Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report on Form 10-K (this “Report”) and the section entitled “Risk Factors.” Unless otherwise indicated, the terms “Beachbody,” "BODi," “we,” “us,” “our,” or the “Company” refer to The Beachbody Company, Inc., a Delaware corporation, together with its consolidated subsidiaries.

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), including statements about and the financial condition, results of operations, earnings outlook, new selling initiatives, and prospects of the Company. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on our current expectations as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to the following:

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our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in selling and marketing, general and administrative and enterprise technology and development expenses (including any components of the foregoing), Adjusted EBITDA, Adjusted Net Income (Loss), and our ability to achieve and maintain future profitability;

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disruptions related to the Pivot, any future restructurings, 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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our liquidity and ability to raise financing;

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our ability to comply with the financial covenants in our ABL Facility;

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our success in retaining or recruiting, or changes required in, officers, key employees or directors;

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other than the pre-funded warrants, our warrants are accounted for as liabilities and changes in the value of such warrants could have a material effect on our financial results;

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our ability to effectively compete in the fitness and nutrition industries;

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our ability to successfully acquire and integrate new operations;

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our reliance on a few key products;

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market conditions and global and economic factors beyond our control;

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the impact of tariffs and global trade disruptions on us, our suppliers, and our customers;

•

intense competition and competitive pressures from other companies worldwide in the industries in which we will operate;

•

litigation and the ability to adequately protect our intellectual property rights; and

•

other risks and uncertainties set forth in this Report under the heading “Risk Factors.”

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by management prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

You should not place undue reliance upon our forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

Overview

BODi is a leading fitness and nutrition company. We focus primarily on digital content, supplements, 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®, LIFT4®, 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 BODi streaming services.

We offer nutritional products such as Shakeology® nutrition shakes and Beachbody Performance supplements.

In the fitness and nutrition industry, we focus primarily on digital content, supplements, 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 ceased the sale of connected fitness inventory in the first quarter of 2025.

Our revenue is generated primarily through a multi-channel network which includes our direct response advertising, affiliates, social media marketing channels, and e-commerce market places such as 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, digital program sales, revenue from the sale of nutritional and other products, and connected fitness revenue (prior to the first quarter of 2025). In addition to selling individual products on a standalone basis, we bundle digital and nutritional products together at discounted prices.

On September 30, 2024, the Company announced a restructuring of its network business (the “Pivot”) which converted the Company’s 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.

For the year ended December 31, 2025, as compared to the year ended December 31, 2024:

•

Total revenue was $251.7 million, a 40% decrease;

•

Digital revenue was $153.3 million, a 32% decrease;

•

Nutrition and other revenue was $97.6 million, a 48% decrease;

•

Connected fitness revenue, which we ceased in the first quarter of 2025, was $0.9 million, an 87% decrease;

•

Gross margin was 73.0%, an increase of 440 basis points ("bps");

•

Total operating expenses were $178.3 million, compared to $353.6 million, which included a $20.0 million impairment of goodwill;

•

Operating income was $5.5 million, the Company's first full year operating income since going public in 2021, compared to an operating loss of $66.2 million in the prior year;

•

Net loss was $2.9 million, compared to a net loss of $71.6 million, which included a $20.0 million impairment of goodwill;

•

Adjusted EBITDA was $30.8 million, compared to $28.3 million; and

•

Adjusted Net Income was $3.5 million, the Company's first full year adjusted net income since going public, compared to a loss of $31.2 million in the prior year.

See “Non-GAAP Information” below for information regarding our use of Adjusted EBITDA and Adjusted Net Income (Loss) and a reconciliation of net loss to Adjusted EBITDA and to Adjusted Net Income (Loss).

Recent Developments

ABL Facility Amendment

On January 7, 2026, (the “ABL Facility Amendment Effective Date”), the Company and Tiger Finance, LLC ("Tiger") entered into Amendment No. 1 to the Credit Agreement (the “Amended ABL Facility Credit Agreement”), which amended the Company’s existing Credit Agreement. The Amended ABL Facility Credit Agreement amends, among other things, certain terms of the prior Credit Agreement including without limitation, to (1) eliminate the maximum capital expenditures covenant, (2) amend the minimum liquidity financial covenant, (3) amend the minimum Three Months Total Billings Target and the minimum Monthly Digital Subscriptions financial covenants which are not tested unless a Covenant Testing Period (as defined in the Amended ABL Facility Credit Agreement) has been triggered, (4) amend the minimum Monthly Digital Subscriptions Target, which is tested if a Covenant Testing Period has been triggered, (5) include a minimum billings fixed charge coverage ratio ("BFCCR") (as defined in the Amended ABL Facility Credit Agreement) financial covenant, which is tested if a Covenant Testing Period has been triggered, (6) extended the date for potential decrease in the interest rate of the ABL Facility, (7) extended the Make Whole prepayment premium, and (8) amend certain financial definitions, reporting covenants and other covenants thereunder.

The Company incurred a 1% amendment fee on the outstanding ABL Facility balance prior to the amendment (fee of $0.3 million).

See Note 10, Debt, and Note 22, Subsequent Events, for additional information on the Amended ABL Facility Credit Agreement.

Key Operational and Business Metrics

We use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions:

As of December 31,

(in millions)

Digital subscriptions 0.87 1.07

Nutritional subscriptions 0.08 0.09

Year Ended December 31,

(in millions, except for percentages)

Average digital retention 96.9 % 96.8 %

Net loss $ (2.9 ) $ (71.6 )

Adjusted net income (loss) (1) $ 3.5 $ (31.2 )

(1) See “Non-GAAP Information” below for a reconciliation of net loss to Adjusted Net Income (Loss) and an explanation for why we consider Adjusted Net Income (Loss) to be a helpful metric for investors.

(2) 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.

Digital Subscriptions

Our ability to expand the number of digital subscriptions is an indicator of our market penetration and growth. Digital subscriptions from our BODi platform 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").

Nutritional Subscriptions

Nutritional subscriptions include monthly subscriptions for nutritional products such as Shakeology® and Beachbody Performance. We also package and bundle the content experience of digital subscriptions with nutritional subscriptions to optimize customer results.

Average Digital Retention

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%.

Total Streams

We use total streams to quantify the number of fitness, nutrition and mindset programs viewed, which is an indicator of customer engagement and retention. While the measure of a digital stream may vary across companies, to qualify as a stream on any of our digital platforms, a program must be viewed for a minimum of 25% of the total running time.

Daily Active Users to Monthly Active Users (DAU/MAU)

We use the ratio of daily active users to monthly active users to measure how frequently digital subscribers are utilizing our service in a given month. We define a daily active user as a unique user streaming content on our platform in a given day. We define a monthly active user as a unique user streaming content on our platform in that same month.

Non-GAAP Information

In addition to our results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we believe the following non-GAAP financial information is useful in evaluating our operating performance.

Adjusted EBITDA

We use Adjusted EBITDA, which is a non-GAAP performance measure, to supplement our results presented in accordance with GAAP. We believe Adjusted EBITDA is useful in evaluating our operating performance, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

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.

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).

The table below presents our Adjusted EBITDA reconciled to our net loss, the closest GAAP measure, for the periods indicated:

Year Ended December 31,

Adjusted for:

Impairment of goodwill — 20,000

Amortization of capitalized cloud computing implementation costs 150 150

Pivot Restructuring (4) — 7,647

Restructuring and platform consolidation costs (5) 2,480 1,644

Change in fair value of warrant liabilities 1,980 (1,144 )

Gain on sale of property and equipment — (784 )

$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.

(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 were not used by the Company after December 31, 2024.

(3) Includes benefits due to the modification of stock awards of $0.9 million and $0.8 million for the years ended December 31, 2025 and 2024, respectively.

(4) Includes (a) restructuring expenses 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 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.

(5) Includes post-Pivot restructuring expenses of $2.5 million for the year ended December 31, 2025. Includes restructuring expenses and personnel costs associated with key initiatives of $1.6 million during the year ended December 31, 2024. The cost primarily relates to termination benefits related to headcount reductions.

(6) Primarily includes interest income.

