Welcome, everybody. Thanks so much for joining us today. I'm Carl Daikeler, CEO and co-founder of The BODi Company, formerly known as The Beachbody Company. Joining me is Mark Goldston, who joined us a few years ago as Executive Chairman to orchestrate our turnaround, and our CFO, Brad Ramberg. We'll walk you through a few quick slides today to give you a sense of where the company came from and how it's doing in its turnaround, which I'll sort of spoiler alert, it's going great. Do I need to read that for everybody?
No, just show it up.
OK, everybody can take a picture of that if you want to. OK, so the company was formed in 1998 and effectively started transacting in 1999. The mission of the business was to take it while the business struggled to take advantage of some of the expertise of direct marketing, particularly in the fitness area, but to use direct marketing, and at that time it was infomercials, in order to help people achieve their goals and lead healthy, fulfilling lives. Over the course of that time, we've created some pretty amazing brands, P90X, Insanity, and Shakeology.
And that has actually been the beautiful accumulation or growth of value creation that we've done over the course of these 27 years now, every year reinventing what is possible with lifestyle transformation, incorporating fitness programs that help walk people through a step-by-step transformation program, using the actual customer's success to help with our marketing, and combining that with both nutrition plans and nutritionals. During the course of those 27 years, we've now accumulated over 140 different proprietary branded programs. We have over 11,000 videos streaming on our BODi platform, which, by the way, BODi, B-O-D-I, was created as an acronym from Beachbody On Demand Interactive. We were lucky enough to have a four-letter URL. We shortened the name of the company to BODi, which many people will know as BODi, but we're going to try to change that here, one person at a time.
We have six owned nutrition brands, as I mentioned, Shakeology being one of the key brands in the company's portfolio and what's really exciting is, over the course of time, how people have embraced our content. We're closing in, actually, on a billion views of our content on the platform. That obviously doesn't include the original days of VHS and DVDs, which we have sold literally tens of millions of those. 32 million customers since our inception, and we've done over $12 billion since we started the company. The opportunity is as big today, if not bigger, than it was when we started the business back in 1998. Overall, general wellness is a $6.5 trillion potential business as measured in 2023.
We operate in two particularly productive areas for direct-to-consumer value creation, and that is both the fitness category, which is a $1.1 trillion potential, and nutrition, also at $1.1 trillion, so we have a lot of work to do to achieve our potential of getting to our $2.2 trillion bandwidth of what kind of market is available out there, but the good news is consumers need it now more than ever, and that doesn't mean that we're out of the woods, though. As a company that has been around for 27 years, you don't know a lot of health and fitness companies that have been around that long. Luckily, we're in a company that is largely content-oriented, which gives us the agility to reinvent and reinvent.
But that also means sales channels have also evolved over the years, and that's where the need for a turnaround came in when we started to see weakness in our two primary sales channels. That's infomercials and then multi-level marketing. With that, I'll turn it over to Mark Goldston, who came in to help us turn the business around three years ago.
Thank you, Carl. I'm just going to turn around before I go up.
There you go.
Thank you very much.
Turn around.
Yeah, there you go. That was it. Turnaround's complete. Yeah, so I joined in June of 2023 to join Carl and the team to really re-architect this company and what attracted me originally to it was the assets of the company. The library is unparalleled. It's got about a $500+ million replication cost just to recreate what Carl and the team have created so I pretty much looked at this and said, between the nutrition brands, the fitness brands, and where this company's value ought to be, there was a big disconnect. Obviously, the company had financial issues, and we knew we had to fix that but fundamentally, from an asset standpoint, I'd rarely seen a company with stronger assets than what this company had.
So when Carl talked about the market opportunity, the one thing that we didn't talk about is the retail opportunity, which I'm going to touch on in a minute, for taking these products which had never been sold in the retail market ever, and we're about to embark on an entire retail strategy for that. One of the things that really struck me was that this company had 22 years of exceptional profitability. And if you look at the thing was taken public after being a very successful private company. The de-SPAC was done in 2021. The company had a valuation of $3.2 billion of market cap. And the assets of the company today are greater than what they were when it de-SPACed in 2021 with a $3.2 billion market cap. So post-IPO and post-COVID, the company started to run into some issues.
