl Diaper: Hormone health program to their subscribers and we're offering a discount to their Palo Alto Telehealth service to our members as we look out over the next several quarters, we will introduce several initiatives that we believe will improve engagement and retention for our subscribers and while we're excited about the broad opportunities that our omnichannel strategy on launch.

Karl Deichler: As we look out over the next several quarters, we'll introduce several initiatives that we believe will improve engagement and retention for our subscribers. And while we're excited about the broad opportunities that our omnichannel strategy unlocks, we remain focused and disciplined in allocating capital efficiently to drive sustainable, profitable growth.

Brad Ramberg: We remain focused and disciplined in allocating capital efficiently to drive sustainable profitable growth bottom line I think we're in a very good place to return to profitable growth in the coming quarters. Okay. Now I will turn the call over to Brad <unk>, our interim CFO for a detailed financial overview of the quarter Brett.

Karl Deichler: Bottom line, I think we're in a very good place to return to profitable growth in the coming quarters.

Brad Ramberg: Okay, now I'll turn the call over to Brad Ramberg, our interim CFO, for a detailed financial overview of the quarter. Thank you. Thank you, Carl, and thank you, everyone, for joining the call today. I will review our Q1 results and provide our outlook for the second quarter. As a reminder, the first quarter was our first full quarter under our new model, and the company generated revenue of $72.4 million, which exceeded the high end of our guidance range of $60 million to $70 million. Adjusted EBITDA of $3.7 million significantly exceeded our guidance range of a $2 million loss to $2 million, and we generated our sixth consecutive quarter of positive adjusted EBITDA.

Brad Ramberg: Thank you, Carl, thank you everyone for joining the call today. I will review our Q1 results and provide our outlook for Q2. As a reminder, Q1 was our first full quarter under our new model, and the company generated revenue of $72.4 million, which exceeded the high end of our guidance range of $60 million to $70 million. Adjusted EBITDA of $3.7 million significantly exceeded our guidance range of a $2 million loss to $2 million, and we generated our 6th consecutive quarter of positive adjusted EBITDA. Now I would like to provide more details about the quarter. Total revenues of $72.4 million declined 16.2% sequentially and declined 39.7% year-over-year, in line with our expectations as we continue our strategic transition.

Brad Ramberg: Thank you Karl and thank you everyone for joining the call today I will review, our Q1 results and provide our outlook for the second quarter. As a reminder, the first quarter was our first full quarter under our new model and the company generated revenue of $72 $4 million, which exceeded the high end of our guidance range of <unk> 60.

Brad Ramberg: To $70 million.

Brad Ramberg: Adjusted EBITDA of $3 $7 million significantly exceeded our guidance range of a $2 million loss to $2 million and we generated our sixth consecutive quarter of positive adjusted EBITDA.

Brad Ramberg: Now I would like to provide more details about the court. Total revenues of $72.4 million declined 16.2% sequentially and declined 39.7% year-over-year in line with our expectations as we continue our strategic transition. Revenues were impacted in the near term by the shift from a multi-level marketing platform to an omni-channel model. strongly believe that the shift to the new omni-channel model will provide additional flexibility and ultimately revenue growth over the next 24 months. Consolidated Q1 growth margins were 71.2%, reflecting an increase of 70 basis points over the prior quarter and an increase of 350 basis points compared to the prior year.

Brad Ramberg: Now I would like to provide more details about the quarter.

Brad Ramberg: Total revenues of $72 4 million declined 16, 2% sequentially and declined 39, 7% year over year in line with our expectations as we continue our strategic transition.

Brad Ramberg: Revenues were impacted in the near term by the shift from a multi-level marketing platform to an omni-channel model. We strongly believe that the shift to the new omni-channel model will provide additional flexibility and ultimately revenue growth over the next 24 months. Consolidated Q1 growth margins were 71.2%, reflecting an increase of 70 basis points over the prior quarter and an increase of 350 basis points compared to the prior year. We are pleased to report that consolidated growth margins exceeded the high end of our long-term target of 65% to 70%, underscoring the strength of our operational execution. Moving to digital and nutrition revenues. Digital revenue decreased 14.8% from the prior quarter to $42.9 million and decreased 30.2% year-over-year.

Brad Ramberg: Revenues were impacted in the near term by the shift from a multilevel marketing platform to an Omnichannel model.

Brad Ramberg: We strongly believe that the shift to the new Omnichannel model will provide additional flexibility and ultimately revenue growth over the next 24 months.

Brad Ramberg: Consolidated Q1 gross margins were 71, 2%.

Flipping an increase of 70 basis points over the prior quarter and an increase of 350 basis points compared to the prior year.

Brad Ramberg: We are pleased to report that consolidated gross margins exceeded the high end of our long-term target of 65 to 70.

Brad Ramberg: We are pleased to report the consolidated gross margins exceeded the high end of our long term target of 65% to 70% underscoring the strength of our operational execution.

Brad Ramberg: scoring the strength of our operational.

Brad Ramberg: Moving to digital and nutrition revenue. Digital revenue decreased 14.8% from the prior quarter to $42.9 million and decreased 30.2% year-over-year. Revenues were impacted by continued pressure on our digital subscriber count, which decreased 5.1% sequentially to 1.02 million and declined 16.6% compared to the same period a year ago. While we've experienced some expected declines in the digital fitness descriptions in the early days of the new business model, the transition away from the MLM has had the most impact on nutritional subscribers because, historically, our nutrition products were almost exclusively sold through our product network. Consistent with our expectations, nutrition revenue decreased 17.7 percent from the prior quarter to 28.7 million and decreased 48.4 percent year over year.

Brad Ramberg: Moving to digital and nutrition revenues.

Brad Ramberg: Digital revenue decreased 14, 8% from the prior quarter to $42 9 million and decreased 32% year over year.

Brad Ramberg: Revenues were impacted by continued pressure on our digital subscriber count, which decreased 5.1% sequentially to 1.02 million and declined 16.6% compared to the same period a year ago. While we've experienced some expected declines in the digital fitness subscriptions in the early days of the new business model, the transition away from the MLM has had the most impact on nutritional subscribers because historically, our nutrition products were almost exclusively sold through our product network. Consistent with our expectations, nutrition revenue decreased 17.7% from the prior quarter to $28.7 million and decreased 48.4% year-over-year. Nutrition subscriptions declined 13.1% sequentially to 80,000 and fell 47.7% year-over-year.

Brad Ramberg: Revenues were impacted by continued pressure on our digital subscriber count, which decreased five 1% sequentially to $1 <unk> million and declined 16, 6% compared to the same period a year ago.

Brad Ramberg: While we've experienced some expected declines in the digital fitness subscriptions in the early days of the new business model the transition away from the MLM has had the most impact on nutritional subscribers because historically, our nutrition products were almost exclusively sold through our product network.

Brad Ramberg: Consistent with our expectations nutrition revenue decreased 17, 7% from the prior quarter to $28 7 million and decreased 48, 4% year over year.

Brad Ramberg: Nutrition subscriptions declined 13.1% sequentially to 80,000 and fell 47.7% year-over-year. Digital Gross Margin was 85.5% for the quarter, down 40 basis points from the prior quarter and representing a 640 basis point improvement from the prior year. Our Digital Gross Margin was in line with our guidance of 85%. The continued strength in year-over-year gross margin was due to a decrease in digital content amortization as a result of a more disciplined production spend. Nutrition and other gross margin was 53.1%, representing an 80 basis point increase in the prior quarter and a 680 basis point decline year over year.