Adjusted Net Income (Loss)

We use adjusted net income (loss), which is a non-GAAP performance measure, to supplement our results presented in accordance with GAAP. We believe adjusted net income (loss) is useful in evaluating our operating performance, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted net income (loss) is not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate adjusted net income (loss) as net income (loss) adjusted for impairment of goodwill, restructuring costs, the change in fair value of warrant liabilities, and other items that are not normal, recurring operating activities necessary to operate the Company's business, and the tax impact of the adjustments as described in the reconciliation below.

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 net income (loss) excludes certain expenses that are required in accordance with GAAP because they are non-cash (for example, in the case of impairment of goodwill and the change in fair value of warrant liabilities) or are not related to our underlying business performance (for example, in the case of restructuring costs).

The table below presents our adjusted net income (loss) reconciled to our net income (loss), the closest GAAP measure, for the periods indicated:

Year Ended December 31,

Adjusted for:

Impairment of goodwill — 20,000

Pivot Restructuring (2) — 18,464

Change in fair value of warrant liabilities 1,980 (1,144 )

Gain on sale of property and equipment — (784 )

Tax impact of adjustment (4) (303 ) (136 )

Adjusted net income (loss) $ 3,463 $ (31,219 )

(1) The year ended December 31, 2025 represents the loss related to the $17.3 million debt extinguishment that the Company made on May 13, 2025. The year ended December 31, 2024 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.

(2) Pivot restructuring 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 were not used by the Company after December 31, 2024. Also, includes (a) restructuring expenses 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 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.

(3) Includes post-Pivot restructuring expenses, primarily termination benefits, of approximately $2.5 million for the year ended December 31, 2025. Includes restructuring expenses and personnel costs associated with key initiatives of approximately $1.6 million during the year ended December 31, 2024.

(4) Tax impact calculated using the annual effective tax rate.

Net Cash Position

We use net cash position, which is a non-GAAP liquidity measure, to supplement our liquidity as presented in accordance with GAAP. We believe that net cash position is useful in viewing our liquidity, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing liquidity. Net cash position is not intended to be a substitute for GAAP financial measures and, as calculated may not be comparable to other similarly titled measures of liquidity for other companies in other industries or within the same industry.

The table below presents our net cash position, which is our cash and cash equivalents less the debt on our balance sheet for the periods indicated:

As of December 31,

Less:

Free Cash Flow

We use free cash flow, which is a non-GAAP liquidity measure, to supplement our cash provided by operating activities as presented in accordance with GAAP. We believe that free cash flow is useful in evaluating our liquidity, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing liquidity. Free cash flow is not intended to be a substitute for GAAP financial measures and, as calculated may not be comparable to other similarly titled measures of liquidity for other companies in other industries or within the same industry.

The table below presents our free cash flow, which is our net cash provided by operating activities less cash used for the purchase of property and equipment for the periods indicated:

Year Ended December 31,

Net cash provided by operating activities $ 21,750 $ 2,562

Less:

Cash used in the purchase of property and equipment 4,399 4,542

Results of Operations

The Company has one operating segment. The following discussion of our results of operations is on a consolidated basis.

(in thousands) Year Ended December 31,

Revenue:

Cost of revenue:

Operating expenses:

Enterprise technology and development 42,311 76,370

Impairment of goodwill — 20,000

Other income (expense)

Loss on debt extinguishment (2,166 ) (2,379 )

Change in fair value of warrant liabilities (1,980 ) 1,144

Income tax provision (125 ) (239 )

Revenue

Revenue includes digital subscriptions, digital program sales, nutritional supplement subscriptions, one-time nutritional sales, connected fitness products (management ceased the sale of bike inventory in the first quarter of 2025), 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, which we sell through our multi-channel network. 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 which at December 31, 2025 had an initial average life of approximately 13 months.

Year Ended December 31,

(dollars in thousands)

Revenue

The decrease in digital revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily attributable to a $48.6 million decrease in revenue from our digital streaming services due to 18% fewer average digital subscriptions in the current year as compared to the prior year as the result of lower demand, a decrease in digital program sales of $11.8 million, and a decrease of $9.9 million in fees from Partners due to the Pivot (there were no fees from Partners after November 1, 2024).

The decrease in nutrition and other revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily attributable to a $71.7 million decrease in revenue from nutritional products due to 44% fewer average nutritional subscriptions in the current year as compared to the prior year as the result of lower demand, a $14.3 million decrease in revenue generated from our preferred customer fees as there were no preferred customer fees after November 1, 2024, a $5.7 million decrease in shipping revenue due to the decrease in nutritional products sold, and a $2.6 million decrease in event ticket sales (there were no events in the year ended December 31, 2025), partially offset by a $5.7 million increase in Amazon sales primarily due to increased focus on this sales channel.

The decrease in connected fitness revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was due to management's decision to cease the sale of bike inventory in the first quarter of 2025.

Cost of Revenue

Digital Cost of Revenue

Digital cost of revenue includes costs associated with digital content creation including amortization and revision of content assets, depreciation of streaming platforms, and digital streaming costs. It also includes customer service costs, payment processing fees, depreciation of production equipment, facilities, and related personnel expenses.

Nutrition and Other Cost of Revenue

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, and related personnel expenses.

Connected Fitness Cost of Revenue

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.

Year Ended December 31,

(dollars in thousands)

Cost of revenue

Gross profit

Gross margin

Nutrition and other 52.9 % 58.4 %

Connected fitness NM (72.0 %)

Total gross margin 73.0 % 68.6 %

The decrease in digital cost of revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was due to a $6.8 million decrease in digital content amortization as a result of lower production spend, a $5.6 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past two years, a $4.0 million decrease in depreciation expense as a result of the end of the useful life of certain fixed assets, a $2.6 million decrease in customer service expense due to a decrease in the volume of contacts related to digital revenue, and a $1.3 million decrease in digital content revisions. The increase in digital gross margin for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily as a result of the decrease in expenses as noted above partially offset by the elimination of partner fees, which did not carry any cost of revenues in the prior year.

The decrease in nutrition and other cost of revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a $14.4 million decrease in product costs due to a decrease in volume of products sold, a $9.8 million decrease in logistics expenses related to the decrease in nutrition and other revenue, a $3.3 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past two years, and a $2.8 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 decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily as a result of the elimination of preferred customer fees, which did not carry any cost of revenues in the prior year and a higher level of promotional offerings in the current year.

The decrease in connected fitness cost of revenue for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was driven by a $5.9 million decrease in logistics expenses and a $2.5 million decrease in the level of inventory adjustments, primarily due to management's decision to cease the sale of bike inventory in the first quarter of 2025.

Operating Expenses

Selling and Marketing

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 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.

Year Ended December 31,

(dollars in thousands)

As a percentage of total revenue 37.2 % 47.8 %

The decrease in selling and marketing expense for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a $93.0 million decrease in Partner compensation (from $119.3 million for the year ended December 31, 2024 to $26.3 million for the year ended December 31, 2025) due to the Pivot (as we no longer have Partner compensation on new sales after November 1, 2024) and the Partner compensation recorded in the current year was the amortization of Partner compensation that was deferred in prior periods, a $21.2 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past two years, and a $5.6 million decrease in event expenses due to no events in the current year (due to the Pivot), partially offset by a $14.3 million increase in media expense due to increased advertising spend with the Pivot transition and a $2.6 million increase in affiliate compensation, which did not exist until late in the fourth quarter of the prior year.

Selling and marketing expenses as a percentage of total revenue decreased by 1,060 bps primarily due to the Pivot and the transition from the MLM model to an affiliate model which significantly reduced Partner compensation and eliminated event expenses.

Enterprise Technology and Development

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 expenses also include reporting and business analytics tools, security systems such as identity management and payment card industry compliance, office productivity software, research and development tracking tools, research and development expenses related to new nutritional product development, 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, enterprise technology hosting expenses, depreciation of enterprise technology-related assets, software licenses, and technology equipment leases.

Year Ended December 31,

(dollars in thousands)

As a percentage of total revenue 16.8 % 18.2 %

The decrease in enterprise technology and development expenses for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to an $18.9 million decrease in depreciation expense as a result of certain long-lived assets that were fully depreciated as of December 31, 2024 and due to $11.1 million of accelerated deprecation recorded in the prior year related to certain long-lived assets due to the Pivot and by a $15.2 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that occurred in the past two years.

