Beachbody Reports $418.8 Million Revenue Decline and Strategic Shift to Affiliate Model

The Beachbody Company, Inc. reported a total revenue of $418.8 million for the fiscal year ending December 31, 2024, marking a 21% decrease from $527.1 million in the previous year. The decline was attributed to a significant drop in both digital and nutritional product sales, with digital revenue falling by 13% to $224.3 million and nutrition revenue decreasing by 25% to $187.8 million. The company also experienced a 66% drop in connected fitness revenue, which totaled $6.6 million, as it plans to cease selling connected fitness inventory starting in early 2025. Despite the revenue decline, Beachbody's net loss improved to $71.6 million from a loss of $152.6 million in 2023, and it reported an Adjusted EBITDA of $28.3 million compared to an Adjusted EBITDA loss of $8.7 million in the prior year.

In a strategic shift, Beachbody announced a transition from its multi-level marketing (MLM) model to a single-level affiliate model, referred to as the "Pivot," on September 30, 2024. This restructuring resulted in a workforce reduction of approximately 33%, or 170 employees, and incurred costs of about $18.5 million. The company also recorded a goodwill impairment of $20 million, reducing its goodwill balance to $65.2 million, primarily due to a sustained decline in its stock price and revenue forecasts.

Operationally, Beachbody reported 1.1 million digital subscriptions and 0.1 million nutritional subscriptions as of December 31, 2024. The average digital retention rate improved to 96.8%, while the daily active users to monthly active users (DAU/MAU) ratio averaged 31.7%. The company also noted a total of 87.4 million streams viewed by subscribers during the year, down from 98.2 million in 2023. The Pivot is expected to impact customer engagement metrics as the company transitions to its new affiliate model.

Looking ahead, Beachbody's management expressed optimism about its ability to generate sufficient liquidity to meet operational needs, particularly as it seeks to finalize an asset-based lending facility by June 30, 2025. However, the company acknowledged potential challenges in maintaining compliance with financial covenants associated with its existing term loan, which matures on February 8, 2026. The company’s future performance will depend on its success in executing the Pivot, retaining customers, and adapting to changing market conditions in the fitness and nutrition sectors.