A lot of that had to do with the fact that it was an MLM or a multi-level marketing company, and those have massive inefficiencies built into them. It is a part-time workforce. Soccer moms and the like, you never know whether they're going to work that day or not. And the infrastructure costs to support an MLM are burdensome, and the compensation structure for an MLM is even more burdensome, so what we said was, we need to figure out how to re-architect this company to move away from being multi-level marketing and build a multi-channel strategy, which is basically direct-to-consumer, Amazon/Marketplace, affiliates, and then retail, and that should be the company, so we did away with the MLM in Q4 of 2024. That was the last quarter that we had it.
In so doing, we really finished off what had been a turnaround process that had started in June 2023 when I joined. You'll see some of the data that we've been able to put up in terms of numbers, re-architecture, et cetera. Basically, this company has gone from a $900 million cash break-even level before I joined. Today, it's $180 million. We have lowered the cash break-even level of the company by $720 million. We've also had eight consecutive quarters of positive adjusted EBITDA, which has been roughly $50 million. We've re-architected the infrastructure of the company to go from over 1,000 employees to less than 300. We restructured all of our debt, which was originally with Blue Torch Capital, $25 million. We refinanced it with Tiger Finance and SG Capital and reduced our overall interest expense by 44%.
We've turned net income positive in Q3 of 2025, which is a seminal event for any turnaround. And we're very cash flow positive as well. So we have a company now that's got a cash level that's in excess of $10 million above its debt level, is very profitable, has a great margin structure, has built enormous operating leverage into the P&L of the company, which is really what you need in a turnaround. And we are a year ahead of schedule. So we did not think, if you talked to me when I joined in June of 2023, my first quarter, I was kind of figuring out where the restroom was. And then starting with that very next quarter and for the ensuing eight quarters, we have been EBITDA positive to the tune of a cumulative $50 million.
We are a year ahead of schedule, which allows us to do what? It allows us to start to innovate. This company has a formidable innovation pipeline that we have created. We are going to be sequencing those launches between 2026 and 2027. Originally, we thought we couldn't get to any of it before 2027. A big part of that will be something we just launched a couple of weeks ago, which is called the 10-Minute BODi, which is a way of basically taking the 185 million people in this country who are overweight and don't exercise because they don't have the time, they think it's too hard, they don't really care, or the mountain is too high to climb. We've created over 400 units of 10-minute content, muscle, core, you name it, that'll take the non-exerciser and help them get healthier.
This isn't about getting six-pack abs and getting big guns. This is about fitting into the jeans that you had a year ago and getting your A1C down so that you can live to fight another day. It's a huge idea. We just launched it. We're really excited about it. We're then coming out with a new P90X called P90X Generation Next in February. We haven't had a new P90X program in 15 years. It's the biggest name in the history of fitness. Everybody's really excited for this to come out. We will be launching a retail line in Q1 and Q2 where we've taken P90X, Insanity, and Shakeology, our three $1 billion brand names. We've created a line of nutritional supplements under the P90X name. We will have one under the Insanity name.
We're taking Shakeology, which is a $3+ billion cumulative sales brand with over a billion servings that has never been sold in a single retail store. So we're taking it out with a small form factor, hired the largest brokerage company in America out of St. Louis to sell our products into grocery, drug, mass merchant, c-stores, and club. We're really excited about this because it will coincide with the launch of the new P90X exercise program. We'll QR code our packaging. So when you buy a product at retail, if you scan the QR code, you get a free month of a $35 value P90X exercise program just by buying our nutrition product. We've got a lot of cool stuff that's coming in the pipeline. From our perspective, the sleeping giant is Shakeology. We sell predominantly a 30-serve bag for $129.
We're going to have a 7-serve bag for less than $40 that will be sold at retail and on our own website, and it will open up this audience to us, so we're addressing the TAM of the non-exerciser. We're creating great new content for the exercise audience that we have. We're taking our nutrition business, which was pretty much part of a walled garden that was only sold within our layer, and we're taking it to the outside world, and the brand exposure that we're going to get from having these brand names in retail stores with cross-marketing back to our exercise programs will be a huge shot in the arm for the company and something that we'll be able to build upon as we go forward.
