Beachbody Company, Inc.
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
BODI$4.25-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-11.
0000950170-24-029409
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0000950170-25-046760
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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Tables are not compared: 15 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (52)
Current report
disruptions related to the Pivot (as defined below) and our ability to implement the proposed restructuring of our core business model;
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our anticipated market opportunity;
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On September 30, 2024, the Company announced a restructuring of its network business (the “Pivot”) which transitioned the Company’s multi-level marketing model (“MLM”) to a single level affiliate model and reduced the Company's headcount by approximately 170 employees (33% of the Company’s workforce on that date) in the fourth quarter of 2024.
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Total revenue was $418.8 million, a 21% decrease;
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Digital revenue was $224.3 million, a 13% decrease;
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Nutrition and other revenue was $187.8 million, a 25% decrease;
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Connected fitness revenue was $6.6 million, a 66% decrease;
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Operating expenses were $353.6 million, compared to $464.1 million;
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Pivot Restructuring
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On September 30, 2024, the Company announced the Pivot which transitioned the Company’s MLM model to a single level affiliate model and reduced the Company's headcount by approximately 170 employees (33% of the Company’s workforce on that date) in the fourth quarter of 2024. The actions associated with the Pivot resulted in approximately $18.5 million in costs recorded in the Company's consolidated statement of operations in the year ending December 31, 2024.
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The following table details the costs incurred and benefits realized associated with the Pivot in the year ended December 31, 2024:
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(1) Due to the Pivot, certain long-lived assets with a net book value of approximately $12.8 million will not be used by the Company after December 31, 2024. The Company performed an impairment review for its long-lived assets, including the long-lived assets that will not be used after December 31, 2024. The Company performed a test of recoverability and concluded that the carrying value of its long-lived assets, which are all in one asset group, were recoverable. The Company decreased the average remaining useful lives for the long-lived assets that were impacted by the Pivot from 25 months prior to the Pivot to 3 months after the Pivot. This resulted in accelerated depreciation expense of $11.1 million that was recorded in the Company's consolidated statement of operations in the year ended December 31, 2024. See Note 6, Property and Equipment, Net, for additional information on the accelerated depreciation.
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(2) Termination ($5.1 million) and retention benefits ($1.1 million) which are included in restructuring expense in the Company's consolidated statement of operations of approximately $6.2 million were recorded in the year ended December 31, 2024.
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(3) Consists of (a) inventory adjustments recorded associated with the decision by management to no longer sell connected fitness inventory beginning in early 2025, which were recorded in cost of revenue-connected fitness ($1.2 million) and (b) inventory adjustments for nutrition and other inventory impacted by the Pivot which were recorded in cost of revenue-nutrition and other ($0.2 million) in the consolidated statement of operations in the year ended December 31, 2024. See Note 4, Inventory, for additional information on the incremental inventory adjustments.
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(4) Modification of stock awards for employees who were impacted by the Pivot which includes accelerating the vesting of any options or restricted stock units ("RSU's") that would have vested within six months of the employees termination date, and all vested options will be available for exercise for a total of six months after the employees termination date (that is, three month in addition to the standard three months per original agreement), which resulted in a decrease to equity based compensation expense of $0.3 million in the Company's consolidated statement of operations for the year ended December 31, 2024. See Note 17, Equity-Based Compensation, for more information on the modification of stock awards.
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Goodwill Impairment
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Term Loan Amendment No. 6
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On October 18, 2024, (the “Term Loan Sixth Amendment Effective Date”), the Company and Blue Torch entered into Amendment No. 6 to the Financing Agreement (the “Term Loan Sixth Amendment”), which amended the Company’s existing Financing Agreement (as defined below). The Term Loan Sixth Amendment amends, among other things, certain terms of the Financing Agreement including without limitation, to (1) remove the minimum revenue financial covenant, (2) amend the minimum liquidity financial covenant, (3) include a minimum consolidated EBITDA (as defined in the Financing Agreement) financial covenant, (4) increase the quarterly principal payments on the Term Loan over the remaining quarterly periods, payable in monthly installments, until the maturity of the Term Loan, and (5) amend certain financial definitions, reporting covenants and other covenants thereunder.
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In connection with the Term Loan Sixth Amendment, on the Term Loan Sixth Amendment Effective Date, the Company made partial prepayments on the Term Loan of $3.2 million along with the related prepayment premium of 2% on $2.0 million of the partial prepayments and accrued interest. The partial prepayment of $3.2 million was accounted for as a partial debt extinguishment and the Company wrote off the proportionate amount of unamortized debt discount and debt issuance costs as of the Term Loan Sixth Amendment Effective Date ($0.4 million) which in addition to the prepayment premium was recorded as a loss on partial debt extinguishment of $0.5 million in the year ended December 31, 2024. The Company also incurred a 1% fee as paid in kind on the outstanding Term Loan balance prior to the prepayment (fee of $0.3 million).
Current report
In connection with the Term Loan Sixth Amendment, the Company also amended and restated the Term Loan Warrants (as defined below) for the purchase of 97,482 shares of the Company’s Class A common stock. The amendment of the Term Loan Warrants amended the exercise price from $9.16 per share to $6.26 per share.
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See Note 11, Debt, for additional information on the Term Loan Sixth Amendment and amendments to the Term Loan Warrants.
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2024 Repricing of Stock options
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The Company determined that a significant portion of its outstanding stock options under the 2020 Plan (as defined below) and the 2021 Plan (as defined below) had an exercise price per share that was significantly higher than the current fair market value of the Company’s common stock (the “2024 Underwater Options”). The Compensation Committee of the Board resolved that it was in the best interests of the Company and its stockholders to amend certain of the 2024 Underwater Options (the “2024 Amended Underwater Options”) for current employees and consultants of the Company to reduce the exercise price of the 2024 Amended Underwater Options to the closing per share price of the Company’s common stock on November 13, 2024 (the “2024 Repricing”). The Company had 451,115 2024 Amended Underwater Options which had their exercise price amended to $6.43 per option.
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The Company recognized incremental stock-based compensation of $0.4 million which was recorded as of the 2024 Repricing, related to 292,031 vested 2024 Amended Underwater Options.