Enterprise technology and development expense as a percentage of total revenue decreased by 140 bps primarily due to the accelerated depreciation on the long-lived assets impacted by the Pivot in the prior year and certain long-lived

assets that were fully depreciated as of December 31, 2024, partially offset by a decrease in revenue at a faster pace than the reduction in enterprise technology and development expenses.

General and Administrative

General and administrative expenses include personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, and human resources functions. General and administrative expense also includes fees for professional services principally comprised of legal, audit, tax, and insurance.

Year Ended December 31,

(dollars in thousands)

As a percentage of total revenue 15.9 % 11.7 %

The decrease in general and administrative expenses for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a $6.9 million decrease in personnel-related expenses due to lower headcount primarily related to the restructuring activities that have occurred in the past two years, a $1.3 million decrease in rent expense due to a decrease in leased space, and a $1.1 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, partially offset by 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.

General and administrative expenses as a percentage of total revenue increased by 420 bps due to the decrease in revenue at a faster pace than the reduction in general and administrative expenses.

Restructuring

In 2025, restructuring charges primarily related to additional post-Pivot headcount reductions. In 2024, restructuring charges related primarily to the Pivot which was announced by the Company on September 30, 2024 (see Note 14, Restructuring, for more information on the Pivot) and key initiatives. The charges incurred primarily consist of employee termination costs.

Year Ended December 31,

(dollars in thousands)

Impairment of Goodwill

Impairment of goodwill includes goodwill impairment in 2024.

Year Ended December 31,

(dollars in thousands)

The Company performed its annual goodwill impairment test as of December 31, 2025 and 2024 and based on a quantitative analysis recognized goodwill impairment of $20.0 million for the year ended December 31, 2024.

Other Income (Expenses)

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) and ABL Facility. Other income, net, consists primarily of interest income earned on investments and cash equivalents.

Year Ended December 31,

(dollars in thousands)

Loss on debt extinguishment $ (2,166 ) $ (2,379 ) $ 213 (9 %)

Change in fair value of warrant liabilities (1,980 ) 1,144 (3,124 ) NM

The loss on debt extinguishment for the year ended December 31, 2025 was due to the repayment in full ($17.3 million) of the Term Loan as of May 13, 2025. The loss on debt extinguishment for the year ended December 31, 2024 was due to partial prepayments of $13.7 million on the Term Loan that occurred in the year ended December 31, 2024. The $3.1 million change in fair value of warrant liabilities during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily resulted from a 68% increase in our stock price during the current year as compared to a 26% decrease in our stock price in the prior year. The $1.9 million decrease in interest expense was primarily due to (1) a decrease of approximately 15% in the average principal debt balance outstanding during the year ended December 31, 2025 as compared to the prior year and (2) a decrease of approximately 38% in the effective interest rate on the ABL Facility (outstanding since May 13, 2025) as compared to the Term Loan (repaid on May 13, 2025). The $2.1 million decrease in other income as compared to the prior year was primarily due to a $1.2 million gain on the sale of a legal claim for a litigation settlement in the year ended December 31, 2024.

Income Tax Provision

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.

Year Ended December 31,

(dollars in thousands)

The income tax provision decrease for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily driven by changes in our valuation allowance and a decrease in the net expense from discrete events.

Liquidity and Capital Resources

Historically, our primary sources of liquidity have been sales of our equity, debt financing, and cash generated from our operations. As of December 31, 2025, we had $39.0 million in cash and cash equivalents.

ABL Facility and Repayment of Term Loan

On May 13, 2025, the Company, the lenders party thereto and Tiger, as administrative agent, entered into a $35.0 million ABL Facility, which includes a $10.0 million uncommitted accordion that matures on May 13, 2028, with the potential for two one-year extensions which would need to be approved by Tiger. The Company borrowed $25.0

million on the Asset-Based Lending Facility Effective Date. The ABL Facility bears interest based on the one-month secured overnight financing rate ("SOFR") plus 9.00% at its inception with a reduction in the rate to the one-month SOFR plus 7.75% after May 13, 2026 if the Company's fixed charge coverage ratio is greater than 1.10x. The ABL Facility is secured by a first lien on substantially all of the Company’s assets and there is no required payment of principal until July 1, 2026, and thereafter the principal repayment is approximately $2.1 million per year, which is split into equal monthly payments of $177,083. The remaining unpaid principal balance of the ABL Facility will be due on May 13, 2028, unless the ABL Facility is extended pursuant to its terms. During the period from May 13, 2025 (inception of the ABL Facility) to December 31, 2025, the ABL Facility had an effective interest rate of 15.09% and a cash interest rate of 13.25%.

The Company used the proceeds from the ABL Facility to repay in full its existing Term Loan on May 13, 2025 (outstanding principal balance of $17.3 million as of the date of repayment) along with the repayment of the outstanding paid in kind of $0.5 million, a prepayment premium of $0.3 million, and outstanding accrued interest of $0.2 million. The repayment of the Term Loan was accounted for as a debt extinguishment and the Company wrote off the remaining amount of unamortized debt discount and debt issuance costs as of the repayment date ($1.7 million) which in addition to the prepayment premium ($0.3 million), and certain legal expenses, was recorded as a loss on debt extinguishment of $2.2 million in the year ended December 31, 2025.

After repaying in full its existing Term Loan, the ABL Facility provided the Company with approximately $5 million in additional capital on its balance sheet.

The ABL Facility also contains customary representations, warranties, and covenants, which include, but are not limited to, restrictions on indebtedness, liens, restricted payments, asset sales, affiliate transactions, changes in line of business, investments, negative pledges and amendments to organizational documents and material contracts. The ABL Facility contains customary events of default, which among other things include (subject to certain exceptions and cure periods): (1) failure to pay principal, interest, or any fees or certain other amounts when due; (2) breach of any representation or warranty, covenant, or other agreement in the ABL Facility and other related loan documents; (3) the occurrence of certain bankruptcy or insolvency proceedings; and (4) certain other customary events of default.‌

The Company’s financial covenants under the ABL Facility are as follows:

The Company shall not fail to exceed the Three Month Total Billings Target (as defined in the Credit Agreement).

The Company shall not fail to exceed the Quarterly Digital Subscriptions Target (as defined in the Credit Agreement).

On an annual basis, the amount of Capital Expenditures (as defined in the Credit Agreement) for the year then ended shall be less than $10 million, which can increase based on certain cost savings metrics.

Liquidity, as defined in the Credit Agreement, shall be greater than $12 million at all times and during a Cure Period (as defined in the Credit Agreement) shall be greater than $13.2 million.

ABL Facility First Amendment

On January 7, 2026, the Company and Tiger entered into the Amended ABL Facility Credit Agreement, which amended the Company’s existing Credit Agreement. The Amended ABL Facility Credit Agreement amends, among other things, certain terms of the Credit Agreement including without limitation, to (1) eliminate the capital expenditures covenant, (2) increase the minimum liquidity financial covenant from $12 million to $15 million, (3) the minimum Three Months Total Billings Target and the minimum Monthly Digital Subscriptions financial covenants are not tested unless the Company's cash balance is less than $4.6 million greater than the outstanding debt principal (a Covenant Testing Period, as defined in the Amended ABL Facility Credit Agreement), (4) decrease the minimum Monthly Digital Subscriptions Target covenant level from 850,000 to 700,000, which is tested if a Covenant Testing Period (as defined in the Amended ABL Credit Facility Agreement) has been triggered, (5) add an additional financial covenant such that if a Covenant Testing Period, as defined in the Amended ABL Facility Credit Agreement) is in effect, the Company must maintain a minimum BFCCR (as defined in the Amended ABL Facility Credit Agreement) of at least 1.1x, (6) extended the date for potential decrease in the interest rate of the ABL

Facility from SOFR plus 9.00% to SOFR plus 7.75% from May 13, 2026 to December 31, 2026, (7) extended the Make Whole prepayment premium from November 13, 2026 to July 7, 2027, and (8) amend certain financial definitions, reporting covenants and other covenants thereunder.

The Company incurred a 1% amendment fee on the outstanding ABL Facility balance prior to the amendment (fee of $0.3 million).

