Company Performance - Xponential Fitness reported a quarterly loss of $0.20 per share, missing the Zacks Consensus Estimate of $0.15, and compared to earnings of $0.16 per share a year ago, representing an earnings surprise of -233.33% [1] - The company posted revenues of $76.88 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.07%, but down from $79.52 million year-over-year [2] - Over the last four quarters, Xponential Fitness has not been able to surpass consensus EPS estimates, and it has topped consensus revenue estimates three times [2] Stock Outlook - Xponential Fitness shares have lost about 37.2% since the beginning of the year, significantly underperforming the S&P 500's decline of -4.3% [3] - The current consensus EPS estimate for the coming quarter is $0.18 on revenues of $78.22 million, and for the current fiscal year, it is $0.79 on revenues of $319.75 million [7] - The estimate revisions trend for Xponential Fitness is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which Xponential Fitness belongs, is currently in the bottom 29% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Data and Key Metrics Changes - North American system-wide sales reached $467 million, an 18% increase year over year [6][17] - Quarterly run rate average unit volumes in North America increased by 8% year over year to $659,000 [7][17] - Total members at the end of the quarter stood at 865,000, up 12% year over year, with same-store sales increasing by 4% [8][17] - Consolidated revenue for the quarter was $76.9 million, down 4% from $79.7 million in the prior year [17] - Adjusted EBITDA for the quarter was $27.3 million, down 9% compared to $29.9 million in the prior year [27] Business Line Data and Key Metrics Changes - Franchise revenue for the quarter was $43.9 million, up 5% year over year, driven by increased royalty revenue [18] - Equipment revenue declined by 20% year over year to $11.1 million, primarily due to a 22% decrease in North American installations [19] - Merchandise revenue decreased by 25% year over year to $6.3 million, attributed to lower sales volumes and price discounts [19] - Franchise marketing fund revenue increased by 18% year over year to $9.3 million, supported by growth in system-wide sales [20] Market Data and Key Metrics Changes - The company opened 116 new studios globally during Q1, with 93 in North America and 23 internationally [14] - The total number of global open studios reached 3,298, with an annualized closure rate of 6% [14] - The company sold 21 licenses during Q1, all internationally, primarily in Club Pilates [15] Company Strategy and Development Direction - The company is focusing on optimizing operations and franchisee health while preparing for long-term success [6][12] - A new field operations function is being launched, with plans to have 12 field managers in place across North America by quarter end [10][11] - The company is actively selling in the majority of the 14 registration states under FDD registration or exemption [11] Management's Comments on Operating Environment and Future Outlook - Management indicated that 2025 will be a year of stabilization, with no degradation in the overall financial health of the business [38][39] - The company is lowering guidance on global net new studio openings while reiterating guidance for system-wide sales and total revenue [29][30] - Management expressed confidence in the health of the franchisee and the execution of operational improvements [39] Other Important Information - The company is undergoing a transformation from an aggressive sales focus to building a foundation of efficiency and effectiveness [35] - Legal judgments and settlements have increased SG&A expenses significantly, with an additional accrual of $15 million recorded [22][23] Q&A Session Summary Question: What are the overarching themes for the next few months? - Management emphasized the transformation towards efficiency and effectiveness, focusing on franchisee support and operational audits [35][36] Question: What is the outlook for studio openings? - Club Pilates is expected to account for over half of the new openings this year, with strong performance anticipated in Yoga Six and Pure Barre [40][44] Question: What is driving the increase in closure rates? - Closures are primarily concentrated in Cycle Bar and StretchLab, with expectations for similar distribution throughout the year [48] Question: How will the new field operations team impact the business? - The field ops team will focus on supporting struggling franchisees and ensuring adherence to operational standards [55][100] Question: What is the impact of tariffs on the business? - The direct impact of tariffs is minimal, affecting only 20% of revenue, with ongoing efforts to mitigate costs [85][86] Question: What changes were made in the franchise disclosure documents? - The company has made adjustments to build-out costs, which have been positively received by franchisees [94][95]