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The Company also determined that outstanding stock options under the Inducement Plan (as defined below) had an exercise price per share that was significantly higher than the current fair market value of the Company’s common stock (the “2024 Underwater Inducement Plan Options”). The Compensation Committee of the Board resolved that it was in the best interests of the Company and its stockholders to amend the 2024 Underwater Inducement Plan Options (the “2024 Amended Underwater Inducement Plan Options”) for the Executive Chairman of the Company to reduce the exercise price of each 2024 Amended Underwater Inducement Plan Option to the closing per share price of the Company’s common stock on November 13, 2024 (the “2024 Inducement Plan Repricing”). The Company had 477,661 2024 Amended Underwater Inducement Plan Options which had their exercise price amended to $6.43 per option.
Current report
As part of the 2024 Inducement Plan Repricing, the Company also determined that the Company's Executive Chairman's 318,440 Performance-Vesting Options would be converted from Performance-Vesting Options to Time-Vesting Options and thus those options will vest and become exercisable with respect to 25% of the Time-Vesting Options on each of the first four anniversaries of June 15, 2023.
Current report
The Company recognized incremental stock-based compensation of $0.1 million which was recorded as of the 2024 Inducement Plan Repricing, related to 119,416 vested 2024 Amended Underwater Inducement Plan Options. In addition, incremental stock-based compensation of $0.5 million was recorded upon the conversion of 79,610 Performance-Vesting Options to Time-Vesting Options which resulted in the full vesting of the unamortized expense for those options upon the conversion.
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See Note 17, Equity-Based Compensation, for additional information on the 2024 Repricing of Stock Options.
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El Segundo Lease
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On November 11, 2024, the Company entered into an amendment to its lease of its headquarters in El Segundo, CA. The amendment extended the lease for 26 months from the original termination date of November 30, 2024 to January 31, 2027 and reduced the leased space from approximately 42,000 square feet to approximately 9,400 square feet. The annual base rent is approximately $0.4 million, with annual increases of approximately 3%.
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See Note 12, Leases, for additional information on the amendment of the El Segundo lease.
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(2) Includes accelerated depreciation expense of $11.1 million for the year ended December 31, 2024 related to certain long-lived assets that due to the Pivot will not be used by the Company after December 31, 2024.
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(3) Includes benefits due to the modification of stock awards of $0.8 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively.
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(5) Includes (a) restructuring expense and personnel costs associated with the Pivot of $6.2 million during the year ended December 31, 2024 and (b) adjustments recorded to connected fitness inventory of $1.2 million due to the decision to cease the sale of connected fitness inventory beginning in early 2025 and adjustments recorded to nutrition and other inventory of $0.2 million due to the Pivot, in the year ended December 31, 2024.
Current report
The decrease in digital revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily attributable to a $30.9 million decrease in revenue from our digital streaming services due to a 25% decrease in the average digital subscriptions in the current year as compared to the prior year on lower demand which was partially offset by the transition of all digital subscriptions to the higher priced BODi subscription over the past year. In addition, in the current year there was a decrease of $4.0 million in fees from Partners due to a 36% decrease in the average number of Partners for the current year as compared to the prior year which was also impacted by the discontinuation of this fee as of November 1, 2024 due to the Pivot. With the Pivot and the transition from an MLM model to an affiliate model, the Company no longer received fees from Partners beginning as of November 1, 2024 and will not receive fees from Partners in 2025. The Company recorded $9.9 million and $13.9 million of fees from Partners for the years ended December 31, 2024 and 2023, respectively. We may experience a decrease in both digital and nutrition revenue in 2025 as we transition from the MLM model and ramp up the single level affiliate model.
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Company's gross profit and gross margin as connected fitness has experienced negative gross profit and gross margins for the years ended December 31, 2024 and 2023, respectively.
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Enterprise technology and development expense as a percentage of total revenue increased by 410 bps due to the accelerated depreciation on the long-lived assets impacted by the Pivot, as well as a decrease in revenue at a faster pace than the reduction in enterprise technology and development expenses.
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The decrease in loss on partial debt extinguishment for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to lower partial prepayments on the Term Loan ($13.7 million in the year ended
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Income Tax Provision
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Term Loan Maturity and Liquidity Considerations
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Removed paragraphs (35)
Previous report
our anticipated growth rate and market opportunity;
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Total revenue was $527.1 million, a 24% decrease;
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Digital revenue was $258.4 million, a 14% decrease;
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Nutrition and other revenue was $249.5 million, a 29% decrease;
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Connected fitness revenue was $19.2 million, a 50% decrease;
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Operating expenses were $464.1 million, compared to $572.7 million;
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2023 Equity Offering
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On November 21, 2023, we effected a 1-for-50 reverse stock split of our issued and outstanding common stock. The reverse stock split did not change the authorized number of shares or the par value of our common stock or preferred stock, but did effect a proportional adjustment to the number of shares of common stock outstanding, per share exercise price and the number of shares of common stock issuable upon the exercise of outstanding stock options, the number of shares of common stock issuable upon the vesting of restricted stock awards ("RSU's"), the number of shares of common stock under the Employee Stock Purchase Plan (the "ESPP"), the conversion rate of our outstanding warrants into common stock and the number of shares of common stock eligible for issuance under our 2021 Stock Plan (the "2021 Plan"). See Note 15, Stockholders' Equity, to our consolidated financial statements included elsewhere in this Report for additional information regarding the reverse stock split.
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Goodwill and Intangible Asset Impairment
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Impairment and Sale of Investment
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In December 2023, the Company recorded a $4.0 million impairment on its $5.0 million investment in equity securities of a privately-held company based on an observable price change. The Company sold this investment on January 9, 2024 for $1.0 million and made a partial prepayment on the Term Loan of $1.0 million. The Company also entered into the Third Amendment (defined later) which amended the minimum liquidity financial covenant. See Note 23, Subsequent Events, to our consolidated financial statements included elsewhere in this Report for additional information on the sale of this investment and the Third Amendment.