Brad Ramberg: Nutrition subscriptions declined 13, 1% sequentially to 80000 and fell 47, 7% year over year.

Brad Ramberg: Digital growth margin was 85.5% for the quarter, down 40 basis points from the prior quarter and representing a 640 basis point improvement from the prior year. Our digital growth margin was in line with our guidance of 85%. The continued strength in year-over-year growth margin was due to a decrease in digital content amortization as a result of a more disciplined production spend. Nutrition and other growth margin was 53.1%, representing an 80 basis point increase from the prior quarter and a 680 basis point decline year-over-year.

Brad Ramberg: Digital gross margin was 85, 5% for the quarter down 40 basis points from the prior quarter and representing a 640 basis point improvement from the prior year.

Brad Ramberg: Our digital gross margin was in line with our guidance of 85%.

Brad Ramberg: The continued strength in year over year gross margin was due to a decrease in digital content amortization as a result of a more disciplined production spend.

Brad Ramberg: Nutrition and other gross margin was 53, 1%, representing an 80 basis point increase from the prior quarter and a 680 basis point decline year over year the.

Brad Ramberg: The increase from the prior quarter was primarily due to a decrease in inventory adjustments in the current quarter, while the decline from the prior year quarter was primarily due to the discontinuation of preferred customer fees on 1 November, which were part of our old business model, where customers paid a monthly fee to purchase products at a discount. In line with our previously stated strategy, we are going to more aggressively pursue new one-time nutrition purchasers with promotional techniques who will ultimately convert to becoming paid subscribers. As a result of increased focus on promotional pricing activity within both the subscriber base and one-time purchasers, we have adjusted our long-term gross margin for nutrition to be in the range of 47% to 50%. Moving on to operating expenses, which were the major focus of our turnaround restructuring efforts over the past 24 months.

Brad Ramberg: The increase from the prior quarter was primarily due to a decrease in inventory adjustments in the current quarter, while the decline from the prior year quarter was primarily due to the discontinuation of preferred customer fees on November 1st, which were part of our old business model, where customers paid a monthly fee to purchase products. In line with our previously stated strategy, we are going to more aggressively pursue new one-time nutrition purchasers with promotional techniques who will ultimately convert to becoming paid subscribers. as a result of increased focus on promotional pricing activity within both the subscriber base and one-time purchases.

Brad Ramberg: In line with our previously stated strategy, we're going to more aggressively pursue new onetime nutrition purchasers with promotional techniques will ultimately convert to becoming paid subscribers.

Brad Ramberg: As a result of increased focus on promotional pricing activity within both the subscriber base and onetime purchasers. We have adjusted our long term gross margin for nutrition to be in the range of 47% to 50%.

Brad Ramberg: we have adjusted our long-term gross margin for nutrition to be in the range of 47 to 50.

Brad Ramberg: Moving on to operating expenses, which were the major focus of our turnaround restructuring efforts over the past 24 months. Operating expenses for the quarter declined 41.1% sequentially and declined 40.0% year-over-year to $55.2 million. Q4 2024 included a $20 million goodwill impairment charge. exclusive of that charge, operating expenses decreased 25.1%. Selling and marketing expenses as a percent of revenue decreased 230 basis points over the prior quarter and declined 660 basis points over the prior year to 42.8. This significant improvement over the prior year was primarily driven by the pivot away from the multi-level marketing channel, as we no longer have partner compensation in our new sales after November 1st, 2014.

Brad Ramberg: Moving on to operating expenses, which were the major focus of our turnaround restructuring efforts over the past 24 months.

Brad Ramberg: Operating expenses for the quarter declined 41.1% sequentially and declined 40.0% year-over-year to $55.2 million. Q4 2024 included a $20 million goodwill impairment charge. Exclusive of that charge, operating expenses decreased 25.1% sequentially. Selling and marketing expenses as a percent of revenue decreased 230 basis points over the prior quarter and declined 660 basis points over the prior year to 42.8%. This significant improvement over the prior year was primarily driven by the pivot away from the multi-level marketing channel as we no longer have partner compensation in our new sales after 1 November 2024.

Brad Ramberg: Operating expenses for the quarter declined 41, 1% sequentially and declined 40.0% year over year to $55 $2 million.

Brad Ramberg: Q4, 2024 included a $20 million goodwill impairment charge.

Brad Ramberg: Lucid about that charge operating expenses decreased 25, 1% sequentially.

Brad Ramberg: Selling and marketing expenses as a percentage of revenue decreased 230 basis points over the prior quarter and declined 660 basis points over the prior year to 42, 8%.

Brad Ramberg: This significant improvement over the prior year was primarily driven by the pivot away from the multi level marketing channel as we no longer have partner compensation and our new sales after November 124.

Brad Ramberg: Enterprise technology and development expense as a percent of revenue decreased 820 basis points from the prior quarter and increased 260 basis points year over year to 17.4 percent of revenue. The significant improvement as compared to the prior quarter was due to accelerated depreciation recorded in the fourth quarter due to The increase as a percent of revenue as compared to the prior year was due to revenue de-leverage. G&A was 16.1% of revenue, an increase of 270 basis points sequentially, and an increase of 490 basis points in the prior year. Both increases as a percent of revenue were due to revenue delivery.

Brad Ramberg: Enterprise technology and development expense as a percent of revenue decreased 820 basis points from the prior quarter and increased 260 basis points year-over-year to 17.4% of revenue. The significant improvement as compared to the prior quarter was due to accelerated depreciation recorded in Q4 due to pivot. The increase as a percent of revenue as compared to the prior year was due to revenue deleverage. G&A was 16.1% of revenue, an increase of 270 basis points sequentially and an increase of 490 basis points from the prior year. Both increases as a percent of revenue were due to revenue deleverage. The Q1 2025 net loss was $5.7 million, compared to a net loss of $14.2 million from the prior year.

The significant improvement as compared to the prior quarter was due to accelerated depreciation recorded in the fourth quarter is a pivot.

Brad Ramberg: The increase as a percent of revenue as compared to the prior year was due to revenue deleverage.

Brad Ramberg: G&A was 16, 1% of revenue an increase of 270 basis points sequentially and an increase of 490 basis points from the prior year.

Brad Ramberg: Both increases as a percent of revenue due to revenue deleverage.

Brad Ramberg: The Q125 net loss was $5.7 million compared to a net loss of $14.2 million from the prior year. The net loss represents an improvement of $8.5 million versus the same quarter last year, which included $1.6 million in restructuring. Adjusted EBITDA was $3.7 million compared to $8.7 million in the prior quarter and $4.6 million in the prior year. Notably, this quarter marks our sixth consecutive quarter of positive adjusted EBITDA.

Brad Ramberg: The Q1 dollars 25, net loss was $5 7 million compared to a net loss of $14 2 million from the prior year.

