The Beachbody Company, Inc. Class A Common Stock 2026 Q2 Earnings Call

Bruce, please go ahead. Welcome, everyone, and thank you for joining us for our second quarter earnings call.

With me on the call today are Mark Goldston, Executive Chairman of The Beachbody Company, Carl Daikeler, Co-founder and Chief Executive Officer, and Brad Ramberg, Interim Chief Financial Officer. Following the prepared remarks, we will 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 of 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 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.

Thanks very much, Bruce, and good afternoon, everyone. Welcome to the BODi second quarter 2026 earnings call. I am pleased to report that BODi delivered another quarter of consistent execution against the turnaround we have been building for three years now. Total revenue for the second quarter was $49.6 million, above the midpoint of our guidance range of $46 million to $51 million. More importantly, this was our fourth consecutive quarter of both operating income and net income, and it was our 11th consecutive quarter of positive adjusted EBITDA, which came in at $6.7 million, which was above the high end of our guidance range of $3 million to $6 million. That also marks our fourth consecutive quarter of double-digit adjusted EBITDA margin, which tells you that the operational discipline that we have built into this business over the past three years is durable.

Net income for the quarter was $1.4 million, also above the high end of our guidance range of a loss of $3 million to break even. Across the board, revenue, net income, and adjusted EBITDA, we either met or exceeded our own guidance again this quarter. Let's turn to the balance sheet. We ended the quarter with $32.4 million of cash. That's against a total debt of approximately $23.6 million, so we had a net cash position of $8.8 million. I'm pleased that we modified our lending agreement with Tiger Finance, and we now have a much less restrictive covenant package. Our new agreement demonstrates the conviction and confidence that our partners have in our long-term strategic initiatives. Let me give you an update on the retail expansion, which continues to build momentum.

Shakeology is off to a great start at Sprouts Farmers Market stores, and they've now expanded our footprint into 131 Sprouts stores nationwide. Importantly, we're already seeing stores coming back for reorders on Shakeology. This quarter, in fact, right now, we've brought Shakeology into 481 The Vitamin Shoppe locations around the country. We've also continued to build on our relationship with KeHE, one of the two largest distributors of natural and organic products in the country, and this gives us a path into their network of grocery accounts. Just recently, we added an account which will open up the UNFI distribution network. That'll happen in November of this year, and UNFI is the other major distributor of consumer goods to the grocery channel. As we've previously discussed, waiting for the retailer shelf set planogram to be updated is a 6 to 12-month process.

While we continue to actively participate in that process with strong distribution partners, we expect to modestly build distribution this year with the expectation for accelerated growth in 2027 as we become more integrated into retailers' planograms. On the nutrition innovation side, our P90X supplement line, which is pre-workout, hydration, creatine, recovery protein, and fast-acting energy, that just became available on Amazon, which opens up an important channel for us to build brand awareness and drive trial. We're also in the process of preparing for the Southern California test market for our new energy drink lineup. We've hired one of the top beverage distribution companies in the country to represent us in the market, and both our Insanity Liquid Shock and our P90X energy drinks are in production and will soon be ready to ship.

We expect the test market rollout to begin in late Q3 or into Q4, and we will continue that rollout throughout the end of the year. I'm very pleased with our packaging and the flavors, and they really distinguish us from the competition. The digital fitness category is a $13 billion market, and the nutritional supplement category is a $164 billion market. That's like a lake versus an ocean. By leading with nutrition, which is exactly what we've done with P90X and Shakeology this year, we're acquiring customers more efficiently, and a meaningful share of those nutrition customers are actually converting into our digital fitness subscriptions as well. That combination, what we call the total solution, is what has always driven this company's best results, and it's exactly what's fueling our direct-to-consumer expansion today. With that, let me turn the call over to Carl.

Thanks, Mark. Coming out of Q1, we outlined a handful of initiatives. We planned to build on the momentum of the P90X Generation Next launch by bringing the P90X supplement line direct-to-consumer and setting it up for retail. We were planning to transition onto the Shopify e-commerce platform, keep expanding our 10-Minute Body microdose fitness catalog, including promotion to the GLP-1 audience. We talked about our plans to launch our new 30 Day Booty Boost program with a new Super Trainer. Our focus in Q2 was also to continue shifting the business toward a nutrition-first multi-channel model, now that we're free of the margin and distribution constraints of the old operating expense structure. Here's where each of those initiatives stand. I'll start with P90X. The Generation Next launch in February was very well-received and it did exactly what we designed it to do.

It set us up for the direct-to-consumer launch of the P90X supplement line in April. Promoting the P90X brand as a whole puts us in a strong position to build demand for both the P90X supplements and the brand-new P90X ready-to-drink energy beverage. On the retail front, we're navigating the retailer's planogram reset timing, which governs when new products get on the shelf. We don't control the growth as much as we'd like, but the interest is definitely real. As Mark outlined, Shakeology's seeing reorders in our test with Sprouts, and we just launched into 481 The Vitamin Shoppe stores. The P90X and Insanity energy beverage line will launch at retail in the second half of 2026. Our transition to the Shopify platform, which we completed right at the end of Q1, was achieved efficiently and with no business interruption.

Honestly, the most exciting thing to come out of Q2, in my opinion, was the visibility Shopify has given us to areas where we can make dramatic improvements in the sales funnel, such as improving order conversion from existing traffic, improving engagement in the funnel, and reducing visitor bounce rate. Shopify ran a thorough audit for us, and we're aggressively adjusting our landing pages and promotions to conform to best practices. We'll continue to see benefits with faster checkout using Shop Pay, better conversion, and the flexibility to run bundle and subscribe-and-save offers that we simply couldn't do on our old e-commerce platform. We see real opportunity to improve conversion further as we optimize our landing pages and site navigation. We have new creative and marketing campaigns in development to build on that momentum.

This is our top priority heading into the third quarter, especially as we set up for the prime health and fitness season in Q1 of 2027. Likewise, the shift to Shopify unlocks our ability to improve our HSA/FSA partnership with industry leader Truemed, which will make it much easier for qualified customers to use their HSA and FSA benefits to save on their purchase of eligible BODi products like Shakeology by using pre-tax dollars. Our 10-Minute Body initiative has proven to be a genuinely valuable addition to the catalog because it fills a need that a fitness app is uniquely qualified to meet versus gyms. We now have a massive catalog of over 400 microdose workouts between five and 10 minutes long for people who are only getting started on their fitness journey or who simply have no more time than that.

That very much includes GLP-1 users, who the data shows are statistically under-exercising, even though their use of these weight loss medications makes resistance training all the more critical, even if it's just 10 minutes a day. Speaking of GLP-1s, here's something we didn't fully anticipate. Our superfood protein shake, Shakeology, is seeing real demand from that same GLP-1 audience, so we're leaning into that application in our advertising and on our landing pages. In early June, we launched 30 Day Booty Boost with a terrific new Super Trainer, Chace Collett, and the feedback on both the program and the trainer has been exceptional. It continues to add to what is the most substantial library of health and fitness content in the world. The most important observation from Q2 is this.