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Sale/Leaseback of Property
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On February 29, 2024, we sold our Van Nuys production facility which had a net carrying value of $4.8 million at December 31, 2023, for $6.2 million. Simultaneous with the sale we entered into a five year lease of the facility at an annual base rate of $0.3 million per year. The Company used the proceeds received from the sale to make a partial prepayment of $5.5 million on the Term Loan. The Company also entered into the Fourth Amendment (defined later) which amended the minimum liquidity financial covenant. See Note 23, Subsequent Events, to our consolidated financial statements included elsewhere in this Report for additional information on the sale and leaseback of this facility and the Fourth Amendment.
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2024 Restructuring
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In January 2024, the Company executed cost-reduction initiatives intended to streamline the business. These actions are expected to result in approximately $1.7 million in costs consisting primarily of termination benefits during the first quarter of 2024.
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(3) Represents a non-cash expense to adjust the carrying value of our connected fitness inventory and related future commitments. This adjustment was included during the year ended December 31, 2022 because of its unusual magnitude due to disruptions in the connected fitness market.
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Prior to the third quarter of 2022, we operated and managed our business in two operating segments, Beachbody and Other, and one reportable segment, Beachbody. During the third quarter of 2022, in connection with the consolidation of our Openfit streaming fitness offering onto the Beachbody digital platform and based on the information used by management to monitor performance and make operating decisions, we changed our segment reporting as it was determined that there is one operating segment. See Note 1, Description of Business and Summary of Significant
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Accounting Policies, to our consolidated financial statements included elsewhere in this Report for additional information regarding our segment reporting.
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The decrease in digital revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily attributable to a $37.8 million decrease in revenue from our digital streaming services due to 33% fewer subscriptions as a result of lower demand and a decrease of $4.4 million in fees from Partners due to a 28% decrease in the number of Partners, partially offset by an increase in revenue per subscription due primarily to the conversion from BOD to BODi during the year. As of December 31, 2023, approximately 80% of our digital subscriptions were BODi subscriptions and the BODi subscription had an increase in price as compared to the BOD subscriptions (e.g. increase in the annual BODi subscription to $179 from $120 for the annual BOD subscription).
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Enterprise technology and development expense as a percentage of total revenue decreased by 100 bps due to lower fixed expenses.
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During the year ended December 31, 2022, due to reduced revenue and operating income forecasts, we tested our definite-lived intangible asset for recoverability, and as a result recognized a $18.9 million impairment charge to reduce to reduce the carrying amounts of our trade names, customer relationships and developed technology intangible assets to their fair values.
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During the year ended December 31, 2022, we also tested our indefinite-lived intangible asset for impairment by comparing its carrying value to its estimated fair value. Based on this analysis, we recognized a $1.0 million impairment charge as the fair value of the indefinite-lived trade name was determined to be less than its carrying value primarily due to lower revenue in the current year and long-term forecast.
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Income Tax (Provision) Benefit
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Critical Accounting Policies and Estimates
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We evaluate the development and selection of our critical accounting policies and estimates and believe that the following items are critical accounting estimates, as they (1) involve a higher degree of judgment or complexity and (2) are most significant to reporting our results of operations and financial position. The following critical accounting policies reflect the significant estimates and judgments used in the preparation of our consolidated financial statements. With respect to the critical accounting polices, even a relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations. In addition, there are other items within our financial statements that require estimation, but are not deemed critical as defined above. More information on the Company's significant accounting polices can be found in the footnotes to our audited consolidated financial statements included in Note 1, Description of Business and Summary of Significant Accounting Policies, in Item 8 of this Annual Report. The critical accounting policies that reflect our more difficult and subjective judgments and estimates used in the preparation of our consolidated financial statements include those noted below.
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Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually and between annual tests if an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit ("RU") below its carrying value or indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. The Company has historically performed its annual goodwill impairment assessment as of October 1. During the fourth quarter of 2023, the Company decided to change the date of its annual impairment assessment from October 1 to December 31. The change was made to more closely align the impairment assessment date with the Company's annual planning and forecasting process. The change in date of the annual impairment test is not deemed material as the new measurement date of December 31 is in relative close proximity to the previous measurement date and the change did not have any impact on goodwill or the impairment of goodwill. The change has been applied prospectively and would not have had an impact on a retrospective basis.
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We completed the required annual impairment test for goodwill as of October 1, 2023, prior to the change of the annual impairment test for goodwill to December 31. We performed a qualitative assessment which leveraged information from the June 30, 2023 quantitative assessment, in which we estimated the fair value of our RU and determined that the fair value of our RU was greater than its carrying value, resulting in no impairment.
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Due to the change in our annual impairment assessment from October 1 to December 31, we performed our annual impairment test as of December 31, 2023.
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2023 Annual Goodwill Impairment Test
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2022 Goodwill Impairment Test
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We completed the required annual impairment test for goodwill as of October 1, 2022. We performed a quantitative assessment, in which we estimated the fair value of our RU and determined that the fair value of our RU was greater than its carrying value, resulting in no impairment.
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Due to the sustained decline in our market capitalization and macro-economic conditions observed in the second quarter of 2022, we performed an interim test for goodwill impairment as of June 30, 2022. We were required to assess our long-lived assets for impairment, which resulted in no impairment, prior to our goodwill impairment test. The results of our interim test for impairment at June 30, 2022 concluded that the fair value of our Beachbody RU exceeded its carrying value, resulting in no impairment.
Previous report
In connection with the consolidation of the Openfit streaming fitness offering onto the Beachbody digital platform, we changed our segment reporting as we determined that there is one operating segment. As a result of this change in segment reporting during the third quarter of 2022, we completed a qualitative test for goodwill impairment by RU both prior to and subsequent to the change. Based on this qualitative assessment, we concluded that no impairment indicators existed for goodwill both prior to and subsequent to the change in segment reporting.
Previous report
Due to reduced revenue and margin forecasts for certain products, we performed an interim test for impairment of our indefinite-lived intangible asset as of September 30, 2022. In testing for impairment of the indefinite-lived trade name, we compared the carrying value of the asset to its estimated fair value. The fair value of the indefinite-lived trade name was determined to be lower than its carrying value, primarily as a result of reduced revenue and margin forecasts for certain supplements. As a result, we recorded a $1.0 million non-cash impairment charge for this intangible asset.
