Xponential Fitness(XPOF) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Financial Highlights Xponential Fitness reported Q2 2025 results, emphasizing global performance and adjusted KPIs, excluding divested brands 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] - 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] Key Financial and Operational Highlights (Q2 2025 vs Q2 2024) 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] 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 This section details Q2 2025 financial performance, including revenue, net income, and Adjusted EBITDA, with corrected 2024 figures Revenue and Operating Performance 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] - 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] Net Income and Adjusted Net Income 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 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 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 The company updated its full-year 2025 guidance, reflecting divestitures and investments, impacting studio openings, revenue, and Adjusted EBITDA Updated Full Year 2025 Guidance 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] 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 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] Corporate Information This section provides an overview of Xponential Fitness, its non-GAAP measures, forward-looking statements, and conference call details About Xponential Fitness, Inc. 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][19] - The company has franchise, master franchise, and international expansion agreements in 49 U.S. states, Puerto Rico, and 30 additional countries[17] Non-GAAP Financial Measures (Definitions) 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][40] - 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] Forward-Looking Statements 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][22] - 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] Second Quarter 2025 Conference Call 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] - 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] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets 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 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] Condensed Consolidated Statements of Cash Flows 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 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 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) |