Goldston, CEO and Co-founder Carl Daikeler, and CFO Brad Ramberg of The Beachbody Company, ticker BODi. During the presentation, please feel welcome to submit questions using the Zoom Q&A interface at the bottom of your screen. After the presentation, we'll open to your questions. And with that, Mark, I'll turn it over to you.
Thank you, Alex. Thanks, everybody. Appreciate you guys taking the time to listen to our BODi presentation. I'm going to give you a little bit of an overview on the company and what we've been able to accomplish here during our turnaround, and then we're going to open it up to Q&A that Alex will moderate, so I joined the company almost two and a half years ago. I spent most of my life being a CEO of major companies, mostly doing turnarounds. That's been my specialty. I joined Carl in his attempt to take this incredible, iconic company that had done amazing work for 21 years, being profitable, and then had a couple of rough financial years and said, "How can we go re-architect this company and have it have a second chapter that's as good or better than the first," so I joined in June of 2023.
The company had had a couple of years where we were -$200 million, -$100 million. And so what can we do here to fix this? The company had formerly been a multi-level marketing company with tens of thousands of sort of part-time independent contractors selling the products. The MLM industry was an industry that was going by the wayside. So what we did is we did a re-architecture of the company, changing of its selling structure, complete revamping of its balance sheet and its manpower base, and a refocusing of its efforts. So let me talk a little bit about that. In the nine quarters I've been here, the last eight quarters, we have been EBITDA positive, which was the first time in many years. So we've made $49 million of cumulative EBITDA in the last eight quarters.
Year to date, the nine months of 2025, we've made $17.9 million of EBITDA. Year to date, we've made $13.1 million of positive free cash flow. And we had our first positive net income quarter in Q3 of 2025 that we just reported a couple of weeks ago where we made $3.6 million. Now, that's the first time since the IPO of this company in 2021 when it had a $3.5 billion valuation. It's the first time the company had been net income positive. We have $34 million of cash and only $25 million of debt. The company, up until a few months ago, had a rather onerous piece of leverage, which was formerly with Blue Torch Capital that had a total cost of capital of about 28.5%. We refinanced that $25 million with Tiger Finance, and our effective cash rate is 13.4%.
So we spend about $3.5-$3.8 million a year in debt service, which is nothing for a company this size. And again, our cash is $10 million above our debt. But most importantly, when I joined, right before I joined, this company had a $900 million break-even level. So it had to do $900 million of revenue to make a dollar of cash. We have re-architected the company. We took it from 900 down to 440, and today it's $180 million. So in a little over two years, we have lowered the break-even of the company by $720 million. We've taken the manpower base from over 1,300 to less than 300, and we've eliminated the MLM business in Q4 of last year. So we became a new company on January 1st, 2025, a new company that we call an omnichannel company. So we sell direct-to-consumer through our website.
We have an affiliate program where people sell our products and they get a commission. There's no recruiting, there's no management. They just sell it and they get paid, and then we've got an Amazon and a marketplace business, and starting in Q1 of 2026, we're creating a virtual consumer packaged goods company, so what we're doing is we're taking a couple of our billion-dollar brand names, P90X, Insanity, and Shakeology. P90X is the biggest name in the history of fitness, and we've created a line of nutritional products: pre-workout, post-workout, energy sticks, whey protein, creatine, and energy drink, and we've created dynamic packaging. We've hired the largest broker firm in America selling brokers to sell it into food, drug, mass merchant, C-stores, and club stores. We've got one of the largest fillers in America producing and filling the products for us.
And we have one of the largest third-party logistics firms in America processing and doing the pick, pack, EDI shipping. So what we do is the marketing and the R&D, and we've farmed everything else. So we've created a virtual CPG company with a variable cost P&L because everything had been farmed out. And these products will be on the shelf at retail, P90X, selling from $15-$35. And they will have QR codes on them that if you scan the QR code, and this is the first time this has ever been done, you will get one free month of P90X exercise program, a $35 value for free, which means you essentially bought the nutritional product for free. We're launching a new P90X exercise program in February of 2026, right around the same time that the nutritional products come out.
First new P90X program in 15 years with a new P90X spokesperson who Carl likes to call the new James Bond of fitness. It's going to be a fabulous program. So that's news. And then in two weeks, we're launching a major new fitness initiative that's designed to go after the 185 million Americans who are overweight and don't exercise. So while we've got the Netflix of fitness library with our 140 titles, 10,000 hours of video, $179 annual subscription fee, there's an entire massive TAM of 185 million people who don't exercise because they are self-conscious, don't want to go to a gym, don't want to spend an hour a day, and can't even really go on a diet because that's why they're overweight. They either need a GLP-1 drug or other medication because they can't get themselves to work.