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Due to reduced revenue and operating income forecasts and sustained decline in our market capitalization during the fourth quarter of 2022, we performed an interim test for goodwill impairment as of December 31, 2022. We assessed our long-lived assets for impairment prior to our goodwill impairment test. In assessing our long-lived assets, we tested the related asset group for recoverability by comparing the carrying value of the asset group to its forecasted undiscounted cash flows. Because the carrying value of the asset group did not exceed its future undiscounted cash flows, we determined that it may not be recoverable. The fair value of the assets within the asset group was then calculated to determine whether an impairment loss should be recognized. The fair values of the customer-related, technology-based, and trade name intangible assets were estimated primarily using a relief-from-royalty approach and calculated to be lower than the carrying value. As a result, we recorded an aggregate impairment charge of $18.9 million. In testing for goodwill impairment, we elected to bypass the optional qualitative test and proceeded to perform a quantitative test by comparing the carrying value of our RU to estimated fair value. The results of our interim test for impairment at December 31, 2022 concluded that the fair value of our RU exceeded its carrying value, resulting in no impairment. Our RU’s fair value exceeded carrying value by approximately 21%.
Reworded paragraphs (58)
Previous wording
BODi is a leading subscription health and wellness company. We focus primarily on digital content, supplements, connected fitness, and consumer health and wellness. Our goal is to continue to provide holistic health and wellness content and subscription-based solutions. We are the creator of some of the world’s most popular fitness programs, including P90X®, Insanity® and 21 Day Fix®, which transformed the at-home fitness market and disrupted the global fitness industry by making it accessible for people to get results—anytime, anywhere. Our comprehensive nutrition-first programs, Portion Fix® and 2B Mindset®, teach healthy eating habits and promote healthy, sustainable weight loss. These fitness and nutrition programs are available through our Beachbody on Demand and Beachbody on Demand Interactive streaming services.
Current wording
BODi is a leading fitness and nutrition company. We focus primarily on digital content, supplements, connected fitness, and consumer health and wellness. Our goal is to continue to provide holistic health and fitness content, subscription-based solutions and digital program sales. We are the creator of some of the world’s most popular fitness programs, including P90X®, Insanity® and 21 Day Fix®, which transformed the at-home fitness market and disrupted the global fitness industry by making it accessible for people to get results—anytime, anywhere. Our comprehensive nutrition-first programs, Portion Fix® and 2B Mindset®, teach healthy eating habits and promote healthy, sustainable weight loss. These fitness and nutrition programs are available through our Beachbody on Demand Interactive ("BODi") streaming services.
Previous wording
We offer nutritional products such as Shakeology® nutrition shakes, Beachbody Performance supplements and BEACHBAR® snack bars as well as a professional-grade stationary cycle with or without a 360-degree touch screen tablet and connected fitness software.
Current wording
We offer nutritional products such as Shakeology® nutrition shakes, Beachbody Performance supplements and BEACHBAR® snack bars.
Previous wording
In the health, wellness and fitness industry, we focus primarily on digital content, supplements, connected fitness, and consumer health and wellness. Our goal is to continue to provide holistic health and wellness content and subscription-based solutions. Leveraging our history of fitness content creation, nutrition innovation, and our network of micro-influencers, whom we call "Partners", we plan to continue market penetration into the health and wellness markets to reach a wider health, wellness and fitness audience.
Current wording
In the fitness and nutrition industry, we focus primarily on digital content, supplements, connected fitness, and consumer health and wellness. Our goal is to continue to provide holistic fitness and nutrition content and subscription-based solutions. Leveraging our history of fitness content creation, nutrition innovation, and our affiliates, we plan to continue market penetration into the fitness and nutrition markets to reach a wider fitness and nutrition audience. Management has determined that it will no longer sell connected fitness inventory in early 2025.
Previous wording
Our revenue is generated primarily through our network of Partners, social media marketing channels, and direct response advertising. Components of revenue include recurring digital subscription revenue, revenue from the sale of nutritional and other products and connected fitness revenue. In addition to selling individual products on a one-time basis, we bundle digital and nutritional products together at discounted prices.
Current wording
Our revenue is generated primarily through affiliates, social media marketing channels, direct response advertising and ecommerce marketplaces like Amazon. In addition, prior to the Pivot (as defined below), an additional primary source of revenue was our network of Partners. Components of revenue include recurring digital subscription revenue, revenue from the sale of nutritional and other products and connected fitness revenue. In addition to selling individual products on a one-time basis, we bundle digital and nutritional products together at discounted prices.
Previous wording
Net loss was $152.6 million, compared to a net loss of $194.2 million; and
Current wording
Net loss was $71.6 million, compared to a net loss of $152.6 million; and
Previous wording
Adjusted EBITDA loss was $8.7 million, compared to Adjusted EBITDA loss of $23.3 million.
Current wording
Adjusted EBITDA was $28.3 million, compared to Adjusted EBITDA loss of $8.7 million.
Previous wording
Our annual goodwill impairment test, which was performed as of December 31, 2023, determined that our goodwill was impaired and we recorded goodwill impairment of $40.0 million in the year ended December 31, 2023. See Note 1, Description of Business and Summary of Significant Accounting Policies and Note 8, Goodwill, to our consolidated financial statements included elsewhere in this Report for additional information regarding the goodwill impairment recorded in the year ended December 31, 2023. We also determined as of December 31, 2023 that our intangible assets were impaired and we recorded an intangible asset impairment of $3.1 million in the year ended December 31, 2023. See Note 1, Description of Business and Summary of Significant Accounting Policiesand Note 9, Intangible Assets, net, to our consolidated financial statements included elsewhere in this Report for additional information regarding the intangible asset impairment recorded in the year ended December 31, 2023.
