The Beachbody Company, Inc.

Good afternoon, thank you for attending today's Beachbody Company Inc. Fourth Quarter 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.

Welcome, everyone, and thank you for joining us for our fourth quarter earnings call. With me on the call today are Mark Goldston, Executive Chairman of Beachbody Company, Carl Deichler, 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 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. Today's call will include references to non-GAAP financial measures such as adjusted EBITDA, net cash, and free cash flow. And a reconciliation of these nine 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.

Thanks very much, Bruce, and good afternoon, everyone, and welcome to the Body Q4 2025 earnings call. 2025 was an important transitional year for Body as we started on January 1st of 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. 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 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. 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 31st of 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 $46 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 body. 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. 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. 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. 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. 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 sugars, 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. 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. 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. 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 a 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 and nutritional supplements a new seven 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. And 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. We will then 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 body brand name and in new packaging in late 26 or early 27. so the pipeline is fertile it's full there's a lot of new nutritional elements in there we're really excited about it but 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 and Sanity 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 Body.com. Our intention is to introduce P90X supplements and the new 7Serve3499 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 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 in 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 at December 31st of 2025, which is 56% above our outstanding debt level of $25 million in Tiger Finance, 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 the lowering of the EBITDA breakeven level from over $900 million prior to my arrival down to a $180 million breakeven level today. And 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, bobby is poised to complete the total turnaround of the company by the end of 2026 a full year ahead of schedule we're looking forward to the second half of 26 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 Deichler. Carl?