Financial Data and Key Metrics Changes - North American system-wide sales reached $467 million, an 18% increase year over year [6][17] - Quarterly run rate average unit volumes increased to $659,000, up 8% year over year [6][17] - Total members increased to 865,000, a 12% rise year over year, with same-store sales up 4% [7][17] - Consolidated revenue for the quarter was $76.9 million, down 4% from $79.7 million in the prior year [17] - Adjusted net loss for the quarter was $7.7 million, translating to a loss of $0.20 per basic share [28] Business Line Data and Key Metrics Changes - Franchise revenue increased to $43.9 million, up 5% year over year, driven by higher royalty revenue [19] - Equipment revenue declined by 20% year over year to $11.1 million, primarily due to a 22% decrease in North American installations [20] - Merchandise revenue fell 25% year over year to $6.3 million, attributed to lower sales volumes and price discounts [20] - Franchise marketing fund revenue rose 18% year over year to $9.3 million, reflecting growth in system-wide sales [21] Market Data and Key Metrics Changes - The company opened 116 new studios globally during Q1, with 93 in North America and 23 internationally [14] - The total number of global open studios reached 3,298, with a closure rate of approximately 1.5% [14] - The company anticipates global net new studio openings to range from 160 to 180, a 29% decrease at the midpoint from the prior year [31] Company Strategy and Development Direction - The company is focusing on transforming its operations to enhance efficiency and effectiveness, particularly in franchisee support [36][39] - A new field operations function is being launched, with plans to have 12 field managers in place across North America [10] - The company is actively working to support its master franchisee base internationally, with a focus on markets like Spain, Portugal, France, Japan, and Australia [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need for stabilization in 2025, with expectations for flat revenue and EBITDA compared to 2024 [39] - The company is confident in its operational health and believes that improvements will lead to growth in the future [40] - Management is closely monitoring consumer behavior and has not seen any significant shifts, maintaining expectations for same-store sales growth in the mid-single digits [92][95] Other Important Information - The company has entered into lease settlement agreements totaling approximately $30.7 million, with most liabilities expected to be settled in 2025 [24] - The anticipated interest expense for 2025 is approximately $49 million, with a tax rate expected to be in the mid to high single digits [33] Q&A Session Summary Question: What are the overarching themes for the next few months? - The company is undergoing a transformation to build a foundation of efficiency and effectiveness, focusing on franchisee support and operational audits [36][38] Question: How many of the new openings will be from Club Pilates? - Club Pilates will account for over half of the new openings and license sales this year [46] Question: What is the expected closure rate for the year? - The company expects a closure rate of 6% to 8%, primarily from Cycle Bar and StretchLab [50] Question: How will the field operations team impact the business? - The field operations team will focus on supporting struggling franchisees and ensuring adherence to operational standards [58][60] Question: What is the company's approach to marketing for StretchLab? - The company has doubled local marketing spend for StretchLab and is considering additional investments to drive leads [69] Question: What factors are impacting the revised unit outlook for the year? - The lack of license sales in Q4 and Q1 has created a bottleneck, along with higher closures than anticipated [76][77]

Exhibit 99.1 Financial Highlights: Q1 2025 Compared to Q1 20243 "Xponential delivered results in line with our expectations this quarter, supported by solid KPIs, while successfully completing our updated financing agreement and making significant progress on the renewals of our Franchise Disclosure Documents," said Mark King, CEO of Xponential Fitness, Inc. "Our team continues to enhance operations and focus upon Xponential's franchisee-first strategy. We look forward to sharing further detail at our upcom ...

