Sweat’s Kayla Itsines, Tobi Pearce share $23m windfall

The glamour duo behind the Sweat fitness empire will share a $23m dividend as COVID-19 lockdowns fuel a rise in new subscribers.

The glamour duo behind global health and fitness empire Sweat will share a $23.2m dividend despite the company slipping to a multimillion-dollar loss.

According to financial statements lodged by The Bikini Body Training Company — the company behind the Sweat fitness app — the digital powerhouse generated $99.5m in revenue in the year to June, with new subscribers signing up as they faced COVID-19 lockdowns.

The 11.2 per cent increase in revenue compares to $89.5m achieved in 2019.

It is the first time the financial results of the company, set up by Tobi Pearce and Kayla Itsines in 2015, had been made public following a corporate restructure last year.

The $23.2m dividend comprises a $200,000 cash payment and an additional $23m declared via a promissory note — a financial instrument that commits the organisation to pay out at a future date.

The US remains the company’s biggest market, where $53.7m of its revenue was sourced during the 2020 financial year, while Australian subscribers generated $8.7m.

However, advertising and marketing costs of $48.4m and other expenses drove the company’s bottom line lower, with a net loss of $5.4m, compared with a profit of $2.9m in 2019.

Mr Pearce, Sweat’s chief executive, said the loss was “definitely not a concern” and followed “over half a decade of incredibly good business success”.

“Front-ending investments, that’s really what a huge portion of this is about,” he said.

“We’ve made some pretty significant investments over the past 12 to 18 months, drastically accelerating our staffing expertise and capability uplift in the organisation, (and) we opened another office interstate in Australia.

“We were already heavily investing in content creation and partnerships at the time, and then obviously COVID came around, so we massively doubled down even further on content then, and obviously on marketing as well, to do our best to make sure everything that our members need we’re able to actually provide to them.”

Tobi Pearce and Kayla Itsines prior to their split earlier this year. Picture: Christian Gilles

Mr Pearce, 28, and ex-fiance Ms Itsines, 29, split earlier this year but have continued as business partners. Mr Pearce is the sole director of The Bikini Body Training Company, and owns an equal share with Ms Itsines.

Mr Pearce said he and Ms ­Itsines continued to play to their strengths in the business, with him as the corporate leader and her as the face of the platform.

“Kayla and I have maintained an incredibly good working relationship and partnership in our organisation since the first day that it was founded,” he said.

“I would suggest that recent business performance is probably a representation of the fact that if anything we’ve got even stronger in that regard.

“Kayla is a tremendously good co-founder. She brings an incredibly unique visitor business and obviously as a trainer I don’t think she needs any more validation.

“She’s motivated tens of millions of women around the world — there’s not many other people who can say they’ve done that.”

While declining to disclose figures, Mr Pearce said COVID-19 had resulted in a “good increase” in subscribers as people were forced to work out at home.

“We’ve been playing heavily in the content space or the digital space for the last five or six years and we’ve obviously been very bullish on this notion of digitally consuming fitness content regardless of where you are, but obviously predominantly at home,” he said.

“As it relates to COVID, I think simply that this has just highlighted that, yes, the opportunity is there, the trend definitely exists, and obviously to some degree it’s arguably acutely accelerated that.”

Mr Pearce and Ms Itsines, both personal trainers, shot to fame after forming the Bikini Body Guide fitness program in 2015. It evolved into Sweat, the top-ranking home fitness app that has been downloaded more than 30 million times. The duo were valued at $209m each on last month’s Young Rich List.