So we've created an entire array of programs around muscle, cardio, core, flexibility that we're going to bring out in two weeks under a very clever moniker that's going to allow us to have a completely non-cannibalistic incremental revenue stream of generating people who are not current exercisers to get in the game. And then for those who are serious exercisers, we'll have our library, we'll have our new P90X, and in the back half of the year, we'll have a new Insanity exercise program. And that will coincide with an Insanity energy drink and an Insanity line of nutritional supplements, which will be sold by our third-party selling broker and filled by our third-party production source and pick, packed, and shipped by our third-party logistics arm.
So when you get to Q2 of 2026, that will be the first year-over-year direct comparison that you can make NewCo to NewCo because comparing us now to what we were last year is irrelevant because it was an MLM and we killed that in December of 2024, so now we're a new company and Q2 of 2026 will be the first quarter where we have an annual year-on-year comparison, so we can now focus on our growth pipeline. We originally were going to do that in 2027, but because our turnaround is a year ahead of schedule, we completed the financial turnaround in two years instead of three, so now we can use 2026 as the year where we open up the innovation pipeline and go after the business, and I will tell you in closing on my opening remarks, two things.
One, we've taken our marketing expense from the high 40s% of sales to the low 30s% by eliminating the MLM cost structure, and we're spending more money on media today with a low 30s% marketing spend than we were when we were in the high 40s, and then lastly, we built a massive amount of operating leverage into our P&L for the first time ever so that we've now structured it so that if our sales were to go up, call it 25%, we could essentially double our profit because of the flow-through that we've got with a $180 million break-even versus the former $900 million break-even, so financial turnaround has been stunning. We've got a great balance sheet. We have blended gross margins of the 72.6%, of which almost 90% of those margins are in digital fitness, 50 plus in nutrition.
We've got a TLV to CAC, which is phenomenal. Our average life of customers is a little over two years, bringing about $380 from them. Against our CAC, we have a great cash-on-cash return. And now all we have to do is open up the innovation pipeline, feed it gradually with our marketing spend. And then as we start to see green shoots, we can go and chase them and hopefully take advantage of the operating leverage we've built in the company. So with that, Alex, I'm going to turn it over to you to moderate the questions. I think I got 10 seconds to spare on my 10-minute overview. So we'll open it up.
Absolutely. Thank you very much, Mark. I think you started touching on some of the ways you guys are starting to explore more innovative distribution methods. And you talked about retail and the free month by QR code. I want to also touch on last week's Reebok partnership announcement. Can you talk a little bit about how that came together and how that unlocks future growth?
Carl?
Yeah. We use that. What we're doing there is Reebok wanted access to our library. Obviously, the library is proprietary to us, but we have a tier that we call BODi Previews that we let people sample each one of the different 140 programs or so. We have many of those workouts on YouTube, for instance, to drive traffic to our brands that then gives people an offer to come subscribe to the app. So we did basically the same thing with the Reebok app. They've got a few million subscribers, and they have access to a tier there that is BODi content. But each one of those workouts is really just the front end, the sample workout of a program. So for instance, let's say you want to do P90X, you would do the sample that we have there in the Reebok app.
And then at the end of it, it says, "Go to this URL and you get a special offer on a full BODi subscription to complete the full program." So there's a benefit to the Reebok subscriber because they get a discount on a subscription to BODi, and we get visibility to that entire database of people. So this is the kind of partnership that we get to do now that we've exited the MLM because we're not protecting the proprietary business model of MLM. You need to respect the distributors. Now we have the ability to get back to our roots, which is partnerships, performance marketing, and so on, using user-generated content to provide social proof. We're really in the sweet spot of what made the company so successful for its first 22 years.
Great context. Thanks, Carl. And I think you've also been doing some experiments to give folks more modular and affordable app and nutrition offerings. I think we've spoken about packaging and trainer-specific. So maybe you could talk a little bit about what led you to offer those and how the reception has been?
Well, obviously, we've been, I think the whole industry has been impressed with what Planet Fitness did with what they call high-volume, low-price subscriptions, got them up to over 30 million members. And we get to do the same thing, but we've got the complete flexibility of doing it without the brick-and-mortar capital expenditure. So for instance, we launched a bespoke or a curated subscription just for the Shaun T. He's the guy Insanity, T25, Dig Deeper
So we obviously see a certain portion go to the $19, a certain portion go to the $9.99, but we're seeing that that is giving us access to higher volume. It's generating significant traffic. And then once those people come into the database, we have the opportunity to market them different subscription tiers and the different nutritional supplements to help them get results with the subscription that they bought. And we're extending that. We'll be extending that into the program that we're very excited about that launches on December 22nd that we think is going to break the TAM open, wide open. We have access to the 185 million people who are overweight or obese, who generally the fitness industry doesn't pay any attention to. And we think we've got a tiger by the tail with that opportunity.