So I would say that the takeaway from the turnaround has been a $720 million reduction in break-even, increases in margins, taking our body count, no pun intended, from over 1,000 people to less than 300 people, having eight consecutive quarters of positive EBITDA, cash flow positive, net income positive in Q3, completely restructured our debt. And now we're in a position where we can actually focus on what this company has always done best, which is creative, innovative, exercise-related programs, and unique and compelling nutritional products, as opposed to having to worry about fighting for your life for financial survival, with our cash level being $10 million above our debt level and our interest rate coming down 44%. Those are no longer issues that we need to be worrying about. So I am thrilled to have come here.
I am blown away by how quickly we were able to re-architect and do the turnaround, and I'm incredibly excited about this innovation pipeline, which I thought we'd have to wait till 2027 to start to launch, which we can start in 2026, so for more of the really good news, I'm going to turn it over to our CFO, Brad Ramberg, who's going to give you sort of the highlights of the milestones of this turnaround. Brad? Green button, not red. I figured that out.
Thanks, Mark. Thanks everyone for joining us today. I wanted to share some of the financial metrics around our turnaround, which are pretty spectacular. I want to show you that we are literally a year ahead of where we thought we would be in the turnaround and why we are poised for growth. As Mark mentioned, we've taken our revenue break-even to get the cash break-even down from $900 million in 2022 to about $180 million today. So literally a $720 million reduction in the amount of revenue we need to do to break even on a cash basis. Our free cash flow. In 2021, our free cash flow was close to negative $300 million. Today, 2025, first three quarters, year to date, we are positive $13.1 million in free cash flow. That's literally over a $300 million improvement from 2021. Adjusted EBITDA.
Just a few years ago, again, 2021, before the financial turnaround, we lost $86 million, just over $86 million. This year, 2025, first three quarters of the year, we're just around $18 million of positive Adjusted EBITDA. Net income, the true bottom line measure of all accounting numbers. 2021, almost $300 million, about $225 million in negative Adjusted EBITDA. So going from negative 225 to the first three quarters of this year, we were negative 8.1. But importantly, in the third quarter of this year, we were net income positive to the tune of over $3 million for the first time since going public. The company is very strong from a cash position, as Mark mentioned. We have cash in excess of our debt. The turnaround is ahead of schedule, and we are poised for growth in 2026 and 2027.
With that, I'll turn it back over to Mark to summarize the highlights.
Thanks, Brad. And we're managing the clock just like a good team would always do. So in terms of the turnaround highlights, and this is my favorite slide because I'm thinking of just putting this on the front lawn of my house. This is really what comes right down to it. You can talk about all the qualitative things, but everybody wants to know what does your house really look like and the underpinnings of the turnaround. So I would say in summary, and this is all based on September 30th because we haven't reported fourth quarter yet, but with a $34 million cash position and $25 million of debt and our average interest rate's about 15.5% all in, it's only about 13.2% from a cash standpoint. So that's been incredibly positive.
The EBITDA being cumulatively almost $50 million, the nine-month numbers that Brad just went through, and the break-even level being reduced the way it was. Frankly, the one thing we didn't talk about was our selling expenses, selling and marketing expenses, which were way up before, like over 50%. We've now got them in the low-to-mid-30s. Amazingly, we are spending more money on media with a low-30s sales and marketing expense than we were spending when it was over 50% because we've taken all of those MLM costs out of sales and marketing. So we could lower the sales and marketing percentage dramatically and increase the actual media spend of the company, which is something I have rarely ever seen a company be able to do.
The innovation pipeline, when we've launched the Super Trainer Collections, which are key people like Autumn Calabrese, Shaun T, where we've taken all the things they've done and we've curated them down to collections that people can subscribe to. So if they want just Autumn, we've got a bunch of stuff from Autumn that you can do. Same thing with Shaun. We're excited about that. The new 10-Minute BODi, this could be a company unto itself. And it's going to take us some time to curate this, but we're really excited about it. The new P90X Generation Next, biggest program in the history of fitness, is now coming out for the first time in 15 years. We have a new P90X spokesperson. His name is Waz. He's a great guy, young, really fit, makes us all want to go and work out harder.
