The Beachbody Company, Inc. (BODI) Q3 2026 earnings review
Beachbody cuts costs to stay profitable, but sales fall faster
Beachbody, the maker of P90X workouts and Shakeology nutrition shakes, kept its bottom line positive through deep marketing cuts while its customer base and cash balance shrank faster. Third-quarter sales fell 25% from a year ago to $45 million, and reported net income of $3.3 million relied on a $2.7 million non-cash accounting gain on warrants. Chief executive Carl Daikeler pointed to profit beating the company's own targets, but the fourth-quarter plan has the revenue decline steepening to 28%.
| Revenue | $45.2M -24.5% from a year ago |
|---|---|
| Digital subscriptions | 0.69M -23.3% from a year ago (-70K from Q2) |
| Profit before interest, taxes and one-offs (Adj. EBITDA) | $6.4M above the $3–6M outlook |
| Fourth-quarter revenue outlook | $38–42M middle of the range: -28% from a year ago |
⚖️ Verdict: 🔴 Bearish
The story got worse because the third quarter was supposed to show a cleaner comparison after last year's exit from multi-level marketing, yet subscriber losses sped up and the fourth-quarter sales plan steps down again. By our math, BODi lost 70,000 digital subscribers in the quarter and burned $6 million in free cash flow, pulling unrestricted cash down to $28 million. On the positive side, marketing cuts and a new $3 million fourth-quarter restructuring plan are protecting operating profit.
The question now is whether new supermarket and Amazon sales can scale before shrinking digital subscriptions and cash burn trigger lender covenant tests. Either holiday launches convert the inventory build back into cash and stabilize sales, or continued subscriber losses below 650,000 force a balance-sheet restructuring. Fourth-quarter cash and subscriber counts will show which path the business is on.
🐂 Bull Case
Lower Marketing Spend Kept Operating Profit Positive
Executive chairman Mark Goldston credited the quarter's profit to "the operating discipline we have built into this company". Since leaving multi-level marketing late in 2024, Beachbody no longer pays multi-layer sales commissions. Selling and marketing costs fell 40% from a year ago to $11.5 million, dropping from 31.9% of sales to 25.6%.
That 6.4-point cost reduction allowed the fitness and nutrition company to report $1.3 million in operating profit despite a 24.5% drop in revenue. Profit before interest, taxes, depreciation and other one-offs (Adjusted EBITDA) reached $6.4 million, topping the $3–6 million plan for an eighth straight beat. However, BODi always sets low profit targets, beating the middle of its Adjusted EBITDA range by 54% on average over the last four quarters.
What to watch: fourth-quarter operating expenses after the planned $3 million restructuring. If revenue falls to $40 million as planned, further cost cuts must carry the entire profit.
Cautious Profit Targets Extended the Beat Streak
Chief executive Carl Daikeler noted that "Net income and adjusted EBITDA exceeded the high end of our guidance and revenue met expectations as we continue to transform our business model." Three months ago, management forecast a third-quarter net loss between zero and $3 million, both before and after one-offs. It has set a loss-to-breakeven target in every quarter for the past year.
The wellness group beat both ranges again, posting $3.3 million in net income and $0.6 million excluding one-offs. Most of the headline net income came from a $2.7 million non-cash accounting gain on warrant liabilities, which move with the company's share price rather than its operations. Even without that gain, underlying profit stayed positive, and the fourth-quarter outlook raises the target for profit excluding one-offs to $1–4 million.
What to watch: fourth-quarter net income excluding one-offs against the $1–4 million target. Hitting that higher bar on smaller sales will require holiday promotions to convert without heavy discounting.
🐻 Bear Case
Digital Subscriber Losses Accelerated Toward Debt Floor
Digital fitness subscriptions generate 62% of Beachbody's revenue and carry an 86.3% gross margin, so the subscriber count is the foundation of the business. For the past three quarters, the digital customer base shrank by 30,000 to 60,000 accounts each quarter as legacy multi-level marketing members cancelled.
Instead of leveling off on the anniversary of the business model change, the losses sped up. By our math, BODi lost 70,000 digital subscriptions over the past three months, nearly double the 40,000 it lost in the same quarter last year. That took the total down 23.3% from a year ago to 690,000, while monthly retention slipped 1.5 percentage points to 95.4%.
The faster drop matters because the company's amended credit agreement sets a minimum floor of 650,000 digital subscriptions whenever cash falls into a lender testing zone. At the third quarter's pace of decline, the subscriber base will cross below 650,000 before the end of the year.
What to watch: year-end digital subscriptions in the fourth-quarter release. A drop below 650,000 would leave the company reliant on keeping its cash balance high enough to avoid triggering lender covenant tests.
Retail Rollout Has Not Stopped Nutrition Decline
Management wants shakes and supplements in supermarkets, online marketplaces and direct-to-consumer (DTC) websites to replace lost subscription sales, and it has shifted advertising toward nutrition, lower-priced Amazon packs, GLP-1 weight-loss users and Shopify checkout upgrades to drive the pivot. Goldston said the "multi-channel distribution strategy is gaining traction as we bring on new partners and expand our rollout across retail, DTC and Amazon." Daikeler added that the team is "executing on our omni-channel strategy to place our iconic brands wherever shoppers are."
- Nutrition and other revenue: $17.4 million, down 26.1% from a year ago and down 6.0% from last quarter
- Implied third-quarter nutrition target: $17.6–19.2 million by our math, which the segment missed
- Nutrition share of total revenue: 38.4%, down from 39.2% a year ago
- Nutritional subscriptions: 60,000, down 14.3% from a year ago
The numbers contradict the claim of commercial traction because nutrition shrank faster than the rest of the company. Furthermore, the fourth-quarter outlook calls for total revenue of $38–42 million, down 28% from a year ago at the middle of the range, showing that new retail shelves and November product launches are not offsetting the decline in direct orders.