And we'll do the same thing with P90X and the entire P90X catalog. So high volume, low price with the opportunity for people to get exactly what the part of the subscription they want or come in for the $19 a month or, as Mark said, the $179 per year if you want access to all the content.
You know, Alex, what makes the company unique, and now it's been unburdened because of the getting rid of the MLM. We couldn't do this before. Because if you were paying 40%-50% commissions, you can't be offering $10 a month curated collections. You'd never make any money. So we don't have to worry about that anymore. So the whole idea of the company changing its name from what was the Beachbody Company, which is six-pack abs and big arms to BODi, was to have it basically have a mantra that it's got you covered from fitness, nutrition, lifestyle, meal planning. So we're basically a total solution to somebody's attempt to get healthier, not just to get more fit, not just to look better, but to get healthier.
And so now that we're unburdened by a commission structure that used to really burden the company from a financial standpoint and a marketing standpoint, now we can go out and say, whether you're an exerciser like I am or someone who hates to work out, half of the people in this country are on meds because they've got high blood pressure, high cholesterol, high blood sugar, sleep apnea, you name it. The other half of the people who've been diagnosed with those afflictions don't take medicine because they don't want to, so they don't exercise, they don't diet, and they don't take medicine, and they've got these afflictions, so what we're trying to say is, look, there is a kinder, gentler, easier solution that we've curated that's designed for you from the people who invented this fitness industry, and it'll be bifurcated.
So we'll have a group of people who just kind of want to get into the jeans from last year that they can't get into or stop huffing and puffing when they climb up their stairs to go to sleep at night to the group of people who are serious exercisers, which is 40 million people. So we've got those people. We've got them addressed. We have better economics now because of the lack of the MLM. And now we go to this virgin frontier TAM of 185 million adults who are overweight who, when the GLP-1 drugs come down in price, a lot of them are going to be using that. And what's the number one problem that you have if you use a GLP-1 drug? You lose your lean muscle mass, which is a terrible thing for someone over 40. So we become the adjunct to that.
So we are perfectly aligned with this new program coming out. It takes some time to get some awareness and traction, but who better than the company? I mean, Carl invented this whole industry. I mean, we're not a company that's just coming up with an idea. This is the company that pioneered home fitness, so we're going to go to all the people who are self-conscious about how they look and don't want to go to a gym and show them in their own home. Give us a few minutes a day, we can get you healthier.
Yeah, it makes a lot of sense. I want to touch on one more product question, and then we'll switch gears into some financial questions, but I think we've spoken a lot about fitness. We've talked about P90X and some of the celebrity trainers that you have.
When I logged into the app for the first time, I was blown away by the nutrition side too. You could do meal planning. You can do calorie tracking. So can we talk a little bit about the synergies between the two? What percentage of customers use both, or what's sort of the funnel between them? And how do you think the retail launch is going to add to the business?
Well, I mean, I will tell you the thing that shocked me was that only, well, less than 10% of our fitness customers, of which we have 900,000, less than 10% of them are using our nutrition products. I'm sure a high percentage of them are using nutrition products, but they're not using ours. Well, ours are expensive. Why are they expensive? Because they were priced for an MLM structure that paid 40%-50% commission rates. So they had to be expensive. So people were like, "Hey, you know right church, wrong pew." Now, with a P90X line, that's going to be $15-$35. And now Shakeology, which has done $4 billion of cumulative sales, 1 billion servings, 10 million users, and has never been sold in a retail store, now it's going to be sold in a seven-serve bag at $39.99.
So now we're going to be able to go to all of these people in our current CRM bucket of 8 million former members and 1 million current users and say, "We now have these popularly priced form factors of P90X and Shakeology. What's that going to do for adoption?" Well, it's not going to go down. I mean, in the end of the day, we will have removed the biggest barrier, which was our price, because we've unburdened the company. So this is a major derivative benefit of getting out of the MLM business. We've got superior products, but we've never been able to go after the broad berth. Although I will tell you, Alex, anecdotally, when the company five, six years ago did $1.4 billion in revenue, $900 million was nutrition, $400 million was fitness. And the company made what, Brad? $140 million at EBITDA or something?
Right around there, yes.
So there's a history here that says this company could do almost $1 billion in nutrition with higher-priced products that aren't as strong as the arsenal that we're about to launch.
Yeah, it's a great history. Thanks for sharing with us. So I think for investors who have been following this story, they've seen earnings losses narrow. They've seen operating leverage grow. Maybe they're on the fence because they're saying, "When is revenue going to come back? Year-over-year comps, I'm not seeing it." How do you sort of communicate, "Now is the right time to get in"? And how do you think about getting them off the fence?
