Beachbody's Q3 2025: Contradictions Emerge on Sales and Marketing Costs, Shakeology Retail Launch, Nutrition Pricing and Subscription Strategies, and EBITDA Guidance and OpEx Cuts

Date of Call: November 10, 2025

Financials Results

• Revenue: $59.9M, down 6.3% sequentially and down 41.4% year-over-year
• Gross Margin: 74.6%, up 230 basis points sequentially and up 730 basis points year-over-year

Guidance:

• Q4 revenue expected to be $50.0M to $57.0M.
• Q4 net income expected to be between -$1.0M and $3.0M.
• Q4 adjusted EBITDA expected to be $5.0M to $9.0M.
• Anticipated revenue mix ~61% digital / 39% nutrition.
• Long-term gross margin targets: digital 87%–89%; nutrition 46%–52%; total 70%–75%.

Business Commentary:

• Turnaround and Financial Milestones:
• The Beachbody Company achieved 8 consecutive quarters of positive adjusted EBITDA and generated $13.1 million in free cash flow through 9 months, with $9 million in Q3 alone.

• This was driven by a successful financial restructuring, which included eliminating structural inefficiencies that reduced the revenue breakeven point by 80% to $180 million.

• Retail Expansion and New Product Pipeline:

• Beachbody plans to introduce new products, including Shakeology to retail for the first time, and new P90X and Insanity supplement lines in 2026.

• This expansion is aimed at leveraging the company's billion-dollar brands in new channels, enhancing the omnichannel strategy, and targeting a broader market with more affordable pricing.

• Customer Base and Subscription Models:

• The new Super Trainer subscription attracted customers with a low-price option, leveraging specific trainers' affinity.

• This strategy is aimed at acquiring new customers and increasing retention by offering varied subscription models tailored to different customer preferences.

• Operational Efficiency and Marketing Cost Reductions:

• Selling and marketing expenses declined significantly, with 31.9% of revenue spent in Q3, down from 38.2% in Q2.
• This reduction was due to the transition away from the multilevel marketing channel and the elimination of legacy costs associated with the MLM model.

Sentiment Analysis:

Overall Tone: Positive

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Q&A:

• Question from Susan Anderson (Canaccord Genuity Corp., Research Division): I'm curious about the customer base — are you seeing any big change with the new business model? And can you share details on who is signing up for the unbundled Super Trainer subscription — new customers or existing ones?
  Response: Customer demographic remains similar to historical DTC users; Super Trainer subscriptions are winning back affinity customers and attracting new users, with a meaningful percentage upgrading to the full subscription.

• Question from Susan Anderson (Canaccord Genuity Corp., Research Division): Can you give more color on the new product pipeline timing, specifically the new P90X product and other digital or nutrition rollouts into the holidays and next year?
  Response: Nutrition expansion is focused in 2026 (P90X and Insanity supplements, retail Shakeology); new digital content launches now through Q1 including Shaun T DIG IN and P90X Generation Next (teased, launches Feb 3); DTC and Amazon availability will be immediate with brick-and-mortar following standard planogram timelines.

• Question from Susan Anderson (Canaccord Genuity Corp., Research Division): Should we expect increased investment in new products to impact operating expense, or is that already planned?
  Response: Product and marketing investments are within the company's disciplined economics and are already included in the guidance for Q4.

• Question from John-Paul Wollam (ROTH Capital Partners, LLC, Research Division): On the nutrition side, can you explain the modest sequential decline and any promotional activities that drove results?
  Response: Declines reflect the transition away from MLM; company is conducting price testing and introducing lower-priced SKUs and bundles which are sustaining demand at lower price points.

• Question from John-Paul Wollam (ROTH Capital Partners, LLC, Research Division): Any update on retail broker progress and visibility for the retail launch next year?
  Response: Broker sell-ins are active; expect retailer responses in ~4–6 weeks and, if accepted, retail shelf presence typically appears ~5–6 months later (late Q1 into Q2); DTC/Amazon launches can occur immediately.

• Question from John-Paul Wollam (ROTH Capital Partners, LLC, Research Division): Can you bridge the selling & marketing decline from Q2 to Q3 and discuss the outlook for that line?
  Response: The sequential decline was driven primarily by the burn-off of legacy deferred partner costs (from ~$25M to ~$3.5M); consumer advertising was maintained; S&M is expected roughly in the mid-30s% of revenue with seasonal Q1 uplift.

• Question from Michael Kupinski (NOBLE Capital Markets, Inc., Research Division): Has the restructuring of the sales force now been completed?
  Response: Yes; organizational and financial restructuring are largely complete and the company is now operating a multichannel model focused on growth into 2026.

