Q4 2025 The Beachbody Co Inc Earnings Call

March 10, 2026

Speaker #1: Good afternoon. Thank you for attending today's Beachbody Company, Inc. fourth quarter 2025 earnings conference call. My name is Tamiya, and I will be your moderator for today's call.

Operator: Good afternoon. Thank you for attending today's The Beachbody Company, Inc. Q4 2025 Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an 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 of ICR. You may proceed, Bruce.

Speaker #1: All lines will be muted during the presentation portion of the call with an 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 #1: I would now like to pass the conference over to your host, Bruce Williams, Managing Director of ICR. You may proceed, Bruce.

Speaker #2: Welcome, everyone, and thank you for joining us for our fourth quarter earnings call. With me on the call today are Mark Goldstein, Executive Chairman of The Beachbody Company; Carl Deikeler, Co-Founder and Chief Executive Officer; and Brad Ramberg, Interim Chief Financial Officer.

Bruce Williams: Welcome, everyone, and thank you for joining us for our Q4 Earnings Call. With me on the call today are Mark Goldston, Executive Chairman of 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 #2: 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.

Speaker #2: 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.

Speaker #2: 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 include today's press release.

Speaker #2: 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.

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 Goldston.

Speaker #2: Now, I would like to turn the call over to Mark.

Speaker #3: Thanks very much, Bruce, and good afternoon, everyone, and welcome to the Beachbody Q4 2025 earnings call. 2025 was an important transitional year for Beachbody, as we started on January 1st, 2025, as a brand new company which would extinguish our former multi-level marketing business model in favor of a five-pronged omnichannel model featuring direct-to-consumer; Amazon and marketplaces; retail distribution for the first time ever, later this year; a single-level affiliate program; and a totally revamped customer win-back program for our former customers, which count more than 8 million and that covers former digital fitness and nutritional customers.

Mark Goldston: Thanks very much, Bruce, and good afternoon, everyone, and welcome to the BODi Q4 2025 Earnings Call. 2025 was an important transitional year for BODi as we started on 1 January 2025 as a brand-new company which had extinguished our former multi-level marketing business model in favor of a five-pronged omni-channel model featuring direct-to-consumer, Amazon, and marketplaces, retail distribution for the first time ever later this year, and a single-level affiliate program, and a totally revamped customer win-back program for our former customers, which count more than 8 million, and that covers former digital fitness and nutritional customers. As a result of the dramatic shift in our business model, year-over-year comparisons are not really relevant from a revenue perspective because we're no longer utilizing the tens of thousands of former MLM sellers in the 2025 and beyond business model.

Speaker #3: As a result of the dramatic shift in our business model, year-over-year comparisons are not really relevant from a revenue perspective because we're no longer utilizing the tens of thousands of former MLM sellers in the 2025 and beyond business model.

Speaker #3: In fact, we have continually expressed over the last 12 months, as you know, that the first time investors can actually make a direct year-over-year quarterly revenue comparison with clean results reflecting the new business model in both years will be the Q3 2026 earnings release.

Mark Goldston: In fact, we continually expressed over the last 12 months, as you know, that the first time investors can actually make a direct year-over-year quarterly revenue comparison with clean results reflecting the new business model in both years will be the Q3 2026 earnings release. As a result of our outstanding financial performance in 2025, in early January 2026, we were able to secure some substantial improvements to certain financial covenants with our lenders, Tiger Finance, and SG Capital. In the new agreement, as long as BODi maintains a cash balance of more than $4.6 million above the outstanding debt level, there will be no testing of the key covenants by our lenders. These covenants will only be tested if our cash balance dips below the $4.6 million dollar cushion above the outstanding debt level.

Speaker #3: As a result of our outstanding financial performance in 2025, in early January 2026, we were able to secure some substantial improvements to certain financial covenants with our lenders Tiger Finance and SG Capital.

Speaker #3: In the new agreement, as long as Body maintains a cash balance of more than $4.6 million above the outstanding debt level, there will be no testing of the key covenants by our lenders.

Speaker #3: These covenants will only be tested if our cash balance dips below the $4.6 million cushion above the outstanding debt level. I'm very pleased to report that as of December 31, 2025, our cash balance was $39 million against an outstanding debt level of only $25 million.

Mark Goldston: I'm very pleased to report that as of 31 December 2025, our cash balance was $39 million against an outstanding debt level of only $25 million, giving us a $14 million cash cushion versus the $4.6 million cash cushion we are required to maintain in order to not have the covenants tested. As we indicated on the Q3 2025 earnings call, we're extremely pleased with the dramatic turnaround of our financial performance. In the two and a half years since I joined as executive chairman to conduct a major turnaround of Beachbody, our financial turnaround, which we previously defined as achieving quarterly and then full-year positive operating income and net income, is one year ahead of the original articulated goal of achieving the milestone by 31 December 2026.

Speaker #3: Giving us a $14 million cash cushion versus the $4.6 million cash cushion we are required to maintain in order to not have the covenants tested.

Speaker #3: As we indicated on the Q3 2025 earnings call, we're extremely pleased with the dramatic turnaround of our financial performance in the two and a half years since I joined as executive chairman to conduct a major turnaround of Body.

Speaker #3: Our financial turnaround, which we previously defined as achieving quarterly and then full-year positive operating income and net income, is one year ahead of the original articulated goal of achieving the milestone by December 31st of 2026.

Speaker #3: In fact, we achieved positive net income in Q3 2025, and today we're reporting that we achieved positive net income in Q4 2025. We've also achieved positive adjusted net income for the full year 2025.

Mark Goldston: In fact, we achieved positive net income in Q3 2025, and today we're reporting that we achieved positive net income in Q4 of 2025, and we've achieved positive adjusted net income for the full year 2025. We also achieved positive operating income in both Q4 and for the full year of 2025. This marks the first time since 2021 that we had both positive operating income and adjusted net income for the full year. To put this impressive milestone achievement in perspective, we had the second consecutive quarter of operating income in Q4 2025 at $8.2 million for the quarter, which was a $41.1 million improvement in operating income versus the same quarter, which was Q4 of 2024, when we recorded an operating loss of $32.9 million.

Speaker #3: We also achieved positive operating income in both Q4 and for the full year of 2025. This marks the first time since 2021 that we had both positive operating income and adjusted net income for the full year.

Speaker #3: To put this impressive milestone achievement in perspective, we had the second consecutive quarter of operating income in Q4 2025 at $8.2 million for the quarter.

Speaker #3: Which was a 41.1 million improvement in operating income versus the same quarter, which was Q4 of 2024, when we recorded an operating loss of $32.9 million.

Speaker #3: From a net income perspective, we recorded positive net income for the second quarter in a row in Q4 of 2025 of $5.2 million. Which was $39.8 million better than the $34.6 million net loss in Q4 of 2024.

Mark Goldston: From a net income perspective, we recorded positive net income for the second quarter in a row in Q4 of 2025 of $5.2 million, which was $39.8 million better than the $34.6 million net loss in Q4 of 2024. In addition, we've continued to demonstrate our financial discipline since I joined 10 quarters ago in June of 2023 by posting our ninth consecutive quarter of positive adjusted EBITDA in Q4 2025 at $12.9 million, which was a 48% increase over the $8.7 million in Q4 of 2024.

Speaker #3: In addition, we've continued to demonstrate our financial discipline since I joined 10 quarters ago, in June of 2023, by posting our ninth consecutive quarter of positive adjusted EBITDA in Q4 2025 at $12.9 million.

Speaker #3: Which was a 48% increase over the $8.7 million in Q4 of 2024. You know, as we've stated on previous earnings calls, because of the accelerated pace of the Body financial turnaround and the fact that we're a full year ahead of schedule, we've designated 2026 as the year when we unleash the first elements of our fertile innovation pipeline.

Mark Goldston: You know, as we've stated on previous earnings calls, because of the accelerated pace of the BODi financial turnaround and the fact that we're a full year ahead of schedule, we've designated 2026 as the year when we unleash the first elements of our future innovation pipeline. The innovations kicked off in December 2025 with the launch of a revolutionary concept designed to address the 185 million American adults who are overweight and/or have issues with blood pressure, cholesterol, blood sugar, sleep apnea, and frankly, don't have the time, the knowledge, or even the inclination to participate in a full-fledged 45- to 90-minute exercise program.

Speaker #3: The innovations kicked off in December 2025 with the launch of a revolutionary concept designed to address the 185 million American adults who are overweight and/or have issues with blood pressure, cholesterol, blood sugar, sleep apnea, and frankly don't have the time, the knowledge, or even the inclination to participate in a full-fledged 45 to 90-minute exercise program.

Speaker #3: This innovative program called the 10-Minute Body is a $400 video program covering a whole range of exercises and body part movements, and it's fun, easy, effective, and can all be accomplished in just 10 minutes a day and for just $10 a month.

Mark Goldston: This innovative program, called the 10 Minute BODi, is a 400-video program covering a whole range of exercises and body part movements, and it's fun, easy, effective, and can all be accomplished in just 10 minutes a day and for just $10 a month. Next, we launched the P90X Generation Next program last month, marking the first time in 15 years where we've introduced a new version of the legendary P90X program, the number one selling extreme fitness program of all time with many millions of users. Carl is going to speak more about the digital fitness innovations for 2026 in a minute. One of the major themes of our innovation pipeline and revised focus within our business is the development of the nutritional side of the business. The nutritional supplement category globally is $164 billion.

Speaker #3: Next, we launched the P90X Generation Next program last month, marking the first time in 15 years where we've introduced a new version of the legendary P90X program, the number one selling extreme fitness program of all time with many millions of users.

Speaker #3: Carl's going to speak more about the digital fitness innovations for 2026 in a minute. One of the major themes of our innovation pipeline and revised focus within our business is the development of the nutritional side of the business.

Speaker #3: The nutritional supplement category globally is 164 billion dollars. That's more than 12 times the size of the global digital fitness category and was always a critical element of the Beachbody Company revenue base often exceeding the digital fitness revenue by two to one in the most successful years of the company.

Mark Goldston: That's more than 12 times the size of the global digital fitness category and was always a critical element of the Beachbody Company revenue base, often exceeding the digital fitness revenue by 2 to 1 in the most successful years of the company. We're going to enter the retail market of grocery, drugstores, mass merchants, and club stores for the first time ever in Q2 of this year with our new P90X line of nutritional supplements, a new 7-serve, $34.99 form factor of our Shakeology brand, which by the way, has sold $3.4 billion cumulatively and had over 1 billion servings as a 30-serve, $129 product. This product, Shakeology, has never been sold at retail. We will also have a Southern California test market in late Q2, early Q3, featuring uniquely formulated energy drinks under the P90X and Insanity label.

Speaker #3: We're going to enter the retail market of grocery, drugstores, mass merchants, and clubstores for the first time ever in Q2 of this year with our new P90X line of nutritional supplements a new seven-serve $34.99 form factor of our Shakeology brand which, by the way, has sold 3.4 billion dollars cumulatively and had over 1 billion servings as a 30-serve, 129-dollar product and this product, Shakeology, has never been sold at retail.

Speaker #3: We will also have a Southern California test market in late Q2, early Q3, featuring uniquely formulated energy drinks under the P90X and Insanity label.

Speaker #3: We will then have the Insanity nutritional supplement line coming out in late Q3, early Q4. We're developing a ready-to-drink Shakeology superfood protein drink in Q3 and Q4.