Brad Ramberg: The net loss represents an improvement of $8.5 million versus the same quarter last year, which included $1.6 million in restructuring charges. Adjusted EBITDA was $3.7 million, compared to $8.7 million in the prior quarter and $4.6 million in the prior year. Notably, this quarter marks our sixth consecutive quarter of positive adjusted EBITDA. Moving on to the balance sheet and cash flows. Our cash balance is $18.1 million, compared to $20.2 million in the prior quarter. Our cash generated from operations for the quarter was $2.3 million. Moving on to Q2 guidance. While we are pleased with the execution of our transformation, I want to reiterate that our Q1 results marked the Q1 of the company's new business model.

Brad Ramberg: The net loss represents an improvement of $8 5 million versus the same quarter last year, which included $1 6 million in restructuring charges.

Brad Ramberg: Adjusted EBITDA was $3 7 million compared to $8 7 million in the prior quarter and $4 6 million in the prior year.

Brad Ramberg: Notably this quarter marks our sixth consecutive quarter of positive adjusted EBITDA.

Brad Ramberg: Next, moving on to the balance sheet and cast. Our cash balance is $18.1 million compared to $20.2 million in the prior quarter. Our cash generated from operations for the quarter was $2.3 million.

Brad Ramberg: Next moving on to the balance sheet and cash flows.

Brad Ramberg: Our cash balance of $18 1 million compared to $20 2 million in the prior quarter.

Brad Ramberg: Our cash generated from operations for the quarter was $2 3 million.

Brad Ramberg: Moving on to second quarter guidance. Well, we are pleased with the execution of our transformation. I want to reiterate that our first quarter results marked the first quarter of the company's new business. As discussed, we significantly lowered expenses and our revenue break even when we strategically pivoted away from the MLM model to our omni-channel marketing and distribution model. This shift has opened new growth channels that we could not previously access and we are very excited about the opportunities ahead. We now have a stronger and more viable long-term business model. But as with companies that are undergoing a transformation, it will take time to develop traction in these new lines of business.

Brad Ramberg: Moving on to second quarter guidance, while we are pleased with the execution of our transformation I want to reiterate that our first quarter results marked the first quarter of the company's new business model.

Brad Ramberg: As discussed, we significantly lowered expenses and our revenue breakeven when we strategically pivoted away from the MLM model to our omni-channel marketing and distribution model. This shift has opened new growth channels that we could not previously access, and we are very excited about the opportunities ahead. We now have a stronger and more viable long-term business model. As with companies that are undergoing a transformation, it will take time to develop traction in these new lines of business. We expect Q2 revenues to be in the range of $51 million to 61 million, a net loss in the range of $7 million to 3 million, and adjusted EBITDA to be in the range of breakeven to $4 million.

Brad Ramberg: As discussed we significantly lowered expenses and our revenue breakeven when we strategically pivoted away from the MLP model for Omnichannel marketing and distribution model.

Brad Ramberg: This shift has opened new growth channels that we cannot previously access and we are very excited about the opportunities ahead.

Brad Ramberg: Now have a stronger and more viable long term business model, but as with companies that are undergoing a transformation. It will take time to develop traction in these new lines of business.

Brad Ramberg: We expect second quarter revenues to be in the range of $51 million to $61 million. a net loss in the range of $7 million to $3 million, and adjusted EBITDA to be in the range of break-even to $4 million.

Brad Ramberg: We expect second quarter revenues to be in the range of 51 million to $61 million.

Brad Ramberg: Net loss in the range of 7 million to $3 million and adjusted EBITDA to be in the range of breakeven to $4 million as.

Brad Ramberg: As we transition to our new business model, we want to reiterate additional color that we provided on our last call to help you contextualize changes in the new financial model. As of today, we anticipate revenues to approximate 63% digital and 37% nutrition moving forward. This is the second quarter of giving guidance in our new model, and should this trend change in the future, we'll update you accordingly. As we move through 2025, we're beginning to see early signs of progress from our new product pipeline and expanded sales. We remain confident these initiatives will drive meaningful impact over time, and we look forward to keeping you updated on our progress throughout the year.

Brad Ramberg: As we transition to our new business model, we want to reiterate additional color that we provided on our last call to help you contextualize changes in the new financial model. As of today, we anticipate revenues to approximate 63% digital and 37% nutrition moving forward. This is the Q2 of giving guidance in our new model, and should this trend change in the future, we'll update you accordingly. As we move through 2025, we're beginning to see early signs of progress from our new product pipeline and expanded sales channels. We remain confident these initiatives will drive meaningful impact over time, and we look forward to keeping you updated on our progress throughout the year. Now let me turn the call back over to Mark for closing comments before we start our Q&A.

Brad Ramberg: As we transition to our new business model, we want to reiterate additional color that we provided on our last call to help you contextualize changes in the new financial model.

Brad Ramberg: As of today, we anticipate revenues to approximate 63% digital and 37% nutrition moving forward. This is the second quarter of giving guidance and our new model and should this trend change in the future we'll update you accordingly.

Brad Ramberg: As we move through 2025, we're beginning to see early signs of progress from our new product pipeline and expanded sales channels.

Brad Ramberg: We remain confident these initiatives will drive meaningful impact over time, and we look forward to keeping you updated on our progress throughout the year.

Mark Goldston: Now, let me turn the call back over to Mark for closing comments before we start. Thanks, Brad. That was a very fulsome summary by... remarks.

Mark Goldston: Now, let me turn the call back over to Mark for closing comments before we start our Q&A.

Mark Goldston: Thanks, Brad. That was a very fulsome summary by the prepared remarks. Victoria, can we please start the queue for the question and answers?

Mark Goldston: Thanks, Brad.

Speaker Change: I would say a very fulsome summary by my prepared remarks, Victoria can we please start the queue for the question and answers.

Victoria: Victoria, can we please start the queue for the questions? Of course!

Operator: Of course. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered.

Of course.

Victoria: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question.

Speaker Change: We will now begin the question and answer session if you'd like to ask a question. Please press star followed by one on your telephone keypad if for any reason you'd like to remove that question. Please press star followed by two.

Speaker Change: Again to ask a question press star one.

As a reminder, if youre using a speakerphone. Please pick up your handset before asking a question. We'll pause here briefly ask questions are registered.

Speaker: We will pause here briefly as questions are registered.

Alec Legge: Our first question comes from the line of Susan Anderson with Canaccord Genuity. Your line is now open. Hi, good evening. Alec Legge. I'm for Susan. Really nice job on the quarter.

Operator: Our first question comes from the line of Susan Anderson with Canaccord Genuity. Your line is now open.

Speaker Change: Our first question comes from the line of Susan Anderson with Canaccord Genuity.

Speaker Change: Your line is now open.

Alec Legg: Hi. Hi, good evening. Alec Legg for Susan. Really nice job on the quarter. I guess my question is on just the retention or the transition of sellers in the old model to the new direct affiliate model. Are you able to provide any color there? Is it performing in line with initial expectations?

Speaker Change: Hi, Good evening, Alex leg on for Susan really nice job on the quarter I guess my question is on Hey.

Mark Goldston: I guess the question is on just the retention or the transition of sellers in the old model to the new direct affiliate model. Are you able to provide any color there? Is it performing in line with initial expectations? Yeah, thanks for joining us. We, I would say that we have, we're pleased with the performance of some of the outliers. We've got some really strong affiliates, but I would say overall, the platform that we're working with is a little bit more institutional than we had hoped for.

Speaker Change: Hey.

Speaker Change: Just the retention or the transition of sellers in the old model to the new direct affiliate model are you able to provide any color. There is it performing in line.