• Question from Michael Kupinski (NOBLE Capital Markets, Inc., Research Division): With lower-priced retail SKUs, do you expect to give up margin on nutrition products?
  Response: Q3 nutrition margin was ~53%; management expects nutrition margin to moderate to a long-term range of 46%–52% as lower price points and promotions drive unit growth while digital margins target 87%–89%.

• Question from Michael Kupinski (NOBLE Capital Markets, Inc., Research Division): Can you frame anticipated marketing spend around the retail rollout for P90X and the timeline for the new P90X exercise program?
  Response: P90X Generation Next is a Q1 program (launch Feb 3); retail marketing spend will scale with wholesale orders and follow a normalized advertising-to-sales ratio and is being baked into planning, but no discrete spend figure was provided.

Contradiction Point 1

Sales and Marketing Costs Post-MLM Exit

It involves the expected level of selling and marketing costs post-MLM exit, which is crucial for understanding the company's cost structure and profitability.

Can you explain the transition in selling and marketing expenses from Q2 to Q3 and outline future spending plans? - John-Paul Wollam (ROTH Capital Partners, LLC, Research Division)

2025Q3: The current spending rate is mid-30s, with seasonal fluctuations. - Brad Ramberg(CFO)

What is the appropriate level for selling and marketing costs after the MLM exit? - Susan Kay Anderson (Canaccord Genuity Corp.)

2025Q2: The selling and marketing margin has decreased from 51% to 39% post-MLM, with a goal to reach the mid-30s by year-end. - Brad Ramberg(CFO)

Contradiction Point 2

Retail Launch of Shakeology

It involves the timeline and process for the retail launch of Shakeology, which is essential for assessing the company's growth strategy and expansion into new channels.

Can you provide an update on retail launch visibility? - John-Paul Wollam (ROTH Capital Partners, LLC, Research Division)

2025Q3: Retail launch is based on planogram resets; products are expected to appear in Q2 2026. - Mark Goldston(ECH)

Could you share details on the retail launch of Shakeology in early 2026? - George Arthur Kelly (ROTH Capital Partners)

2025Q2: Shakeology will launch in Q1 2026 with a limited rollout in select grocery, drug, mass merchant, club store, and convenience store chains. - Mark Goldston(ECH)

Contradiction Point 3

Nutrition Subscription Model and Pricing Strategy

It involves changes in the company's strategy for nutrition subscriptions, which directly impacts customer acquisition, retention, and revenue streams.

What factors drove the changes in nutrition revenue and which promotion strategies were effective? - John-Paul Wollam (ROTH Capital Partners, LLC, Research Division)

2025Q3: Before the transition, Shakeology was $130 per month. We're now introducing smaller serving sizes. Promotions and bundled activities are increasing demand at lower price points. - Brad Ramberg(CFO)

How are you approaching nutrition pricing ahead of your retail launch this year? - George Kelly (Roth Capital Partners)

2025Q1: We are now focusing more on one-time nutrition purchases, which will lower gross margins but increase the reach of potential customers. When launching in retail, margins may differ but we will prioritize gross profit over individual margin. - Mark Goldston(CFO)

Contradiction Point 4

Nutrition Revenue and Product Pricing Strategy

It involves changes in the pricing strategy and revenue expectations for the nutrition segment, which is a significant part of Beachbody's product offering.

What drove the sequential changes in nutrition revenue and which promotions were effective? - John-Paul Wollam (ROTH Capital Partners, LLC, Research Division)

2025Q3: Before the transition, Shakeology was $130 per month. We're now introducing smaller serving sizes. - Brad Ramberg(CFO)

How do you view the nutrition business beyond retail, and what are the positives and quantifiable aspects? - JP Wollam (ROTH Capital Partners)

2024Q4: We're introducing new products like the 3 Day Refresh and the new Shakeology flavors and new recipes, and we actually didn't change the price of Shakeology. - Carl Daikeler(CEO)

Contradiction Point 5

EBITDA Guidance and Operating Expense Reduction

It involves changes in financial forecasts, specifically regarding EBITDA guidance and operating expense reduction, which are critical indicators for investors.

Will new product investments impact the P&L, or were the costs already planned? - Susan Anderson (Canaccord Genuity Corp., Research Division)

2025Q3: EBITDA guidance for the year is 1.25%. And we are at breakeven when you look at Q1. - Brad Ramberg(CFO)

Is the EBITDA guidance fully baked, or are there remaining steps to reduce OpEx further? - JP Wollam (ROTH Capital Partners)

2024Q4: EBITDA guidance for Q1 is negative 2% to positive 2%. The company is learning daily and adjusting operating expenses as needed. - Brad Ramberg(CFO)