See Note 10, Debt, and Note 22, Subsequent Events, for additional information on the Amended ABL Facility Credit Amendment.

Liquidity Considerations

We were in compliance with the financial covenants under our ABL Facility as of December 31, 2025. The Company believes it will have adequate cash flows to support its ongoing operations for at least one year following the date that these consolidated financial statements are issued.

See Note 10, Debt, for additional information on the ABL Facility and the repayment of the existing Term Loan.

Term Loan

On August 8, 2022, the Company, Beachbody, LLC, a Delaware limited liability company and wholly-owned direct subsidiary of the Company (the “Borrower”), and certain subsidiaries of the Company (together with the Company, the “Guarantors”), entered into a financing agreement (as amended, the “Financing Agreement”) with the lenders party thereto and Blue Torch Finance, LLC, ("Blue Torch") as administrative agent and collateral agent for such lenders, providing for a senior secured term loan facility in an initial aggregate principal amount of $50.0 million (the “Term Loan”). Obligations under the Financing Agreement were guaranteed by the Guarantors and secured by a lien on and security interest in substantially all of the assets of the Borrower and the Guarantors, subject to customary exceptions. Between January 1, 2024 and April 30, 2025, the Company made partial prepayments of $13.7 million on the Term Loan. As noted above, the Term Loan was repaid in full on May 13, 2025. During the period from January 1, 2025 to May 13, 2025, the Term Loan was a SOFR loan, with an effective interest rate of 28.00% and a cash interest rate of 11.63%.

See Note 10, Debt, to our consolidated financial statements included elsewhere in this Report for additional information on the Term Loan.‌

Lease Obligations

As of December 31, 2025, we have $14.5 million of purchase commitments and lease obligations associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. See Note 11, Leases, to our consolidated financial statements included elsewhere in this Report for discussion of our leases and Note 13, Commitments and Contingencies, to our consolidated financial statements included elsewhere in this Report for discussion of our contractual commitments that are primarily due within the next year.‌

Cash Flows

For the years ended December 31, 2025 and 2024, our net cash flows were as follows:

Year Ended December 31,

(dollars in thousands)

Net cash provided by operating activities $ 21,750 $ 2,562

Net cash (used in) provided by investing activities (4,399 ) 1,058

Net cash provided by (used in) financing activities 1,030 (15,868 )

As of December 31, 2025, we had cash and cash equivalents totaling $39.0 million.

Net cash provided by operating activities was $21.8 million and $2.6 million for the years ended December 31, 2025 and 2024, respectively. The increase in cash provided by operating activities during the year ended December 31, 2024, compared to the prior year, was primarily due to a decrease in net loss of $68.8 million, a decrease of $9.8 million of cash used related to accrued expenses, and an increase in cash provided by other assets of $8.5 million, partially offset by a decrease in depreciation and amortization expense of $22.8 million, a decrease in goodwill impairment of $20.0 million, a decrease in equity-based compensation of $11.5 million, an increase in cash used in deferred revenue of $7.3 million, and a decrease in the amortization of content assets of $6.8 million.

Net cash (used in) provided by investing activities was $(4.4) million and $1.1 million for the years ended December 31, 2025 and 2024, respectively. The increase in net cash used in investing activities was due to proceeds received from the sale of the Van Nuys facility of $5.6 million in the prior year.

Net cash provided by (used in) financing activities was $1.0 million and $(15.9) million for the years ended December 31, 2025 and 2024, respectively. The increase in net cash provided by financing activities was primarily due to the $25.0 million borrowing on the ABL Facility in the current year and $0.5 million of proceeds from the exercise of stock options, partially offset by the $22.6 million repayment of the Term Loan in the current year and $1.8 million of payments for debt issuance costs in the current year.

Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth and overall economic conditions. We continue to assess and efficiently manage our working capital, and expect to generate additional liquidity through continued cost control initiatives. We believe that existing cash and cash equivalents and cost control initiatives will provide the Company with sufficient liquidity to meet our anticipated cash needs, including debt service requirements, for the next twelve months as well as for the longer-term (i.e., beyond the next twelve months).

We may also explore additional debt or equity financing to supplement our anticipated working capital balances and further strengthen our financial position, but do not at this time know which form it will take or what the terms will be. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financial covenants that would restrict our operations. The sale of additional equity would result in additional dilution to our shareholders. There can be no assurances that we will be able to raise additional capital in amounts or on terms acceptable to us.

Critical Accounting Estimates

Our consolidated financial statements included elsewhere in this Annual Report have been prepared in accordance with GAAP. The preparation of consolidated financial statements requires us to make judgments, estimates and assumptions that affect the amounts reported in our consolidated financial statements and related notes. We evaluate our estimates and judgments on an on-going basis. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results in these areas could differ from management's estimates. Note 1, Description of Business and Summary of Significant Accounting Policies, to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. Following are the Company's accounting policies impacted by judgments, assumptions and estimates.

Inventory

Inventory consists of raw materials, work in process, and finished goods, is accounted for by using the first-in, first-out method, and is valued at the lower of cost or net realizable value. To estimate any necessary adjustments against the carrying value of inventory, various assumptions are made in regard to excess or slow-moving inventories including future demand for our products, anticipated margin, planned product discontinuances, and the physical condition (e.g. age and quality) of the inventory. If future demand and market conditions are less favorable than our assumptions, additional inventory adjustments may be required.

Total adjustments to the carrying value of excess inventory and inventory on hand to net realizable value were $1.5 million and $4.2 million during the years ended December 31, 2025 and 2024, respectively. The Company recorded $1.5 million and $1.7 million of these adjustments in nutrition and other cost of revenue for the years ended December 31, 2025 and 2024, respectively. The Company also recorded adjustments in connected fitness cost of revenue of zero and $2.5 million during the years ended December 31, 2025 and 2024, respectively. Actual future

write-offs of inventory may differ from estimates and calculations used to determine inventory adjustments due to changes in customer demand or other market conditions.

In the three months ended September 30, 2024, management determined that it would no longer sell connected fitness inventory in early 2025. Based on this decision, the Company recorded $1.2 million in adjustments in the year ended December 31, 2024 to reduce connected fitness inventory to net realizable value. In addition, the Company recorded $0.2 million in adjustments in the year ended December 31, 2024 to reduce nutrition and other inventory impacted by the Pivot.

Goodwill and Intangible Assets Impairment

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. We test goodwill for impairment at a level within the Company referred to as the RU. We carry our definite-lived intangible assets at cost less accumulated amortization. If an event or change in circumstances occurs that indicates the carrying value may not be recoverable, we would evaluate our definite-lived intangible assets for impairment at that time. We evaluate the recoverability of goodwill and indefinite-lived intangible assets as of December 31 of each fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value of an asset might be impaired. Potential impairment indicators include a significant decline in revenues, earnings, or cash flows, material adverse changes in the business climate, and a significant decline in the market capitalization due to a sustained decrease in our stock price. We are permitted to first assess qualitative factors to determine whether the quantitative impairment test is necessary. If the qualitative impairment analysis (Step 0) results in a determination that the fair value of an RU or an indefinite lived intangible asset is more likely than not less than its carrying amount, we perform a quantitative impairment analysis (Step 1). We may bypass the qualitative assessment and proceed directly to the quantitative assessment.

2025 Goodwill Impairment Test

In testing for goodwill impairment as of December 31, 2025, the Company performed a qualitative goodwill impairment assessment (Step 0) for its RU which indicated that the fair value of its RU exceeded its carrying value, and determined that the goodwill of $65.2 million as of December 31, 2025 was not impaired. The impairment analysis included an assessment of certain qualitative factors including, but not limited to, the results of prior fair value calculations, the movement of the Company's share price and market capitalization, the Company's overall financial performance, and macroeconomic and industry conditions. The Company considered the qualitative factors and weighed the evidence obtained and determined that it was not more likely than not that the fair value of its RU assets was less than its carrying amount. Although the Company believes the factors considered in the impairment analysis are reasonable, significant changes in any one of the assumptions used could have produced a different result.