Mark Goldston: We will have Insanity nutritional supplement line coming out in late Q3, early Q4. We're developing a ready-to-drink Shakeology superfood protein drink in Q3 and Q4. It requires no mixing, and we'll have innovative new protein bars from P90X and Shakeology as well, hopefully in Q4 of 2026. We're also considering a complete revamp of the existing line of Beachbody supplement products, putting them under the new BODi brand name and in new packaging in late 2026 or early 2027. The pipeline is fertile, it's full. There's a lot of new nutritional elements in there, and we're really excited about it.

Speaker #3: It requires no mixing. And we'll have innovative new protein bars from P90X and Shakeology as well, hopefully in Q4 of 2026. We're also considering a complete revamp of the existing line of Beachbody supplement products, putting them under the new Body brand name and in new packaging in late 2026 or early 2027.

Speaker #3: So the pipeline is fertile, it's full, there's a lot of new nutritional elements in there, and we're really excited about it. But importantly, now that we no longer have the constraints of the incredibly high 40 to 50 percent sales commission structure of the former MLM model, we can now price our nutritional products at very affordable price points that are dramatically lower than our previous nutritional products were priced at.

Mark Goldston: Importantly, now that we no longer have the constraints of the incredibly high 40 to 50% sales commission structure of the former MLM model, we can now price our nutritional products at very affordable price points that are dramatically lower than our previous nutritional products were priced at. With brand names like P90X, Insanity, and Shakeology, we will walk in the door of retail with very high aided brand awareness levels, given that millions of people have been exposed to or been part of those brands previously. We now have the ability to price our products at much lower price points, which represents a huge opportunity not only at retail, but in our DTC business as well at BODi.com. Our intention is to introduce P90X supplements and the new 7-serve $34.99 Shakeology form factor in April 2026 on our new Shopify website.

Speaker #3: With brand names like P90X, Insanity, and Shakeology, we will walk in the door of retail with very high aided brand awareness levels, given that millions of people have been exposed to or been part of those brands previously.

Speaker #3: We now have the ability to price our products at much lower price points, which represents a huge opportunity not only at retail but in our DTC business as well at Body.com.

Speaker #3: Our intention is to introduce P90X supplements and the new seven-serve, $34.99 Shakeology form factor in April 2026 on our new Shopify website. And the retail rollout of these products in brick and mortar will follow beginning in May of 2026, with some exciting news when Shakeology will debut in Sprouts supermarkets in the seven-serve, $34.99 bag.

Mark Goldston: The retail rollout of these products in brick-and-mortar will follow beginning in May 2026 with some exciting news when Shakeology will debut in Sprouts Farmers Market in the 7-serve $34.99 bag. There will be many other retail accounts who will carry the Shakeology and the P90X supplement lines as well, and our retail selling partner, Advantage Solutions, is in the process of presenting those lines and securing confirmation and orders over the next four to eight weeks. With the impressive financial turnaround at BODi, the highlights of which include recording positive operating income for the full year of 2025, positive adjusted net income for the full year of 2025, 9 consecutive quarters of positive adjusted EBITDA, a cash balance of $39 million at 31 December 2025, which is 56% above our outstanding debt level of $25 million to Tiger Finance.

Speaker #3: There will be many other retail accounts who will carry the Shakeology and the P90X supplement lines as well. And our retail selling partner, Advantage Solutions, is in the process of presenting those lines and securing confirmation and orders over the next four to eight weeks.

Speaker #3: With the impressive financial turnaround at Body, the highlights of which include recording positive operating income for the full year of 2025, positive adjusted net income for the full year of 2025, nine consecutive quarters of positive adjusted EBITDA, a cash balance of 39 million dollars at December 31st of 2025, which is 56% above our outstanding debt level of 25 million dollars at Tiger Finance, a 44% reduction in interest charges versus our previous BlueTorch debt, massive operating leverage being built into the P&L as a result of the lowering of the EBITDA break-even level from over 900 million prior to my arrival down to a 180 million dollar break-even level today, and lastly, achieving the financial aspect of the turnaround a year ahead of our original schedule.

Mark Goldston: A 44% reduction in interest charges versus our previous Blue Torch debt. Massive operating leverage being built into the P&L as a result of a lowering of the EBITDA breakeven level from over $900 million prior to my arrival down to a $180 million breakeven level today. Lastly, achieving the financial aspect of the turnaround a year ahead of our original schedule. Combined with the 2026 debut of the new products and programs within our impressive innovation pipeline, BODi is poised to complete the total turnaround of the company by the end of 2026, a full year ahead of schedule.

Speaker #3: Combined with the 2026 debut of the new products and programs within our impressive innovation pipeline, Body is poised to complete the total turnaround of the company by the end of 2026, a full year ahead of schedule.

Speaker #3: We're looking forward to the second half of 2026 when the first clean year-over-year top-line comparisons can be made as the legacy business model elements from the MLM will have burned off by then and we can clearly describe how the new products and programs that we're introducing throughout 2026 are doing and whether or not they're contributing to our number one goal of returning to year-over-year top-line revenue growth to match the impressive year-over-year financial turnaround performance.

Mark Goldston: We're looking forward to the second half of 2026 when the first clean year-over-year top-line comparisons can be made as the legacy business model elements from the MLM will have burned off by then, and we can clearly describe how the new products and programs that we're introducing throughout 2026 are doing and whether or not they're contributing to our number one goal of returning to year-over-year top-line revenue growth to match the impressive year-over-year financial turnaround performance. With that, I'd now like to turn the mic over to our co-founder and CEO, Carl Daikeler. Carl?

Speaker #3: With that, I'd now like to turn the mic over to our co-founder and CEO, Kyle Deichler. Kyle?

Speaker #2: Thanks, Mark. And thank you all for joining us today. Our Q4 results, which Mark introduced and Brad will detail shortly, demonstrate the operational momentum we've been building throughout 2025. The progress we've made with the financial turnaround has created an extremely efficient business, which is now in such a good position to accelerate into this exciting pipeline of new offers that we can maximize in multiple sales channels.

Carl Daikeler: Thanks, Mark, and thank you all for joining us today. Our Q4 results, which Mark introduced and Brad will detail shortly, demonstrate the operational momentum we've been building throughout 2025. The progress we've made with the financial turnaround has created an extremely efficient business, which is now in such a good position to accelerate into this exciting pipeline of new offers that we can maximize in multiple sales channels. As we said in our last earnings call, the end-of-year offers we launched going into Black Friday, Cyber Monday, and the holidays, and then into Q1 2026, were well-stacked to maximize the new model. We saw productive demand for the new Shaun T lifting program called Dig In, bundled with the special holiday and New Year subscription offer.

Speaker #2: As we said in our last earnings call, the end-of-year offers we launched going into Black Friday and Cyber Monday and the holidays and then into the first quarter of 2026 were well-stacked to maximize the new model.

Speaker #2: We saw productive demand for the new Shawn Tee lifting program with the special holiday and New Year subscription offer. We also launched our high-volume, low-priced tier of over 400 microdose fitness workouts that are 10 minutes or less to serve the over 185 million people in the US who are overweight or obese, or who just don't have time or the inclination to do longer workout sessions, or who are intimidated by the gym.

Carl Daikeler: We also launched our high-volume, low-price tier of over 400 microdose fitness workouts that are 10 minutes or less to serve the over 185 million people in the US who are overweight or obese, or just don't have time or the inclination to do longer workout sessions, or who are intimidated by the gym. That tier, which we call 10 Minute BODi, is driven by a free 10-day trial and a very compelling $10-a-month price point. The 10 Minute BODi launch has shown instant popularity of microdose fitness programming, with about 8% of our viewership already choosing these shorter formats in the last couple of months. Looking ahead, our restructured performance marketing and creative teams are prepared to support our most exciting launch from our innovation pipeline, P90X Generation Next.

Speaker #2: That tier, which we call 10-Minute Body, is driven by a free 10-day trial and a very compelling $10-a-month price point. The 10-Minute Body launch has shown instant popularity of microdose fitness programming, with about 8% of our viewership already choosing these shorter formats in the last couple of months.

Speaker #2: Looking ahead, our restructured performance marketing and creative teams are prepared to support our most exciting launch from our innovation pipeline, P90X Generation Next. After this last year of restructuring in 2025, we now have the people, the agencies, and the strategies in place to maximize this launch.

Carl Daikeler: After this last year of restructuring in 2025, we now have the people, the agencies, the strategies in place to maximize this launch and the rest of our plans for the year. In fact, we launched the new P90X program in early February to a packed house of media and influencers in New York City, which will carry that launch momentum into Q2 as we debut the P90X branded supplement line, both direct-to-consumer and at retail. Here's what's most meaningful about this supplement launch. Our supplement strategy represents a significant business model shift. What many people never realized about the company is that historically, in our peak year of $1.2 billion in annual revenue, fitness accounted for only 34% of that revenue, or about $400 million, while other revenue, driven primarily by supplements, accounted for $783 million.

Speaker #2: And the rest of our plans for the year. In fact, we launched the new P90X program in early February to a packed house of media and influencers in New York City, which will carry that launch momentum into the second quarter as we debut the P90X branded and at retail.

Speaker #2: Here's what's most meaningful about this supplement launch. Our supplement strategy represents a significant business model shift. What many people never realized about the company is that historically, in our peak year of $1.2 billion in annual revenue, fitness accounted for only 34% of that revenue, or about $400 million.

Speaker #2: While other revenue, driven primarily by supplements, accounted for $783 million. And our MLM model at that time required a network compensation structure that limited margin and pricing flexibility to really scale.

Carl Daikeler: Our MLM model at that time required a network compensation structure that limited margin and pricing flexibility to really scale. Now, without that obstacle, we'll soon offer our highly effective supplements under the P90X and Shakeology brands at $15 to 35 price points with healthy margins. That's unprecedented for us and significantly changes our economics and potential to really scale into the mass market. This shift in affordability fits well into our proven model of what we call the total solution that people need for healthy lifestyle change, which includes both fitness and nutrition. This approach to the total solution is one of the reasons our customers have always gotten such amazing healthy results at BODi. We've definitely seen that our best years were driven by this combination of effective supplements and fitness.

Speaker #2: Now, without that obstacle, we'll soon offer our highly effective supplements under the P90X and Shakeology brands at $15 to $35 price points with healthy margins.

Speaker #2: That's unprecedented for us. And significantly changes our economics and potential to really scale into the mass market. And this shift in affordability fits well into our proven model of what we call the total solution that people need for healthy lifestyle change, which includes both fitness and nutrition.

Speaker #2: This approach to the total solution is one of the reasons our customers have always gotten such amazing healthy results at Body. We've definitely seen that our best years were driven by this combination of effective supplements and fitness.

Speaker #2: But our data and analytics team has recently seen a growing trend where the cost of customer acquisition offering digital fitness first has steadily increased, while customer acquisition costs when offering nutrition first have actually decreased.

Carl Daikeler: Our data and analytics team has recently seen a growing trend where cost of customer acquisition offering digital fitness first has steadily increased, while customer acquisition cost when offering nutrition first has actually decreased. It makes sense too, because the nutrition supplement business has swelled to over 12 times the market size of digital fitness. We're taking all those observations built on the foundation of the power of the total solution of bundled fitness and nutrition, and now starting to leverage three of our most famous and successful brand names into this proven premise, starting with this combination of the new P90X Generation Next program and the new line of P90X supplements and beverages. The P90X brand already has an incredible 62% aided awareness score in consumer surveys, which gives us a massive competitive advantage in launching this nutrition line in all our sales channels, especially retail.