Speaker Change: With initial expectations.

Carl Daikeler: Yeah. Thanks for joining us. I would say that we have... We're pleased with the performance of some of the outliers. We've got some really strong affiliates, but I would say overall, the platform that we're working with is a little bit more institutional than we had hoped for. We're actually making a transition in mid-June to a very user-friendly model that will actually deputize many more of our subscribers to become affiliates for us because it's much simpler and easy for them to promote the program that they love so much. While we do see productivity from the affiliate program, it hasn't lived up to our expectations because we didn't make it simple enough for more of our subscribers to get involved. While it's productive, we're looking forward to the next few quarters to actually see growth in that area.

Speaker Change: Yes, thanks for joining us.

Speaker Change: I would say that we have.

Speaker Change: We're pleased with the performance of <unk>.

Speaker Change: Some of the outliers, we've got some really strong affiliates, but I would say overall the platform. We're working with is a little bit more institutional than we.

Brad Ramberg: So we're actually making a transition in mid-June to a very user-friendly model that will actually deputize many more of our subscribers to become affiliates for us because it's much simpler and easy for them to promote the program that they love so much. So while we do see productivity from the affiliate program, it hasn't lived up to our expectations because we didn't make it simple enough for more of our subscribers to get involved. So while it's productive, we're looking forward to the next few quarters to actually see growth in that area. Perfect, that makes sense.

Speaker Change: Had hoped for so we are actually making a transition in mid June to a very user friendly model that will actually deputize. Many more of our subscribers to become affiliates force because it's much simpler and easier for them to promote the program that they love. So much so while we do see productivity from the affiliate program. It Hasnt live.

Speaker Change: Up to our expectations, because we didnt make it simple enough for more of our subscribers to get involved so while it's productive we're looking forward to the next few quarters to actually see growth in that area.

Alec Legg: Perfect. That makes sense. Just to follow up, how should we think about selling and marketing going forward? How is management thinking about balancing, maybe reinvesting some of the savings from the change in the business model into your own marketing and brand building activities?

Speaker Change: Perfect that makes sense and then just a follow up how are we how should we think about selling and marketing going forward.

Brad Ramberg: And then just to follow up, how are we, how should we think about selling and marketing going forward? And how is management thinking about balancing, maybe reinvesting some of the savings from the change in the business model into your own marketing and brand building activities?

Speaker Change: How is management thinking about balancing maybe reinvesting some of the savings from the change in the business model into your own marketing and brand building activities.

Carl Daikeler: Brad?

Brad.

Brad Ramberg: Hi, this is Greg. This is Brad. Good to talk to you again. Now that we're in a new business model or selling the marketing percentage of revenue. In the old network model, the amount that we paid to our partners was significantly higher than we're paying under the new model. But I'll tell you, as we gain traction in the new model, we will continue to use cash generated to reinvest into selling and marketing, because at the end of the day, what we care most about is gross profit dollars. So we're very conscious of our relationship between LTV and CAC, but we will continue to invest to generate the highest level of gross profit dollars.

Brad Ramberg: Hi, this is Brad. Good to talk to you again. Now that we're in a new business model, our selling and marketing percentage of revenue has changed. In the old network model, the amount that we paid to our partners was significantly higher than we're paying under the new model. I'll tell you, as we gain traction in the new model, we will continue to use cash generated to reinvest into selling and marketing. At the end of the day, what we care most about is gross profit dollars. We're very conscious of our relationship between LTV and CAC, but we will continue to invest to generate the highest level of gross profit dollars that we can.

Speaker Change: This is Brad good to talk to you again.

Speaker Change: <unk>.

Speaker Change: Now that we're in a new business model, our selling and marketing percentage of revenue has changed and the old network model. The amount that we paid to our partners were significantly higher than we are paying under the new model.

Speaker Change: As we gain traction in the new model, we will continue to use cash generated to reinvest in the selling and marketing because at the end of the day, what we care most about is gross profit dollars.

Speaker Change: We're very conscious of our relationship between LTV and CAC, we will continue to invest to generate the highest level of gross profit dollars that we can.

Alec Legg: Thank you. One more question.

Brad Ramberg: Yeah. We have more room in the P&L because we don't have all that residual comp.

Brad Ramberg: Yeah, we have more room in the we have more room in the P&L because we don't have all that residual comp.

Speaker Change: Yes, we have more room in that you have more room in the P&L, because we don't have all of that residual comp.

Speaker: It makes Okay, thank you so much. Yeah, of course. Thank you so much for your question.

Alec Legg: That makes sense.

Speaker Change: That makes sense yeah.

Brad Ramberg: Yeah.

Speaker Change: Yeah.

Operator: Okay.

Carl Daikeler: Victoria, next-

Speaker Change: Okay, alright, thank you so much.

Operator: Thank you. Yeah, of course. Thank you so much for your question. Our next question comes from the line of George Kelly with ROTH Capital Partners. Your line is now open.

Speaker Change: Thank you so much for your question.

George Kelly: Our next question comes from the line of George Kelly with Ross Capital Partners. Your line is now open. Hey, everybody. Thanks for taking my question.

Speaker Change: Our next question comes from the line of George Kelly with Roth Capital Partners.

Speaker Change: Your line is now open.

George Kelly: Hey, everybody. Thanks for taking my questions. Maybe if we could circle back just to the first question that was just asked about the affiliate platform, can you expand on sort of what changes you're making with the new platform, how you're making it simpler and the plan to attract more affiliates into your network?

George Kelly: Hey, everybody thanks for taking my questions.

Carl Deichler: Maybe if we can circle back just to the first question that was just asked about the affiliate platform. Can you expand on sort of what changes you're making with the new platform, how you're making it simpler and and the plan to attract more affiliates in your network. Yeah, thanks, George. Good to hear from you again. It's Carl. So really excited about it. The company we're going to be working with called Social Ladder has made it their business to really focus on, I would call it the mom and pop affiliate, which is our bread and butter.

Speaker Change: Maybe if we can circle back just to the first question that was just asked about.

George Kelly: The affiliate platform.

George Kelly: Can you expand on sort of what changes youre, making with the new platform, how youre, making it simpler and.

George Kelly: And the plan to attract more affiliates in your network.

George Kelly: Yes.

Carl Daikeler: Yeah. Thanks, George. Good to hear from you again. It's Carl. Really excited about it. The company we're gonna be working with called SocialLadder has made it their business to really focus on, I wanna call it the mom-and-pop affiliate, which is our bread and butter. That's what built the MLM. Frankly, the transition from the MLM was in order to reward the seller with 100% of the earnings potential from the demand that they create. What SocialLadder does is combines a community. This will be a centralized community for all our subscribers to participate in for free. Within that community sits right next to that is the affiliate program. They don't have to go to a separate platform. They don't have to go through a separate sign-on process.

George Kelly: Yeah. Thanks, George good to hear from you again, it's Carl.

George Kelly: No.

We're excited about it.

Speaker Change: The company, we're going to be working with called social ladder has made their business to really focus on I want to call. It the mom and pop affiliate, which is our bread and butter. That's all built.