Current wording
Our annual goodwill impairment test, which was performed as of December 31, 2024, determined that our goodwill was impaired and we recorded goodwill impairment of $20.0 million for the year ended December 31, 2024. See Note 1, Description of Business and Summary of Significant Accounting Policies and Note 8, Goodwill, to our consolidated financial statements included elsewhere in this Report for additional information regarding the goodwill impairment recorded for the year ended December 31, 2024.
Previous wording
Our ability to expand the number of digital subscriptions is an indicator of our market penetration and growth. Digital subscriptions include BOD (through March 2023), BODi, and prior to July 2022, Openfit subscriptions. Digital subscriptions include paid and free-to-pay subscriptions with free-to-pay subscriptions representing approximately
Current wording
Our ability to expand the number of digital subscriptions is an indicator of our market penetration and growth. Digital subscriptions include BOD (through March 2023) and BODi. Digital subscriptions include paid and free-to-pay subscriptions with free-to-pay subscriptions representing less than 1% of total digital subscriptions on average. Digital subscriptions are inclusive of all billing plans, currently for annual, semi-annual, quarterly and monthly billing intervals. In addition, we also have promotional offers which at times include membership options for greater than one year or the ability to buy a subscription for one year and get the second year free ("BOGO").
Previous wording
Nutritional subscriptions include monthly subscriptions for nutritional products such as Shakeology, Beachbody Performance, BEACHBAR, Bevvy, and Ladder Supplements. We also package and bundle the content experience of digital subscriptions with nutritional subscriptions to optimize customer results.
Current wording
Nutritional subscriptions include monthly subscriptions for nutritional products such as Shakeology, Beachbody Performance and BEACHBAR. We also may package and bundle the content experience of digital subscriptions with nutritional subscriptions to optimize customer results.
Previous wording
We use month-over-month digital subscription retention, which is defined as the average rate at which the total subscriber file is retained for the next period, to measure customer retention. For example, a 95% average digital retention rate would correspond with retaining each month an average of 95% of digital subscribers existing at the beginning of that month. A 95% average digital retention rate would translate into a loss at the end of a quarter of approximately 15% of the subscribers existing at the beginning of the quarter. This calculation excludes new customer acquisitions or subscribers added in a specific month, so this calculation can never exceed 100%.
Current wording
We use month-over-month digital subscription retention, which is defined as the average rate at which the total subscriber file is retained for the next period, to measure customer retention. For example, a 95% average digital retention rate would correspond with retaining each month an average of 95% of digital subscribers existing at the beginning of that month. A 95% average digital retention rate would translate into a loss at the end of the quarter of approximately 15% of the subscribers existing at the beginning of the quarter. This calculation excludes new customer acquisitions or subscribers added in a specific month, so this calculation can never exceed 100%.
Previous wording
We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision (benefit), equity-based compensation and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.
Current wording
We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision, equity-based compensation, restructuring costs and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.
Previous wording
We include this non-GAAP financial measure because it is used by management to evaluate BODi’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because they are non-cash (for example, in the case of depreciation and amortization, impairment of goodwill and intangible assets and equity-based compensation) or are not related to our underlying business performance (for example, in the case of restructuring costs, interest income and expense).
Current wording
We include this non-GAAP financial measure because it is used by management to evaluate BODi’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because they are non-cash (for example, in the case of depreciation and amortization, impairment of goodwill and intangible assets and equity-based compensation) or are not related to our underlying business performance (for example, in the case of restructuring costs, interest income and interest expense).
Previous wording
(1) Represents the loss related to the $15.0 million partial debt prepayment that the Company made on July 24, 2023.
Current wording
(1) Represents the loss related to the $1.0 million, $5.5 million, $4.0 million and $3.2 million partial debt prepayments that the Company made on January 9, 2024, February 29, 2024, April 5, 2024 and October 18, 2024, respectively, and the $15.0 million partial debt prepayment that the Company made on July 24, 2023.
Previous wording
(4) Includes restructuring expense and personnel costs associated with executing our key growth priorities during the year ended December 31, 2023 and with the consolidation of our digital platforms during the year ended December 31, 2022. The cost primarily relates to termination benefits related to headcount reductions.
Current wording
(6) Includes restructuring expense and personnel costs associated with key initiatives of $1.6 million during the year ended December 31, 2024 and restructuring expense and personnel costs of $7.2 million associated with executing our key growth priorities during the year ended December 31, 2023. The cost primarily relates to termination benefits related to headcount reductions.
Previous wording
The following discussion of our results of operations is on a consolidated basis.
Current wording
The Company has one operating segment. The following discussion of our results of operations is on a consolidated basis.
Previous wording
Revenue includes digital subscriptions, nutritional supplement subscriptions, one-time nutritional sales, connected fitness products, access to our online Partner business management platform, preferred customer program memberships and other fitness-related products. We often sell bundled products that combine digital subscriptions, nutritional products, and/or other fitness products. We consider these sales to be revenue arrangements with multiple performance obligations and allocate the transaction price to each performance obligation based on its relative stand-alone selling price. We defer revenue when we receive payments in advance of delivery of products or the performance of services. Digital subscriptions revenue is recognized ratably over the subscription period of up to 38 months.
Current wording
Revenue includes digital subscriptions, digital program sales, nutritional supplement subscriptions, one-time nutritional sales, connected fitness products, access to our online Partner business management platform (prior to November 1, 2024), preferred customer program memberships (prior to November 1, 2024) and other fitness-related products. We often sell bundled products that combine digital subscriptions, nutritional products, and/or other fitness products. We consider these sales to be revenue arrangements with multiple performance obligations and allocate the transaction price to each performance obligation based on its relative stand-alone selling price. We defer revenue when we receive payments in advance of delivery of products or the performance of services. Digital subscriptions revenue is recognized ratably over the subscription period of up to 38 months.
Previous wording
The decrease in nutrition and other revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily attributable to a $85.9 million decrease in revenue from nutritional products due to 25% fewer nutritional subscriptions as a result of lower demand and a $9.5 million decrease in revenue generated from our preferred customer fees as there was a 36% decrease in preferred customers and a $4.3 million decrease in fitness accessories revenue.
