Planet Fitness(PLNT) - 2024 Q2 - Quarterly Results

Q2 2024 Financial & Operational Highlights Planet Fitness reported strong Q2 2024 results with total revenue up 5.1% to $300.9 million and diluted EPS at $0.56 Q2 2024 Key Financial Metrics (vs. Q2 2023) (in millions) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $300.9M | $286.5M | +5.1% | | System-wide Same Store Sales | +4.2% | N/A | N/A | | Net Income Attributable to PLNT | $48.6M | $41.1M | +18.2% | | Diluted EPS | $0.56 | $0.48 | +16.7% | | Adjusted Net Income | $62.2M | $57.7M | +7.8% | | Adjusted Diluted EPS | $0.71 | $0.65 | +9.2% | | Adjusted EBITDA | $127.5M | $118.9M | +7.2% | - Opened 18 new stores system-wide in Q2 2024 (17 franchisee-owned, 1 corporate-owned), reaching a total of 2,617 stores as of June 30, 2024[2] - Total members reached approximately 19.7 million members as of June 30, 2024[1][9] - Ended the quarter with $447.7 million in cash and marketable securities[2] Q2 2024 Operating Results by Segment Total revenue increased 5.1% to $300.9 million, driven by Franchise and Corporate-owned store growth Franchise Segment Franchise segment revenue grew 9.1% to $107.8 million, with EBITDA increasing 17.1% to $77.4 million - Franchise revenue increased by $8.9 million (9.1%) to $107.8 million[3] - The revenue increase was driven by higher royalty revenue ($6.3 million) from a 4.3% same-store sales increase and new stores, as well as higher National Advertising Fund (NAF) revenue ($2.1 million)[3] - Franchise segment EBITDA increased by $11.3 million (17.1%) to $77.4 million, aided by revenue growth and a $3.1 million legal reserve that negatively impacted Q2 2023[4] Corporate-owned Stores Segment Corporate-owned stores revenue increased 10.3% to $125.5 million, with EBITDA growing 1.2% to $49.3 million - Corporate-owned stores revenue increased by $11.7 million (10.3%) to $125.5 million[3] - The increase was driven by $6.6 million from stores in the same-store sales base (which had a 4.0% sales increase) and $5.1 million from new and acquired stores[3] - Corporate-owned stores segment EBITDA increased by $0.6 million (1.2%) to $49.3 million[4] Equipment Segment Equipment segment revenue declined 8.4% to $67.7 million, but EBITDA increased 8.4% to $18.6 million - Equipment revenue decreased by $6.2 million (8.4%) to $67.7 million[4] - The decrease was caused by lower revenue from equipment sales to new franchisee-owned stores ($4.7 million) and existing stores ($1.5 million)[4] - Equipment segment EBITDA increased by $1.4 million (8.4%) to $18.6 million, due to higher margin equipment sales[4] Share Repurchase Program Planet Fitness initiated a $280 million ASR in Q2 2024 and approved a new $500 million share repurchase program - Entered into a $280 million Accelerated Share Repurchase (ASR) agreement on June 12, 2024[5] - Received an initial delivery of approximately 3.1 million shares of Class A common stock, which were retired; final settlement is expected in Q3 2024[5] - The Board of Directors approved a new $500 million share repurchase program, contingent on the completion of the ASR, to replace the 2022 program[5] 2024 Full-Year Outlook Planet Fitness reiterated its 2024 full-year guidance, projecting 3-5% system-wide same-store sales growth and 7-9% Adjusted EBITDA growth Reiterated 2024 Full-Year Guidance | Metric | 2024 Expectation | | :--- | :--- | | System-wide New Store Openings | 140 to 150 | | New Equipment Placements (Franchisee) | 120 to 130 | | System-wide Same Store Sales Growth | 3% to 5% | | Revenue Growth | 4% to 6% | | Adjusted EBITDA Growth | 7% to 9% | | Adjusted Net Income Growth | 4% to 6% | | Adjusted Diluted EPS Growth | 7% to 9% | - Expects 2024 net interest expense to be approximately $75.0 million[6] - Capital expenditures are expected to increase by approximately 25%, driven by additions to the corporate-owned store portfolio[6] Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including Statements of Operations, Balance Sheets, and Cash Flows Condensed Consolidated Statements of Operations Total revenues increased to $300,941 thousand in Q2 2024, with income from operations at $87,379 thousand and diluted EPS at $0.56 Q2 2024 Statement of Operations Highlights (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenue | $300,941 | $286,463 | | Income from Operations | $87,379 | $77,002 | | Net Income | $49,312 | $44,180 | | Net Income Attributable to PLNT | $48,640 | $41,135 | | Diluted EPS | $0.56 | $0.48 | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets were $2,974,040 thousand, with cash at $246,961 thousand and long-term debt at $2,156,551 thousand Balance Sheet Highlights (in thousands) | Line Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $246,961 | $275,842 | | Total Assets | $2,974,040 | $2,969,693 | | Long-term debt, net | $2,156,551 | $1,962,874 | | Total Liabilities | $3,293,870 | $3,088,684 | | Total Stockholders' Deficit | ($319,830) | ($118,991) | Condensed Consolidated Statements of Cash Flows Net cash from operating activities was $167,948 thousand for H1 2024, with significant cash used in investing and financing Six Months Ended June 30 Cash Flow Highlights (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $167,948 | $157,330 | | Net Cash used in Investing Activities | ($90,436) | ($201,021) | | Net Cash used in Financing Activities | ($103,693) | ($130,876) | | Net Decrease in Cash | ($27,360) | ($173,839) | Non-GAAP Financial Measures Reconciliation This section reconciles non-GAAP financial measures, with Q2 2024 Adjusted EBITDA increasing 7.2% to $127,503 thousand Reconciliation of Net Income to EBITDA and Adjusted EBITDA Adjusted EBITDA for Q2 2024 was $127,503 thousand, a 7.2% increase from Q2 2023 Q2 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $49,312 | $44,180 | | Interest, Taxes, D&A | +$77,711 | +$74,086 | | EBITDA | $127,023 | $114,066 | | Other Adjustments | +$480 | +$4,873 | | Adjusted EBITDA | $127,503 | $118,939 | Reconciliation of Segment EBITDA All three operating segments contributed positively to Q2 2024 EBITDA growth, totaling $127,023 thousand Q2 Segment EBITDA (in thousands) | Segment | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Franchise | $77,409 | $66,101 | | Corporate-owned stores | $49,296 | $48,705 | | Equipment | $18,575 | $17,129 | | Corporate and other | ($18,257) | ($17,869) | | Total Segment EBITDA | $127,023 | $114,066 | Reconciliation of Net Income to Adjusted Net Income Adjusted Net Income for Q2 2024 increased to $62,167 thousand, with Adjusted Diluted EPS at $0.71 Q2 Reconciliation to Adjusted Net Income (in thousands, except per share) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $49,312 | $44,180 | | Total Adjustments (pre-tax) | +$34,500 | +$33,641 | | Adjusted Income Before Taxes | $83,812 | $77,821 | | Adjusted Income Taxes | ($21,645) | ($20,156) | | Adjusted Net Income | $62,167 | $57,665 | | Adjusted Net Income per Share, Diluted | $0.71 | $0.65 |