Financial Performance - System-wide sales reached $474 million, a 12% year-over-year increase[15] - Run-Rate Average Unit Volume (AUV) was $659,000, up 3% year-over-year[15] - Total revenue was $76 million, a 1% year-over-year decrease[21] - Adjusted EBITDA was $28 million, a 14% year-over-year increase, with a 37% margin[21, 32] - Adjusted net earnings per share were $026[29] Studio and License Growth - The company has 3,327 global studios, a 7% year-over-year increase[26] - The company has 6,344 global licenses, a 4% year-over-year increase[26] Strategic Initiatives - The company completed the divestitures of Rumble and CycleBar brands[14] - The company entered into a Fit Commerce agreement, guaranteeing a minimum of $50 million in commissions over a 5-year contract[10, 24] Full Year 2025 Guidance - The company expects between 170 and 190 net new studio openings globally[34] - The company expects system-wide sales to be between $178 billion and $18 billion[34] - The company expects revenue to be between $300 million and $310 million[34] - The company expects Adjusted EBITDA to be between $106 million and $111 million[34]

[Executive Summary & Q2 2025 Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Financial%20Highlights) Xponential Fitness reported Q2 2025 results, emphasizing global performance and adjusted KPIs, excluding divested brands [Introduction](index=1&type=section&id=Introduction) Xponential Fitness, a leading global franchisor, reported Q2 2025 results, emphasizing global numbers and adjusted KPIs - Xponential Fitness, Inc. (NYSE: XPOF) is one of the leading global franchisors of boutique health and wellness brands[2](index=2&type=chunk) - All financial data and KPI information are presented on an adjusted basis to include full historical data for all brands in the portfolio as of June 30, 2025, and to exclude information for brands not owned as of that date[3](index=3&type=chunk) [Key Financial and Operational Highlights (Q2 2025 vs Q2 2024)](index=1&type=section&id=Financial%20Highlights%3A%20Q2%202025%20Compared%20to%20Q2%202024) Q2 2025 saw increased system-wide sales and Adjusted EBITDA, significant net income improvement, and continued operational growth - CEO Mark King highlighted progress on key initiatives, including team expansion, a new retail partnership, and the divestiture of CycleBar and Rumble, with guidance revised for 2026 investments[5](index=5&type=chunk) Q2 2025 Financial and Operational Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | System-wide sales (global) | $473.5M | N/A | +12% | | Quarterly AUV (run rate) | $659,000 | $638,000 | +3% | | Total members | 863,000 | N/A | +8% | | Gross new studios opened | 86 | N/A | N/A | | Reported revenue | $76.2M | $76.9M | -1% | | North America same store sales growth | 1% | 7% | -6 percentage points | | Net income | $1.3M | $(14.3)M | Significant improvement | | Basic EPS | $(0.01) | $(0.30) | Significant improvement | | Adjusted net income | $14.5M | $0.03M | Significant improvement | | Adjusted basic EPS | $0.26 | $(0.04) | Significant improvement | | Adjusted EBITDA | $28.1M | $24.7M | +14% | [Detailed Second Quarter 2025 Financial Results](index=2&type=section&id=Results%20for%20the%20Second%20Quarter%20Ended%20June%2030%2C%202025) This section details Q2 2025 financial performance, including revenue, net income, and Adjusted EBITDA, with corrected 2024 figures [Revenue and Operating Performance](index=2&type=section&id=Revenue%20and%20Operating%20Performance) Total revenue slightly decreased year-over-year due to lower equipment and merchandise sales, offset by franchise growth Q2 2025 Revenue Breakdown (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------ | :-------- | :-------- | :----------- | | Franchise revenue | $45,353 | $43,020 | +5.4% | | Equipment revenue | $9,509 | $12,925 | -26.4% | | Merchandise revenue | $5,613 | $6,134 | -8.5% | | Franchise marketing fund revenue | $9,461 | $8,380 | +12.9% | | Other service revenue | $6,272 | $6,444 | -2.6% | | **Total revenue, net** | **$76,208** | **$76,903** | **-0.9%** | - The decrease in total revenue was driven by lower equipment revenue (resulting from a decline in installations) and merchandise sales, partially offset by higher franchise and franchise marketing fund revenue[8](index=8&type=chunk) - The accompanying financial information for the three and six months ended June 30, 2024, has been corrected from amounts previously reported, with details included in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025[36](index=36&type=chunk) [Net Income and Adjusted Net Income](index=2&type=section&id=Net%20Income%20and%20Adjusted%20Net%20Income) Net income reached **$1.3 million** in Q2 2025, a significant improvement from a prior year loss, with adjusted net income at **$14.5 million** Q2 2025 Net