In the analyst’s model, the EBITDA loss in 2022 estimate is narrowed to $(37) million versus $(86) million in 2021.
During a chat with the analyst, the CFO did say the company is aiming for positive EBITDA in 2023E.
Feedback from the Coaches was that there was too much complexity in the offerings and that the workout content release schedule was too crowded in 2022, the analyst said.
Management has created a standardized model, where Coaches offer clients a 3-week workout regimen, followed by one week off, the analyst added.
The annual subscription fee for all content is now $179, including the BOD catalog and BODi.
Previously, Coaches would sell BOD for $119 and then try to trade up clients to add the premium BODi for an additional $20/month.
The analyst said that management prioritizes revenue and cash flow generation over subscriber growth.
The analyst is impressed with new COO Noel Geoffroy, who will be leading the Project Pegasus initiative.
COO Noel Geoffroy and CEO Julien Mininberg are very committed to driving operating margin to higher than previous peak of 16.0% in FY22, the analyst added.
The analyst believes FY24 guidance for organic sales and operating margin could be ranges of modestly down to slightly up Y/Y.
The analyst believes the free cash flow estimate of $153 million is realistic.
It’s still unclear when retailer inventory will bottom, but consumption patterns are less bad, and inventory is okay in some places, specified the analyst.
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