Carl Deichler: That's what built the MLM. And frankly, the transition from the MLM was in order to reward the seller with 100% of the earnings potential from the demand that they create. So what Social Ladder does is combines a community. This will be a centralized community for all our subscribers to participate in for free. And within that community sits right next to that is the affiliate program. So they don't have to go to a separate platform. They don't have to go through a separate sign on process and all the tools that they need and references and links and promo codes all sit right within our BODi.com ecosystem.

Speaker Change: And frankly, the transition from the MLM was in order to reward the seller with 100%.

Speaker Change: The earnings potential from the demand that they create so with social ladder doses combined our community. This will be a centralized community for all of our subscribers to participate in for free.

And within that community is just right next to that is the affiliate program. So they don't have to go to a separate platform. It will have to go through a separate.

Speaker Change: Sign on process and all the tools that they needed references and links and promo codes all fit right within our body dot com ecosystem.

Carl Daikeler: All the tools that they need and references and links and promo codes all sit right within our bodi.com ecosystem. It's much simpler. I was super impressed with the platform, and it's just in a different approach. Where the traditional affiliate model is, you know, more institutional for people who have blogs or listicles that they're running, what we're doing is we're helping people who lose 20, 30, 50 pounds with our programs, and they, you know, whenever they walk into a room, they create demand for their stunning results. We wanna make it as easy as possible for them to help their friends and family order, and they get the credit. That's what the SocialLadder platform does by taking out a lot of the extraneous business stuff that a more institutional platform is built for. That'll launch in mid-June.

Carl Deichler: It's much simpler. I was super impressed with the platform and it's just a different approach where the traditional affiliate model is more institutional for people who have blogs or listicles that they're running. What we're doing is we're helping people who lose 20, 30, 50 pounds with our programs. And whenever they walk into a room, they create demand for their stunning results. We want to make it as easy as possible for them to help their friends and family order and they get the credit. And that's what the Social Ladder platform does by taking out a lot of the extraneous business stuff that a more institutional platform is built for.

Speaker Change: It's much simpler I was super impressed with the platform and it's just a different approach.

Speaker Change: Additional affiliate model is.

Speaker Change: Institutional for people, who have logs or listicle is that theyre running what we're doing is we're <unk>.

Speaker Change: Helping people, who lose 2030 50 pounds with our programs.

Welcome to we're really creating demand for their stunning results, we want to make it as easy as possible for them to help their friends and family.

Speaker Change: Order and they get the credit and that's what the social ladder platform does by taking out a lot of the.

Speaker Change: Extraneous business stuff that are more institutional platform is built for them. So that will launch in mid June we have already done user acceptance testing of that.

George Kelly: So that'll launch in mid-June. We've already done user testing of that with a group of current affiliates and they are super excited about the usability of this platform. Okay. That's helpful info. Thanks.

Carl Daikeler: We've already done user testing of that, with a group of current affiliates. They are super excited about the usability of this platform.

Speaker Change: With a group of.

Speaker Change: Current affiliates and they are super excited about the usability of the platform.

George Kelly: Okay. That's helpful. Thanks. Next question is on your nutrition business, specifically pricing. I guess just curious how you plan to. I think you said in your prepared remarks that you're going to, your gross margin will settle in nutrition a little bit lower than where it's been running. I guess, is a lot of that just sort of resetting prices a bit lower? Or, especially as you prepare for your retail launch, in a bigger way later this year, how are you thinking about pricing going into that?

Speaker Change: Okay. Okay. That's helpful. Thanks, and then next question is on your nutrition business.

George Kelly: And then next question is on your nutrition business. Specifically pricing, I guess, just curious how you plan to, I think you said in your prepared remarks that you're going to, your gross margin will settle in nutrition a little bit lower than where it's been running. So I guess is a lot of that just sort of resetting prices a bit lower and especially as you prepare for your retail launch? in a bigger way later this year, how are you thinking about pricing going into that? Um, well George, part of what Brad had talked about and called to in the prepared remarks is You know we are selling more one-time nutrition.

Speaker Change: Specifically pricing.

Speaker Change: I guess, just curious how you plan to.

Speaker Change: Thank you said in your prepared remarks that youre going to.

Your gross margin will settle in nutrition, and a little bit lower than where it's been running.

Speaker Change: So I guess is a lot of that just sort of resetting prices a bit lower.

Speaker Change: And especially as you prepare for your retail launch.

Speaker Change: In a bigger way later this year, how are you thinking about pricing going into that.

Brad Ramberg: Well, George, part of what Brad had talked about and Carl, too, in the prepared remarks is.

Mark Goldston: Well, George, part of what Brad had talked about and Carl, too, in the prepared remarks is.

George Kelly: Well George part of what Brad had talked about and culture in the prepared remarks is.

Mark Goldston: You know, we are selling more one-time nutrition. You have to remember, when we were the MLM last year, those people are 100% focused on selling subscription, not selling one time, because their commission would be higher. Now that we're defocused on that and we're much more focused now on bringing in new people to the franchise, we will have a higher incidence of one-time purchases. The good news to that is we'll bring in more people, and potentially they then can convert to becoming subscribers. Think about the magazine business. Some people buy in the newsstand, some people have a subscription. There's a place for both. What that does is that will lower your overall gross margin, 'cause obviously, if you were 95%, 98% subscription, your margins would be higher.

George Kelly: We are selling more one time nutrition. So you have to remember when when we were the MLM last year.

Carl Deichler: So you have to remember when when we were the MLM last year Those people are 100% focused on selling. Now that we're de-focused on that and we're much more focused now on bringing in new people to the franchise. We will have a higher incidence of one-time purchase. The good news to that is we'll bring in more people, and potentially they then can convert to becoming subscribers.

George Kelly: Those people are 100% focused on selling subscription.

Selling one time, because they are commission would be higher now.

George Kelly: Now that were defocused on that and we're much more focused now on bringing in new people to the franchise.

We will have a higher incidence of onetime purchase so the good news to that is we're bringing more people and potentially they then can convert to become a subscribers think about the magazine business when people buy on the newsstand and people have a subscription as a place for both but what that does is that will lower your overall gross margin because.

Carl Deichler: Think about the magazine business. Some people buy on the newsstand. It's a place for both, but what that does is that will lower your overall gross margin because obviously if you were 95, 98% subscription, your margins would be higher. But because we no longer have the tens of thousands of MLM sellers and we're going out direct to the consumer, we must focus more than we did before on one-time purchases. When we go into retail, end of this year and into next year, obviously going to retail and wholesale margins will be different than the margins that we experienced in direct-to-consumer.

George Kelly: Obviously, if you were 95%, 98% subscription your margins would be higher but because we no longer have the tens of thousands of MLM sellers and we're going out direct to the consumer we must focus more than we did before on onetime purchases. When we go into retail ended this year.

Mark Goldston: Because we no longer have the tens of thousands of MLM sellers and we're going out direct to the consumer, we must focus more than we did before on one-time purchases. When we go into retail end of this year and into next year, obviously, going to retail and wholesale margins will be different than the margins that we experience in direct-to-consumer. You will dwarf the number of people that you can reach by using food, drug, mass merchant, convenience, and club stores. As Brad said, we are 1,000% focused on the generation of gross profit, not transfixed on the margin per se. If we can drive many more unit sales, even at a lower margin, our gross profit will be dramatically higher. As you know, that's what you use to cover your overhead and make a profit.

George Kelly: And into next year.