Speaker #2: It makes sense too, because the nutrition supplement business has swelled to over 12 times the market size of digital fitness. So we're taking all those observations, built on the foundation of the power of the total solution of bundled fitness and nutrition, and now starting to leverage three of our most famous and successful brand names into this proven premise, starting with this combination of the new P90X Generation Next program and the new line of P90X supplements and beverages.

Speaker #2: The P90X brand already has an incredible 62% aided awareness score in consumer surveys, which gives us a massive competitive advantage in launching this nutrition line in all our sales channels, especially retail.

Speaker #2: Likewise, we'll be advertising Shakeology direct to consumers, which, as we've mentioned in prior calls and as Mark said, Shakeology has already sold over a billion servings without ever being offered at retail.

Carl Daikeler: Likewise, we'll be advertising Shakeology direct to consumers, which as we've mentioned in prior calls and as Mark said, Shakeology has already sold over 1 billion servings without ever being offered at retail. The enthusiasm from major retailers for our Q2 Shakeology launch is confirming that this product is ready to scale past its legacy in the MLM. In late Q2 or early Q3, 2026, we'll be launching an irreverent energy beverage line under the Insanity brand, targeting a younger, more male-oriented demographic. We'll also be launching a science-backed performance energy beverage line to serve a broader male and female target customer under the P90X brand, both in a Southern California market test.

Speaker #2: So the enthusiasm from major retailers for our second quarter Shakeology launch is confirming that this product is ready to scale past its legacy in the MLM.

Speaker #2: And in late Q2 or early Q3 2026, we'll be launching an irreverent energy beverage line under the Insanity brand, targeting a younger, more male-oriented demographic.

Speaker #2: And we'll also be launching a science-backed performance energy beverage line to serve a broader male and female target customer under the P90X brand, both in a Southern California market test.

Speaker #2: Our goal is to read the performance of those new products in the test market, make any necessary modifications, and be ready for a national rollout of the Insanity and P90X energy drinks in 2027.

Carl Daikeler: Our goal is to read the performance of those new products in the test market, make any necessary modifications, and be ready for a national rollout of the Insanity and P90X energy drinks in 2027. In terms of marketing support, this is where it gets really interesting. Our D2C marketing model, which we've refined over nearly 30 years, is designed to be self-liquidating, meaning the advertising basically pays for itself through sales generated. Now that marketing spend for our nutritional lines will not only drive profitable direct sales, it will also drive traffic across retail, Amazon, affiliate channels, and through our customer database, which is already showing very promising signs of productivity with new supplement offerings.

Speaker #2: In terms of marketing support, this is where it gets really interesting. Our D2C marketing model, which we've refined over nearly 30 years, is designed to be self-liquidating—meaning the advertising-based lead pays for itself through sales generating.

Speaker #2: So now that marketing spend for our nutritional lines will not only drive profitable direct sales, it will also drive traffic across retail, Amazon, affiliate channels, and through our customer database, which has already shown very promising signs of productivity with new supplement offerings.

Speaker #2: And every one of those customers who enter the ecosystem with a nutrition purchase will get a free trial offer to join the fitness platform, which is a major value add and a competitive advantage in the supplement space.

Carl Daikeler: Every one of those customers who enter the ecosystem with a nutrition purchase will get a free trial offer to join the fitness platform, which is a major value add and a competitive advantage in the supplement space. This rising tide of supplement promotion with the value add of digital fitness will give us efficiencies that will float all ships in all channels. Again, the power of the total solution, which has driven customer results for almost 30 years, is alive and well. We're just accentuating that relationship of nutrition and fitness to take advantage of current tailwinds. As I mentioned last quarter, all of this will be supported by our transition to the Shopify e-commerce platform and its ease of checkout and high conversion metrics to maximize all this traffic starting in late March.

Speaker #2: So this rising tide of supplement promotion, with the value add of digital fitness, will give us efficiencies that will float all ships in all channels.

Speaker #2: Again, the power of the total solution, which has driven customer results for almost 30 years, is alive and well. We're just attenuating that relationship of nutrition and fitness to take advantage of current tailwinds.

Speaker #2: And as I mentioned last quarter, all of this will be supported by our transition to the Shopify e-commerce platform and its ease of checkout and high conversion metrics to maximize all this traffic starting in late March.

Speaker #2: So we're in a very strong position, with the agility of a startup thanks to our new operating efficiencies, combined with our portfolio of proven, well-known brands.

Carl Daikeler: We're in a very strong position with the agility of a startup, thanks to our new operating efficiencies, combined with our portfolio of proven, well-known brands and a customer database that took decades to build, all running on an incredibly efficient structure. With 9 quarters of positive EBITDA and our second consecutive quarter of positive net income since we went public in 2021, it's clear this turnaround now has some stability. As we execute our first full year with this completely new business model, the team is invigorated and hustling to maximize our momentum, responsibly deploying capital in the first half of 2026 and gradually ramping up into 2027. Okay, let's get the details on Q4 results and the 2025 full year performance from our CFO, Brad Ramberg. Brad?

Speaker #2: And a customer database that took decades to build, all running on an incredibly efficient structure. With nine quarters of positive EBITDA, and our second consecutive quarter of positive net income since we went public in 2021, it's clear this turnaround now has some stability.

Speaker #2: As we execute our first full year with this completely new business model, the team is invigorated and hustling to maximize our momentum, responsibly deploying capital in the first half of 2026 and gradually ramping up into 2027.

Speaker #2: Okay. So, let's get the details on Q4 results and the 2025 full-year performance from our CFO, Brad Ramberg. Brad? Thank you, Carl. And thank you, everyone, for joining the call today.

Brad Ramberg: Thank you, Carl, and thank you everyone for joining the call today. I will review our Q4 results and provide our outlook for Q1 2026. We continue to make significant progress on our transformation and have successfully re-architected our cost structure to drive operating leverage. For the quarter, we exceeded our guidance for net income and adjusted EBITDA while producing revenues that were above the midpoint of guidance. Before I get into the details of the quarter, I wanna note that the quarter includes a $2.2 million benefit from the reversal of a bonus accrual made in Q3, of which $1.9 million benefited operating expenses, and $300,000 benefited the cost of revenue, and the elimination of an additional planned $2.2 million bonus accrual in Q4 that was included in our guidance.

Speaker #2: I will review our Q4 results and provide our outlook for the first quarter of 2026. We continue to make significant progress on our transformation.

Speaker #2: And as we successfully re-architected our cost structure to drive operating leverage, for the quarter, we exceeded our guidance for net income and adjusted EBITDA, while producing revenues that were above the midpoint of guidance.

Speaker #2: Before I get into the details of the quarter, I want to note that the quarter includes a $2.2 million benefit from the reversal of a bonus accrual made in Q3, of which $1.9 million benefited operating expenses and $300,000 benefited the cost of revenue.

Speaker #2: And the elimination of an additional planned $2.2 million bonus accrual in Q4 that was included in our guidance. We generated our second consecutive quarter of net income and our ninth consecutive quarter of positive adjusted EBITDA.

Brad Ramberg: We generated our second consecutive quarter of net income and our ninth consecutive quarter of positive adjusted EBITDA. For the full year, we are proud that we generated operating income and adjusted net income both for the first time since going public in 2021, while also driving positive free cash flow. Now I'd like to provide more details about the quarter. Total revenues of $55.5 million declined 7.3% sequentially and declined 35.7% year-over-year, in line with our expectations as we continue our strategic transformation. Revenues continue to be impacted in the near term by our shift from a multi-level marketing platform to the omni-channel model. Consolidated Q4 gross margins were 74.5%, reflecting a decrease of 10 basis points sequentially, but an increase of 400 basis points compared to the prior year.

Speaker #2: For the full year, we are proud that we generated operating income and adjusted net income—both for the first time since going public in 2021—while also driving positive free cash flow.

Speaker #2: Now, I'd like to provide more details about the quarter. Total revenues of $55.5 million declined 7.3% sequentially and declined $35.7 million year over year, in line with our expectations.

Speaker #2: As we continue our strategic transformation, revenues continue to be impacted in the near term by our shift from a multi-level marketing platform to the omnichannel model.

Speaker #2: Consolidated Q4 gross margins were 74.5%, reflecting a decrease of 10 basis points sequentially, but an increase of 400 basis points compared to the prior year.

Speaker #2: We are pleased to report that consolidated gross margin remained at the high end of our target, underscoring our strong operational execution. Moving to digital and nutrition and other revenues, it should be noted that the year-over-year decline is heavily influenced by revenant revenue from the former MLM legacy business, which was shut down December 31, 2024.

Brad Ramberg: We are pleased to report the consolidated gross margin remained at the high end of our target, underscoring our strong operational execution. Moving to digital and nutrition and other revenues. It should be noted that the year-over-year decline is heavily influenced by recurring revenue from the former MLM legacy business, which was shut down 31 December 2024. Therefore, there's a component of the MLM legacy digital and nutrition revenue in the 2025 numbers, which prevents us from having a direct year-over-year comparison to what we are forecasting for Q1 2026. Digital revenue decreased 5.8% sequentially to $34.3 million and 31.9% year-over-year.

Speaker #2: Therefore, there's a component of the MLM legacy digital and nutrition revenue in the 2025 numbers, which prevents us from having a direct year-on-year comparison to what we were forecasting for Q1 2026.

Speaker #2: Digital revenue decreased 5.8% sequentially to $34.3 million, and 31.9% year over year. Digital revenues reflect continued pressure on our digital subscriptions, which decreased 3.3% quarter over quarter to approximately $870,000, and declined 18.7% compared to the same period a year ago.

Brad Ramberg: Digital revenues reflect continued pressure on our digital subscriptions, which decreased 3.3% quarter-over-quarter to approximately 870,000, and declined 18.7% compared to the same period a year ago. Nutrition and other revenue decreased 9.6% from the prior quarter to $21.2 million and decreased 39% year-over-year. Nutrition subscriptions increased 14.3% sequentially to approximately 80,000 and fell 11.1% year-over-year. Digital gross margin was 87.3%, decreasing 80 basis points sequentially, but up 140 basis points from prior year. Our digital gross margin was in line with our target. The continued strength in year-over-year gross margin was primarily due to a decrease in digital content amortization and depreciation due to more disciplined production and fixed asset spending.

Speaker #2: Nutrition and other revenue decreased 9.6% from the prior quarter to $21.2 million and decreased 39% year over year. Nutrition subscriptions increased 14.3% sequentially to approximately $80,000 and fell 11.1% year over year.

Speaker #2: Digital gross margin was 87.3%, decreasing 80 basis points sequentially but up 140 basis points from the prior year. Our digital gross margin was in line with our target.

Speaker #2: The continued strength in year-over-year gross margin was primarily due to a decrease in digital content amortization and depreciation, due to more disciplined production and fixed asset spending.

Speaker #2: Nutrition and other gross margin was 53.7%, flat sequentially and up 140 basis points versus last year. Nutrition gross margins exceeded our target. Excluding certain one-time benefits, the gross margin would have been 50.5%.

