The Beachbody Company, Inc.

Good afternoon, ladies and gentlemen. Welcome to the Beachbody Company's first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I'd like to remind everyone that this conference call is being recorded. And I will now turn the conference over to Eddie Plank, Beachbody's Group Vice President of Investor Relations.

Welcome, everyone, and thank you for joining us for our first quarter 2022 earnings call. With me on the call today are Carl Deichler, co-founder, chairman, and chief executive officer of the Beachbody Company, and Sue Collins, president and chief financial officer. Following Carl's and Sue's 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. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from the suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. Today's call will include references to non-GAAP financial measures, such as adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on our website. Now, I would like to turn the call over to Carl.

Thank you, Eddie, and good afternoon, everyone. When we reported full-year earnings for 2021 on March 1st, we outlined our strategy to make the business more productive and efficient, allowing us to deliver profits and free cash flow in every type of demand environment, regardless of whether they're tailwinds or headwinds. While the environment remains challenging, our results for first quarter 2022 reflect solid initial progress on that strategy, with revenue and adjusted EBITDA ahead of expectations. During the quarter, we saw a positive response to new product launches. We continued to enhance subscriber lifetime value, and we remained focused on the highest return customer acquisition opportunities while tightly managing expenses. While there's still more to do, our performance in the first quarter is an important first step, one we'll build on as we continue to advance the strategy over the course of 2022. I'm particularly excited about the response to our new launches in the first quarter. This demonstrates Beachbody's ability to quickly create demand through compelling content, as well as the benefit of our unique synergistic approach that combines digital fitness, nutrition, and community into each new program launch. For example, the response to the launch of our job one program was incredibly positive as its 20-minute format capitalized on the need for workouts and nutrition programs that aren't only effective but also easily fit into our busy lives. More recently, the launch of the four-week gut protocol program outpaced early expectations, driving nutritional upsells among existing subscribers as well as new customers. This performance supports our thesis that integrating nutrition and fitness and offering a total solution is a compelling value proposition to both existing and new subscribers. Our launch calendar for 2022 has so much innovation with unique Beachbody offerings that will build on this growing demand for solutions that serve our subscribers' entire well-being, from gut health to reducing anxiety, from losing weight to building muscle. to just giving people an easy-to-follow gateway to get themselves back on track. For example, in late May, we'll be launching our first hybrid program called Fire & Flow, which I think is the future of fitness because it integrates both rigorous fitness days and stress-reducing functional recovery days. This is fitness for true wellness, and it's ideal for meeting the post-pandemic mindset where subscribers are looking for solutions that not only improve their physical health, but also support their mental well-being. Led by two of our best-known female super trainers, Fire & Flow is highly anticipated by our subscriber base for its launch later this month. We're also leveraging the agility of our content-driven model to expand our addressable market and broaden our demographic appeal. For instance, in July, we're launching Lift More, a resistance training sequel to the program called Lift 4.0. which is consistently one of our most streamed programs on Beachbody On Demand. Lyft 4 is a franchise that's been particularly effective at driving acquisition of new male users, many of whom live with partners who are already committed Beachbody subscribers. Lyft More is currently being tested by a few hundred of our coaches, and we're very excited about the feedback we're getting from men and women. Speaking of our coaches... During the first quarter, we saw higher productivity within our coach network as our new launches increased focus and motivation across this proprietary sales channel. That's especially encouraging when you consider that our pipeline of fitness and nutrition launches this year is the most prolific in our history. With each launch, our coaches serve not just as our most compelling sales channel, but also as the human connection that creates community and accountability for all our subscribers and it's accountability that's been an essential lever for successful lifestyle change for so many customers since we started Beachbody. This social influencer network of coaches is not only a very special group of leaders, they're a unique competitive advantage for us that I believe we're only scratching the surface of today. This quarter, we also continued to scale our live premium tier, Beachbody On Demand Interactive, or BODY as we call it. We've refined our programming for BODY by leveraging learning from the initial launch last year, and those refinements are helping to drive viewership. For instance, we've incorporated live versions of our most popular program titles, which gives us a real competitive advantage in the fitness content space by offering these special live presentations of programs like 21 Day Fix, Morning Meltdown 100, and the Muscle Burns Fat program. And we've seen an incredible response to other special events, from live program premieres on this tier to mash-up workouts that feature several of our most popular trainers performing together. They're a lot of fun. We're also initiating new three-week body challenges on the first Monday of every month. With a set program of content along with live support from our trainers and coaches, this is a format that is very attractive to getting new subscribers started on the body tier and existing customers reengaged in improving their fitness and nutrition. Okay, now let's talk about connected fitness. Home indoor cycling is a competitive space, but the Beachbody On Demand experience is really in its own category. Our customers see the value in combining a commercial-grade bike with our immersive, engaging fitness content and proven nutrition guidance, meal plans, and recipes. And it's all delivered directly on the bike's screen. We continue to ensure that the bike and digital subscription is priced competitively. But ultimately, it's the superior Beachbody content and holistic experience that defines our value proposition. While digital subscriptions remain the tip of the spear for our new customer acquisition, which is how Beachbody has always defined the category, connected fitness is an important lever for driving lifetime value for a cohort we refer to as our super users. We're pleased with the demand for the bike in the first quarter, and we continue to build brand momentum across our entire user base with approximately 2.5 million subscriptions. Moving on to marketing. Our efforts to focus solely on the marketing channels that are immediately accretive to cash flow are continuing to drive our CAC to LTV ratio back towards our historic levels. We're already seeing benefits from our recent actions to streamline and focus the marketing organization. The marketing team has been extremely disciplined at managing spend on the most efficient and profitable media opportunities for customer acquisition. We also continue to evolve our lifecycle management capabilities to deepen engagement with our existing subscriber base. In addition to the positive response to new product launches, we're also progressing on our strategy to drive up sales as we reduce friction in the purchase funnel, for instance. Later this month, we'll roll out the ability to purchase supplements and accessories from within the app for the very first time. This will allow customers to transact in the same place they go to complete their workouts at the very moment when it's top of mind for them. With a strong pipeline of product innovation and enhanced merchandising capabilities, we're confident in our ability to return momentum to the nutrition business. Our results in the first quarter are encouraging and demonstrate the consistency and agility of our content-driven business. We aren't bound to equipment or even technology to help customers get results. We create world-class content. We've done it for over two decades and we test it to make sure it delivers results that outperform the customer's expectations. Then roll it out and let the coach and customer who get results be the most effective promotional channel in the industry. That creates a unique advantage, one that's especially important when the environment is dynamic as we've seen over the last year. Okay, let me summarize. We remain laser-focused on executing on our strategy to generate profits and cash flow in any demand environment. Combined with a focus on disciplined marketing and efficient customer acquisition, we expect to not only drive revenue, but also further enhance profitability with a focus on creating long-term value for our customers, employees, and shareholders. So with that, Sue, I'll turn it over to you.