George Kelly: Obviously go into retail and wholesale margins will be different than the margins that we experienced in direct to consumer but.

Carl Deichler: You will dwarf the number of people that you can reach by using food, drug, mass merchant, convenience, and club stores. And so as Brad said, we are 1,000% focused on the generation of gross profit, not transfixed on the margin, per se. If we can drive many more unit sales, even at a lower margin, our gross profit will be dramatically higher. And as you know, that's what you use to cover your overhead and make a profit. So that's how we're focused. It's much more, can we bring new people right now and going forward into the franchise?

Brad Ramberg: You will dwarf the number of people that you can reach by using food drug mass merchant convenience in club stores and so as Brad said, we are 1000% focus on the generation of gross profit not transfixed on the margin per se and we can drive many more units.

Brad Ramberg: <unk>, even at a lower margin or gross profit will be dramatically higher as you know that's what you used to cover your overhead and make a profit. So that's how we're focused it's much more can we bring new people right now and going forward into the franchise.

Mark Goldston: That's how we're focused. It's much more can we bring new people right now and going forward into the franchise while still managing to serve the people who have subscriptions with us.

George Kelly: while still managing to serve the people who have subscriptions. Okay, understood.

Brad Ramberg: While still managing to serve the people who have subscriptions with us.

George Kelly: Okay, understood. Just two last quick ones. On your new credit facility, congrats on getting that done. Can you give any of the terms, such as the interest rate or any kind of covenants?

Speaker Change: Okay understood and then just two last quick ones.

Speaker: And then just two last quick ones.

Speaker: on your new credit facility.

On your new credit facility, congrats on getting that done.

Brad Ramberg: Congrats on getting that done. Can you give any of the terms, such as the interest rate or any kind of covenants? And secondly, in the prepared remarks, you talked about expecting to see growth, I think, by the end of 4Q or into 2026, meaning sort of sequential stability? Or can you just be more specific on exactly what you're expecting?

Speaker Change: Can you give us any of the terms such as the interest rate or any kind of covenants.

Mark Goldston: Yes.

George Kelly: Secondly, in the prepared remarks, you talked about expecting to see growth, I think by the end of Q4 or into 2026. Were you meaning sort of sequential stability, or can you just be more specific on exactly what you're expecting?

Speaker Change: Lee.

Speaker Change: And in the prepared remarks, you talked about.

Speaker Change: Expecting to see growth I think by the end of <unk> into 2026.

Speaker Change: Meaning sort of sequential stability or can you just be more specific on exactly what youre expecting.

Brad Ramberg: Yeah, I'll start. Go ahead. Thanks. The second one first, to avoid giving guidance on that, we were talking growth and the macro. not providing strict numerical What we're talking about is when we get the retail program ready to launch and when the new affiliate program that Carl talked about, which will come in in the summer, starts to take hold, our feeling is that we will likely experience some growth from a higher level of productivity. And then as we embark on the retail. and we'll have a new program that comes out as well. We hope that that will help us drive.

Mark Goldston: Yeah. I'll start with the second one first.

George Kelly: Let's go ahead, thanks.

Speaker Change: I'll start that's all I had thanks for.

Mark Goldston: The second one first, to avoid giving guidance on that. We were talking growth in the macro sense, not in providing strict numerical. What we're talking about is when we get the retail program ready to launch and when the new affiliate program that Carl talked about, which will come into the summer, starts to take hold, our feeling is that we will likely experience some growth from a higher level of productivity from the affiliates because they're on an easier-to-use platform. As we embark on the retail initiative and we'll have a new program that comes out as well, we hope that that will help us drive growth on that. As relates to the loan facility, yes, you know, great thanks to Blue Torch Capital for being our partner for the past, you know, 2+ years, almost 3 years.

Speaker Change: The second one first to avoid giving guidance on that we were talking to growth in the macro sense.

Speaker Change: Not in providing strict numerical.

Speaker Change: What we're talking about is when we when we get the retail program ready to launch and when the new affiliate program that Karl talked about which will come into the summer starts to take hold our feeling is that we will likely experience some growth from a higher level of productivity from the affiliates because they're on an easier to use platform.

And then as we embark on the retail initiative and we'll have a new program that comes out as well, we hope that that will help us drive growth on that as it relates to the loan facility yes.

Brad Ramberg: Yes, you know, great thanks to BlueTorch Capital for being our partner for the past was in favor of. the point just the interest alone, including the PIC, was 14.68%. So we picked up about a point and a half just on the interest rate alone. And you have to remember, the amortization costs of all the other things that we had in that BlueTorch loan were another 13.1%. So we were paying a notional rate of 27.8% between the interest and all the other amortized costs. compare that to this loan, which only has about 2% added in. and amortized costs, 27.8 before, 15.33 now, so a big step up for us in terms of improvement.

Speaker Change: Great Thanks to blue towards capital for being our partner for the past two plus years almost three years that loan was going to come due as you know in February of 2026. So we were able to retire at nine months early.

Mark Goldston: That loan was going to come due, as you know, in February 2026. We were able to retire it 9 months early. We're thrilled with our new partner, Tiger Finance and SG. Basically, the loan that we got, and you'll see tomorrow when we file the 10-Q, George, there will be an attachment of the credit agreement to the 10-Q. Just in a sort of high line cliff notes, the interest rate is SOFR plus 9. In today's numbers, that would be about a 13.3, 13.33% interest rate. The interest rate we had on the old loan, just the interest alone, including the PIK, was 14.68%. We picked up, you know, about a point and a half just on the interest rate alone.

Speaker Change: Thrilled with our new partner Tiger Finance.

Speaker Change: S T and basically.

Speaker Change: The loan that we got and you'll see tomorrow, when we file the 10-Q, George there will be an attachment of the credit agreement to the 10-Q, but just yeah.

Speaker Change: Sort of high line Cliff note the interest rate is so for plus nine.

Speaker Change: And today's numbers that would be about a 13 313, 33% interest rate.

Speaker Change: The interest rate, we had on the old loan.

Speaker Change: Just the interest alone, including the Pik was $14 six 8%. So we picked up about a point and a half just on the interest rate alone and you have to remember the amortization cost of all the other things that we had in that blue torch loan or another 13, 1%. So we were paying.

Mark Goldston: You have to remember, the amortization costs of all the other things that we had in that Blue Torch loan were another 13.1%. We were paying a notional rate of 27.8% between the interest and all the other amortized costs. If you compare that to this loan, which only has about 2% added into the base interest rate, it's about 15.33%. 27.8 all costs, including interest and amortized costs, 27.8 before, 15.33 now. A big step up for us in terms of improvement. We also managed to have a one-year moratorium on principal repayment. We will have 12 months where we don't have to do that. This is a great situation for us.

Speaker Change: And notional rate of 27, 8% between the interest and all the other amortized costs and if you compare that to this loan which only has about 2%.

Speaker Change: Added into the base interest rate, it's about $15 three 3%. So 2007, eight all costs, including interest and amortized costs 27, eight before $15 33, now so a big step up for us in terms of improvement. We also managed to have a one year moratorium.

Brad Ramberg: We also managed to have a one-year moratorium. So... We will have 12 months. So this is a great situation for us. We're really excited about our new partners at Tiger and S. And it will also give us, frankly, after the payoff of the Blue Torch loan and all the fees and legal fees, we'll add about, Brad correct me if I'm wrong, we'll add about $5 million of incremental capital to the balance. Yeah, that's correct. We'll have about five minutes to balance sheet. I would feel great about that. And it's a three-year term. Understood. Thank you.

