The following is a summary of the The Beachbody Company, Inc. (BODI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 revenue stood at $102 million, achieving the midpoint of projected guidance.

• Achieved a significant improvement with gross margins at 67.3%, marking an 880 basis point increase year over year.

• Adjusted EBITDA for Q3 was remarkably high at $10.1 million, a drastic improvement from a $5.8 million EBITDA loss in Q3 of the previous year.

• Marked a fourth consecutive quarter of positive adjusted EBITDA and generated $5.3 million in positive free cash flow year-to-date.

Business Progress:

• Completed a major shift from a multilevel marketing (MLM) model to a single level affiliate model effective November 1, 2024.

• The new affiliate model simplifies operations and maximizes return on advertising spend, lifetime value and operational economics.

• Launching new products under P90X and Insanity brand names in 2025 and 2026, respectively, which will be sold through various channels including major retailers.

• Plans to expand the affiliate program to TikTok shops by Q2 2025.

Opportunities:

• Transitioning to a single level affiliate model, to capitalize on streamlined sales processes and improved compensation for affiliates.

• The new business model facilitates multichannel distribution including direct response marketing, a growing Amazon business, and future retail partnerships.

• Introducing new products in the Nutrition segment, expanding brand presence, and leveraging e-commerce platforms.

Risks:

• Q4 traditionally experiences lower revenue, impacting the company's performance as they transition to the new affiliate model.

• Adjustment phase involving training for new affiliates could slow momentum initially.

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