Brad Ramberg: Nutrition and other gross margin was 53.7%, flat sequentially and up 140 basis points versus last year. Nutrition gross margins exceeded our target. Excluding certain one-time benefits, the gross margin would have been 50.5%. Operating expenses for the quarter declined 16.4% sequentially and 64.6% year-over-year to $33.2 million. Note, the prior year included a $20 million impairment of goodwill. Selling and marketing expense as a percent of revenue increased 40 basis points over the prior quarter, but declined a significant 1,280 basis points year-over-year to 32.3%. This significant improvement over the prior year stems from eliminating partner compensation following our December 31, 2024 exit from the multi-level marketing channel.

Speaker #2: Operating expenses for the quarter declined 16.4% sequentially and 64.6% year over year to $33.2 million. Note the prior year included a $20 million impairment of goodwill.

Speaker #2: Selling and marketing expense as a percent of revenue increased 40 basis points over the prior quarter but declined a significant 1,280 basis points year over year to 32.3%.

Speaker #2: This significant improvement over the prior year stems from eliminating partner compensation following our December 31, 2024, exit from the multi-level marketing channel. Enterprise technology and development expense was 15.7% of revenue, down 170 basis points sequentially and $990 year-over-year.

Brad Ramberg: Enterprise technology and development expense was 15.7% of revenue, down 170 basis points sequentially and 990 basis points year-over-year, driven primarily by lower depreciation due to lower tech spend necessary to support our new business model. G&A was 11.8% of revenue, decreasing 510 basis points sequentially and 160 basis points from the prior year. The sequential improvement reflects reduced personnel expenses from prior restructurings and lower professional fees. This disciplined expense management delivered strong profitability. Operating income for the quarter was $8.2 million, compared to a loss of $32.9 million in the prior year, marking our second consecutive quarter of operating income.

Speaker #2: Driven primarily by lower depreciation due to lower tech spend necessary to support our new business model. G&A was 11.8% of revenue, decreasing 510 basis points sequentially and 160 basis points from the prior year.

Speaker #2: The sequential improvement reflects reduced personnel expenses from prior restructurings and lower professional fees. This disciplined expense management delivered strong profitability. Operating income for the quarter was $8.2 million, compared to a loss of $32.9 million in the prior year, marking our second consecutive quarter of operating income.

Speaker #2: Q4 2025 net income was $5.2 million; our second consecutive quarter of net income, compared to a net loss of $34.6 million last year. For the full year, net loss was $2.9 million versus a $71.6 million net loss a year ago.

Brad Ramberg: Q4 2025 net income was $5.2 million, our second consecutive quarter of net income, compared to a net loss of $34.6 million last year. For the full year, net loss was $2.9 million, versus a $71.6 million net loss a year ago. Adjusted net income was $7.2 million for the quarter, versus a $4.7 million adjusted net loss in the prior year. For the full year, adjusted net income was $3.5 million, compared to a $31.2 million adjusted net loss last year. Adjusted EBITDA was $12.9 million, compared to $9.5 million sequentially and $8.7 million in the prior year, marking our ninth consecutive quarter of positive adjusted EBITDA.

Speaker #2: Adjusted net income was $7.2 million for the quarter, versus a $4.7 million adjusted net loss in the prior year. For the full year, adjusted net income was $3.5 million compared to a $31.2 million adjusted net loss last year.

Speaker #2: Adjusted EBITDA was $12.9 million, compared to $9.5 million sequentially and $8.7 million in the prior year, marking our ninth consecutive quarter of positive adjusted EBITDA.

Speaker #2: For the full year, adjusted EBITDA was $30.8 million versus $28.3 million in the prior year. As Mark discussed, in early January of '26, we executed an amendment for our ABL facility, which modified our covenants.

Brad Ramberg: For the full year, adjusted EBITDA was $30.8 million versus $28.3 million in the prior year. As Mark discussed, in early January 2026, we executed an amendment for our ABL facility, which modified our covenant. Most importantly, as long as our cash balance exceeds our extending debt principal by $4.6 million, our key covenants are not subject to testing. Our cash balance was $39 million compared to $33.9 million in the prior quarter and $20.2 million last year. Our net cash position is $15.4 million. Cash generated from operations for the full year was $21.8 million, compared to $2.6 million in the prior year. Free cash flow was $17.4 million, compared to -$2 million in the prior year. Now turning to our Q1 guidance.

Speaker #2: Most importantly, as long as our cash balance exceeds our extending debt principal by $4.6 million, our key covenants are not subject to testing.

Speaker #2: Our cash balance was $39.0 million, compared to $33.9 million in the prior quarter and $20.2 million last year. Our net cash position is $15.4 million.

Speaker #2: Cash generated from operations for the full year was $21.8 million compared to $2.6 million in the prior year, while free cash flow was $17.4 million compared to negative $2.0 million in the prior year.

Speaker #2: Now, turning to our first quarter guidance, while we are pleased with the execution of our transformation, I want to reiterate that we just completed the first year of our pivot away from the MLM model to our multi-channel marketing and distribution model.

Brad Ramberg: While we are pleased with the execution of our transformation, I want to reiterate that we just completed the first year of our pivot away from the MLM model to our multi-channel marketing and distribution model. Please keep in mind that this guidance should not be compared to Q1 2025, because Q1 2025 still had significant revenue recognized from the legacy MLM model. As discussed, we significantly lowered expenses in our revenue break-even point. This shift has opened new growth channels that we could not previously access, and we're very excited about the opportunities ahead. We now have a stronger balance sheet and a 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.

Speaker #2: Please keep in mind that this guidance should not be compared to Q1 2025, because Q1 2025 still had significant revenue recognized from the legacy MLM model.

Speaker #2: As discussed, we significantly lowered expenses in our revenue break-even point. This shift has opened new growth channels that we could not previously access, and we're very excited about the opportunities ahead.

Speaker #2: We now have a stronger balance sheet and a 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.

Speaker #2: As the tail of our legacy business winds down, we expect that the first time we will be able to do a year-over-year comparison of our new business model will be comparing Q3 2026 to Q3 2025.

Brad Ramberg: As the tail of our legacy business winds down, we expect that the first time we will be able to do a year-over-year comparison of our new business model will be comparing Q3 2026 to Q3 2025. We expect first quarter revenues to be in the range of $49 million to 54 million, net income to be in the range of negative $2 million to positive $1 million, and adjusted EBITDA to be in the range of $4 million to 7 million. The outlook for net income does not include the change in fair value of warrant liabilities as it is significantly impacted by the change in the company's stock price, which cannot be estimated. As we continue to transition to our new business model, we want to provide additional updates to help you contextualize changes in our new financial model.

Speaker #2: We expect first quarter revenues to be in the range of $49 million to $54 million; net income to be in the range of negative $2 million to positive $1 million; and adjusted EBITDA to be in the range of $4 million to $7 million.

Speaker #2: The outlook for net income does not include the change in fair value of warrant liabilities, as it is significantly impacted by the change in the company's stock price, which cannot be estimated.

Speaker #2: As we continue to transition to our new business model, we want to provide additional updates to help you contextualize changes in our new financial model.

Speaker #2: For the quarter, we anticipate revenues to approximate 63% digital and 37% nutrition and other. However, in line with the strategies we articulated on this call, we currently expect a notable shift by the end of '26 to a much larger percentage of our business being in nutrition and other, and the attendant margins that come along with it.

Brad Ramberg: For the quarter, we anticipate revenues to approximate 63% digital and 37% nutrition and other. However, in line with the strategies we articulated on this call, we currently expect a notable shift by the end of 2026 to a much larger percentage of our business being in nutrition and other, and the attendant margins that come along with it. For the quarter, our digital growth margin target is expected to be in the range of 86% to 88%. Our nutrition and other growth margin target is forecasted to be in the 44% to 50% range, which is in line with our volume expectations and certain promotional efforts planned. Our total growth margin target is expected to be in the 69% to 73% range. Over the last two years, we've made considerable progress against our business transformation.

Speaker #2: For the quarter, our digital gross margin target is expected to be in the range of 86% to 88%. Our nutrition and other gross margin target is forecasted to be in the 44% to 50% range, which is in line with our volume expectations and certain promotional efforts planned.

Speaker #2: Our total gross margin target is expected to be in the 69% to 73% range. Over the last two years, we've made considerable progress against our business transformation.

Speaker #2: We've significantly lowered our break-even point to strengthen our financial position, putting us on a solid financial foundation to execute against our growth initiatives that will drive long-term shareholder value.

Brad Ramberg: We've significantly lowered our break-even point and strengthened our financial position, putting us on a solid financial foundation to execute against our growth initiatives that will drive long-term shareholder value. I look forward to updating you on our progress in our next earnings call. I'll now turn the call back over to Mark for closing remarks.

Speaker #2: I look forward to updating you on our progress in our next earnings call. I'll now turn the call back over to Mark for closing remarks.

Speaker #1: Thanks very much, Brad, and thanks to everybody for attending today. Tamiya, we'll open it up now to questions. There should be some people in the queue.

Mark Goldston: Thanks very much, Brad, and thanks for everybody for attending today. Camille will open it up now to questions. There should be some people in the queue. She will take the questions as they appear, and then at the conclusion of the questions, I'll come back on for some closing remarks.

Speaker #1: She will take the questions as they appear, and then, at the conclusion of the questions, I'll come back on for some closing remarks.

Speaker #3: Thank you. We will now begin with the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad.

Operator: Thank you. We will now begin with the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. The first question comes from Susan Anderson with Canaccord Genuity. You may proceed.

Operator: Thank you. We will now begin with the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. The first question comes from Susan Anderson with Canaccord Genuity. You may proceed.

Speaker #3: The first question comes from Susan Anderson with Canaccord Annuity. You may proceed.

Speaker #4: Hi, good afternoon, Alec Legon for Susan. Thanks for taking our question. You guys have done a great job lowering the break-even point over the last few years.

Alex Legg: Hi, good afternoon. Alex Legg on for Susan. Thanks for taking our question. You guys have done a great job lowering the break-even point over the last few years. I guess, what's next for management's priorities? If you had to kind of rank them, is it still a focus on driving profitability or maybe starting to shift some of that towards returning to growth through all of the new launches and innovations planned for this year and into 2027? Thank you.

Alec Legg: Hi, good afternoon. Alex Legg on for Susan. Thanks for taking our question. You guys have done a great job lowering the break-even point over the last few years. I guess, what's next for management's priorities? If you had to kind of rank them, is it still a focus on driving profitability or maybe starting to shift some of that towards returning to growth through all of the new launches and innovations planned for this year and into 2027? Thank you.

Speaker #4: I guess what's next for management's priorities, if you had to kind of rank them? Is it still a focus on driving profitability, or maybe starting to shift some of that towards returning to growth through all of the new launches and innovations planned for this year?

Speaker #4: And in 2027? Thank you.

Speaker #1: Alex, great question. This is Mark. Listen, we've worked so hard to re-architect the company to be focused on profitability that that's just not something we're probably ever going to take out of our primary focus.

Mark Goldston: Alex, great question. This is Mark Goldston. You know, listen, we worked so hard to rearchitect the company to be focused on profitability that that's just not something we're probably ever gonna take out of our primary focus. That being said, this innovation pipeline which we articulated is pretty fertile. The beauty is a lot of what you're gonna see, I believe, at this point, is a reallocation of the marketing spend to the newer shiny new initiatives. Rather than making a large increase in the amount of the marketing spend, we're just gonna basically redeploy that capital into what we believe is the highest and best use. You'll see an increased focus, as Carl Daikeler alluded to, on nutrition. Typically with us, nutrition has a much lower customer acquisition cost and gives us a great yield.