Income and EPS | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :---------- | :---------- | | Net income | $1.3M | $(14.3)M | | Basic EPS | $(0.01) | $(0.30) | | Adjusted net income | $14.5M | $0.03M | | Adjusted basic EPS | $0.26 | $(0.04) | | Class A Common Stock shares (basic) | 35.0M | 31.8M | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased by **14%** year-over-year to **$28.1 million** in Q2 2025, reflecting improved operational performance Q2 2025 Adjusted EBITDA | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------- | :---------- | :---------- | :----------- | | Adjusted EBITDA | $28.1M | $24.7M | +14% | [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$38.7 million** in cash, with total long-term debt at **$377.8 million**, and **$8.3 million** net cash from operations Liquidity and Debt (as of June 30, 2025) | Metric | Amount (in millions) | | :-------------------------------- | :------------------- | | Cash, cash equivalents and restricted cash | $38.7 | | Total long-term debt | $377.8 | | Net cash provided by operating activities (6 months ended June 30, 2025) | $8.3 | [2025 Financial Outlook](index=2&type=section&id=2025%20Outlook) The company updated its full-year 2025 guidance, reflecting divestitures and investments, impacting studio openings, revenue, and Adjusted EBITDA [Updated Full Year 2025 Guidance](index=2&type=section&id=Updated%20Full%20Year%202025%20Guidance) Xponential Fitness updated its full-year 2025 guidance, projecting decreases in studio openings and revenue, but increased North America system-wide sales - Guidance and year-over-year comparisons for net new studio openings and system-wide sales exclude CycleBar and Rumble results in both periods due to divestiture[12](index=12&type=chunk) Full Year 2025 Guidance (Updated vs. Previous) | Metric | Updated Guidance (2025) | Change from 2024 (midpoint) | Previous Guidance (2025) | | :-------------------------------- | :-------------------------- | :-------------------------- | :------------------------- | | Net new studio openings | 170 to 190 | -37% | N/A | | North America system-wide sales | $1.780B to $1.800B | +13% | N/A | | Revenue | $300.0M to $310.0M | -5% | $315.0M to $325.0M | | Adjusted EBITDA | $106.0M to $111.0M | -7% | $120.0M to $125.0M | | Tax rate | Mid-to-high-single digits | N/A | N/A | [Non-GAAP Reconciliation Note](index=3&type=section&id=Non-GAAP%20Reconciliation%20Note) Quantitative reconciliation of estimated full-year Adjusted EBITDA to GAAP measures is not feasible due to high variability and low visibility of certain items - The Company is not able to provide a quantitative reconciliation of the estimated full year Adjusted EBITDA for fiscal year ending December 31, 2025, without unreasonable efforts due to the high variability, complexity, and low visibility with respect to certain items such as taxes, TRA remeasurements, and income and expense from changes in fair value of contingent consideration from acquisitions[14](index=14&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides an overview of Xponential Fitness, its non-GAAP measures, forward-looking statements, and conference call details [About Xponential Fitness, Inc.](index=3&type=section&id=About%20Xponential%20Fitness%2C%20Inc.) Xponential Fitness is a leading global franchisor of boutique health and wellness brands, operating six brands across 49 U.S. states and 30 countries - Xponential Fitness operates a diversified platform of six brands spanning modalities including Pilates, barre, stretching, strength training, metabolic health, and yoga, with its portfolio including Club Pilates, StretchLab, YogaSix, Pure Barre, BFT, and Lindora[17](index=17&type=chunk)[19](index=19&type=chunk) - The company has franchise, master franchise, and international expansion agreements in 49 U.S. states, Puerto Rico, and 30 additional countries[17](index=17&type=chunk) [Non-GAAP Financial Measures (Definitions)](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA to evaluate performance, excluding non-operating items, as supplemental to GAAP - Non-GAAP financial measures, including EBITDA, Adjusted EBITDA, adjusted net income (loss), and adjusted net earnings (loss) per share, are used to evaluate operating performance by excluding certain non-operating or non-recurring items such as equity-based compensation, acquisition and transaction expenses, litigation expenses, TRA remeasurement, impairment of goodwill, brand divestiture costs, transformation initiative costs, and restructuring charges[20](index=20&type=chunk)[40](index=40&type=chunk) - Non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP[20](index=20&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section discusses forward-looking statements regarding future performance and strategies, subject to risks and