Management will continue to monitor its RU and long-lived asset group for changes in the business environment that could impact its fair value. Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of our RU may include supply chain disruptions; the demand for at-home fitness solutions; adverse macroeconomic conditions; volatility in the equity and debt markets which could result in higher weighted-average cost of capital and our subscriber growth rates. Changes in management's expectations of future performance could have a significant impact on the Company's RU fair value. It should be noted that revenue and expectations of revenue have a significant impact on the RU's fair value. For the year ended December 31, 2025 the Company's revenue decreased by 40% from the prior year. Continual decreases in revenue could have an impact on the future fair value of the Company's RU. The fair value of our RU has been impacted by and will continue to be impacted by the volatility in the market price of our common stock. The Company's stock price increased by 68% in the year ended December 31, 2025 and declined by 26% in the year ended December 31, 2024. Decreases in the Company's stock price may result in a decrease in the fair value of the Company's RU and potential for incremental goodwill impairment. Changes in any of the assumptions used in the valuation of the RU, or changes in the business environment could materially impact the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

We are exposed to foreign currency exchange risk related to transactions in currencies other than the U.S. Dollar, which is our functional currency. Our foreign subsidiaries, sales, certain inventory purchases and operating expenses expose us to foreign currency exchange risk. For the years ended December 31, 2025 and 2024, approximately 8% and 10%, respectively, of our revenue in each year was in foreign currencies. These sales were primarily denominated in Canadian dollars and British pounds.

We may use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on our net cash flows. We may enter into option contracts to hedge forecasted payments, typically for up to 12 months, for cost of revenue, selling and marketing expenses, general and administrative expenses, and intercompany transactions not denominated in the local currencies of our foreign operations. We may designate some of these instruments as cash flow hedges and record them at fair value as either assets or liabilities within the consolidated balance sheets. Some of these instruments may be freestanding derivatives for which hedge accounting does not apply.

The Company has no outstanding foreign exchange options at December 31, 2025 and 2024. As part of the Pivot, the Company decided to exit the sale of nutritional and other physical products in the UK and France. Nutrition and other revenue in the UK and France were not significant.

A hypothetical 10% change in exchange rates, with the U.S. dollar as the functional and reporting currency, would result in an approximate $1.4 million increase or decrease in cost of revenue and operating expenses.

The aggregate notional amount of foreign exchange derivative instruments at December 31, 2025 and 2024 was zero.

Interest Rate Risk

Our exposure to interest rate risk is primarily associated with our ABL Facility borrowings, which was a secured overnight financing rate (" SOFR") loan during the year ended December 31, 2025 and subject to variability in the SOFR. If the interest rate on our ABL Facility were to increase or decrease by 1% for the year and our indebtedness remained constant throughout the period, our annual interest expense would not change materially. Further, our exposure to interest rate volatility is partially mitigated by interest income on our highly liquid investments. At this point, we do not believe that our liquidity has been materially affected by the debt market uncertainties noted in the last few years, and we do not believe that our liquidity will be significantly impacted in the near future.

Item 8. Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Beachbody Company, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Beachbody Company, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15(a)2 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Deferred Revenue — Refer to Note 1 and 2 to the financial statements

Critical Audit Matter Description

The Company’s recorded deferred revenue includes the sale of digital subscriptions that represent a single, stand-ready obligation with deferred revenue recorded for subscription fees billed in advance of service delivery. The Company also sells a variety of bundled offerings with multiple performance obligations that combine digital subscriptions, nutritional products, and/or other fitness products which the Company accounts for as if they were distinct. Revenue from these arrangements is recognized over the subscription period and deferred revenue is recorded for non-refundable cash payments received for the Company’s performance obligation to transfer, or stand ready to transfer, subscription services in the future.

We identified subscription-based deferred revenue as a critical audit matter because subjective auditor judgment was required to evaluate the subscription-based deferred revenue due to the variety of subscription offerings and manual nature of the models used to estimate such balances. This required an increased extent of audit effort to evaluate the audit evidence relating to the completeness and accuracy of the subscription-based deferred revenue.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s processes to capture all its subscription-based deferred revenue balances included the following, among others:

▪

We performed a reconciliation of the Company’s general ledger to the supporting subscription-based deferred revenue calculations.

▪

We tested the source information underlying the subscription-based deferral calculation by performing the following procedures:

We identified any new subscription-based offerings during the year and evaluated them for proper inclusion within the subscription-based deferral calculation. We evaluated that the new subscription-based offerings were properly recorded and the appropriate revenue recognition criteria was applied.

We tested individual transactions and evaluated the mathematical accuracy, occurrence and classification by obtaining and inspecting source documents such as invoices.

We tested completeness of subscription-based deferred revenue by tracing individual revenue transactions into the deferred revenue balance.

▪

With the assistance of our data specialists, we developed an independent model to recalculate the revenue recognition of the subscription-based deferred revenue balance and compared the results of the model to the recorded balance of the Company.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 10, 2026

We have served as the Company's auditor since 2023.

The Beachbody Company, Inc.

Consolidated Balance Sheets

(in thousands, except par value and share data)

As of December 31,

Assets

Current assets:

Restricted short-term investments 4,250 4,250

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of lease liabilities 1,036 1,338

Long-term lease liabilities, net 738 1,973

Stockholders’ equity:

Class C: no shares issued and outstanding at December 31, 2025 and 2024 — —

Accumulated other comprehensive loss (47 ) (49 )

Total liabilities and stockholders’ equity $ 147,035 $ 174,556

The accompanying notes are an integral part of these consolidated financial statements.

The Beachbody Company, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

Year Ended December 31,

Revenue:

Cost of revenue:

Operating expenses:

Enterprise technology and development 42,311 76,370

Impairment of goodwill — 20,000

Other income (expense)

Loss on debt extinguishment (2,166 ) (2,379 )

Change in fair value of warrant liabilities (1,980 ) 1,144

Income tax provision (125 ) (239 )

Net loss per common share, basic and diluted $ (0.41 ) $ (10.51 )

Weighted-average common shares outstanding, basic and diluted 6,971 6,818

The accompanying notes are an integral part of these consolidated financial statements.

The Beachbody Company, Inc.

Consolidated Statements of Comprehensive Loss

(in thousands)

Year Ended December 31,

Other comprehensive (loss) income:

Foreign currency translation adjustment 2 (106 )

Total other comprehensive income (loss) 2 (26 )

Total comprehensive loss $ (2,858 ) $ (71,668 )

The accompanying notes are an integral part of these consolidated financial statements.

The Beachbody Company, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands)

Accumulated

Additional Other Total

Class A and Class X Common Stock Paid-In Accumulated Comprehensive Stockholders’

Shares Amount Capital Deficit Income (Loss) Equity

Other comprehensive loss, net of tax — — — — (26 ) (26 )

Issuance of shares due to Employee Stock Purchase Plan 43 — 272 — — 272

Tax withholdings on vesting of restricted stock (32 ) — (263 ) — — (263 )

Pre-funded warrants exercised 123 — — — — —

Other comprehensive income, net of tax — — — — 2 2

Options exercised, net of tax withholdings 81 — 524 — — 524

Issuance of shares due to Employee Stock Purchase Plan 39 — 143 — — 143

Tax withholdings on vesting of restricted stock (42 ) — (274 ) — — (274 )

The accompanying notes are an integral part of these consolidated financial statements.

The Beachbody Company, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Impairment of goodwill — 20,000

Depreciation and amortization expense 8,680 31,439

Realized losses on hedging derivative financial instruments — 64

Change in fair value of warrant liabilities 1,980 (1,144 )

Amortization of debt issuance costs 1,446 2,490

Paid-in-kind interest expense 218 808

Change in lease assets 1,439 —

Gain on sale of property and equipment — (784 )

Changes in operating assets and liabilities:

Net cash provided by operating activities 21,750 2,562

Cash flows from investing activities:

Purchase of property and equipment (4,399 ) (4,542 )

Proceeds from sale of property and equipment — 5,600

Net cash (used in) provided by investing activities (4,399 ) 1,058

Cash flows from financing activities:

Proceeds from exercise of stock options 524 —

Tax withholdings payments for vesting of restricted stock (274 ) (263 )

Payment of debt issuance costs (1,781 ) —

Net cash provided by (used in) financing activities 1,030 (15,868 )

Cash, cash equivalents and restricted cash, beginning of year 20,187 33,409

Cash, cash equivalents and restricted cash, end of year $ 39,017 $ 20,187

Supplemental disclosure of cash flow information:

Cash paid during the year for interest $ 2,639 $ 3,561

Cash received during the year for federal income taxes (324 ) —

Cash paid during the year for Texas GMT income taxes 73 85

Cash paid during the year for UK income taxes 33 37

Cash paid during the year for Canada income taxes 32 86

Cash paid during the year for income taxes from other jurisdictions 18 24

Supplemental disclosure of noncash investing activities:

Property and equipment acquired but not yet paid for $ 280 $ 225

Supplemental disclosure of noncash financing activities:

Paid-in-kind fee recorded as incremental debt issuance cost — 818

The accompanying notes are an integral part of these consolidated financial statements.