Speaker Change: On principal repayment so.

Speaker Change: So we will have 12 months, where we don't have to do that so this is it's a great situation for us we're really excited about our new partners at Tiger at ESG and it gives us room and it will also give us frankly after the pay off of the Blue torch.

Mark Goldston: We're really excited about our new partners at Tiger and SG. It gives us some room, and it will also give us, frankly, after the payoff of the Blue Torch loan and all the fees and legal fees, Brad, correct me if I'm wrong, we'll add about $5 million of incremental capital to the balance sheet after paying off Blue Torch and all the legal fees associated with this.

Speaker Change: Loan and all the fees and legal fees will add about Brad correct me, if I'm wrong will add about $5 million of incremental capital to the balance sheet after paying off the move towards an all of the legal fees associated with it.

George Kelly: Yeah, that's correct. We'll add about $5 million to the balance sheet this week.

Brad Ramberg: Yes, that's correct and what about the balance sheet. This week.

Mark Goldston: We feel great about this. It's a three-year term.

Speaker Change: So we feel great about this.

Brad Ramberg: And it's a three year okay.

George Kelly: Okay. Understood. Thank you.

Brad Ramberg: Understood. Thank you.

Mark Goldston: Okay. Thank you, George.

Speaker: Thank you, George.

Brad Ramberg: Okay. Thank you George.

Chris Sakai: Thank you for your question. Our next question comes from the line of Chris Sakai with Singular Research. Your line is now open. Uh, yes, I I'm in for gaucho. I've got a question, nutrition subscription fell 47.7% year-over-year. But retail launches are pending.

Operator: Thank you for your questions. Our next question comes from the line of Chris Sakai with Singular Research. Your line is now open.

Brad Ramberg: Thank you for your questions.

Speaker Change: Our next question comes from the line of Christopher <unk> with singular research.

Speaker Change: Your line is now open.

Chris Sakai: Yes, hi. I'm in for Gowshihan. I've got a question. Nutrition subscriptions sell 47.7% year-over-year, but retail launches are pending. How are you tracking customer migration from subscriptions to one-time purchases? What retention strategies are in place for this shift?

Speaker Change: Yes, hi, I'm in for Galaxy.

Speaker Change: I've got a question.

Speaker Change: Nutrition nutrition, so 47, 7% year over year.

Speaker Change: But retail launches are pending.

Carl Deichler: How are you tracking customer migration from subscriptions to one-time purchases and what retention strategies are in place for this shift? Obviously, thanks for the question. Obviously, just the transition from MLM alone, we knew that there would be some disruption to that file size. As I mentioned in the prepared comments, institutionalizing our own subscribe and save program, similar to the success we're seeing on Amazon, has started to rebuild the nutritional subscription file. And at the same time, now we can advertise and performance marketing for our nutritionals. So we're generating... one-time orders or trial orders, if you will, that now our CRM team works to win back or give special offers to the one-time trial customer to convert them into a subscriber.

Speaker Change: How are you tracking customer migration from subscriptions to onetime purchases and what retention strategies are in place for this shift.

Speaker Change: Okay.

Carl Daikeler: Obviously, thanks for the question. Obviously, just the transition from MLM alone, we knew that there would be some disruption to that file size. As I mentioned in the prepared comments, institutionalizing our own subscribe and save program, similar to the success we're seeing on Amazon, has started to rebuild the nutritional subscription file. At the same time, now we can advertise in performance marketing for our nutritional. We're generating one-time orders or trial orders, if you will, that now our CRM team works to win back or give special offers to the one-time trial customer to convert them into a subscriber. It's early days in that, and I'm sure we're not providing guidance on what those percentages are.

Speaker Change: Obviously, thanks for the question obviously, the just the transition from MLM alone we knew that there would be some disruption to that file side as I mentioned in the prepay.

Speaker Change: Prepared comments institutionalizing, our own subscribing to save program similar to the success, we're seeing on Amazon has started to rebuild the.

Speaker Change: Nutritional subscription file and at the same time now we can advertise in performance marketing for our nutritional so we're generating.

Speaker Change: One time orders or trial orders, if you will that now our CRM team works too.

Speaker Change: Win back or give special offers to the onetime trial customer to convert them into a subscriber. It's early days in that and I'm sure, we're not providing guidance on.

Carl Deichler: It's early days in that, and I'm sure we're not providing guidance on what those percentages are, but we've got a very strong team in terms of building that affinity against what the objective of the customer is and what the benefit to them to now joining the subscription file will be. However, Because of the shift from the MLM to what I would consider to be a more customer-centric approach, we don't have a problem with people just buying one time every month. Like some people, they would prefer that you've got subscription fatigue out there. We are seeing returning customers and repeat customers in the one-time file.

Speaker Change: What those percentages are but we've got a very strong team in terms of building that affinity against what the objective of the customer is and what what's the benefit to them now joining the subscription file will be however.

Carl Daikeler: We've got a very strong team in terms of building that affinity against what the objective of the customer is and what the benefit to them to now joining the subscription file will be. However, because of the shift from the MLM to what I would consider to be a more customer-centric approach, we don't have a problem with people just buying one time every month. Like some people, they would prefer that you've got subscription fatigue out there. We are seeing returning customers and repeat customers in the one-time file. Like I said, though, it's early. We just launched the marketing initiative against nutrition midway through Q1. It's gonna take us a few months, if not a quarter, to understand the customer behavior to make that predictable.

Speaker Change: Because of the shift from the MLM two what I would consider to be a more customer centric approach. We don't have a problem with people just buy one time every month like some people. They would prefer you got subscription fatigue out there we are seeing returning customers and repeat customers and the ones.

Brad Ramberg: Like I said, though, it's early. We just launched the marketing initiative against nutrition midway through the first quarter. So it's going to take us a few months, if not a quarter, to understand the customer behavior to make that predictable.

Speaker Change: Like I said, though its early we just launched.

Speaker Change: The marketing initiative against the attrition midway through the first quarter, so it's going to take us.

Speaker Change: Two months, if another quarter or two to understand the customer behavior to make that predictable.

Speaker: And just adding on to what Carl said, when we do launch the retail initiative end of the year and into next year, obviously, by definition, those are one-time sales. a higher ticket Whether or not that was the right thing to do to actually grow your franchise is a story for another day. So right now we're looking at this as a completely fresh Okay, thanks.

Mark Goldston: Just adding on to what Carl said, when we do launch the retail initiative, end of the year into next year, obviously, by definition, those are one-time sales. I mean, most of those people will continue to go back to whether it's a grocery store, drugstore, food, mass merchant, whatever the case may be, and buy products on their visits, on their shopping visits. Those are always essentially one-time sales. We as a company have really never focused on it before because when we had an MLM, which we no longer have, but when we had it, their incentive was to sell subscriptions because that was a higher ticket value and therefore they could get higher commission and the ongoing payments.

Speaker Change: And just adding on to what Carl said you know.

Speaker Change: When we do launch the retail initiative.

Speaker Change: You know ended the year and into next year, obviously by definition those are one time sale.