uncertainties that may cause actual results to differ - Forward-looking statements relate to expected business growth, projected new studio openings, profitability, anticipated industry trends, projected financial and performance information (such as system-wide sales), competitive position, and ability to execute business strategies[21](index=21&type=chunk)[22](index=22&type=chunk) - Risks and uncertainties that may cause actual results to differ materially include the outcome of government investigations and litigation, ability to retain key management, relationships with franchisees, difficulties in studio openings, international expansion risks, loss of reputation, geopolitical uncertainty, trade policies, general economic conditions, and other risks described in SEC filings[22](index=22&type=chunk) [Second Quarter 2025 Conference Call](index=3&type=section&id=Second%20Quarter%202025%20Conference%20Call) Xponential Fitness hosted a conference call on August 7, 2025, to discuss its Q2 2025 financial results, with replay details provided - The Company hosted a conference call on August 7, 2025, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to discuss its second quarter 2025 financial results[15](index=15&type=chunk) - A live webcast of the conference call was available on the Company's Investor Relations site, and a telephonic replay was available until 11:59 p.m. ET on Thursday, August 21, 2025[16](index=16&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities slightly decreased from December 2024 to June 2025, while total stockholders' deficit increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------------ | :------------ | :------------------ | :------- | | Cash, cash equivalents and restricted cash | $38,679 | $32,739 | +$5,940 | | Total current assets | $102,693 | $84,147 | +$18,546 | | Goodwill | $127,789 | $135,240 | -$7,451 | | Total assets | $399,815 | $403,397 | -$3,582 | | Total current liabilities | $112,887 | $107,887 | +$5,000 | | Long-term debt, net of current portion | $352,554 | $341,742 | +$10,812 | | Total liabilities | $596,171 | $597,402 | -$1,231 | | Total stockholders' deficit | $(313,166) | $(310,815) | -$2,351 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenue was **$76.2 million**, with operating income significantly improving to **$14.8 million**, resulting in **$1.3 million** net income Condensed Consolidated Statements of Operations Highlights (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :--------- | :--------- | :------- | | Total revenue, net | $76,208 | $76,903 | -$695 | | Total operating costs and expenses | $61,385 | $79,992 | -$18,607 | | Operating income (loss) | $14,823 | $(3,089) | +$17,912 | | Total other expense | $13,165 | $11,122 | +$2,043 | | Net income (loss) | $1,346 | $(14,343) | +$15,689 | | Net income (loss) attributable to Xponential Fitness, Inc. | $969 | $(9,563) | +$10,532 | | Basic EPS | $(0.01) | $(0.30) | +$0.29 | - The accompanying financial information for the three and six months ended June 30, 2024, has been corrected from amounts previously reported[36](index=36&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$8.3 million** for the six months ended June 30, 2025, with decreased investing and positive financing cash flows Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :-------------------------------- | :--------- | :--------- | :------- | | Net cash provided by operating activities | $8,341 | $5,682 | +$2,659 | | Net cash used in investing activities | $(2,860) | $(11,761) | +$8,901 | | Net cash provided by (used in) financing activities | $459 | $(4,998) | +$5,457 | | Increase (decrease) in cash, cash equivalents and restricted cash | $5,940 | $(11,077) | +$17,017 | | Cash, cash equivalents and restricted cash, end of period | $38,679 | $26,017 | +$12,662 | [Net Income (Loss) to GAAP EPS](index=9&type=section&id=Net%20Income%20(Loss)%20to%20GAAP%20EPS) This section details GAAP basic and diluted EPS calculation, showing a basic loss per share of **$(0.01)** for Q2 2025, a significant improvement GAAP EPS Calculation (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net income (loss) attributable to XPO Inc. - diluted | $1,346 | $(14,343) | | Less: net loss attributable to noncontrolling interests | $156 | $4,827 | | Less: dividends on preferred shares | $(1,898) | $(2,150) | | Net loss attributable to XPO Inc. - basic and diluted | $(396) | $(9,654) | | Weighted average shares of Class A common stock outstanding—basic and diluted | 34,972 | 31,806 | | Net loss per share attributable to Class A common stock - basic | $(0.01) | $(0.30) | [Reconciliations of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliations%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations from GAAP net income (loss) to non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted Net Income Reconciliation to Adjusted EBITDA (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net income (loss) | $1,346 | $(14,343) | | Interest expense, net | $12,274 | $10,869 | | Income taxes | $312 | $132 | | Depreciation and amortization | $2,973 | $4,517 | | **EBITDA** | **$16,905** | **$1,175** | | Equity-based compensation | $2,666 | $4,196 | | Acquisition and transaction expenses (income) | $(1,915) | $(1,217) | | Impairment of goodwill and other noncurrent assets | $12,928 | $12,089 | | Restructuring and related charges | $1,263 | $2,325 | | **Adjusted EBITDA** | **$28,100** | **$24,686** | Reconciliation to Adjusted Net Income (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net income (loss) | $1,346 | $(14,343) | | Acquisition and transaction expenses (income) | $(1,915) | $(1,217) | | Impairment of goodwill and other noncurrent assets | $12,928 | $12,089 | | Restructuring and related charges | $1,263 | $2,325 | | **Adjusted net income** | **$14,513** | **$29** | | Adjusted net earnings (loss) per share - basic | $0.26 | $(0.04) |

Company Overview - Xponential Fitness, Inc. is a boutique fitness brand franchisor operating in the U.S., Canada, and several international markets [1] - The company primarily generates revenues through franchise license fees, along with additional income from equipment and merchandise sales [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the financial drivers of a company, often revealed through a DCF model valuation [1] - This approach allows for flexibility beyond traditional investment categories such as value, dividend, or growth investing, considering all prospects of a stock to assess risk-to-reward [1]

Group 1 - Xponential Fitness (XPOF) shares increased by 35.4% to close at $10.1, following a period of 22% loss over the past four weeks, indicating a significant recovery in investor sentiment [1][2] - The rise in shares is attributed to the conclusion of an SEC probe that began in December 2023, which raised concerns over potential securities fraud and accounting issues, but ended with no enforcement action [2] - The company is expected to report quarterly earnings of $0.15 per share, reflecting a year-over-year increase of 600%, with revenues projected at $77.16 million, up 0.8% from the previous year [3] Group 2 - The consensus EPS estimate for Xponential Fitness has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4] - Xponential Fitness holds a Zacks Rank of 3 (Hold), while another company in the same industry, OneSpaWorld (OSW), has a Zacks Rank of 2 (Buy) and has shown a 1.5% increase in its last trading session [5][6] - OneSpaWorld's consensus EPS estimate has increased by 2.6% over the past month to $0.24, representing a year-over-year change of 20% [6]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has bureaus and studios in key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2][3] Group 2 - The company is committed to using technology to enhance workflows and has adopted various automation and software tools, including generative AI [4][5] - All content published by Proactive is edited and authored by humans, ensuring adherence to best practices in content production and search engine optimization [5]

Company Highlights - Xponential Fitness boasts over $1.7 billion in system-wide sales[20] - The company reported $318 million in revenue[20] - Adjusted EBITDA reached $114 million[20] - The company has over 850,000 members[20] System-Wide Sales Breakdown - StretchLab accounts for 57% of system-wide sales[21] - Club Pilates contributes 10% to system-wide sales[21] - Pure Barre represents 15% of system-wide sales[21] - YogaSix makes up 13% of system-wide sales[21] - All other brands collectively account for 5% of system-wide sales[21] International Expansion - International business currently accounts for 4% of revenue and 5% of Adjusted EBITDA, projected to grow to 8% and 10% respectively in 5 years[69] Financial Targets - The company targets 10% annual growth in net new studio openings and Adjusted EBITDA[117] - The company is aiming for a 40%-45% Adjusted EBITDA margin[117] - The company is aiming for a 50%-60% Levered Free Cash Flow Conversion of Adjusted EBITDA[117]

