Beachbody Company Inc ((BODI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Beachbody Company Inc.’s recent earnings call presented a balanced sentiment, highlighting both strong financial improvements and significant challenges. The company exceeded revenue expectations, improved gross margins, and maintained a positive EBITDA streak, yet faced notable revenue declines and a drop in digital subscribers. As Beachbody undergoes a substantial business model transition, it remains optimistic about future retail launches and cost management strategies.
Exceeded Revenue Expectations
Beachbody Company reported Q2 2025 revenues of $63.9 million, surpassing the guidance range of $51 million to $61 million. This achievement underscores the company’s ability to retain customers better than anticipated during its ongoing business model transition.
Improved Gross Margin
The company achieved a gross margin of 72.3%, marking a 300 basis point improvement year-over-year. This figure not only exceeds the previous year’s performance but also surpasses the long-term target range of 65% to 70%.
Positive EBITDA Streak
Beachbody reported its seventh consecutive quarter of positive adjusted EBITDA, with a cumulative total of $39.5 million. This consistent performance highlights the company’s effective cost management and operational efficiency.
Reduced Selling and Marketing Costs
Selling and marketing expenses decreased significantly, from 51.1% of revenue last year to 39.9% this quarter. This reduction aligns with the company’s strategic goal of bringing these costs below 35% of revenue.
Debt Refinancing Achievement
The company successfully refinanced its debt with Tiger Finance and SG Capital, reducing the overall interest rate by more than 40%. This move is expected to improve financial flexibility and reduce interest expenses.
Upcoming Retail Launch
Beachbody plans to roll out its Shakeology and P90x nutritional lines in retail starting Q1 2026. By leveraging these billion-dollar brands, the company aims to capture new revenue streams and expand its market presence.
Innovative Marketing Initiatives
To drive customer engagement and subscriber growth, Beachbody launched referral and affiliate programs. These initiatives are designed to enhance brand visibility and attract new customers.
Revenue Decline
Despite exceeding revenue expectations, Beachbody experienced a total revenue decline of 11.6% sequentially and 42% year-over-year. This decline is attributed to the strategic transition the company is undergoing.
Digital Subscriber Decline
The digital subscriber count decreased by 7.8% sequentially to 940,000, and 18.2% year-over-year. This drop reflects the challenges faced in retaining subscribers during the business model shift.
Nutrition Revenue Drop
Nutrition revenue decreased 15.6% from the prior quarter and 51.8% year-over-year, impacted by the shift from a multi-level marketing model. This decline highlights the challenges in transitioning the nutrition segment.
Decreased Nutrition Subscriptions
Nutrition subscriptions fell 12.5% sequentially to 70,000 and 52.1% year-over-year. This significant drop underscores the impact of the company’s strategic shift on its nutrition business.
Forward-Looking Guidance
Looking ahead, Beachbody aims to achieve positive free cash flow for the full year 2025, a milestone not reached since 2020. The company has outlined strategic plans for 2026, including the retail rollout of its Shakeology brand and the launch of new P90x and INSANITY products. These initiatives are anticipated to drive significant revenue and profit opportunities.
In summary, Beachbody Company Inc.’s earnings call reflected a balanced outlook, with strong financial achievements offset by significant challenges. The company is optimistic about its future, with strategic initiatives aimed at driving growth and improving financial performance. As Beachbody navigates its business model transition, investors will be keenly watching its progress in the coming quarters.