Current wording
The decrease in nutrition and other revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily attributable to a $46.9 million decrease in revenue from nutritional products due to a 29% decrease in the average nutritional subscriptions in the current year as compared to the prior year on lower demand, a $9.4 million decrease in revenue generated from our preferred customer fees as there was a 41% decrease in the average number of preferred customers for the current year as compared to the prior year which was impacted by the discontinuation of this fee as of November 1, 2024 due to the Pivot, a $2.5 million decrease in fitness accessories revenue due to the decrease in Partners in the current period and a $2.2 million decrease in event ticket sales due primarily to the decrease in the number of, length of and attendance at events. With the Pivot and the transition from an MLM model to an affiliate model, the Company no longer received preferred customer fees beginning as of November 1, 2024 and will not receive preferred customer fees in 2025. The Company recorded $14.3 million and $23.7 million of preferred customer fees for the years ended December 31, 2024 and 2023, respectively. With the Pivot, the Company will also significantly reduce the number of, and length of, events, which will significantly reduce event ticket sales in 2025. The Company recorded $2.6 million and $4.8 million of event ticket sales for the years ended December 31, 2024 and 2023, respectively.
Previous wording
The decrease in connected fitness revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a 34% decrease in the number of bikes delivered (from 31,471 in 2022 to 20,853 in 2023) and a 29% decrease in the average sales price for a bike.
Current wording
The decrease in connected fitness revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to an approximate 57% decrease in the number of bikes delivered (from approximately 20,900 in 2023 to approximately 9,000 in 2024) and an approximate 20% decrease in the average sales price for a bike. Management has determined that it will no longer sell connected fitness inventory beginning in early 2025.
Previous wording
Digital cost of revenue includes costs associated with digital content creation including amortization and revision of content assets, depreciation of streaming platforms, digital streaming costs, and amortization of acquired digital platform intangible assets. It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses.
Current wording
Digital cost of revenue includes costs associated with digital content creation including amortization and revision of content assets, depreciation of streaming platforms, digital streaming costs and amortization of acquired digital platform intangible assets (in the 2023 period). It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses.
Previous wording
Nutrition and other cost of revenue includes product costs, shipping and handling, fulfillment and warehousing, customer service, and payment processing fees. It also includes depreciation of nutrition-related e-commerce websites and social commerce platforms, amortization of acquired formulae intangible assets, facilities, and related personnel expenses.
Current wording
Nutrition and other cost of revenue includes product costs, shipping, logistics, fulfillment and warehousing, customer service, and payment processing fees. It also includes depreciation of nutrition-related e-commerce websites and social commerce platforms, amortization of acquired formulae intangible assets (in the 2023 period), facilities, and related personnel expenses.
Previous wording
Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping costs, warehousing and logistics costs, costs associated with service calls and repairs of products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.
Current wording
Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping, fulfillment, warehousing and logistics costs, costs associated with service calls and repairs of products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.
Previous wording
The decrease in digital cost of revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was due to a $3.2 million decrease in depreciation expense as a result of the end of the useful life of certain fixed asset, a $1.5 million decrease in streaming costs due to lower platform usage and a $0.5 million decrease in the amortization of content assets as a result of lower production spend partially offset by a $1.6 million increase in program revisions and a $1.5 million increase in customer service due to an increase in the volume of contacts related to digital revenue due to the migration of customers from BOD to BODi. The decrease in digital gross margin for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily a result of fixed expenses on lower digital revenue.
Current wording
The decrease in digital cost of revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was due to a $8.1 million decrease in digital content amortization as a result of lower production spend, a $5.9 million decrease in depreciation expense as a result of the end of the useful life of certain fixed assets and a $3.9 million decrease in digital content revisions. The increase in digital gross margin for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily as a result of the decrease in expenses as noted above.
Previous wording
The decrease in nutrition and other cost of revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $17.8 million decrease in product costs and a $14.1 million decrease in fulfillment and shipping expense related to the decrease in nutrition and other revenue, lower inventory adjustments of $8.2 million, a $6.0 million decrease in depreciation expense as a result of the end of the useful life of certain fixed assets and a $4.7 million decrease in customer service expense due to a decrease in the volume of contacts related to nutrition and other revenue. Nutrition and other gross margin increased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily as a result of lower inventory adjustments.
Current wording
The decrease in nutrition and other cost of revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to an $11.1 million decrease in product costs due to a decrease in volume of products sold and a $8.5 million decrease in fulfillment, freight and shipping expenses related to the decrease in nutrition and other revenue, a $3.9 million decrease in depreciation expense as a result of the end of the useful life of certain fixed assets, a $2.4 million decrease in customer service expense due to a decrease in the volume of contacts related to nutrition and other revenue and lower inventory adjustments of $1.6 million. Nutrition and other gross margin increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily as a result of the decrease in depreciation expense and the decrease in customer service expense.
Previous wording
The decrease in connected fitness cost of revenue for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was driven by a $27.8 million decrease in product costs as a result of the decrease in the number of bikes delivered and inventory adjustments recorded in previous periods, lower inventory adjustments of $21.0 million, a $6.5 million decrease in freight, fulfillment, and shipping expenses as the result of a 34% decrease in the number of bikes delivered and a $3.2 million decrease in amortization expense due to intangible asset impairment recorded in the fourth quarter of 2022. The connected fitness negative gross margin improvement for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily a result of lower product costs on bikes delivered, due to previous inventory adjustments, and lower inventory adjustments, partially offset by the impact of higher freight costs and fixed warehousing expenses on lower connected fitness revenue.
Current wording
The decrease in connected fitness cost of revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was driven by a $6.0 million decrease in fulfillment, freight and shipping expenses related to the decrease in connected fitness revenue, a $5.7 million decrease in product costs as a result of an approximate 57% decrease in the number of bikes delivered and lower inventory adjustments of $4.7 million. The decrease in connected fitness gross margin for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due primarily to fixed expenses on lower connected fitness revenue and an approximate 20% decrease in the average sales price for a bike. Management has determined that it will no longer sell connected fitness inventory beginning in early 2025. The discontinuation of the sale of connected fitness inventory is expected to increase the
Previous wording
Selling and marketing expenses primarily include the cost of Partner compensation, advertising, royalties, promotions and events, and third-party sales commissions as well as the personnel expenses for employees and consultants who support these areas. Selling and marketing expenses also include depreciation of certain software and amortization of contract-based intangible assets. Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue, timing of new content and nutritional product launches, and the timing of our media investments to build awareness around launch activity.