Speaker #1: That being said, this innovation pipeline, which we articulated, is pretty fertile. The beauty is, a lot of what you're going to see, I believe, at this point, is a reallocation of the marketing spend to the newer, shiny-pin initiatives.

Speaker #1: So rather than making a large increase in the amount of the marketing spend, we're just going to basically redeploy that capital into what we believe is the highest and best use, and you'll see an increased focus, as Carl alluded to, on nutrition.

Speaker #1: And typically, with us, nutrition has a much lower customer acquisition cost and gives us a great yield, and it also gives us a migratory path over to the digital fitness business.

Mark Goldston: It also gives us a migratory path over to the digital fitness business. I think that the takeaway is financial discipline will never go away. People are enjoying the fruits of our efforts in terms of watching what's happened to this company financially. People wanna stay on that. It's kind of like getting yourself fit. You know, you don't wanna lose your newfound fitness. We have a lot of exciting things that we can invest in. Look, if we see green shoots and the profitability allows for it, would we do additional investment spending? Sure. For right now, we think we've got an ample media budget that if we allocate it against the right news, will bear fruit.

Speaker #1: So I think that the takeaway is financial discipline will never go away. People are enjoying the fruits of our efforts in terms of watching what's happened to this company financially.

Speaker #1: So people want to stay on that. It's kind of like getting yourself fit—you don't want to lose your newfound fitness. But we have a lot of exciting things that we can invest in.

Speaker #1: And look, if we see green shoots, and the profitability allows for it, would we do additional investment spending? Sure. But for right now, we think we've got an ample media budget that, if we allocate it against the right news, will bear fruit.

Speaker #4: Thanks, Mark. And then just to follow up, I know still it's about a month in, but I guess any early reads on the P90X launch—has it brought in new customers to the platform, reactivated old ones?

Alex Legg: Thanks, Mark. Just to follow up, I know it's about a month in, but I guess any early reads on the P90X launch. Has it brought in new customers to the platform, reactivated old ones? I know you talked about the reactivation campaign or maybe a good mix of both.

Alec Legg: Thanks, Mark. Just to follow up, I know it's about a month in, but I guess any early reads on the P90X launch. Has it brought in new customers to the platform, reactivated old ones? I know you talked about the reactivation campaign or maybe a good mix of both.

Speaker #4: I know you talked about the reactivation campaign, or maybe a good mix of both.

Speaker #1: Carl?

Mark Goldston: Carl?

Speaker #2: Yeah, we're very pleased with the reaction from our customers and subscribers to the release. It's obviously a brand new program that is paying homage to the legacy that was created 15 years ago when we launched the original P90X, did this big activation in New York, and have had millions of impressions both in earned media and paid media.

Carl Daikeler: Yeah. We're very pleased with the reaction from our customers and subscribers to the release. It's obviously a brand new program that is paying homage to the legacy that was created 15 years ago when we launched the original P90X. We did this big activation in New York and have had millions of impressions both in earned media and paid media. We're seeing solid uptake within our subscriber base of the program, but we're also, quite honestly, just a month into the release of it. This first wave of customers who are doing it, they're gonna be like the next wave of proof.

Speaker #2: We're seeing solid uptake within our subscriber base of the program, but we're also, quite honestly, just a month into the release of it. So this first wave of customers who are doing it—they're going to be like the next wave of proof.

Speaker #2: So we'll be surfing this launch for probably the next 12 months as we continue to gather success stories and demonstrate to both our current subscribers and new prospective subscribers that this program works—that people, not just extreme athletes or extreme fitness people, can do it, but beginners can do it with a modifier, and people who are just trying to get back their athletic body from when they were in high school and college.

Carl Daikeler: We'll be surfing this launch for probably the next 12 months as we continue to gather success stories and demonstrate to both our current subscribers and new prospective subscribers that this program works, that most people, not just extreme athletes or extreme fitness people can do it, but beginners can do it with a modifier and, people who are just trying to get back in their athletic body from when they were in high school and college. The initial indications are good, but it's also early days, and this next wave of success stories are what sort of propel the momentum of a new program like this.

Speaker #2: So the initial indications are good, but it's also early days, and this next wave of success stories are what sort of propel the momentum of a new program like this.

Speaker #4: Thanks, Carl. I'll turn it back.

Alex Legg: Thanks, Carl. I'll turn it back.

Alec Legg: Thanks, Carl. I'll turn it back.

Speaker #2: Thanks, Alex.

Carl Daikeler: Thanks, Alex.

Speaker #1: Thanks, Alex.

Mark Goldston: Thanks, Alex.

Speaker #3: Thank you. The next question comes from Eric Deloris with Craig Hallum. You may proceed.

Operator: Thank you. The next question comes from Eric Des Lauriers with Craig-Hallum. You may proceed.

Speaker #4: Great, thanks for taking my questions, and congrats on another very impressive quarter and impressive year here. All right, first question is just a bit of a follow-up to the early read on P90X.

Eric Des Lauriers: Great. Thanks for taking my questions, and congrats on another very impressive quarter and impressive year here.

Carl Daikeler: Thank you, Eric.

Eric Des Lauriers: My first question is just a, you know, just a bit of a follow-up to the early read on P90X. Just, I wonder if you have an early read on the 10 Minute BODi, you know, consumer response thus far. On this note, if you could just kinda clarify, I heard you mention 8%, I think, of your customers are essentially doing this sort of, I think you called it microdose, you know, kinda 10-minute fitness programs on your platform. Was that all 10 Minute BODi, or are there other sort of microdose fitness programs that you have on your platform as well?

Speaker #4: Just wondering if you have an early read on the 10-Minute Body consumer response thus far. And then, on this note, if you could just kind of clarify—I heard you mention 8%, I think, of your customers are essentially doing this sort of, I think you called it, microdose kind of 10-minute fitness programs.

Speaker #4: On your platform, was that all 10-Minute Body? Are there other sort of microdose fitness programs that you're having on your platform as well?

Speaker #2: Thanks for the question, Eric. Yeah, very pleased with the response to 10-Minute Body. Again, these things start to grow, right? You start to learn what channels work best, what media platforms work best, what creative messaging works best.

Carl Daikeler: Thanks for the question, Eric. Yeah. Very pleased with the response to 10 Minute BODi. Again, these things, they start to grow, right? You start to learn what channels work best, what media platforms work best, what creative messaging works best. Yes, it's actually not 8% of our subscribers are using it, but 8% of the viewership for the entire platform is coming from 10-minute or less microdose fitness workouts. We've got 5-minute workouts, 8-minute workouts, and that's all part of this 10 Minute BODi subscription, which as you recall, the exciting thing about the subscription is it gives us the lever that, you know, we saw Planet Fitness do so well with, and that's high volume, low price.

Speaker #2: And yes, it's actually not that 8% of our subscribers are using it, but 8% of the viewership for the entire platform is coming from 10-minute or less microdose fitness workouts.

Speaker #2: So we've got 5-minute workouts, 8-minute workouts, and that's all part of this 10-Minute Body subscription, which, as you recall, the exciting thing about the subscription is it gives us the lever that we saw Planet Fitness do so well with—and that's high volume, low price.

Speaker #2: So we're advertising a 10-day free trial of our full microdose fitness catalog, which then rolls into a $10-a-month subscription. However, people coming in to subscribe or take that 10-day free trial also then get offered the $19 full subscription.

Carl Daikeler: We're advertising 10 days free trial of our full microdose fitness catalog, which then rolls into a $10-a-month subscription. However, people coming in to subscribe or take that 10-day free trial also then get offered the $19 full subscription. The thing I'm most pleased about, I won't get too specific, but I will say I'm quite pleased with what the conversion is of people who come in with the intent to buy the $10-a-month subscription, who actually then level up to the full subscription, which is a similar model that we've seen offline that grew Planet Fitness so well, and we're starting to see that same dynamic in this virtual fitness environment. Again, still early days, just launched it around Christmas time. But we're seeing strong uptake, and it's frankly helping us do exactly what we said.

Speaker #2: And the thing I'm most pleased about—I won't get too specific—but I will say, I'm quite pleased with what the conversion is of people who come in with the intent to buy the $10-a-month subscription, who actually then level up to the full subscription, which is a similar model that we've seen offline that grew Planet Fitness so well.

Speaker #2: And we're starting to see that same dynamic in this virtual fitness environment. So again, still early days—just launched it around Christmastime. But we're seeing strong uptake, and it's frankly helping us do exactly what we said, and that is reach the 185 million people who are overweight or obese, not inclined to do a full program, definitely not going to join a gym, to do a 10-minute workout program, but are just looking for a way to fit it in their schedule.

Carl Daikeler: That is to reach 185 million people who are overweight or obese, not inclined to do a full program, definitely not gonna join a gym to do a 10-minute workout program, but are just looking for a way to fit it in their schedule. We think this really has some great running room, particularly in conjunction with the focus on nutrition. That combination is gonna be a total solution that helps us reach this huge TAM. Good signs, and we think good runway ahead of us.

Speaker #2: And we think this really has some great running room, particularly in conjunction with the focus on nutrition. So that combination is going to be a total solution that helps us reach this huge TAM.

Speaker #2: So, good signs, and we think good runway ahead of us.

Speaker #1: You know, Eric, it's Mark. What's interesting is, especially on a 10-Minute Body, because we are going after the 185 million people who largely don't exercise.

Mark Goldston: You know, Eric. This is Mark. What's interesting is, especially on the 10 Minute BODi, because we are going after the 185 million people who largely don't exercise. Really the first thing you have to do is build awareness, then you gotta build reception, then you have to build exploration into the program, and then build conversion. Very different when you're marketing a fitness program to a fitness audience. When you're marketing a fitness program to an audience that does not partake in fitness, your gestation period is longer, and normally would be. Because they have to first be aware of it, then they got to look into it, decide if they want to do it, and then convert. We've known that all the way through.

Speaker #1: So really, the first thing you have to do is build awareness. Then you’ve got to build reception. Then you have to build exploration into the program.

Speaker #1: And then build conversion. Very different when you're marketing a fitness program to a fitness audience. But when you're marketing a fitness program to an audience that does not partake in fitness, your gestation period is longer than it normally would be, because they have to first be aware of it, then they’ve got to look into it, decide if they want to do it, and then convert.

Speaker #1: So we've known that all the way through. This is a long-term play by the company to make sure that we've got a product offering to this massive TAM of people who have previously exhibited behavior that would say they don't want to do 45- to 90-minute workouts.

Mark Goldston: This is a long-term play by the company to make sure that we've got a product offering to this massive TAM of people who have previously exhibited behavior that would say they don't want to do 45- to 90-minute workouts. That's for the people who are already in the fitness business.

Speaker #1: That's for the people who are already in the fitness business.

Speaker #4: That's all very helpful, and it sounds like you guys have done a great job thus far on this sort of different or new marketing approach.

Eric Des Lauriers: That's all very helpful and sounds like, you guys have done a great job thus far on this, sort of, different or new, marketing approach. I mean, it sounds like, a very great uptake already. Congrats on the initial success and excited to see, what's to come. My next question is, on the nutritional, brick-and-mortar rollout. First, I mean, a huge congrats on, announcing Sprouts. I mean, you know, what an excellent first customer-

Speaker #4: I mean, it sounds like very great uptake already, so congrats on the initial success, and excited to see what's to come. My next question is on the nutritional brick-and-mortar rollout first.

