The Beachbody Company, Inc.

Good afternoon, ladies and gentlemen. Welcome to the Beachbody Company fourth quarter 2023 and full year 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 would like to remind everyone that this conference call is being recorded. And I will now turn the conference over to your host, Bruce Williams, Managing Director of ICR Investor Relations.

Welcome, everyone, and thank you for joining us for our fourth quarter earnings call. With me on the call today are Mark Goldstein, Executive Chairman of the Beachbody Company, Carl Deichler, Co-Founder and Chief Executive Officer, and Mark Swedan, 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. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. 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 Mark.

Thank you, Bruce, and welcome, everyone. I joined the company last summer with one goal, to help this team and this amazing company execute a successful turnaround plan return beach body to its roots of being solidly profitable and as the leader in helping people get healthy results with our fitness and nutrition products we've made incredible strides in the last seven months and it shows in the results this quarter and for the year last quarter we told you we would lower the break-even point of our company improve our liquidity and expand our sales channels and continue to execute against our turnaround plan i'm happy to report that during the fourth quarter we accomplished all of these goals. We dramatically lowered our revenue breakeven from over $900 million in 2022 to less than $500 million in 2024. We put an agreement in place to expand our sales presence on Amazon. We improved our liquidity position. And we're going to continue to execute against our turnaround plan by posting positive adjusted EBITDA performance this quarter. we exceeded both revenue and adjusted EBITDA guidance, and we can confidently state that we will achieve a milestone event by becoming cashflow positive in Q1 of 2024, which would be the first time since 2020. We've built significant operating leverage in the P&L, and we're actively deploying several operating strategies this quarter and getting encouraging results. As a reminder, Our turnaround plan has been focused on enhancing our liquidity, re-architecting our selling and marketing, digital experience, and nutrition business to drive revenues, and continuing our cost transformation and re-architecture of the company to dramatically reduce our break-even point without undermining the core business model that generates the revenue. We actually accomplished what we said we would do in each of these areas this quarter. Our fourth quarter performance gives us confidence that we will be cash flow positive in the first quarter of 2024 and puts us in a good position for the remainder of the year and beyond. I'll now expand on our liquidity enhancement before I turn it over to Carl, who will update you on our go-to-market strategy and our digital and nutrition businesses. And then Mark will close out with an update on our cost transformation initiatives. On the liquidity front, we've been enhancing our balance sheet with numerous actions, including a capital raise in Q4, we're selling non-core assets, and those things have helped to enhance the overall liquidity position of the company. The combination of these actions enhanced the balance sheet by over $10 million to date. This, along with our reduced breakeven point, has put us in a position to generate positive free cash flow in Q1 of 2024. We believe that our improved liquidity position puts us in a better position to execute on our strategic initiatives to take advantage of the competitive advantages of the company and to stabilize and drive revenue while importantly building cash. In 2023, we successfully completed a reinvention and simplification of our digital platform, and we're extremely pleased with the results, evidenced by the stable quarter-to-quarter revenues. We also have healthy retention metrics, and we were just awarded the top-rated fitness app in 2023 by CNN. I'm also excited to share the new initiatives to rebuild the value of our nutrition business with a robust spotlight schedule on a different supplement every month. We will also continue the expansion of our nutrition business on Amazon, and we've got compelling new product initiatives scheduled to be introduced throughout 2024. In addition, we now believe that our database of 14 million contacts includes potential Beachbody nutritional supplement customers who collectively purchased well over one billion dollars of our nutritional products since 2016 we intend to create tailored nutritional offers designed to re-engage that massive reservoir of millions of our former nutritional subscribers as part of our nutritional turnaround plan for 2024 and beyond you know stepping back I believe we've barely scratched the surface on the enormous white space that's in front of us. Some of the major opportunities are as follows. We have significant potential to expand our sales aperture to partnerships with large organizations. We'll be expanding our outreach and appeal to the male demographic, which represents roughly 50% of the digital fitness and nutrition TAM, and yet is only around 15% of our business today. despite our rich past with the mail market. Carl will talk more about the mail market initiative later, and he'll also unveil a significant initiative which builds upon our successful history of leveraging our existing award-winning content in a very new and exciting way that augments our conventional subscription model. As I look across this marketplace, I believe that the fitness industry is still very fragmented, and it's ripe for consolidation. I've purchased many, many companies during my career, and I believe that once our turnaround is complete, we will be in a strong position to use our $340 million federal NOL and our $385 million state NOL as a powerful vehicle to initiate some meaningful consolidation within the fitness and nutrition industries. I want to reiterate my confidence in the value of the Body Platform. The company holds invaluable assets, including what we believe to be the world's most extensive digital fitness library. We have a range of highly efficacious nutritional products and a massive database in excess of 14 million contacts that will be the focus of our Winback programs, along with our large base of subscribers who have a very low churn rate, and of course, our highly skilled leadership team. What we've accomplished thus far in our transformation in such a short time, is a testament to the power of the platform and the team's hard work. Now I will turn it over to Carl to discuss the progress we've made on our initiatives. Carl.