The Beachbody Company, Inc.

Notes to Consolidated Financial Statements

Note 1. Description of Business and Summary of Significant Accounting Policies

Organization

The Beachbody Company, Inc. (“BODi” or the “Company”) is a leading fitness and nutrition company and the creator of some of the world’s most popular fitness programs. The Company’s fitness programs are available for streaming through subscription and/or digital program purchases on the Beachbody On Demand Interactive (“BODi”) digital platform, accessible through a web browser, iOS devices, Android devices and Roku. BODi offers nutritional products such as Shakeology nutrition shakes and Beachbody Performance supplements, which have been designed and clinically tested to help customers achieve their goals. The Company’s revenue has historically been generated primarily through a network of micro-influencers (“Partners”), social media marketing channels, and direct response advertising. On September 30, 2024, the Company announced strategic initiatives to transition its network business from a Multi-Level Marketing ("MLM") model with its Partners to a single level affiliate model (the "Pivot"). See Note 14, Restructuring, for more information on the Pivot.

Basis of Presentation and Principles of Consolidation

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”), and pursuant to the regulations of the U.S. Securities and Exchange Commission ("SEC").

The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated in consolidation.

Certain amounts from prior periods have been reclassified in the consolidated balance sheet and the consolidated statement of cash flows to conform to the current period presentation. For the activity in the year ended December 31, 2024, deferred tax liabilities and other liabilities have been combined and presented as other liabilities in the accompanying consolidated balance sheets and consolidated statement of cash flows.

Consolidated Balance Sheet:

The following table presents the reclassifications made to the Consolidated Balance Sheet:

(in thousands)

December 31, 2024 (as reported) Reclassification December 31, 2024 (adjusted)

Deferred tax liabilities $ 1 $ (1 ) $ —

Consolidated Statement of Cash Flow:

The following table presents the reclassifications made to the Consolidated Statement of Cash Flows:

(in thousands)

December 31, 2024 (as reported) Reclassification December 31, 2024 (adjusted)

Deferred income taxes $ 5 $ (5 ) $ —

Management believes such changes provide greater clarity to the users of the consolidated financial statements and are not meant to conceal or otherwise hide information from the users of the consolidated financial statements or represent corrections of an error or change in accounting principle.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that may impact the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates in our consolidated financial statements include, but are not limited to, the useful life and recoverability of long-lived assets, the valuation of warrant liabilities, the recognition and measurement of income tax assets and liabilities, impairment of goodwill, and the net realizable value of inventory. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities. Actual results could differ from those estimates. We periodically review estimates and assumptions and we reflect the effects of changes, if any, in the consolidated financial statements in the period that they are determined.

Segments

The Company has one operating and reporting segment. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are accessed. The Company's CODM is its chief executive officer ("CEO"). The results of the operations are provided to and analyzed by the CODM at the Company level and accordingly, key resource decisions and assessment of performance are performed at the Company level based on the Company’s consolidated net loss.

Summary of Significant Accounting Policies

Presentation of Financial Statements-Going Concern

The Company applies ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40)-Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, about whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that its financial statements are issued.

Recurring Fair Value Measurements

For assets and liabilities that are measured using quoted prices (unadjusted) in active markets for identical assets or liabilities, the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs (Level 1). Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data (Level 2). For all remaining assets and liabilities for which there are no significant observable inputs, fair value is derived using an assessment of various discount rates, default risk, credit quality, and the overall capital market liquidity (Level 3). These valuations require significant judgment.

Non-Recurring Fair Value Measurements

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets can include

long-lived assets (including goodwill) that are written down to fair value when they are impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Cash and Cash Equivalents

The Company considers all cash and short-term investments purchased with maturities of three months or less when acquired to be cash equivalents. Cash and cash equivalents include:

•

cash held in checking and money market funds;

•

amounts in transit from payment processors for customer credit and debit card transactions; and

•

highly liquid investments with original maturities of three months or less at the time of purchase.

Cash and cash equivalents are carried at cost, which approximates market value. The Company maintains its cash at financial institutions, and the balances, at times, may exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts. The Company mitigates its risk by placing funds in high-credit quality financial institutions and utilizing nightly sweeps into U.S. Treasury funds for certain cash accounts. We regularly monitor the financial stability of the financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents. Restricted cash primarily consists of cash held related to an irrevocable letter of credit, see Note 10, Debt, for additional information on the letter of credit.

Inventory

Inventory consists of raw materials, work in process, and finished goods. Inventory is accounted for using the first-in, first-out method and is valued at the lower of cost or net realizable value. The Company records adjustments to the carrying value of inventory based on assumptions regarding future demand for the Company’s products, anticipated margin, planned product discontinuances, and the physical condition (e.g. age and quality) of the inventory.

Accounts Receivable, Net (included in Other Current Assets)

The Company's accounts receivable primarily represents amounts due from third-party sales. The allowance for credit losses is based on several factors, including the length of time accounts receivable are past due, the Company's previous loss history, the specific customer's ability to pay its obligations and any other forward looking data regarding customers' ability to pay which may be available.

Content Assets, Net

The Company capitalizes costs associated with the development and production of programs on its streaming platforms. The Company capitalizes production costs as customer usage and retention data supports that future revenue will be earned. These costs are classified as non-current assets in the consolidated balance sheets.

Content assets are predominantly monetized as a film group and are amortized over the estimated useful life based on projected usage, which has been derived from historical viewing patterns, resulting in an accelerated amortization pattern. Amortization begins when the program is first available for streaming by customers and is recorded in the consolidated statements of operations as a component of digital cost of revenue. When an event or change in circumstances indicates a change in projected usage, content assets are reviewed for potential impairment in aggregate at a group level. To date, the Company has not identified any such event or changes in circumstances.

Property and Equipment, Net

Property and equipment, which includes computer software and web development costs, are recorded at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets, which primarily range from two to seven years. Leasehold improvements are depreciated over the shorter of the life of the assets or the remaining life of the related lease. Costs of maintenance, repairs, and minor replacements are expensed when incurred, while expenditures for major renewals and betterments that extend the useful life of an asset or provide additional utility are capitalized.

Software and web development projects in-process consist primarily of costs associated with internally developed software that has not yet been placed into service. The Company capitalizes eligible costs to acquire, develop, or

modify internal-use software that are incurred subsequent to the preliminary project stage. Depreciation of these assets begins upon the initial usage of the software.

When property is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in net income (loss).

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting. The cost of an acquired company is assigned to the tangible and identifiable assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. Any excess of the purchase price over the fair value of tangible and intangible assets acquired is assigned to goodwill. The transaction costs associated with business combinations are expensed as they are incurred.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the fair value of the consideration transferred in a business combination over the fair value of the underlying identifiable assets and liabilities acquired. Goodwill and intangible assets deemed to have an indefinite life are not amortized. Instead, goodwill and indefinite-lived intangible assets are assessed for impairment annually or more frequently if an event or change in circumstances occurs that, with respect to goodwill, would more likely than not reduce the fair value of a reporting unit ("RU") below its carrying value or, for indefinite-lived intangible assets, indicate that it is more likely than not that the asset is impaired. The Company performs its annual goodwill impairment assessment as of December 31 of each fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value of an asset might be impaired. Potential impairment indicators include a significant decline in revenues, earnings, or cash flows, material adverse changes in the business climate, and a significant decline in the market capitalization due to a sustained decrease in our stock price. We are permitted to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If the qualitative impairment analysis (Step 0) results in a determination that the fair value of an RU or an indefinite lived intangible asset is more likely than not less than its carrying amount, we perform a quantitative impairment analysis (Step 1). We may bypass the qualitative assessment and proceed directly to the quantitative assessment.