The small serve for Shakeology, something we've always talked about doing. If you go on Amazon, people are selling protein superfoods for $49-$79. We were at $139, $129. We're now going to be priced down where we need to be below 40 bucks. We're coming out with energy drinks that we're going to test under the Insanity and the P90X brand names, which we'll put at retail. We've talked about our supplement launches. We'll have new Shakeology products at the end of the year, and we're looking at protein bars from P90X, Insanity, and Shakeology, which will be uniquely positioned to what their audiences are. And that's just part of the pipeline. We have a lot more than that. So there is no shortage of ideas. There never have been.
When Carl and I get in a room with a whiteboard, we could probably fill the thing up in 10 minutes. And he's the man who pioneered all of this entire fitness revolution from infomercials to DVDs. So we know from a content standpoint, we're always going to be better than the other people are. And now we've got the financial flexibility to be actually put gas in the car that we can drive, where before we were actually driving on fumes. So from a turnaround perspective, A-plus financially, a year ahead of schedule. The pipeline is fertile. It's going to take some time to get traction. We will not get out over our skis. We will not overspend against it. We will do it on a metered basis.
And hopefully by the end of next year, beginning of the following year, people will see that the total turnaround is complete. So with that, we've got about five and a half minutes left for any questions people have. Yep.
Congratulations on the pipeline.
Thank you.
As you're kind of getting your discussions about getting your retail distribution, I was wondering if you initially thought that you were going to go into first convenience stores and things like that. I was wondering as you're getting into discussions for your retail rollout, has that process changed?
No. It's a great question. So the retail process is much slower than I remembered it to be when I was running the big packaged goods companies. They all run on planograms. So they do shelf sets. They do them once or twice a year, and they don't change their timing. So if you thought you were going to launch in January and they're not doing a shelf reset till March, you won't be in the store until March. So our broker firm is the one that's doing all the sales presentations. We've done in excess of 50, I believe. And we will be getting answers back from those retailers about, will they be buying the product? When will they take it? How many SKUs will they want? So we're aggregating all of that. And so it's a slower process because of the nature of the industry.
The convenience stores for us will be a big part of the energy drink business, less so for nutritional supplements. They don't have shelf space, so they want grab and go. Yeah, sure. Yep.
Can you tell us what the long-term margin structure could look like for this business on an EBITDA level? If you take like a three to five-year view.
I could, but then I'd be giving you a projection, so I can't. So all I can tell you is it's a good question. All I can tell you is that our gross margins should normalize in the low- to mid-70s, would you say?
Yeah.
Right? And you could be in the high 80s to 90% on fitness and be in the 50s% as we get bigger in retail, probably mid-40s to 50% in nutrition. And with a $180 million break-even and massive operating leverage, you can do the math and figure out. I will tell you this mathematically. If you were to grow your revenues 25% with how we've restructured the company, you could double your EBITDA. So that shows you all the operating leverage. So now we just got to go out and try to do that. Yeah. Question? Other question out there? Well, this has been great. Really appreciate you guys coming. We're really excited. Oh, go ahead.
Thanks, Mark. Of all the online media that you've tested so far, what do you think is the best for your demographic? Is it Instagram? Is it TikTok? What are you finding here today?
I don't think we've found the best yet. I think all of us, and I mean all of us in every industry, have used a disproportionate amount of Google and Meta. I mean, that's pretty much been the way people have done. I mean, yes, people use YouTube because it's massively popular. They've used TikTok, but you need specific content that works in that genre. You can't just take your content and slap it in there. Same thing with Pinterest. There's tons of other avenues out there that I think on a go-forward basis, we're going to have to start looking at. The difference is, though, the audiences. So audiences that are 30+ are not heavy TikTok audiences. They are sort of YouTube. So you have to bifurcate your model to say, for the younger group of people, I need to use a different medium.
It's the old adage, if your parents are on it, the kids won't be. And so we're learning as we're going. And frankly, having a retail business is going to help us because there is massive media exposure value of having products on a shelf of a Target or an Albertsons or a Kroger that whether they buy.
Agency, CAC to LTV ratio is what will scale.
And when somebody asks, like, you know, what's your target audience, what I like to say about this company is take your two fingers and put them on top of your left wrist. And if you can feel that sucker beating, you're our target audience. When it stops, we're done with you. So with that, I close. Thank you.