Speaker #4: I mean, a huge congrats on announcing Sprouts. I mean, what an excellent first customer to be able to announce. Just wondering if you could delve in a bit deeper, to the extent that you're able to share, how the conversations between other retailers and Advantage Solutions are going thus far.

Mark Goldston: Yeah.

Eric Des Lauriers: Just wondering if you could delve in a bit deeper to the extent that you're able to share how the conversations between other retailers and Advantage Solutions are going thus far, and if we should think of any other help in terms of channel penetration. Like, should we continue to think of grocery as being the initial channel that we should look for these early wins? Or just how broad are these, you know, early conversations going with retailers? Thank you.

Speaker #4: And if we should think of any other help in terms of channel penetration, should we continue to think of grocery as being the initial channel that we should look for for these early wins?

Speaker #4: Or I guess just how broad are these early conversations going with retailers? Thank you.

Mark Goldston: Yeah. We have sent out, I mean, dozens of what are called sample sets, which is when the brokers go and present this to the buyers, if the buyers have interest, they request what's called a sample set so they can actually see the product. The way that works is they then take that to a buying committee, which then makes a decision, puts it into a planogram, and gives you a target date to get in the store. We right now, through Advantage, have a lot of these sets out to people who are going through the quote review process. Yes, a lot of the initial will be in the grocery channel. Shakeology going into Sprouts is a big deal.

Speaker #2: Yeah, so we have sent out, I mean, dozens of what are called sample sets, which is when the brokers go and present this to the buyers.

Speaker #2: If the buyers have interest, they request what's called a sample set, which they can actually see the product. And then the way that works is, they then take that to a buying committee, which then makes a decision, puts it into a planogram, and gives you a target date to get in the store.

Speaker #2: So, we right now, through Advantage, have a lot of these sets out to people who are going through the review process. And yes, a lot of the initial will be in the grocery channel—Shakeology going into Sprouts, a big deal.

Speaker #2: We just heard today, I can't share it because I don't have anything in writing yet, but we did hear today from our nutrition division that there is a multi-hundred store chain - can't say the trade class - who wants to put in the entire Shakeology line, all SKUs.

Mark Goldston: We just heard today. I can't share it because I don't have anything in writing yet, but we did hear today from our nutrition division that there is a multi-hundred store chain, can't say the trade class, who wants to put in the entire Shakeology line, all SKUs. Again, this is gonna be a momentum that's gonna build throughout, you know, Q2, as we talked about. We will be in store in Sprouts, it looks like in May, which is great. As we get into Q3, these buying committees that receive these sample sets, who hopefully will have made positive decisions to put the product in for both P90X and Shakeology, will start to bear fruit.

Speaker #2: So again, this is going to be a momentum that's going to build throughout Q2, as we talked about. We will be in store in Sprouts, it looks like, in May, which is great.

Speaker #2: And then, as we get into Q3, these buying committees that receive these sample sets—who hopefully will have made positive decisions to put the product in for both P90X and Shakeology—will start to bear fruit.

Speaker #2: Remember, though, we're launching the new Shopify platform in a couple of weeks for Body.com. And that's when the new P90X and the new Shakeology form factor will be available direct to consumer.

Mark Goldston: Remember, though, we're launching the new Shopify platform in a couple weeks for BODi.com, and that's when the new P90X and the new Shakeology form factor will be available direct to consumer, both to our current users in our database, our former users, and people show up at the site. The DTC business for P90X supplements and Shakeology will lead the brick-and-mortar rollout just from a timing standpoint. We'll start marketing it using our various ascendant media tools at the end of April and into May.

Speaker #2: Both through our current users and our database, our former users, and people who show up at the site. So the DTC business for P90X supplements and Shakeology will lead the brick-and-mortar rollout from a timing standpoint.

Speaker #2: And then we'll start marketing it using our various and Century Media tools at the end of April and into May.

Speaker #4: That's all very helpful, and very encouraging. Congrats again on all the progress so far. Thanks.

Eric Des Lauriers: That's all very helpful and, very encouraging. Congrats again on all the progress so far. Thanks.

Speaker #2: Thanks, Eric. Appreciate it.

Mark Goldston: Thanks, Eric. Appreciate it.

Speaker #3: Thank you. The following comes from Michael Kupinski with Noble Capital Markets. You may proceed.

Operator: Thank you. The following comes from Michael Kupinski with Noble Capital Markets. You may proceed.

Speaker #1: Thank you for taking my questions, and congratulations on an excellent print. Yes, I just want to follow up—exciting news on the Shakeology and the Sprout supermarkets.

Michael Kupinski: Thank you for taking my questions, and congratulations on an excellent print. I just wanna follow up. Exciting news on the Shakeology and the Sprouts supermarkets. I was just wondering how many stores will that include? Is it all 484 stores beginning in May?

Speaker #1: I was just wondering, how many stores will that include? Is it all 484 stores beginning in May?

Speaker #2: No, it won't. It'll be a component—a meaningful component—but it'll be a component of that.

Mark Goldston: No, it won't. It'll be a meaningful component, but it'll be a component of that.

Speaker #1: Gotcha. And then, in terms of the fact that your implication in terms of Q3 kind of showing revenue growth, can you kind of just break out what you anticipate that you will achieve by then?

Michael Kupinski: Gotcha. Then in terms of the fact that your implication in terms of Q3 kind of showing revenue growth, can you kind of just break out for us in terms of your thoughts of what you anticipate that you will achieve by then? I mean, are you anticipating that?

Speaker #1: I mean, are you anticipating that, like, for instance, will you be in all 484 stores with the Shakeology? Just kind of lay out the timeline, maybe, of what you anticipate to kind of see in delivering the revenue growth.

Mark Goldston: Yeah.

Michael Kupinski: Like for instance, will you be in all 484 stores with the Shakeology? You know, just kind of lay out the timeline maybe of what you anticipate to kind of see in delivering the revenue growth.

Speaker #2: Yeah, so just to be clear, when Brad talked about this, he mentioned that Q3 of 2026 will be the first quarter where you can do a clean year-on-year comparison, and then hopefully we can report on the progress of the traction of the items from our Innovation Pipeline.

Mark Goldston: Yeah. Just to be clear, when Brad talked about this, he talked about that Q3 of 2026 will be the first quarter where you can do a clean year-on-year comparison, and then hopefully we can then report on the progress and the traction of the items from our innovation pipeline. He did not say and did not make a projection that we will grow in that quarter because that would be giving guidance beyond the quarter in front of us, which of course we don't do. Not to say that it won't grow, but we're not making a projection about growth for Q3. Logically for Sprouts, it's unlikely that you will be in those stores and then three months later go to the whole chain. It probably doesn't work that way.

Speaker #2: He did not say, and did not make a projection, that we will grow in that quarter, because that would be giving guidance beyond the quarter in front of us—which, of course, we don't do.

Speaker #2: So, not to say that it won't grow, but we're not making a projection about growth for Q3. So logically, for Sprouts, it's unlikely that you will be in those stores and then, three months later, go to the whole chain.

Speaker #2: It probably doesn't work that way. I'm going to read the component of stores that you're in, which is a meaningful number. And then, at some point, yes, you will probably go chain-wide.

Mark Goldston: They're gonna read the component of stores that you're in, which is a meaningful number. At some point, yes, you will probably go chain-wide. It usually doesn't happen in a 2 or 3-month period. The other retailers, we believe, Michael, will have started to show that we're in the store on the shelf with both P90X and Shakeology by Q3, and we'll start to be able to read, one, how much incremental business are we doing DTC because of the advent of these new products, two, are we getting a better penetration rate with our digital subscriber base? 'Cause right now, as you know, Michael, it's less than 10% of our digital fitness subscribers also use our nutrition. There's no way that only 10% of those people are using anyone's nutrition, but they're only using ours.

Speaker #2: Usually, it doesn't happen in a two- or three-month period. And then the other retailers, we believe, Michael, will have started to show that we're in the store, on the shelf, with both P90X and Shakeology by Q3.

Speaker #2: And we'll start to be able to read, one, how much incremental business are we doing DTC because of the advent of these new products.

Speaker #2: Two, are we getting a better penetration rate with our digital subscriber base? Because right now, as you know, Michael, it's less than 10% of our digital fitness subscribers who also use our nutrition.

Speaker #2: There's no way that only 10% of those people are using anyone's nutrition. But they're only using ours. That's largely because we were so formerly hamstrung by the pricing strata of the MLM, that we were selling $50 to $130 products in nutrition today.

Mark Goldston: That's largely because we were so formerly hamstrung by the pricing strata of the MLM that we were selling $50 to $130 products in nutrition. Today, the P90X line is $15 to $35, and the new Shakeology formula, in fact, is $35, $34.99. We're in a whole different ballgame in terms of trying to get cross-pollination, trying to get new people who land the site, and trying to get the 8 million former BODi members, probably $1 billion to $1.5 billion of former nutritional revenue is in there, to try to get them to now look at these new products. We think the confluence of all of these spokes on the wheel will start to show in Q3 and into Q4.

Speaker #2: The P90X line is $15 to $35, and the new Shakeology form factor is $35, $34.99. So we're in a whole different ballgame in terms of trying to get cross-pollination, trying to get new people who land on the site, and trying to get the 8 million former Body members—probably a billion to a billion and a half dollars of former nutritional revenue is in there—to try to get them to now look at these new products.

Speaker #2: So, we think the confluence of all of these spokes on the wheel will start to show in Q3 and into Q4. And if that were to be successful, then that would put us in a position where you're comparing us clean to clean, year-on-year, and hopefully that would show some green shoots.

Mark Goldston: If that were to be successful, then that would put us in a position where you're comparing us clean to clean year on year, and hopefully, that would show some green shoots, which would be great.

Speaker #2: Which would be great.

Speaker #1: And thanks for that clarification in the color. I'm asking this next question because I get this from shareholders. How relevant is the Beachbody brand to the younger fitness consumers today?

Michael Kupinski: Thanks for that clarification and the color. I'm asking the next question because I get this from shareholders. How relevant is the Beachbody brand to the younger fitness consumers today, and especially as you plan to roll out new products targeting the younger demo? Just kind of give us some clarification there.

Speaker #1: And especially, as you plan to roll out new products targeting the younger demo, just kind of give us some clarification there.

Speaker #2: I mean, listen, it's a great question. The reality of it is, Beachbody and now BODi are authentication brand names. So, they're not primary destination brand names.

Mark Goldston: I mean, listen, it's a great question. The reality of it is Beachbody, and now BODi, are authentication brand names. So they're not primary destination brand names, they're authentication brand names. So the Shakeology carries the day, the P90X carries the day, the Insanity carries the day. What we have done historically is use the Beachbody name because of its history to provide an aura of efficacy that we now have with BODi, because we think BODi is more suited to the current world and the current environment that we're in, one. Two, as we wanna branch out into nutrition and as we wanna branch out into the people who don't heavily exercise, having a company called BODi with a fresh perspective is a far better tool than communicating that everybody who uses our products is after six-pack abs and big biceps.

Speaker #2: They're authentication brand names. So the Shakeology carries the day, the P90X carries the day, the Insanity carries the day. What we have done historically is use the Beachbody name, because of its history, to provide an aura of efficacy that we now have with BODi.

Speaker #2: Because we think Body is more suited to the current world and the current environment that we're in—one. And two, as we want to branch out into nutrition, and as we want to branch out into people who don't heavily exercise, having a company called Body, with a fresh perspective, is a far better tool than communicating that everybody who uses our products is after six-pack abs and big biceps.