Current wording
Selling and marketing expenses primarily include the cost of Partner compensation, affiliate expenses (which began on November 1, 2024), advertising, royalties, promotions and events, and third-party sales commissions as well as the personnel expenses for employees and consultants who support these areas. Selling and marketing expenses also include depreciation of certain software and amortization of contract-based intangible assets (in the 2023 period). Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue, timing of new content and nutritional product launches, and the timing of our media investments to build awareness around launch activity.
Previous wording
The decrease in selling and marketing expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $46.5 million decrease in Partner compensation as a result of lower commissionable revenue, a $14.1 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the current and prior year and a $9.9 million decrease in the amortization of intangible assets due to the impairment of certain assets in the fourth quarter of 2022.
Current wording
The decrease in selling and marketing expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to a $49.4 million decrease in Partner compensation as a result of the decrease in the number of Partners, lower commissionable revenue, a decrease in the commission rate paid to Partners that started at the beginning of January 2024 and the discontinuation of the Partner network in December 2024, an $11.8 million decrease in event expenses due primarily to a decrease in the number of, length of, and attendance at events, an $11.0 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the current and prior year and a $4.5 million decrease in the amortization of intangible assets due to the impairment of certain assets in the fourth quarter of 2023. With the Pivot and the transition from the MLM model to an affiliate model, the Company will no longer incur Partner compensation in 2025. The Company recorded Partner compensation of $119.3 million and $168.6 million for the years ended December 31, 2024 and 2023, respectively. The Company will incur affiliate compensation but it is expected to be significantly less than the previously recorded Partner compensation. The Pivot will also significantly reduce the number of, and length of, events for Partners and these event expenses are expected to be reduced significantly in 2025. The Company recorded approximately $5.4 million and $17.2 million of event expenses for the years ended December 31, 2024 and 2023, respectively. The Company also expects a decrease in personnel-related expenses in 2025 due to the headcount reductions associated with the Pivot.
Previous wording
Selling and marketing expense as a percentage of total revenue increased by 150 bps primarily due to the decrease in revenue.
Current wording
Selling and marketing expense as a percentage of total revenue decreased by 570 bps primarily due to the decrease in Partner compensation and event expenses.
Previous wording
Enterprise technology and development expenses includes maintenance and enhancements of the Company’s enterprise resource planning system, which is the core of our accounting, procurement, supply chain, and other business support systems and primarily relate to enterprise systems applications, hardware, and software that serve as the technology infrastructure for the Company and are not directly related to services provided or tangible goods sold. Enterprise technology and development also includes reporting and business analytics tools, security systems such as identity management and payment card industry compliance, office productivity software, research and development tracking tools, and other non-customer facing applications. Enterprise technology and development expenses include personnel-related expenses for employees and consultants to maintain the Company's technology systems and are involved in the research and development of new and existing nutritional products, depreciation of enterprise technology-related assets, software licenses, hosting expenses, and technology equipment leases.
Current wording
Enterprise technology and development expenses primarily include personnel-related expenses for employees and professional fees paid to consultants to maintain the Company’s enterprise resource planning system, which is the core of our accounting, procurement, supply chain, and other business support systems and primarily relate to enterprise systems applications, hardware, and software that serve as the technology infrastructure for the Company and are not directly related to services provided or tangible goods sold. Enterprise technology and development also includes reporting and business analytics tools, security systems such as identity management and payment card industry compliance, office productivity software, research and development tracking tools, and other non-customer facing applications. Enterprise technology and development expenses also include payroll and related costs for employees involved in the research and development of new and existing products and services, enterprise technology hosting expenses, depreciation of enterprise technology-related assets, software licenses, and technology equipment leases.
Previous wording
The decrease in enterprise technology and development expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $17.3 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the current and prior year and a $12.4 million decrease in depreciation expense as a result of the end of the useful life of certain fixed assets.
Current wording
The increase in enterprise technology and development expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to a $6.9 million increase in depreciation expense as a result of accelerated depreciation of $11.1 million related to certain long-lived assets that due to the Pivot will no longer be used by the Company after December 31, 2024 partially offset by a $4.6 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the current and prior year. With the Pivot and the transition from the MLM model to an affiliate model, the Company expects a decrease in personnel-related expenses in 2025, due to the headcount reductions associated with the Pivot, and a decrease in depreciation expense in 2025 due to the long-lived assets impacted by Pivot which were fully depreciated as of December 31, 2024.
Previous wording
The decrease in general and administrative expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $9.5 million decrease in personnel-related expenses as a result of lower headcount primarily related to the restructuring activities that occurred in the current and prior year, a $4.1 million decrease in insurance expense as some of our insurance is based on the level of the Company's revenues or the number of employees, which both have declined in the current period compared to the prior period and a $3.4 million decrease in professional fees due to cost reduction measures.
Current wording
The decrease in general and administrative expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to a $4.4 million decrease in professional and accounting fees due to a management focus on decreasing spending, a $2.1 million decrease in insurance expense as some of our insurance is based on the level of the Company's revenues or the number of employees, which both have declined in the current period compared to the prior period, a $1.5 million decrease in personnel-related expenses as a result of lower headcount primarily related to the restructuring activities that occurred in the current and prior year and a $0.8 million gain on the sale of the Van Nuys facility which was recorded as a reduction of general and administrative expenses in the year ended December 31, 2024. The Company expects a decrease in personnel related expenses in 2025 due to the headcount reductions associated with the Pivot.
Previous wording
General and administrative expense as a percentage of total revenue decreased by 30 bps primarily due to the reduction in insurance expenses.
Current wording
General and administrative expense as a percentage of total revenue increased by 70 bps due to the decrease in revenue at a faster pace than the reduction in general and administrative expenses.