Well, you can't do year-over-year comps in a business that's completely different from what it was. So comparing a non-MLM business to what was an MLM is apples and oranges. So we told people, we started telling people this a year ago, that January of 2025 was going to be the first month of the new company. What makes it new? It's got a $180 million overhead as opposed to $900 million. It's got a completely new structure, and there's no more MLM. So it's not revenue declines versus prior year. That's not relevant. It's NewCo It's now super profitable. So it's not like we're about to get to earnings. We've been EBITDA positive for two years running, eight consecutive quarters. We're net income positive. We're free cash flow positive. So this NewC o is a tremendous, powerful financial structure that has operating leverage built in.
And in order to get revenue growth, Alex, what do we need? We need new product and new ideas. What do we have? A new program coming out to the $185 million, a new P90X, a new Insanity, a new retail line, new curated collections from our Super Trainers at lower price points. So we're going to have a lot of arrows that we're firing out of our quiver, and that will make NewC o revenue against NewC o base, hopefully higher. But it's got to be NewC o revenue against NewC o base, not NewC o revenue against OldC o revenue. Because OldC o I mean, who cares if you have $500 million of revenue and you lost $221 million? I mean, congratulations.
Yeah, no, I agree. I mean, the stock is up 160-something% in the last six months.
Yeah, and the market cap is $90 million, and we got a Hilco valuation on a library that's $550 million just on the library. So while it's wonderful that the stock is up, it's ridiculous that the company has a market cap of $90 million with $34 million of cash and $25 million of debt. Makes no sense.
So let me sort of zoom out. We're in the home stretch of the year. Q1 is very popular, very seasonal. I think you've spoken about some of the highlights in the Q1 and Q2 with new product launches and some of the new target audience. Could we sort of look out into 2026 as a whole and talk about some of the catalysts and milestones that investors have to look forward to?
From an investor standpoint?
Yes.
Without getting anywhere close to making projections that we don't want to make, I will tell you this. If I'm an investor and I'm looking at the company, I would look at it through the lens that the management of the company looks at its business. How do you guys, meaning us, how do we look at the business? What's your KPI dashboard going to look like? I would tell you what our KPI dashboard is going to look like is how are we doing on digital subscribers in terms of are we gaining them and what's happening to retention? How are we doing with our new nutritional objectives? Are we getting more people?
Forget about subscribers because we want subscribers, but are we getting more individuals to purchase our nutritional products, which if we do and they stay in the franchise, we can upsell them to a whole host of products? I'm definitely looking at that. Number three, what is the massive awareness going to do when you've got P90X, Insanity, and Shakeology products all over America on retail shelves? What's that going to do for your branding presence, derivative media value of driving people to your website? And number four, how successful can we be at selling current and former Beachbody members these new nutritional products that we're bringing out?
And lastly, can we take our supplements and our meal plans and introduce them to an entirely new group of people, which is the 185 million people who don't exercise, who don't eat healthy, which, I mean, with Shakeology alone, Shakeology's pitch is it's your hall pass for the day. You have all your vital nutrients in a single 140-calorie shake. If you ate McDonald's for lunch and Pizza Hut for dinner, but you'd had a Shakeology in the morning, you literally would have gotten your vital nutrients for the day. So we're going after a group of people who are not necessarily the healthiest eaters, and we can give them something that looks like a magic bullet from a nutrition standpoint. That's a whole lot. So that's what we will be looking at.
And if those things bear green shoots and we get revenue growth, we've clearly shown that the company's financially turned around, then this thing should be worth a lot of money.
Makes sense. Well, maybe as the last question, we still have a couple of questions from the audience on brick and mortar. I think folks are excited. There's one question which is around where in the store do you see yourselves? Is it with nutrition supplements? Is it with sports equipment? Are you trying to sort of align a retail offering with any particular stores or sports? And how do you think about that?
We'll be in several sections. So the Shakeology product line will be over where the protein powders and other superfood alternatives are because we are the only superfood plus protein. So we'll be there. The energy drinks, when they come out, will be in an energy drink section. And then there's a workout section that's got whey protein and pre and post-workout. And that's where the majority of the P90X and the Insanity pre and post-workout products will end up sitting. So you will probably be talking to three different buyers, maybe four, within a given chain. And there will be times, Alex, when we will pay for and they will want us to do an end aisle display where we put the family of products on an end cap. So you've got all of them together.
But by and large, we will be in different, which for us is great because it gives us additional aisles to show up in a retail environment to get brand exposure. As opposed to just being in one section in one aisle, we'll probably be in total of three different sections and three different aisles.
Great context. And with that, we are at time. So I'd like to thank you, Mark, Carl, and Brad for sharing the Beachbody story with us. And also like to thank everybody listening for spending time with us today.
Thanks, everyone. Appreciate you guys.