Speaker Change: Most of those people will continue to go back to whether it's a grocery store drugstore food mass merchant or whatever the case may be and by products on their visits and they're shopping visits and so those are always essentially one time sale. So we as a company have really never focused on it before because when we had.

Speaker Change: An MLM, which we no longer have it when we had it.

Speaker Change: Their incentive was to sell subscriptions because that was a higher ticket value and therefore, they could get higher.

Speaker Change: Commission and the ongoing payments.

Mark Goldston: Whether or not that was the right thing to do to actually grow your franchise is a story for another day. Right now we're looking at this with a completely fresh perspective.

Speaker Change: Whether or not that was the right thing to do to actually grow your franchise story for another day. So right now we're looking at this as a completely fresh perspective.

Chris Sakai: Okay, thanks. Connected Fitness revenue fell about 74% year-over-year, but 1,500 bikes were delivered. Is this segment being phased out, or are you exploring partnerships, like white label partnerships?

Speaker Change: Okay. Thanks, and so connected fitness revenue fell about 74% year over year, but 500 bikes were deliberate is this segment being faced out or are you exploring partnerships.

Carl Deichler: And so, Connected Fitness revenue fell about 74% year-over-year, but 1,500 bikes were delivered. Is this segment being phased out or are you exploring partnerships? White Label Partnership. Yeah, I can't comment too much, but we are absolutely both supporting the bike that we sold, and we want to make sure that those customers have a great experience, but we have essentially sold through that inventory. However, we do have the opportunity now because the bike content on our platform that we continue to produce is so good. It's actually quite attractive for, as you said, for people who are selling the equipment in other channels to be able to partner with us so that we are the content to their hardware.

Speaker Change: White label partnerships.

Speaker Change: Yes.

Carl Daikeler: Yeah. We can't comment too much. We are absolutely both supporting the bike that we sold, and we wanna make sure that those customers have a great experience. We have essentially sold through that inventory. However, we do have the opportunity now because the bike content on our platform that we continue to produce is so good. It's actually quite attractive for, as you said, for people who are selling the equipment in other channels to be able to partner with us so that we are the content to their hardware. We've got some of those conversations going. We do think that it can be a part of our overall business model.

Speaker Change: Yes.

Speaker Change: We.

Speaker Change: I can't comment too much but we are absolutely both supporting the bite that we sold and we want to make sure that those customers have a great experience, but we have essentially sold through that inventory. However, we.

Speaker Change: We do have the opportunity now because the content on our platform and we continue to produce is so good it's actually quite attractive for as you said for people who are selling the equipment and other channels to be able to partner with us. So that we are content to there.

Brad Ramberg: So we've got some of those conversations going, and we do think that it can be a part of our overall business model. But just to be clear going forward, we are not producing new equipment for sale. We are not selling any more bikes going forward. When the last bike is out the door, we will not be making it. As Carl said, our special sauce, our go-to-war skill as a company, is that we're the best producers of content in this industry. So, going forward, not only can we serve the people that have our own bikes, but to Carl's point.

Speaker Change: Hardware. So we've got some of those conversations going.

Speaker Change: And we do think that it can be a part of our overall business model.

Mark Goldston: Just to be clear, going forward, we are not producing new equipment for sale. We are not selling any more bikes going forward. Once the last bike is out the door, we will not be making it. As Carl said, our special sauce, our go-to-war skill as a company is that we're the best producers of content in this industry. Going forward, not only can we serve the people that have our own bikes, but to Carl's point, we can supply content to anyone who has a bike using our terrific content. We will not be making any more bikes.

Speaker Change: But just to be clear going forward, we are not producing new equipment for sale, we are not selling any more bikes going forward. One last Blake is out the door, we will not be making it as Carl said, our special sauce or go to war skill as a company as it were the best producers of content.

Speaker Change: This industry and so going forward not only can we serve the people that have our own bikes that to karl's point weekend supply content for anyone who hasn't like using our terrific content, but we will not be making any more bikes.

Speaker: using our terrific content, but we will not. Okay, great. Thanks for the answer. Sure, thanks for the question. Thank you for your question.

Chris Sakai: Okay, great. Thanks for the answers.

Speaker Change: Okay, great. Thanks for the answers.

Mark Goldston: Sure. Thanks for the question.

Speaker Change: Sure. Thanks for the question.

Operator: Thank you for your question. No additional questions waiting at this time.

Thank you for your question.

Mark Goldston: No additional questions waiting at this time. I would now like to hear a call back over the Mark Goldstein.

Speaker Change: No additional questions waiting at this time.

Mark Goldston: Okay.

Operator: I would now like to hand the call back over to Mark Goldston.

I'd now like to hear your call back over to Michael Kim.

Mark Goldston: Thank you, Victoria.

Mark Goldston: Thank you, Victoria, and thank you everybody for attending today. Just in summary, we're thrilled with the performance that we had in our sort of Q1 with our new business model. We really outperformed what we thought we would do, which is really terrific. We are thrilled with our new Tiger Finance financing deal that we just announced. You will see that attached to the 10-Q that will be filed tomorrow. It gives us a lot of flexibility and we have a lot of plans going forward that are growth plans and having this flexibility with the new loan agreement, plus the new products that we've got in the pipeline. As Carl mentioned, the revamped affiliate platform, which will be much more appealing and easier to use.

Michael Kim: Thank you Victoria and thank you everybody for attending today just in summary, we are thrilled with the performance that we had in our set of first quarter with our new business model.

Mark Goldston: And thank you, everybody, for attending today. Just in summary, we're thrilled with the performance that we had in our sort of first quarter with our new business model. that will be filed tomorrow. but it gives us a lot of flexibility and we have a lot of plans going forward that are growth plans and having this flexibility with the new loan agreement. There are great green shoots ahead of us and we're pretty excited about it.

Michael Kim: We really outperformed what we thought we would do which is really terrific and we are thrilled with our new Tiger finance.

Michael Kim: Financing deal that we just announced and you will see that attached to the 10-Q that will be filed tomorrow.

Speaker Change: But it gives us a lot of flexibility and we have a lot of plans going forward with our growth plans and having this flexibility with the new loan agreement plus the new products that we got in the pipeline and as Karl mentioned, the revamped affiliated platform, which will be much more appealing and easier to use.

Mark Goldston: We think there are great green shoots ahead of us, and we're pretty excited about it. As always, if you have any questions, please feel free to reach out to the company, and funnel them through Brad Ramberg, our CFO. Thank you for attending.

Speaker Change: There are great Green shoots ahead of us and we're pretty excited about it. So as always if you have any questions. Please feel free to reach out to the company.

Victoria: So as always, if you have any questions, please feel free to reach out to the company. funneled them to Brad Ramberg, our CFO, and thank you for That concludes today's call.

Speaker Change: And just final them too Brad Ramberg, our CFO and.

Speaker Change: Thank you for attending.

Operator: That concludes today's call. Thank you for your participation. Enjoy the rest of your day.

Speaker Change: That concludes today's call. Thank you for your participation and enjoy the rest of your day.

Victoria: Thank you for your participation and enjoy the rest of your day. Thank you, Victoria.

Mark Goldston: Thank you, Victoria.

Speaker Change: Thank you Victoria.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Q1 2025 Beachbody Co Inc Earnings Call

Request a DemoDemo

BODI

BODi

Earnings