What to watch: fourth-quarter nutrition revenue and its share of total sales. If nutrition cannot cross 40% of revenue during the fourth-quarter rollout, the retail and marketplace channels are still too small to stabilize the top line.
Cash Burn Pushed Liquidity Toward Lender Triggers
While Beachbody reports positive operating profit, it is burning cash. Over the first nine months of 2026, operating activities used $10.1 million in cash and free cash flow was negative $12.1 million, compared with positive $13.1 million a year earlier. By our math, subtracting the first half leaves negative $6.4 million of free cash flow in the third quarter alone.
Two balance-sheet shifts drained the bank account. First, inventory climbed 53% since December to $14.4 million as the company stocked up for retail and holiday launches. Second, customers paid less upfront for annual fitness plans, pulling deferred revenue down $15.1 million over nine months. Unrestricted cash fell $4.9 million in the quarter to $27.5 million, while net cash after subtracting $22.9 million of debt dropped from $15.4 million at year-end to $4.6 million.
What to watch: fourth-quarter cash and inventory balances. If holiday sales do not turn that $14.4 million of inventory back into cash, liquidity will approach the $22.5 million threshold where lender covenant testing begins.
Nutrition Margin Drop Cut Into Cost Savings
Selling through retail partners and running promotional discounts costs more than shipping high-priced subscriptions directly to members. In the third quarter, the gross margin on nutrition and other products fell 7.9 percentage points from a year ago to 45.8%, while digital gross margin slipped 1.7 points to 86.3%. Together, those drops pulled company gross margin down 3.8 points to 70.7%.
At the same time, fixed overhead is rising as a share of the shrinking revenue base. Enterprise technology and development rose 5.2 percentage points to 22.6% of sales, and general and administrative costs rose 2.8 points to 19.7%. Those increases offset the marketing savings and pushed operating margin down 5.4 points from a year ago to 2.9%.
What to watch: nutrition gross margin in the fourth quarter, when holiday promotions peak. Another drop toward the low 40s would show that marketplace and wholesale volume carries too little margin to cover fixed technology costs.
👓 Other Themes
Fourth-Quarter Outlook Adds New Restructuring Charges
Beachbody recorded no restructuring charges during the first nine months of 2026 after completing its initial workforce cuts in late 2024 and 2025. The fourth-quarter outlook introduces $3 million of new restructuring expenses as Goldston noted that "Additional cost efficiencies are lowering our breakeven point even further." The release does not specify which departments or roles the company is cutting, or how much cash the move will save in 2027.
💲 Other KPIs
Deferred revenue — cash customers have paid upfront for digital memberships not yet delivered — fell 11.9% from last quarter and 24.4% since December. The shrinking balance reduces the guaranteed revenue the US wellness group can recognize in coming quarters and drains operating cash flow.
Customer workout streams fell 24.4% from a year ago and dropped 12.5% from 15.2 million last quarter. The pace of decline widened from 14.0% in the first quarter and 15.6% in the second, tracking the drop in paying digital members. Daily active users as a share of monthly users slipped 0.6 percentage points from a year ago to 31.4%.
Weighted-average diluted shares rose 5.3% from 7.05 million a year ago as the fitness provider issued employee stock awards without buying back shares. Stock-based compensation rose to $1.9 million in the quarter from $1.0 million a year earlier.
🔮 Guidance
New. The plan puts fourth-quarter sales at $40 million in the middle of the range, down 28.0% from a year ago and down 11.5% from the third quarter. That represents a steeper annual drop than the 24.5% decline just reported, even though the fourth quarter includes holiday promotions and new retail distribution.
New. The forecast calls for $7.5 million at the middle of the range, up from $6.4 million in the third quarter but down 41.8% from $12.9 million a year ago. BODi has beaten the top of its Adjusted EBITDA range in every quarter for two years, by an average of 54% against the middle of the range over the last four quarters.
New. The outlook centers on a $0.5 million net loss, down from $3.3 million of net income in the third quarter and $5.2 million a year ago. The forecast includes $3 million of planned restructuring charges and excludes any non-cash valuation swings on warrant liabilities.
New. Excluding the $3 million restructuring charge, the plan calls for $2.5 million of profit at the middle of the range, up from $0.6 million in the third quarter but down 65.3% from $7.2 million a year ago. It is the first time in over a year that management has set a positive target range for profit excluding one-offs.
❓ Key Questions
How many retail stores currently carry Beachbody nutrition products?
The earnings release did not update store counts for Sprouts or Vitamin Shoppe, nor did it break out retail or Amazon sales. Without door counts and reorder rates, investors cannot verify whether retail is growing.
Will digital subscriptions breach the 650,000 covenant level in Q4?
Digital subscriptions fell by 70,000 in the third quarter to 690,000. Another quarter at that pace would push the count below the 650,000 level that applies if cash drops into the lender's covenant-testing zone.
When will the $14.4 million inventory build turn into cash?
Inventory has risen 53% since December, contributing to $12.1 million of free cash flow burn over nine months. Management has not stated how much of that stock is tied to retail shelf fills versus unsold warehouse inventory.
What will the $3 million fourth-quarter restructuring cut?
The fourth-quarter outlook includes $3 million of restructuring charges after zero in the first nine months. Investors need to know how much of the charge is cash severance and what annual savings it will produce in 2027.