Summary of Exponential Fitness (XPOF) 2025 Investor Day Industry Overview - The boutique fitness and wellness industry is currently valued at $40 billion and is projected to grow to $85.9 billion by 2030, indicating a strong demand for community-driven personalized wellness experiences [4][22]. Company Highlights - Exponential Fitness is a leading global franchise in boutique fitness and wellness, operating over 3,300 studios worldwide across eight brands [5][22]. - The company aims to be the best franchisor in the fitness space, focusing on a world-class member experience, data-driven strategies, and international expansion [6][15]. Leadership and Strategic Changes - The company experienced leadership changes, including the departure of the Founder CEO, leading to a focus on stabilizing the business and building a new leadership team [7][10]. - The new leadership is tasked with three main objectives: stabilize the business, build a new leadership team, and create a forward-looking growth plan [10]. Financial Performance - System sales reached over $1.7 billion, with company revenue of $318 million and adjusted EBITDA of $114 million in the last twelve months [23]. - Club Pilates, the crown jewel of the portfolio, generated system-wide sales of $1.2 billion and has an average studio AUV of $1 million [46][50]. Core Brands and Growth Strategies - The four core brands highlighted are: 1. **Yoga Six**: 200 studios, strong same-store sales growth of 5%, and a focus on yoga teacher training [25][26]. 2. **Pure Bar**: Dominates the bar studio market with 620 locations, showing a 50% increase in Google searches year-over-year [29][30]. 3. **StretchLab**: Positioned in the wellness space, focusing on educating consumers about the benefits of assisted stretching [35][37]. 4. **Club Pilates**: Fastest-growing brand with 98% booking capacity, indicating significant growth potential [46][48]. Marketing and Consumer Engagement - The company plans to enhance its digital presence and marketing strategies to better engage with its 850,000 members [56][62]. - A full-funnel marketing strategy will be implemented to drive brand awareness and member retention [64]. Partnerships and Collaborations - Exponential Fitness is focusing on strategic partnerships that benefit the company, its partners, and franchisees, including collaborations with ClassPass and health service partners [67][68]. - A recent partnership with Lululemon resulted in significant leads and new memberships, showcasing the potential of strategic collaborations [72]. Franchisee Support and Development - The company is shifting to a franchisee-first mindset, emphasizing communication, training, and operational support to enhance franchisee success [78][82]. - A robust training program and a franchise management system are being developed to streamline operations and improve performance tracking [80][81]. Future Outlook - Exponential Fitness aims to evolve into a world-class franchisor, focusing on operational excellence, franchisee support, and sustainable growth [52][88]. - The company is exploring new studio formats and technology enhancements to improve the customer experience and operational efficiency [42][44]. Conclusion - Exponential Fitness is positioned for significant growth in the booming boutique fitness industry, with a strong focus on franchisee support, innovative marketing strategies, and expanding its core brands to capture a larger market share [6][15][52].

Studio Operations and Growth - As of March 31, 2025, the company had 3,298 studios operating globally, an increase from 3,079 studios as of March 31, 2024, representing a growth of approximately 7.1%[163] - The number of North America franchisee-owned studios increased from 2,646 in Q1 2024 to 2,805 in Q1 2025, reflecting a growth of 6%[178] - The company has 1,509 additional studios contractually committed to open under existing franchise agreements in North America as of March 31, 2025[163] - New studio openings in North America totaled 93 in Q1 2025, compared to 85 in Q1 2024, reflecting a growth strategy focus[178] - The total number of operating studios globally increased to 3,298 in Q1 2025 from 3,079 in Q1 2024, marking a growth of 7.1%[179] Financial Performance - System-wide sales for the three months ended March 31, 2025, reached $466.8 million, compared to $396.4 million for the same period in 2024, reflecting a year-over-year increase of approximately 17.7%[173] - Total revenue for Q1 2025 was $76.883 million, a decrease of 3.5% compared to $79.693 million in Q1 2024[188] - Operating income for Q1 2025 was $9.679 million, representing an increase of 21% from $7.994 million in Q1 2024[188] - The company reported a net loss of $2.659 million for Q1 2025, an improvement from a net loss of $3.750 million in Q1 2024[188] - For the three months ended March 31, 2025, the adjusted EBITDA was $27.3 million, a decrease of 8.8% from $29.9 million in the same period of 2024[212] Revenue Breakdown - Franchise revenue increased to $43.9 million, up $2.1 million, or 5%, driven by higher same store sales and an increase in operating studios[2] - Equipment revenue decreased by $2.8 million, or 20%, to $11.1 million, primarily due to a decline in global equipment installations[3] - Merchandise revenue fell to $6.3 million, down $2.1 million, or 25%, attributed to lower demand from studios[4] - Franchise marketing fund revenue rose