Previous wording
In 2023, restructuring charges primarily relate to activities focused on aligning our operations with our key growth priorities, including a reduction in headcount. Restructuring charges in 2022 relate to the consolidation of our streaming fitness and nutrition offerings into a single Beachbody platform. The charges incurred primarily consist of employee termination costs.
Current wording
In 2024, restructuring charges related primarily to the Pivot which was announced by the Company on September 30, 2024 (see Note 15, Restructuring, for more information on the Pivot) and key initiatives. Restructuring charges in 2023 primarily relate to activities focused on aligning our operations with our key growth priorities, including a reduction in headcount. The charges incurred primarily consist of employee termination costs.
Previous wording
Impairment of goodwill includes goodwill impairment in 2023.
Current wording
Impairment of goodwill includes goodwill impairment in 2024 and 2023.
Previous wording
The Company performed its annual goodwill impairment test as of December 31, 2023 and based on the quantitative analysis recognized goodwill impairment of $40.0 million for the year ended December 31, 2023.
Current wording
The Company performed its annual goodwill impairment test as of December 31, 2024 and 2023 and based on the quantitative analysis recognized goodwill impairment of $20.0 million and $40.0 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Impairment of intangible assets includes intangible asset impairment in 2023 and 2022.
Current wording
Impairment of intangible assets includes intangible asset impairment in 2023.
Previous wording
The change in fair value of warrant liabilities consists of the fair value changes of the public, private placement, Term Loan and Common Stock warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt discount and issuance costs for our Term Loan (defined below) in 2023 and 2022. Other income, net, consists of interest income earned on investments and gains (losses) on foreign currency.
Current wording
The change in fair value of warrant liabilities consists of the fair value changes of the public, private placement, Term Loan and Common Stock warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt discount and issuance costs for our Term Loan (as defined below). Other income, net, consists of interest income earned on investments and gains (losses) on foreign currency.
Previous wording
The loss on partial debt extinguishment for the year ended December 31, 2023 was due to the partial prepayment of $15.0 million on the Term Loan as of July 24, 2023. The Company recorded an impairment of $4.0 million on its other investment during the year ended December 31, 2023. The decrease in change in fair value of warrant liabilities during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily resulted from a relatively lower decline in our stock price during the current period partially offset by the issuance of the Common Stock Warrants on December 13, 2023 and the change in their value to December 31, 2023. The increase in interest expense was primarily due to borrowings under the Term Loan during the year ended December 31, 2023 compared to borrowings outstanding on the Term Loan for only approximately 4.5 months during the year ended December 31, 2022. The increase in other income was primarily due to higher interest income as a result of higher interest rates on our cash balances.
Current wording
December 31, 2024 as compared to $15.0 million in the year ended December 31, 2023). The Company recorded an impairment of $4.0 million on its other investment during the year ended December 31, 2023. The $1.5 million decrease in the change in fair value of warrant liabilities during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily resulted from a relatively lower decline in our stock price during the current year partially offset by the issuance of the Common Stock Warrants on December 13, 2023 and the change in their value to December 31, 2024. The $2.0 million decrease in interest expense was primarily due to lower average borrowings under the Term Loan during the year ended December 31, 2024 due primarily to principal prepayments of $28.7 million on the outstanding Term Loan balance from July 1, 2023 to December 31, 2024. The $1.2 million increase in other income as compared to the prior year was primarily due to a $1.2 million gain on the sale of the expected settlement amount from the pending resolution of a legal claim made by the Company in the year ended December 31, 2024.
Previous wording
Income tax (provision) benefit consists of income taxes related to U.S. federal and state jurisdictions as well as those foreign jurisdictions where we have business operations.
Current wording
Income tax provision consists of income taxes related to U.S. federal and state jurisdictions as well as those foreign jurisdictions where we have business operations.
Previous wording
The income tax provision increase for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily driven by changes in our valuation allowance and a decrease in the net expense from discrete events.
Current wording
The income tax provision increase for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by changes in our valuation allowance and an increase in the net expense from discrete events.
Previous wording
Historically, our primary sources of liquidity have been sales of our equity, debt financing, and cash generated from our operations. As of December 31, 2023, we had $33.4 million in cash and cash equivalents.
Current wording
Historically, our primary sources of liquidity have been sales of our equity, debt financing, and cash generated from our operations. As of December 31, 2024, we had $20.2 million in cash and cash equivalents.
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Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
On December 10, 2023, the Company entered into a securities purchase agreement for the issuance and sale of 420,769 shares of Class A common stock at a purchase price of $9.75 per share and pre-funded warrants to purchase up to 122,821 shares of Class A common stock at a pre-funded purchase price of $9.7499 per share and an exercise price of $0.0001 per share with certain institutional investors in a registered direct offering. The Company received proceeds of $4.9 million, net of placement agent fees. The Company also issued 543,590 warrants (the "Common Stock Warrants") to purchase 543,590 shares of Class A common stock at an exercise price of $11.24 per share in a concurrent private placement. On January 12, 2024, the investor exercised all of the pre-funded warrants and converted them into 122,821 shares of the Company's Class A common stock. See Note 15, Stockholders' Equity, to our consolidated financial statements included elsewhere in this Report for additional information regarding the Equity Offering (defined later).
Previous report — wording carried elsewhere
Please see "Non-GAAP Information" below for a reconciliation of net loss to Adjusted EBITDA and an explanation for why we consider Adjusted EBITDA to be a helpful metric for investors.
Previous report — wording carried elsewhere
1% of total digital subscriptions on average. Digital subscriptions are inclusive of all billing plans, currently for annual, quarterly and monthly billing intervals.
Previous report — wording carried elsewhere
Due to reduced revenue and margin forecasts we tested the related asset group for recoverability as of June 30, 2023. In testing for recoverability, we compared the carrying value of the asset group to its forecasted undiscounted cash flows to determine whether it was recoverable. Because the carrying value of the asset group did not exceed its future undiscounted cash flows, we determined that the carrying value of the asset group was recoverable and thus no impairment was recognized.