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Interactive Strength (TRNR) - 2024 Q2 - Quarterly Results
TRNRInteractive Strength (TRNR)2024-08-14 20:29

Financial Performance - The company reported a net loss of 10.6millionforQ22024,oralossof10.6 million for Q2 2024, or a loss of 17.48 per diluted share, an improvement from a net loss of 13.6million,oralossof13.6 million, or a loss of 40.78 per diluted share in Q2 2023[1]. - Adjusted EBITDA for the quarter was a loss of 2.9million,reflectinga2.9 million, reflecting a 2.8 million improvement compared to Q2 2023[2]. - Net loss for Q2 2024 was 10,637,000,animprovementfromanetlossof10,637,000, an improvement from a net loss of 13,602,000 in Q2 2023, while the six-month net loss decreased from 29,563,000in2023to29,563,000 in 2023 to 22,031,000 in 2024[17]. - Adjusted EBITDA for Q2 2024 was (2,894,000),comparedto(2,894,000), compared to (5,731,000) in Q2 2023, and (10,157,000)forthesixmonthsendedJune30,2023,comparedto(10,157,000) for the six months ended June 30, 2023, compared to (6,342,000) in 2024[18]. - Total revenue for Q2 2024 was 621,000,significantlyupfrom621,000, significantly up from 316,000 in Q2 2023, with six-month revenue increasing from 473,000in2023to473,000 in 2023 to 984,000 in 2024[19]. - Fitness product revenue rose to 258,000inQ22024from258,000 in Q2 2024 from 224,000 in Q2 2023, while membership revenue surged from 32,000to32,000 to 207,000 in the same period[19]. - Total operating expenses decreased from 10,800,000inQ22023to10,800,000 in Q2 2023 to 7,002,000 in Q2 2024, with research and development expenses at 2,474,000comparedto2,474,000 compared to 2,326,000 in the prior year[19]. - Net loss for the six months ended June 30, 2024, was 22,031,000,animprovementfromanetlossof22,031,000, an improvement from a net loss of 29,563,000 for the same period in 2023[21]. Cash Flow and Assets - Cash and cash equivalents as of June 30, 2024, were 156,000,withtotalcurrentassetsincreasingto156,000, with total current assets increasing to 8,270,000 from 5,356,000attheendof2023[20].−Totalassetsincreasedto5,356,000 at the end of 2023[20]. - Total assets increased to 37,765,000 as of June 30, 2024, compared to 16,802,000attheendof2023[20].−Currentliabilitiesroseto16,802,000 at the end of 2023[20]. - Current liabilities rose to 35,599,000 from 21,534,000attheendof2023,primarilyduetoanincreaseinaccountspayableandloanpayable[20].−Netcashusedinoperatingactivitiesdecreasedto21,534,000 at the end of 2023, primarily due to an increase in accounts payable and loan payable[20]. - Net cash used in operating activities decreased to 5,160,000 from 11,200,000year−over−year[21].−Netcashusedininvestingactivitieswas11,200,000 year-over-year[21]. - Net cash used in investing activities was 1,407,000, compared to 868,000intheprioryear[21].−Netcashprovidedbyfinancingactivitieswas868,000 in the prior year[21]. - Net cash provided by financing activities was 6,673,000, down from 13,687,000inthepreviousyear[21].−Cashandrestrictedcashattheendoftheperiodwas13,687,000 in the previous year[21]. - Cash and restricted cash at the end of the period was 156,000, significantly lower than 1,403,000attheendofthepreviousyear[21].BusinessStrategyandMarketOutlook−Thecompanyexpectstogeneratebetween1,403,000 at the end of the previous year[21]. Business Strategy and Market Outlook - The company expects to generate between 2.0 million and 2.5millioninrevenueforQ32024,contingentonthetimingofreceivingrequiredcertificationsforEuropeandeliveries[6].−SuccessfulpilotswereconductedwithCrunchFitnessandGold′sGym,leadingtoordersfor13and2CLMBRsrespectively,withGold′sGymplanninginstallationsin23locations[3][4].−Thecompanyanticipatesstronginternationaldemand,havingsecuredinitialordersinGermanyandtheGulfregion,withexpectationstoselltoatleastteninternationaldistributorsthisyear[5].−Thecompanydoesnotexpecttoachievepreviousrevenueandprofitabilityguidanceuntil2025duetoaslowerrampinrevenueforCLMBRfollowingitsacquisition[6].−ThecompanyhasshifteditsbusinessmodeltoprimarilyfocusonB2BsalesfollowingtheacquisitionofCLMBR,Inc.,andwillnolongerreportcertainDTCmetrics[17].−Thecompanyisinvestinginnewproductdevelopmentandmarketexpansionstrategiestoenhancerevenuegrowthandoperationalefficiency[17].−Thecompanyplanstoprovideupdatedguidanceonrevenueandprofitabilitywhentimingbecomesmorecertain[6].Stockholder′sEquityandCompensation−Stockholder′sequitywasreportedat2.5 million in revenue for Q3 2024, contingent on the timing of receiving required certifications for European deliveries[6]. - Successful pilots were conducted with Crunch Fitness and Gold's Gym, leading to orders for 13 and 2 CLMBRs respectively, with Gold's Gym planning installations in 23 locations[3][4]. - The company anticipates strong international demand, having secured initial orders in Germany and the Gulf region, with expectations to sell to at least ten international distributors this year[5]. - The company does not expect to achieve previous revenue and profitability guidance until 2025 due to a slower ramp in revenue for CLMBR following its acquisition[6]. - The company has shifted its business model to primarily focus on B2B sales following the acquisition of CLMBR, Inc., and will no longer report certain DTC metrics[17]. - The company is investing in new product development and market expansion strategies to enhance revenue growth and operational efficiency[17]. - The company plans to provide updated guidance on revenue and profitability when timing becomes more certain[6]. Stockholder's Equity and Compensation - Stockholder's equity was reported at 0.4 million as of June 30, with an equity offering of 4.0millioncompletedonJuly2,improvingcompliancewithNasdaq′sEquityRule[7].−Stock−basedcompensationrecordedwas4.0 million completed on July 2, improving compliance with Nasdaq's Equity Rule[7]. - Stock-based compensation recorded was 6,291,000, a decrease from 18,938,000intheprioryear[21].−Thecompanyissuedcommonstockworth18,938,000 in the prior year[21]. - The company issued common stock worth 3,969,000 for the acquisition of a business[21]. - The company capitalized 155,000instock−basedcompensationrelatedtosoftwaredevelopment[22].−Thecompanyreportedachangeinfairvalueofconvertiblenotesamountingto155,000 in stock-based compensation related to software development[22]. - The company reported a change in fair value of convertible notes amounting to 316,000[21]. - The company experienced a loss on exchange of warrants for equity totaling $358,000[21]. Product Development and Challenges - The company is focused on enhancing the durability of CLMBR components, which caused delays in product shipping and revenue generation[2]. - The partnership with WOODWAY aims to ensure CLMBR meets the stringent specifications of commercial users[2].