The Beachbody Company, Inc.

for Earnings Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a Q&A session. I would like to remind everyone that this conference call is being recorded. And I would now like to turn the conference over to our host, James Cabrinar with Hayden IR. James, you may proceed.

Welcome, everyone, and thank you for joining us for our second quarter earnings call. With me on the call today are Mark Goldson, executive chairman of the Beachbody Company, Carl Deichler, co-founder and chief executive officer, and Mark Swiden, chief financial officer. Following the prepared remarks, we'll open up the call 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 include today's press release. Today's call will include references to non-GAAP financial measures, such as adjusted EBITDA, net cash, and free cash flows. 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, James, and good afternoon, everyone. Q2 2024 was a continuation of Q1's strong start as we continue to deliver against our strategic initiatives and remain steadfast in our turnaround plan. Starting with financial performance, I'm thrilled to share that revenue was ahead of the midpoint of guidance. Second, we beat net loss guidance by coming in with a lower net loss than we were guiding to. And third, adjusted EBITDA also beat guidance. Additionally, we're pleased to announce that we had our lowest net loss since going public, and this was our third consecutive quarter of positive adjusted EBITDA. Another key performance metric we're proud to announce, is that we reported an overall gross margin of 69%, our best gross margin since 2021. Digital fitness gross margin came in at an impressive 81%, also the highest since 2021, while nutrition also outperformed on gross margin, reaching a 61% level, a level not seen in our nutrition business since 2020. These margin gains are key because they provide the operating leverage we always highlight. With this stronger structural foundation, incremental revenue will flow through at a much higher rate, really amplifying the impact of our growth initiative. Moving to key progress made in our turnaround, I want to reiterate the details of our three key turnaround strategies. The first strategy is to enhance our cash liquidity and balance sheet positions. In Q1, we reported our first positive free cash flow quarter since 2020. And here in Q2, we took additional strategic actions to fortify our liquidity position in April by proactively amending our revenue covenants for our term loan with Blue Torch Capital. Our amended debt covenant lowered the quarterly revenue threshold from $120 million down to $100 million per quarter. And this will last until December 31st of 2024, And then subsequently it will go to $110 million per quarter beginning in Q1 of 2025. We also paid down another $4 million on the debt, reducing the outstanding debt principle to $25 million, which is one half of what it was a year ago. The liquidity covenant was also decreased by the same amount of the $4 million pay down from $22 million down to $18 million. We believe this demonstrates that our lender has confidence in our progress to run a positive free cash flow business at a much lower revenue threshold requirement. The second strategy is establishing operating leverage by significantly reducing costs. We have dramatically reduced our revenue break-even point by over $400 million from over $900 million in 2022 to under $500 million in 2024. This has been achieved through cost-based transformation and a re-architecting of the body enterprise. We've built operating leverage into the P&L at the current revenue run rate, positioning us to drive significant operating profit as our turnaround gains traction. We committed to generating over $250 million in cost savings by 2024 compared to 2021 levels, and our Q2 2024 results show that we remain on track to deliver these $250 million in cost savings. And the third strategy is to focus on stabilizing revenues and repositioning the company for growth. We've developed revenue-driving strategies aimed at boosting our top line, which will debut as we move more towards the end of 2024 and into 2025. As we move forward, we're enthusiastic about our current and future innovation pipelines. which is centered on increasing consumer accessibility to our extensive library of over 130 programs. Additionally, we plan to investigate strategic collaborations and create inventive marketing campaigns to further broaden the reach of our nutrition business, among other initiatives. A key driver of our future growth is making nutrition available on the body.com website, which just started to become available on a select basis. We're going to roll this out comprehensively over the coming quarters so we can start taking our fair share of the $164 billion nutritional supplement TAM or total addressable market. While we love the fitness TAM, which is $13 billion, nutrition clearly gives us a more than 12x TAM to chase versus the fitness TAM, the combination of a powerful digital fitness business and a nutritional supplement business is what makes Body unique because we're the only ones that have both fitness and nutrition as part of a holistic program. Nobody else does that. In fact, nutrition is approximately half of the company's revenues and presents a major growth opportunity. Let me put this in perspective. In the glory days of Body or the Beachbody Company, Our nutrition business was almost $800 million at our peak, and our digital fitness business peaked at $365 million. So at one point, nutrition was more than 2x the revenue of the fitness business. So nutrition is a huge area of future opportunity for us. So in summary, before I hand it over to Carl, I want to reiterate that body's performance reflects proof points that the strategy, and disciplined focus of our turnaround plan, which we constructed after my arrival in June of 2023, that these things are working and we're tracking ahead of schedule on critical milestone achievements. I'm pleased to announce that the company has already achieved the five key strategic comparatives built into the turnaround plan. What are they? One, cutting our debt in half. Two, lowering the break-even point. Three, delivering positive adjusted EBITDA for three consecutive quarters. Four, building substantial operating leverage into our P&L. And five, and which is the year to date, we've achieved cumulative positive free cash flow. As we remain in balance sheet optimization mode, we're going to continue to focus on executing our turnaround plan to optimize cash generation from our valuable asset base with the goal of not only delivering positive adjusted EBITDA and free cash flows, but also focusing on gap net income as the next key milestone and the impressive and rapid turnaround of body. Importantly, as we move towards Q4 of 2024 and then into 2025, we'll be tapping our innovation pipeline that we previously spoke about as we attempt to return to revenue growth, which will enable us to take advantage of our dramatically improved operating leverage and deliver even stronger potential adjusted EBITDA performance. Now I'm going to turn it over to Carl, and he's going to discuss our top line revenue growth initiatives. Carl?