As of December 31, 2025 and 2024, the Company had no indefinite-lived intangible assets.

Long-Lived Assets

Management reviews long-lived assets (including property and equipment, content assets, and definite-lived intangible assets) for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of assets is determined by first grouping the long-lived assets at the lowest level for which there are identifiable cash flows, and then comparing the carrying value of each asset group to its forecasted undiscounted cash flows. If the forecasted undiscounted cash flows indicates that the carrying value of the assets is not recoverable, an impairment test of the asset group is performed. Impairment is recognized if the carrying amount of the asset group exceeds its fair value. The Company performed a test for recoverability at December 31, 2025 and concluded that the carrying value of its long-lived assets were recoverable. The Company performed a test for recoverability at December 31, 2024, and concluded that the carrying value of its long-lived assets were not recoverable. The fair value of the assets within the asset group were then calculated to determine whether an impairment loss should be recognized. The fair value of the long-lived assets were estimated and calculated to be higher than the carrying value and thus no impairment was recognized for the year ended December 31, 2024.

As of December 31, 2025 and 2024, the Company’s long-lived assets were located in the U.S.

Leases

The Company accounts for its leases of administrative offices and production studios under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee and are recorded on the consolidated balance sheets as both a right-of-use ("ROU") asset and lease liability, calculated by discounting fixed lease payments over the lease term at the discount rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is

amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset results in straight-lined rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the ROU asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. The Company does not have any finance leases or leases where it acts as a lessor as of December 31, 2025.

In calculating the ROU asset and lease liability, the Company elected the practical expedient to combine lease and non-lease components. Rental income on subleases is recognized on a straight-line basis over the estimated lease term. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and instead recognizes rent expense on a straight-line basis over the lease term for such leases.

Warrant Liabilities

The Company has issued warrants on several occasions including during its initial public offering process, the execution of its Term Loan (as defined below) and in the Equity Offering (as defined below), which have not met the criteria to be classified in stockholders' equity.

Public and Private Placement Warrants

The Company has outstanding warrants for the purchase of 200,000 shares of the Company's Class A common stock at an exercise price of $575.00 per share (the “Public Warrants”) and outstanding warrants for the purchase of 106,667 shares of the Company's Class A common stock at an exercise price of $575.00 per share (the “Private Placement Warrants”). All of the Public and Private Placement Warrants remained outstanding as of December 31, 2025 and the Public and Private Placement Warrants will expire on June 25, 2026. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, as described in the warrant agreement. In no event will the Company be required to net cash settle any warrant. The Private Placement Warrants are transferable, assignable or salable in certain limited exceptions. The Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will cease to be Private Placement Warrants and will become Public Warrants and will be redeemable by the Company and exercisable by such holders on the same basis as the other Public Warrants.

Term Loan Warrants

In connection with the Term Loan (as defined below), the Company issued warrants for the purchase of 94,335 shares of the Company’s Class A common stock at an exercise price of $92.50 per share to certain holders affiliated with Blue Torch Finance, LLC (the “Term Loan Warrants”). In connection with the Term Loan Second Amendment (as defined below), the Term Loan Fifth Amendment (as defined below) and the Term Loan Sixth Amendment (as defined below), the Company also amended and restated the Term Loan Warrants. The Term Loan amendments amended the exercise price of the Term Loan Warrants as follows:

Date From To

Term Loan Second Amendment July 24, 2023 $92.50 per share $20.50 per share

Term Loan Fifth Amendment April 5, 2024 20.50 per share 9.16 per share

Term Loan Sixth Amendment October 18, 2024 9.16 per share 6.26 per share

The Term Loan warrants vest on a monthly basis over four years and have a seven-year term (expiring on August 8, 2029). In connection with the Equity Offering (as defined below), the Term Loan Warrants conversion ratio was amended resulting in an increase in the number of shares purchased upon the exercise of the Term Loan Warrants to 97,482 shares of the Company's Class A common stock.

Common Stock Warrants

In connection with the Equity Offering (as defined below), the Company issued warrants (the "Common Stock Warrants") on December 10, 2023, to certain institutional investors to purchase 543,590 shares of Class A common stock at an exercise price of $11.24 per share. The Common Stock Warrants may be exercised at any time beginning June 13, 2024, and will expire on June 13, 2029. See Note 15, Stockholders' Equity, for additional information on the Equity Offering and the Common Stock Warrants.

The Company evaluated the Public, Private Placement, Term Loan and Common Stock Warrants (collectively, the "Warrants") under ASC 815, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded they do not meet the criteria to be classified in stockholders’ equity. Since the Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as other liabilities in the consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the change in fair value of warrant liabilities within the consolidated statements of operations at each reporting date. The Public, Private Placement, Term Loan and Common Stock Warrants, are valued using a Black-Scholes option-pricing model as described in Note 3, Fair Value Measurements to the consolidated financial statements.

The change in the fair values of the Warrants for the years ended December 31, 2025 and 2024, resulted in a $2.0 million non-cash expense and $1.1 million non-cash income in the change in fair value of the warrant liabilities in the consolidated statements of operations, respectively.

Revenue Recognition

The Company’s primary sources of revenue are from sales of digital subscriptions, nutritional products, and connected fitness equipment (management ceased the sale of connected fitness inventory in the first quarter of 2025). The Company determines revenue recognition through the five-step model which requires us to:

(i) identify our contracts with a customer;

(ii) identify our performance obligations in the contract;

(iii) determine the transaction price in the contract;

(iv) allocate the transaction price to our performance obligations in the contract; and

(v) recognize revenue when each performance obligation under the contract is satisfied.

The Company records revenue when it fulfills its performance obligation to transfer control of the goods or services to its customer and defers revenue when it receives payments in advance of fulfilling its performance obligations. Revenue that is deferred is included in deferred revenue (for the remaining deferral period that is less than one year) and in other liabilities (for the remaining deferral period that is more than one year) in the consolidated balance sheets. Control of shipped items is generally transferred when the product is delivered to the customer. Control of services, which are primarily digital subscriptions, transfers over time, and as such, revenue is recognized ratably over the subscription period which at December 31, 2025, had an initial average life of approximately 13 months. Shipping and handling charges billed to customers are included in revenue. The Company markets and sells its products primarily in the United States, Canada, and the United Kingdom (the "UK"). As part of the Pivot, the Company decided to exit the sale of nutritional and other physical products in the UK and France. Nutrition and other revenue in the UK and France were not significant.

The amount of revenue recognized is the consideration that the Company expects it will be entitled to receive in exchange for transferring goods or services to its customers. Revenue is recorded net of expected returns, discounts, and credit card chargebacks, which are estimated using the Company’s historical experience. If actual costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. The Company sells a variety of bundled offerings that combine digital subscriptions, nutritional products, and/or other fitness products. The Company considers these sales to be revenue arrangements with multiple performance obligations. For customer contracts that include multiple performance obligations, the Company accounts for individual performance obligations if they are distinct. The transaction price is then allocated to each performance obligation based on its stand-alone selling price. The Company generally determines the standalone selling price based on the prices charged to customers. Revenue is presented net of sales taxes and value added taxes ("VAT") and GST/HST ("Goods and Services Tax"/"Harmonized Sales Tax") which are collected from customers and remitted to applicable government agencies.

A description of our principal revenue generating activities is as follows:

Digital Subscriptions – Our digital subscription services provide access to BODi, which provides a vast library of workout content. Digital subscriptions represent a single, stand-ready obligation and are paid for either at the time of or in advance of service delivery. Revenue from these arrangements is recognized over the subscription period.

Nutritional and Other Products – We offer a comprehensive line of nutritional products including nutritional supplement subscriptions and one-time nutritional sales. We often sell bundled products that combine digital subscriptions, nutritional products and/or fitness products. Revenue is recognized when control of the goods is transferred to the customer, which typically occurs upon delivery. See below for discussion of bundled products.

Connected Fitness – We offered a connected fitness system through the first quarter of 2025 that included in-home fitness equipment and associated digital content subscriptions. Some of our in-home fitness contracts had multiple performance obligations, which included both hardware and a subscription service commitment. Revenue was recognized when control of the equipment was transferred to the customer, usually upon delivery. See below for discussion of bundled products. Management ceased the sale of connected fitness inventory in the first quarter of 2025.