to $9.3 million, an increase of $1.4 million, or 18%, due to higher same store sales in North America[5] Restructuring and Costs - The company recognized total restructuring charges of $2.4 million for the three months ended March 31, 2025, compared to $6.8 million for the same period in 2024, showing a reduction of approximately 64.7%[167] - The company expects to incur additional restructuring charges throughout 2025, estimated between $5.2 million to $9.0 million, related to lease terminations and other restructuring costs[168] - Total operating costs and expenses decreased by $4.5 million, or 6.3%, to $67.2 million, with significant reductions in costs of product revenue and franchise service revenue[6] - Selling, general and administrative expenses increased by $8.9 million, or 24%, to $45.5 million, primarily due to higher legal expenses and salaries[7] Cash Flow and Financing - Cash provided by operating activities increased to $5.8 million for the three months ended March 31, 2025, compared to $2.7 million in the same period of 2024, reflecting a $3.1 million increase[221] - Cash used in investing activities decreased significantly to $1.0 million in the three months ended March 31, 2025, from $9.2 million in the same period of 2024, primarily due to lower acquisition costs[222] - Cash provided by financing activities was $5.0 million for the three months ended March 31, 2025, compared to cash used of $3.4 million in the same period of 2024, marking an $8.4 million change[223] - The total principal amount outstanding on the Term Loans, including exit fee, was $379.1 million as of March 31, 2025[218] - The company entered into an eighth amendment to the Credit Agreement, extending the final maturity date to August 1, 2027, and providing for additional term loans of $10.0 million[217] Market Challenges and Future Outlook - Same store sales growth for the three months ended March 31, 2025, was 4%, down from 9% in the same period of 2024[173] - The company paused offering or selling franchises in California and Maryland due to compliance investigations, which may adversely affect anticipated royalty or franchise revenue[165] - The company sold 21 new franchise licenses globally during the three months ended March 31, 2025, compared to 173 in the same period of 2024, indicating a significant decline in new franchise sales[173] - The number of licenses contractually obligated to open internationally indicates potential future studio openings, although one third of global license obligations are over 12 months behind schedule[181][182]

Q1 2025 Financial Performance - System-wide sales in North America reached $467 million, an 18% increase year-over-year[11] - Run-rate Average Unit Volume (AUV) was $659,000, an 8% increase year-over-year[11] - Total members reached 865,000, a 12% increase year-over-year[13] - Revenue was $77 million, a 4% decrease year-over-year[34] - Adjusted EBITDA was $27 million, a 9% decrease year-over-year[34] Key Metrics and Guidance - Global studios increased to 3,298, a 7% increase year-over-year[33] - Global licenses reached 6,286, a 4% increase year-over-year[33] - The company projects 160-180 net new studio openings globally for FY 2025[44] - System-wide sales in North America are projected to be between $1935 million and $1955 million for FY 2025[44] - Adjusted EBITDA is projected to be between $120 million and $125 million for FY 2025[44]

Core Insights - Xponential Fitness reported a revenue of $76.88 million for the quarter ended March 2025, reflecting a decrease of 3.3% year-over-year, with an EPS of -$0.20 compared to $0.16 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $76.07 million by 1.07%, while the EPS fell short of the consensus estimate of $0.15 by 233.33% [1] Financial Performance Metrics - Same store sales increased by 4%, slightly below the average estimate of 4.8% from five analysts [4] - Franchise revenue was reported at $43.89 million, which is lower than the average estimate of $44.44 million but shows a year-over-year increase of 5.1% [4] - Revenue from the franchise marketing fund reached $9.27 million, exceeding the average estimate of $8.49 million, with an 18.4% year-over-year increase [4] - Merchandise revenue was reported at $6.26 million, surpassing the average estimate of $5.94 million, but reflecting a significant decline of 23.5% year-over-year [4] - Other service revenue was $6.36 million, slightly below the average estimate of $6.61 million, with a year-over-year decrease of 19.1% [4] - Equipment revenue was reported at $11.10 million, exceeding the average estimate of $9.95 million, but showing a decline of 20.1% year-over-year [4] Stock Performance - Xponential Fitness shares have returned +9% over the past month, compared to a +11.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]