Speaker #2: Not that we don't have those products, but our PAM is far greater with the broader BODY name. And you're going to see we're working on a concept I mentioned in my prepared remarks, where we may take a lot of our existing nutritional products—not P90X, not Shakeology—and put them under a BODY brand name umbrella with dynamic packaging, etc.

Mark Goldston: Not that we don't have those products, but our TAM is far greater with the broader BODi name. You're gonna see we're working on a concept I mentioned in my prepared remarks, where we may take a lot of our existing nutritional products, not P90X, not Shakeology, and put them under a BODi brand name umbrella with dynamic packaging, et cetera, that we could then launch and further entrench the BODi brand name and take advantage of the history of the company. Carl, do you have anything to add to that?

Speaker #2: …that we could then launch and further entrench the BODY brand name and take advantage of the history of the company. Carl, do you ever want to add to that?

Carl Daikeler: I'll add one little side anecdotal proof point that the underlying brands are really what attract the customer. At this activation event for the launch of P90X Generation Next, I was shocked at the number of 20-something influencers who came up to me and told me that they watched their parents succeed and maybe have the best results and be in the best shape of their adult lives while these kids were growing up. They're in grade school. Now this was their chance to participate in an extreme fitness program that they can do at home. The trainer, Aisha, appeals to this 20-something, 30-something-year-old who's looking for extreme results that are very convenient right at home.

Speaker #3: I'll add one little side anecdotal proof point that the underlying brands are really what attract the customer. So, at this activation event for the launch of P90X Generation Next, I was shocked at the number of 20-something influencers who came up to me and told me that they watched their parents succeed—and maybe had the best results, being in the best shape of their adult lives, while these kids were growing up.

Speaker #3: They're in grade school, and now this was their chance to participate in a pro and extreme fitness program that they can do at home.

Speaker #3: And the trainer was a share appeal to this 20-something, 30-something-year-old who's looking for extreme results that are very convenient right at home. On the other side of that, we just got finished shooting some 10-minute body workouts that are designed for people who are 50, 60-plus.

Carl Daikeler: On the other side of that, we just got finished shooting some workouts, 10-minute BODi workouts, that are designed for people who are 50, 60 plus. We get to attract the demographic under the overarching brand, the brand that stands for holistic fitness and health. We get to attract the demographic based on the content and the nutritional solution that we pair it with. That's what gives the company incredible flexibility. That's the beauty of content, is we can morph the target based on what we create rather than perhaps an equipment or brick-and-mortar type of strategy. That gives us great flexibility and breadth.

Speaker #3: So, we get to attract the demographic under the overarching brand—the brand that stands for holistic fitness and health. We get to attract the demographic based on the content and the nutritional solution that we pair it with.

Speaker #3: And that's what gives the company incredible flexibility. That's the beauty of content— we can morph the target based on what we create, rather than perhaps an equipment or brick-and-mortar type of strategy.

Speaker #3: And that gives us great flexibility and breadth.

Speaker #1: But you'll see us, Michael, going forward. You'll see us using the Body brand name more in an authentication vein to help build its awareness of these high-awareness products that we're marketing.

Mark Goldston: You'll see us, Michael, going forward, you'll see us using the BODi brand name more in a, in an authentication vein to help build its awareness of these high-awareness products that we're marketing. We're definitely going to make a transitional focus to make sure that the BODi brand name raises its awareness and can take advantage of the legacy of the prior Beachbody company in terms of being an expert coming to the marketplace.

Speaker #1: So we're definitely going to make a transitional focus to make sure that the BODY brand name raises its awareness and can take advantage of the legacy of the prior Beachbody company, in terms of being an expert coming to the marketplace.

Speaker #4: That's terrific. That was extremely helpful. Thank you very much.

Michael Kupinski: Terrific. That was extremely helpful. Thank you very much.

Speaker #2: Thank you, Michael.

Mark Goldston: Thank you, Michael.

Speaker #5: Thank you. The next question comes from George Kelly with Roth Capital Partners. You may proceed.

Operator: Thank you. Next question comes from George Kelly with ROTH Capital Partners. You may proceed.

Speaker #6: Hey, everyone. Thanks for taking my questions. First, just an accounting question on Q4 for Edit. I think I just wanted to make sure I had it right.

George Kelly: Hey, everyone. Thanks for taking my questions. First, just an accounting question on Q4. Grant, I think I just wanted to make sure I had it right. There was a $2.2 million reversal that benefited the OpEx lines you gave. I guess there was a small component in COGS as well. Then there was an additional $2.2 million that was baked into guidance. Effectively, it was a $4.4 million benefit to guidance. Did I just repeat that correctly?

Speaker #6: There was a $2.2 million reversal that benefited the OpEx lines. You gave—I guess there was a small component in COGS as well. And then there was an additional $2.2 million that was baked into guidance.

Speaker #6: So, effectively, it was a $4.4 million benefit to guidance. Did I just repeat that correctly?

Speaker #7: Hi, George. Yes, this is Brad. You did repeat that correctly. That is right.

Mark Goldston: Hi, George. Yes, this is Brad. You did repeat that correctly. That is right.

Brad Ramberg: Hi, George. Yes, this is Brad. You did repeat that correctly. That is right.

Speaker #6: Okay, excellent. Thank you. And then, second question: there was a lot of discussion in the prepared remarks about you having an opportunity to adjust pricing, and you went through the new P90X pricing, as well as Shakeology at the different form factor.

George Kelly: Okay, excellent. Thank you. Second question. There was a lot of discussion in the prepared remarks just about you having an opportunity to sort of adjust pricing, and you went through the new P90X pricing stuff in Shakeology at the different form factor. Within Shakeology, you know, on a per serving basis, Shakeology, like, the pricing is still pretty elevated. I'm wondering if there's a point over the next year or so where you would contemplate just lowering, you know, once maybe your retail business is developed or I'm not sure what it would take, but might you do more of a per serving pricing shift at Shakeology?

Speaker #6: Within Shake, on a per-serving basis, Shakeology—like, the pricing is still pretty elevated. So I’m wondering if there’s a point over the next year or so where you would contemplate just lowering once maybe your retail business has developed, or—I’m not sure what it would take—but might you do more of a per-serving pricing shift at Shakeology?

Mark Goldston: That's a great question, George. I would say the following. Our per serving, our per serving price today on the 7-serve is about $4.99, something around just under $5. We are positioned as you know, because we've got these 100 different ingredients and all the superfood ingredients in addition to protein. We're positioned as a premium product because we give you all of these extra benefits initially. We wanna be priced at the upper end within that marketplace, whereas the pure solo protein powders are priced less. That's not our direct competitor because we're a superfood with adaptogens and all of the other things that we've got in the Shakeology product. If we were just a protein powder, it might be a different ballgame, one. Two, we're gonna see how this performs in the retail market.

Speaker #2: That's a great question, George. I would say the following. Our per-serving price today on the seven-serve is about $4.99, something around, just under $5.

Speaker #2: We are positioned, as you know, because we've got these 100 different ingredients and all the superfood ingredients in addition to protein. We're positioned as a premium product because we give you all of these extra benefits in addition.

Speaker #2: So, we want to be priced at the upper end within that marketplace. Whereas the pure solo protein powders are priced less. That's not our direct competitor because we're a superfood with adaptogens and all of the other things that we've got in the Shakeology product.

Speaker #2: So if we were just a protein powder, it might be a different ballgame. One, two, we're going to see how this performs in the retail market.

Speaker #2: You'd always like to take the superior product, which we have, and go out with a more premium positioning, because that margin flexibility gives you the ability to do more marketing, more sampling, more trial, more local participation events.

Mark Goldston: You'd always like to take the superior product, which we have, and go out with a more premium positioning because that margin flexibility gives you the ability to do more marketing, more sampling, more trial, more local participation events. You've got the margin to be able to do that. That's been our strategy. Certainly, we have the opportunity both at retail and direct-to-consumer, as opposed to lowering the absolute price, to use promotional wells, where there are points at which we can put this thing on promotional pricing and will give us the ability to make a value statement because our regular retail price would be $34.99. Now yours for, I'm making this up, for $29.99, whereas if you just lower the absolute price of the product, then you're just an EDLP, which is everyday low price versus a high-low strategy.

Speaker #2: You've got the margin to be able to do that, and so that's been our strategy, certainly. We have the opportunity both at retail and direct-to-consumer, as opposed to lowering the absolute price, to use promotional wells where there are points at which we can put this thing on promotional pricing.

Speaker #2: And we'll give us the ability to make a value statement because our regular retail price would be $34.99 — now yours, for making this up, for $29.99.

Speaker #2: Whereas if you just lower the absolute price of the product, then you're just an EDLP, which is everyday low price versus a high-low strategy.

Speaker #2: And as you know, grocery follows two pricing strata. Some people are EVLP, some people are high-low. And I think the high-low gives you more flexibility.

Mark Goldston: As you know, grocery follows two pricing strata. Some people are EDLP, some people are high-low, and I think the high-low gives you more flexibility. My strong preference would be to keep our premium positioning and then if we need to, promote off of that.

Speaker #2: So, my strong preference would be to keep our premium positioning, and then, if we need to, to promote off of that.

Speaker #3: I'll just add that the reason this product has sold over a billion servings is people can tell the substance of this formulation. And we've always had pressure, internally and externally, to perhaps tweak the formula to lower the price.

Carl Daikeler: I'll just add that the reason this product has sold over 1 billion servings is people can tell the substance of this formulation. We've always had pressure internally and externally to perhaps tweak the formula to lower the price, and have the optics of a lower price formula. We've held the quality and potency because it is so distinct. That's our unique selling proposition, is that you can feel the difference. That's why we think it's gonna be a good decision for retailers to put it on the shelf because this one stands out because of the resilience of this formulation. You really can tell the difference.

Speaker #3: And have the optics of a lower price formula, but we've held the quality and potency because it is so distinct. And that's our unique proposition— that you can feel the difference.

Speaker #3: And that's why we think it's going to be a good decision for retailers to put it on the shelf, because this one stands out because of our resilience of this formulation.

Speaker #3: You really can tell the difference. I'll send you.

Mark Goldston: I mean, we're selling, you know, a tub of whey protein on P90X for the same price that we're selling a 7-serve in Shakeology because the additional ingredients in Shakeology is what makes it a premium product. I mean, at $129.95, which is what the company sold it for for the last umpteen years, you were at about $4.33 per serving. Normally, as you know, George, when you come down in form factor, you go up in price per serving. Our price per serving on the 7-serve is $4.99. On the 30-serve, it's like $4.33. In the same zip code.

Speaker #1: I mean, we're selling a tub of whey protein on P90X for the same price that we're selling a seven-serve in Shakeology, because the additional ingredients in Shakeology are what make it a premium product.

Speaker #1: I mean, at $129.95—which is what the company sold it for for the last umpteen years—you were at about $4.33 per serving. Normally, as you know, George, when you come down in form factor, you go up in price per serving.

Speaker #1: So, our price per serving on the seven-serve is $4.99. On the 30-serve, it's like $4.33. So, in the same zip code.

Speaker #6: Okay, okay. And then, last question I had for you—like I said, two-parter. Before the Sprouts launch, have you done any kind of testing in-store at Sprouts?

George Kelly: Okay. Last question I had for you, I guess a two-parter. Before the Sprouts launch, have you done any kind of testing in-store at Sprouts? Second question is, do you have any additional retail distribution secured after Sprouts? That's all I had. Thank you.