In cases where a customer contract contains multiple performance obligations, which the Company refers to as bundled products, we account for each obligation individually if they are distinct. We allocate the transaction price, net of discounts, to each performance obligation based on its standalone selling price. Revenue from such arrangements is recognized when control is transferred to the customer. For nutritional and other products, revenue is recognized usually upon delivery. For digital subscription service commitments, revenue is recognized ratably over the subscription period.

The Company operates primarily as the principal in its relationships where third parties sell or distribute the Company’s goods or services. Fees to the third parties are recorded in selling and marketing expenses within the consolidated statements of operations. The Company in certain instances serves as the agent in relationships with third parties. The activity in these relationships is immaterial.

Cost of Revenue

Digital Cost of Revenue

Digital cost of revenue includes costs associated with digital content creation including amortization and revisions of content assets, depreciation of streaming platforms, and digital streaming costs. It also includes customer service costs, payment processing fees, depreciation of production equipment, facilities, and related personnel expenses.

Nutrition and Other Cost of Revenue

Connected Fitness Cost of Revenue

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 the products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics. Management ceased the sale of connected fitness inventory in the first quarter of 2025.

Shipping and Handling

The Company utilizes the practical expedient under ASC 606-10-25-18B to account for shipping and handling costs incurred to deliver products to customers as fulfillment activities, rather than a promised service (a revenue element). Shipping and handling costs are included in Nutrition and other cost of revenue and Connected fitness cost of revenue in the consolidated statements of operations primarily in the period during which the products ship. The costs associated with shipping connected fitness and nutrition and other products to customers were $7.3 million and $15.0 million for the years ended December 31, 2025 and 2024, respectively.

Selling and Marketing

Selling and marketing expenses primarily include the costs 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.

The Company pays Partner, affiliate and third-party sales commissions when commissionable sales are made. In cases where the underlying revenue is deferred, the Company also defers the commissions and expenses these costs in the same period in which the underlying revenue is recognized. Deferred Partner commissions are included in other current assets and other assets in the consolidated balance sheets and were $1.5 million and $27.1 million as of December 31, 2025 and 2024, respectively. Deferred affiliate commissions are included in other current assets and other assets in the consolidated balance sheets and were $0.7 million and $0.2 million as of December 31, 2025 and 2024, respectively.

Partners were also eligible for various bonuses, recognition, and complimentary participation in events, including those based on sales volume. The Company expensed these costs in the period in which they were earned. These expenses as well as Partner commissions earned but not paid and affiliate commissions earned but not paid are included in accrued expenses in the consolidated balance sheets.

Advertising costs are primarily comprised of social media, television media, and internet advertising expenses and also include print, radio, and related production costs. Generally, the costs to produce television and web advertising are expensed as incurred, while television media costs are expensed at the time the media airs. Total advertising expense, including the costs to produce advertisements, was $39.9 million and $29.5 million for the years ended December 31, 2025 and 2024, respectively.

Enterprise Technology and Development

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 the Company's 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 expenses also include reporting and business analytics tools, security systems, such as identify management and payment card industry compliance, office productivity software, research and development tracking tools, research and development expenses related to new nutritional product development, 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, enterprise technology hosting expenses, depreciation of enterprise technology-related assets, software licenses, and technology equipment leases.

Research and development costs, which are expensed as incurred, were $1.7 million and $1.6 million for the years ended December 31, 2025 and 2024, respectively.

Equity-Based Compensation

The Company measures and recognizes compensation expense for all equity-based awards based on their estimated grant date fair values. The Company recognizes the expense on a straight-line basis over the requisite service period, and forfeitures are accounted for as they occur. Equity-based compensation expense is included in cost of revenue, selling and marketing, enterprise technology and development, and general and administrative expenses within the consolidated statements of operations.

Derivative Financial Instruments

The Company may use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on the Company’s net cash flows. The Company may enter into option contracts to hedge forecasted payments, typically for up to 12 months, for cost of revenue, selling and marketing expenses, general and administrative expenses, and intercompany transactions not denominated in the local currencies of the Company’s foreign operations. The Company may designate certain of these instruments as cash flow hedges and record them at fair value as either assets or liabilities within the consolidated balance sheets. Certain of these instruments may be freestanding derivatives for which hedge accounting does not apply.

Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income (loss) until the hedged forecasted transaction affects earnings. Deferred gains and losses associated with cash flow hedges of third-party payments are recognized in cost of revenue, selling and marketing, or general and administrative expenses, as applicable, during the period when the hedged underlying transaction affects earnings. Changes in the fair value of

derivatives for which hedge accounting does not apply are immediately recognized directly in earnings to cost of revenue.

The Company classifies cash flows related to derivative financial instruments as operating activities in the consolidated statements of cash flows.

Income Taxes

The Company is subject to income taxes in the United States, Canada, and the UK. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets ("DTAs") and liabilities ("DTLs") for the expected future tax consequences of events to be included in the consolidated financial statements. Under this method, DTAs and DTLs are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date.

In evaluating the Company’s ability to recover DTAs, all available positive and negative evidence is analyzed, including historical and current operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. Based on the level of losses, the Company has established a valuation allowance ("VA") to reduce its net DTAs to the amount that is more likely than not to be realized. To the extent we establish a VA or increase or decrease this allowance in a given period, we would include the related tax expense or tax benefit within the tax provision in the consolidated statement of operations in that period. In the future, if we determine that we would be able to realize our DTAs in excess of their net recorded amount, we would make an adjustment to the DTA VA and record an income tax benefit within the tax provision in the consolidated statement of operations in that period.

The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other income, net, respectively, in the consolidated statements of operations. Accrued interest and penalties are included in accrued expenses and other liabilities in the consolidated balance sheets.

Restructuring and Related Charges

The Company records liabilities for restructuring costs in the period in which the liability is incurred. Costs for involuntary separation programs are recorded when management has approved the plan for separation, the employees are identified and made aware of the benefits they are entitled to, it is unlikely that the plan will change significantly, and if applicable, any required governmental notification is made. Costs associated with benefits that are contingent on the employee continuing to provide service are recognized over the required service period.

Foreign Currency

The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is the local currency of the subsidiaries. The assets and liabilities of these subsidiaries are translated into U.S. dollars at exchange rates in effect at the end of each reporting period. Revenues and expenses for these subsidiaries are translated at average exchange rates in effect during the applicable period. Translation adjustments are included in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Gains and losses related to the recurring measurement and settlement of foreign currency transactions are included as a component of other income, net in the consolidated statements of operations and were a loss of $0.3 million and a gain of $0.6 million during the years ended December 31, 2025 and 2024, respectively.

Earnings (loss) per share

Basic net loss per common share is calculated by dividing net loss allocable to common shareholders by the weighed-average number of common shares outstanding during the period. Diluted net loss per common share adjusts net loss and net loss per common share for the effect of all potentially dilutive shares of the Company’s common stock. Basic and diluted loss per common share are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, to improve disclosures about a public entity's reportable segments through enhanced disclosures about significant segment expenses. The Company adopted this new accounting guidance on a retrospective basis on January 1, 2024, and the adoption did not have a material effect on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, to improve disclosures about a company's income taxes paid and the effective rate reconciliation table. The Company adopted this new accounting guidance on a retrospective basis on January 1, 2025, and the adoption did not have a material effect on its consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, to provide additional disclosure about the nature of a company's expenses included in the income statement. The guidance in this update will be effective for public companies for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326-20 to provide a practical expedient and an accounting policy election (for all entities other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The Company adopted this guidance on January 1, 2026, and the adoption did not have a material effect on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvement to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The amendments also supersede the guidance on web site development costs in ASC 350-50. The guidance in this update will be effective for all entities for annual periods beginning after December 15, 2027 and interim reporting periods within those reporting periods. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the potential impact, if any, of adopting this guidance on its consolidated financial statements.

Note 2. Revenue

The Company’s revenue disaggregated by geographic region is as follows (in thousands):

Year Ended December 31,

Geographic region:

BODI US Equity

BODI · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

BODI US Equity☆

BODI · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

BODI US Equity