Industry Overview - The Consumer Discretionary sector has experienced mixed performance in 2025 due to elevated inflation, high interest rates, and uncertainty in trade and fiscal policies, leading to cautious consumer behavior in discretionary spending categories [1] - Despite a relatively stable job market, inflationary pressures and rising living costs have constrained consumer spending ability [1] - Businesses in the sector face planning challenges due to unpredictable tariff developments affecting sourcing, pricing strategies, and inventory management [1] Earnings Performance - As of April 30, 43.3% of companies in the Zacks Consumer Discretionary sector, representing 60.9% of the sector's market capitalization, reported earnings, with 53.8% beating earnings estimates and 46.2% surpassing revenue estimates [2] - Year-over-year earnings increased by 4% on a 0.7% rise in revenues, influenced by inflationary pressures and fluctuating consumer sentiment, particularly among lower-income households [2] - First-quarter 2025 earnings for the sector are expected to increase by 0.8% year-over-year, a significant decline from the 19% growth in the previous quarter [4] Segment Performance - The leisure and recreation services segment has performed relatively well despite headwinds, driven by a shift in consumer preference towards experience-based spending in fitness, gaming, and entertainment [3] - However, the industry is facing challenges such as rising labor and supply costs, tightening pricing flexibility, and increased competition [3] Company-Specific Insights - Planet Fitness is set to report first-quarter 2025 results, with an Earnings ESP of +0.71% and a Zacks Rank of 3, indicating a potential earnings beat [5][6] - The Zacks Consensus Estimate for Planet Fitness's first-quarter 2025 revenues is $280.7 million, reflecting a 13.2% increase year-over-year, with EPS expected to be 62 cents, up 17% from the previous year [7] - Peloton Interactive is expected to report a revenue decrease of 13.7% year-over-year, with a consensus estimate of $619.7 million and a projected loss per share of 6 cents, an improvement from a loss of 45 cents in the prior year [9] - Xponential Fitness is anticipated to report a revenue decline of 4.3% year-over-year, with revenues pegged at $76.1 million and EPS expected to decline by 6.3% [11] - PENN Entertainment is projected to report first-quarter revenues of $1.7 billion, indicating a 5.9% growth year-over-year, with a consensus loss per share of 29 cents, improving from a loss of 79 cents in the previous year [13]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud and unlawful business practices involving Xponential Fitness, Inc. and its officers or directors following the company's disappointing financial results and subsequent stock price drop [1][3]. Financial Performance - On March 13, 2025, Xponential reported an unexpected loss for the fourth quarter and a 7.7% year-over-year revenue decline [3]. - The company's Board of Directors announced that the financial statements for the fiscal year ended December 31, 2023, would need to be restated [3]. - Following these announcements, Xponential's stock price fell by $4.66 per share, or 38.45%, closing at $7.46 per share on March 14, 2025 [3]. Legal Investigation - Pomerantz LLP is actively investigating claims on behalf of investors of Xponential Fitness, Inc. regarding possible securities fraud [1]. - Investors are encouraged to contact Pomerantz LLP for more information about the investigation [1].

Core Insights - Xponential Fitness (XPOF) has experienced a significant decline of nearly 50% since the last strong buy recommendation, indicating a substantial drop in investor confidence and market performance [1] Company Analysis - The company has been under scrutiny due to its poor stock performance, which has led to discussions about the potential need for investors to cut losses [1] - The author emphasizes a commitment to providing in-depth analysis that goes beyond previous coverage, focusing on various analytical lenses such as academic research and financial correlations [1]

Core Insights - Pomerantz LLP is investigating claims on behalf of investors of Xponential Fitness, Inc. regarding potential securities fraud or unlawful business practices [1] - Xponential reported an unexpected loss for Q4 2025 and a 7.7% year-over-year revenue decline, leading to a significant stock price drop of 38.45% [3] Financial Performance - Xponential announced a fourth quarter loss and a revenue decline of 7.7% year-over-year [3] - The company's stock price fell by $4.66 per share, closing at $7.46 on March 14, 2025, following the financial results announcement [3] - The Board of Directors determined that the financial statements for the fiscal year ended December 31, 2023, should be restated [3]

Group 1: Stock Performance - Xponential Fitness (XPOF) shares increased by 23.2% to close at $9.19, following a notable trading volume compared to typical sessions, despite a 57% loss over the past four weeks [1] - The stock's rally is seen as a rebound from a 38.45% drop on March 14, 2025, due to a financial restatement announcement, with investors viewing the prior sell-off as an overreaction [2] Group 2: Financial Performance - The company is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 450%, while revenues are projected to be $80.61 million, down 10.6% from the previous year [3] - The consensus EPS estimate for the quarter has been revised 15.5% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [4] Group 3: Industry Context - Xponential Fitness operates within the Zacks Leisure and Recreation Services industry, where Target Hospitality (TH) also operates, closing the last trading session at $5.71 with a -38.2% return over the past month [4] - Target Hospitality's consensus EPS estimate has decreased by 80.8% over the past month to $0.06, representing a -79.3% change compared to the previous year [5]

Group 1 - Xponential Fitness, Inc. is under investigation for potential securities fraud and unlawful business practices involving its officers and directors [1] - The company reported an unexpected loss for Q4 2025 and a 7.7% year-over-year revenue decline, leading to a restatement of its financial statements for the fiscal year ended December 31, 2023 [2] - Following the financial announcements, Xponential's stock price dropped by $4.66 per share, or 38.45%, closing at $7.46 per share on March 14, 2025 [2] Group 2 - Pomerantz LLP is a prominent firm specializing in corporate, securities, and antitrust class litigation, with a history of recovering multimillion-dollar damages for victims of securities fraud and corporate misconduct [3]