Interactive Strength Reports 519% Annual Recurring Revenue Increase YOY As They Launch FORME Product

Interactive Strength Inc. d/b/a FORME TRNR announced its financial results for the first quarter of 2023. 

Headquartered in Austin Texas, FORME is a digital fitness platform that combines premium smart home gyms with live virtual personal training and coaching. FORME delivers an immersive and dynamic at-home fitness experience through two connected hardware products: 1. The FORME Studio (fitness mirror) and 2. The FORME Studio Lift (fitness mirror and cable-based digital resistance).

In addition to the company's connected fitness hardware products, FORME offers expert personal training and health coaching in different formats and price points through Video On-Demand, Custom Training, and Live 1:1 virtual personal training. 

CEO Comments

Trent Ward, co-founder and CEO of FORME, said, “We are excited to be presenting our first quarter results as a public company and to announce additional funding on attractive terms that underscore the potential of FORME’s combination of premium smart home gyms and virtual personal training. 

“There was a lower level of hardware products installed in the quarter as we were managing working capital closely leading up to the IPO at the end of April. As a result, we ended the quarter with a backlog of sold but not yet installed hardware products. We did announce a few key partnership opportunities recently with Signa Sports United, a specialist sports e-commerce company with more than 80 online sites serving over 6 million customers worldwide, and Aethos hotels. 

“The average annualized recurring revenue per household more than tripled to $1,650, reflecting the impact of our strategy to introduce higher revenue training services to our premium smart home gyms. We believe this focus on generating significantly higher recurring revenue per customer than our peers will be the biggest driver toward our future profitability. 

“Importantly, we were also able to demonstrate strong control of operating expenses. Although our total operating expenses on a GAAP  basis was $19.6 million in the first quarter of 2023 as compared to $10.1 million for the same period in 2022, we reduced non-GAAP total operating expenses, which excludes depreciation and amortization, stock-based compensation expense and IPO readiness costs and expenses, for the first quarter of 2023 to $3.6 million from $9.4 million for the same period in the prior year, a 62% reduction. We expect to generally maintain consistent operating expense levels during the rest of 2023 and plan to continue to manage costs appropriately to allow for the operating leverage inherent in our technology platform. 

“When combined with the proceeds from the IPO, we believe the proceeds from the senior loan we signed this week should fund the  Company well into 2024 and are a testament to the exciting business we are building.” 

Note Purchase Agreement 

On June 6, 2023, the company signed a note purchase agreement to issue senior secured notes (the "Notes") with gross proceeds to the Company of up to $15.0 million. The lead investor has committed to purchase at least $7.5 million of the Notes and the Notes have a two-year maturity, at 10.0% interest per annum, and with a 5.0% original issuance discount, representing a total cost of debt of 12.5% over the term of the Notes. 

Annual Recurring Revenue for 2023 was reported as $364,800 versus $58,919 for 2022.  

Image sourced from Shutterstock

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.