Speaker #6: And then, second question is, do you have any additional retail distribution secured after Sprouts? And that's all I had. Thank you.

Mark Goldston: We have not done any testing there. The testing, as Carl alluded to, has been 15 years and $3.4 billion and 1 billion servings, which a lot of the buyers have said, you know, everybody knows Shakeology. Thank God it's finally available at retail. That's the answer to that question. In terms of the additional retailers, as I was saying in my earlier comments, when Eric asked the question, we have, you know, dozens and dozens of sample sets out to the retail buying community that our brokers at Advantage Solutions have taken out there, and they're all under review by the buyers and then ultimately the buying committee. We're waiting for feedback, most of which will happen within the month of April and early May.

Speaker #2: We have not done any testing there. The testing, as Carl alluded to, has been 15 years and $3.4 billion and a billion servings, which a lot of the buyers have said, 'Everybody knows Shakeology.'

Speaker #2: Thank God it's finally available at retail. So that's the answer to that question. And in terms of the additional retailers, as I was saying in my earlier comments when Eric asked the question, we have dozens and dozens of sample sets out to the retail buying community that our brokers at Advantage Solutions have taken out there.

Speaker #2: And they're all under review by the buyers, and then ultimately the buying committee. And we're waiting for feedback, most of which will happen within the month of April and early May.

Speaker #2: And then we will have hard numbers about who's taking the initial launch and when it will be on shelf. But our anticipation is we'll be in late Q2 and into Q3.

Mark Goldston: Then we will have, you know, hard numbers about who is taking the initial launch and when it will be on shelf. Our anticipation is we'll be in late Q2 and into Q3, we'll start getting many more retailers. Like I said, we have one I can't talk about because it was an oral, not a firm purchase order yet, which is coming, but it's a multi-hundred store chain that's planning on putting Shakeology, all flavors, all SKUs. We just learned that this morning, so hopefully that will materialize as a written purchase order, and then we can talk about it.

Speaker #2: We'll start getting many more retailers. And like I said, we have one I can't talk about because it was an oral, not a firm purchase order yet, which is coming.

Speaker #2: But it's a multi-hundred-store chain that's planning on putting Shakeology—all flavors, all SKUs. We just learned that this morning. So hopefully that will materialize as a written purchase order, and then we can talk about it.

Speaker #4: Thank you. The final question comes from Alex Hantman with Sidonian Co. You may proceed.

Operator: Thank you. The final question comes from Alex Hantman with Sidoti & Company. You may proceed.

Speaker #6: Hi. Good afternoon. Thanks for taking questions. Maybe a little bit beyond retail, I'm curious what you've learned so far from the Reebok relationship, and whether that channel can become a meaningful contributor to subscriber adds, and if there's an opportunity to partner with similar brands.

Alex Hantman: Hi. Good afternoon. Thanks for taking questions. Sure. Maybe, you know, a little bit beyond retail. I'm curious what you've learned so far from the Reebok relationship and whether that channel can become a meaningful contributor to subscriber adds, and if there's an opportunity to partner with similar brands. Yeah, I think it's early days, certainly on that partnership and that is a subscription model as well. We will certainly read that closely. Regardless of where that nets out, whether it's great or whether it doesn't end up being great, we just brought in somebody to head up partnerships, and our whole focus is going to be who can we align with where we become a value add to their customer base and reciprocalize, they become a value add to our customer base.

Speaker #2: Yeah, I think it's early days, certainly on that partnership. And that is a subscription model as well, so we will certainly read that closely. But regardless of where that nets out, whether it's great or whether it doesn't end up being great, we just brought in somebody to head up partnerships.

Speaker #2: And our whole focus is going to be: who can we align with, where we become a value add to their customer base, and reciprocal as they become a value add to our customer base?

Speaker #2: Because we've now got a much broader range of products, both in terms of our 10-Minute Body, the new P90X program, now these new nutritional products, the new form factors, and our more attractive overall price points.

Mark Goldston: 'Cause we've now got a much broader range of products, both in terms of our 10 Minute BODi, the new P90X program, now these new nutritional products, the new form factors, our more attractive overall price points. You know, we're selling $15 to 34 product. We didn't have that before. Our ability to go out and craft partnerships because of that is way more compelling now than it would've been 6 months ago. I'm hopeful that over the next 12 months you'll start to see some of these partnerships materialize, because everybody acknowledges the power of our brands. Now that we've got some pricing power to go along with that, I think it'll bear fruit. Thanks, Mark. Great context. Then just to follow up on something from the 10-K. Yeah. Just to follow up on something from the 10-K.

Speaker #2: We're selling $15 to $34 products. We didn't have that before, and so our ability to go out and craft partnerships because of that is way more compelling now than it would have been six months ago.

Speaker #2: So I'm hopeful that over the next 12 months, you'll start to see some of these partnerships materialize, because everybody acknowledges the power of our brands.

Speaker #2: And now that we've got some pricing power to go along with that, I think it'll bear fruit.

Speaker #6: Thanks, Mark. Great context. And then, just to follow up on something from the 10-K—yeah, just to follow up on something from the 10-K—I think you mentioned GLP-1s as both a tailwind and a potential headwind.

Mark Goldston: You know, I think you mentioned GLP-1s as both a tailwind, you know, and a potential headwind. Just curious, you know, are you hearing customers talk to you about that? Is it affecting, you know, any sort of meal planning that you're doing or formulations that you guys are making? Well, I would say that it's actually. We see it far more as an opportunity for us because every person who makes the investment in a GLP-1 weight loss pharmaceutical is gonna need to remediate the prospect of muscle loss by doing some exercise and by fueling themselves well. Shakeology is an absolutely ideal, easy solution for people who are obviously looking for an easy solution. So that's been a quite productive line of communication and messaging in our marketing and advertising.

Speaker #6: I'm curious, are you hearing customers talk to you about that? Is it affecting any sort of meal planning that you're doing, or formulations that you guys are making?

Speaker #3: Well, I would say that we actually see it far more as an opportunity for us, because every person who makes the investment in a GLP-1 weight loss pharmaceutical is going to need to remediate the prospect of muscle loss by doing some exercise.

Speaker #3: And by fueling themselves well. Shakeology is an absolutely ideal, easy solution for people who are obviously looking for an easy solution. So that's been a quite productive line of communication and messaging in our marketing and advertising.

Speaker #3: But likewise, we've also produced content on the platform specifically for the GLP-1 user. Again, this is not a person who was seeking complete lifestyle change.

Mark Goldston: Likewise, we've also produced content on the platform specifically for the GLP-1 user. Again, this is not a person who was seeking complete lifestyle change. They're looking for a bit of a biohack, a shortcut to try to get some results and get traction on a healthier lifestyle. You can imagine how something like 10 Minute BODi and specifically content designed for a GLP-1 user to help them with resistance training and cardio in a way that's manageable and fits into their lifestyle, that'll be quite attractive. The convenience of doing at home is just the perfect formula.

Speaker #3: They're looking for a bit of a biohack, a shortcut to try to get some results and get traction on a healthier lifestyle. So you can imagine how something like 10-Minute Body, and specifically content designed for a GLP-1 user to help them with resistance training and cardio in a way that's manageable and fits into their lifestyle, that that'll be quite attractive.

Speaker #3: And the convenience of doing it at home is just the perfect formula. So we actually feel quite well aligned with the growth of the GLP-1 sector and also, quite honestly, offering GLP-1 type formulations into our large database of people who've already raised their hand and said, "We'd like to find a way to lose weight." And perhaps they're not a current subscriber, but now they're in our database that we can make compelling offers to so that they get access to the best solution available.

Mark Goldston: We actually feel quite well aligned with the growth of the GLP-1 sector and also, quite honestly, offering GLP-1 type formulations into our large database of people who've already raised their hand and said, "You know, we'd like to find a way to lose weight." Perhaps they're not a current subscriber, but now they're in our database that we can make compelling offers to them so that they get access to the best solution available. We see it as a tailwind. If you read the research that's been published on GLP-1s, what it basically says is that when you go on a normal diet without a drug and you lose 20lbs, approximately 20 to 25% of your loss is muscle, and the other 75 to 80% is fat.

Speaker #3: So we see it as a tailwind.

Speaker #2: If you read the research that's been published on GLP-1, what it basically says is that when you go on a normal diet without a drug and you lose 20 pounds, approximately 20 to 25 percent of your loss is muscle.

Speaker #2: And the other 75 to 80 percent is fat. When you lose weight on a GLP-1 drug, based on all the research that we've seen, you lose between 40 to 50 percent of that weight in lean muscle.

Mark Goldston: When you lose weight on a GLP-1 drug, based on all the research that we've seen, you lose between 40 to 50% of that weight in lean muscle. Your lean muscle loss, based on the research we've read, is double when you do it through a drug versus when you do it through a regular calorie-restricted diet. To Carl's point, we become the perfect adjunct to anybody on a GLP-1 drug. Because what otherwise, you know, you run the risk of getting what people would call skinny fat, which is you've lost the weight, but you have no musculature. If you're over 40, that is definitely not what you wanna be doing because your musculature, your musculoskeletal strength has everything to do with your balance and not having falls, and fractures and things of that nature.

Speaker #2: So, your lean muscle loss, based on the research we've read, is double when you do it through a drug versus when you do it through a regular caloric-restricted diet.

Speaker #2: So to Carl's point, we become the perfect adjunct to anybody on a GLP-1 drug because otherwise, you run the risk of getting what people would call 'skinny fat,' which is you've lost the weight, but you have no musculature.

Speaker #2: And if you're over 40, that is definitely not what you want to be doing because your musculature, your musculoskeletal strength—everything to do with your balance and not having falls and fractures and things of that nature.

Speaker #2: So the more that category expands and now that they're offering it in pill form, it looks like, not just injections with syringe injection, I think the more relevant we become as a partner to that as opposed to viewing them as a competitor.

Mark Goldston: The more that category expands, and now that they're offering it in pill form, it looks like not just injections, syringe injections. I think the more relevant we become as a partner to that as opposed to viewing them as a competitor. Great context. Thank you. That's all from us. Great. Thank you very much.

Speaker #6: Great context. Thank you. That's all from us.

Speaker #2: Great. Thank you very much.

Speaker #4: I'll pass that over.

Operator: I'll pass back over to Mark Goldston for closing remarks.

Speaker #2: Operator, any more questions?

Mark Goldston: Operator, any more questions?

Speaker #4: Thank you for the closing remarks. No.

Operator: No.

Speaker #2: Listen, this has been great. Really appreciate everybody attending today. We are obviously thrilled with our performance in 2025—it was beyond our expectations. And we're really excited about the innovation pipeline for 2026.

Mark Goldston: Listen, this has been great. Really appreciate everybody attending today. We are obviously thrilled with our performance in 2025. It was beyond our expectations, and we're really excited about the innovation pipeline for 2026 and hopefully watching that bear fruit, especially as we get towards the second half of the year. As always, if anything comes up, please either reach out to us directly at the company through Brad Ramberg, our CFO, or through ICR. Thanks, everyone. Have a great day.

Speaker #2: And hopefully, watching that bear fruit, especially as we get towards the second half of the year. So, as always, if anything comes up, please either reach out to us directly at the company through Brad Ramburger, CFO, or through ICR.

Speaker #2: So, thanks everyone. Have a great day.

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

Q4 2025 The Beachbody Co Inc Earnings Call

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