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Financial Data and Key Metrics Changes - The company reported a consolidated revenue of $78.8 million for the third quarter, down 2% from $80.5 million in the prior year period [19][21] - Adjusted net income for the third quarter was $19.3 million, or adjusted net income of $0.36 per basic share, compared to a net loss of $18.1 million in the prior year [25] - Adjusted EBITDA was $33.5 million in the third quarter, up 9% from $30.8 million in the prior year period, with an adjusted EBITDA margin of 42% [26] Business Line Data and Key Metrics Changes - North America system-wide sales were $432.2 million, up 10% year-over-year, primarily driven by growth from net new studio openings [17] - Same-store sales were down 0.8% for the quarter but up 5.4% on a two-year stacked basis [17] - North America run-rate average unit volumes climbed to $668,000 in the third quarter, up 2% from $654,000 in the prior year period [19] Market Data and Key Metrics Changes - The global boutique fitness market is expected to reach $60 billion by 2030, driven by increasing demand for specialized fitness experiences [6] - The company ended the quarter with 3,066 global open studios, having opened 78 new studios and closed 32 studios [16] Company Strategy and Development Direction - The company is focusing on enhancing marketing, operations support, unit growth, innovation, and cost efficiencies to drive growth and financial returns [10][11] - Following recent divestitures, the company has streamlined its brand portfolio, which is expected to improve franchisee support and operational efficiency [10][12] - The company plans to implement a national brand campaign for Club Pilates to enhance brand awareness and drive organic growth [12][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in lead flow and member conversion, particularly in the context of enhanced privacy safeguards [18] - The company is taking a conservative approach to North American system-wide sales projections due to current business conditions [29] - The outlook for 2025 includes projected North America system-wide sales ranging from $1.73 billion to $1.75 billion, representing a 12% increase at the midpoint [29] Other Important Information - The company expects to see marketing fund spend exceed marketing fund revenue by approximately $5 million in the fourth quarter due to the nationwide branding campaign [31] - The company recorded a net loss of $6.7 million in the third quarter, compared to a net loss of $18.1 million in the prior year [25] Q&A Session Summary Question: Update on Club Pilates comps - In Q3, Club Pilates comps came into the low single digit or about 1%, reflecting the maturity of the studio base [34] Question: Balancing higher prices with member retention - The company is conducting a pricing analysis to ensure a thoughtful approach to pricing and packages while maximizing studio usage [38] Question: Private equity involvement in franchisee base - The company is exploring opportunities to bring in larger-scale operators and private equity into the franchisee base, particularly for Club Pilates [41] Question: National ad campaign purpose - The national ad campaign aims to test new marketing channels and understand their effectiveness, which could benefit other brands in the future [48]

Key Operating Metrics - Global studios increased by 8% year-over-year, reaching 3,066[13] - Global licenses increased by 3% year-over-year, totaling 5,318[13] - System-wide sales in North America increased by 10% year-over-year, reaching $432 million[14] - Run-Rate AUV in North America increased by 2% year-over-year, reaching $668,000[14] - Same-store sales increased by 7% year-over-year for studios open greater than 36 months[21] - Total members decreased by 1% to 796,000[21] Financial Performance - Revenue decreased by 2% year-over-year to $79 million[25] - Adjusted EBITDA increased by 9% year-over-year to $33 million, with a margin of 42% compared to 38% in the previous year[25, 33] - Adjusted net earnings per share - diluted is $034, compared to ($005) in Q3 2024[30] Future Outlook (FY 2025 Guidance) - The company anticipates between 170 and 190 net new studio openings globally, a -37% change vs 2024[35] - System-wide sales in North America are projected to be between $173 billion and $175 billion, a 12% increase compared to 2024[35] - Revenue is expected to be between $300 million and $310 million, a -5% change vs 2024[35] - Adjusted EBITDA is projected to be between $106 million and $111 million, a -7% change vs 2024[35]

Financial Performance - Total revenue for Q3 2025 decreased by $1.7 million, or 2%, to $78.8 million compared to $80.5 million in Q3 2024[5] - The company reported a net loss of $6.7 million, or a loss of $0.18 per basic share, an improvement from a net loss of $18.1 million, or a loss of $0.29 per basic share in the prior year[7] - Adjusted net income was $19.3 million, or adjusted net earnings of $0.36 per basic share, compared to an adjusted net loss of $0.3 million in the prior year[8] - Adjusted EBITDA for Q3 2025 was $33.5 million, a 9% increase from $30.8 million in Q3 2024[9] - Total revenue for the three months ended September 30, 2025, was $78.824 million, a decrease of 2% compared to $80.530 million in the same period of 2024[24] - Franchise revenue increased to $51.882 million for the three months ended September 30, 2025, up 16% from $44.458 million in 2024[24] - Net loss attributable to Xponential Fitness, Inc. for the three months ended September 30, 2025, was $4.859 million, compared to a net loss of $12.120 million in the same period of 2024[24] - Operating income for the nine months ended September 30, 2025, was $28.068 million, a significant improvement from an operating loss of $1.700 million in 2024[24] - Adjusted EBITDA for the three months ended September 30, 2025, was $33,479 thousand, up from $30,802 thousand in the same period of 2024, indicating an increase of 5.5%[30] - Adjusted net income attributable to Xponential Fitness, Inc. for the three months ended September 30, 2025, was $13,924 thousand, compared to a loss of $219 thousand in the same period of 2024[30] Cash and Debt Position - The company had approximately $41.5 million in cash and cash equivalents and $376.4 million in total long-term debt as of September 30, 2025[10] - Cash, cash equivalents, and restricted cash increased to $41.463 million as of September 30, 2025, from $32.739 million at the end of 2024[26] - Total current assets rose to $99.217 million as of September 30, 2025, compared to $84.147 million at the end of 2024, reflecting a 17.9% increase[22] - Total liabilities decreased to $559.000 million as of September 30, 2025, down from $597.402 million at the end of 2024[22] - The company reported a net cash provided by operating activities of $17.640 million for the nine months ended September 30, 2025, compared to $10.901 million in 2024[26] Studio Openings and Sales Growth - System-wide sales reached $432.2 million in Q3 2025, reflecting a 10% year-over-year increase[6] - Quarterly average unit volume (AUV) was $668,000, up 2% year-over-year, with total members increasing by 7% to 796,000[6] - For full year 2025, the company expects net new studio openings in the range of 170 to 190, a decrease of 37% at the midpoint[11] - North America system-wide sales are projected to be between $1.730 billion and $1.750 billion, representing a 12% increase at the midpoint[11] - System-wide sales growth is driven by new studio openings and increases in same store sales, with approximately 7% and 2% of franchisee sales contributing to royalty and marketing fund revenue, respectively[31] Impairments and Charges - The impairment of goodwill and other noncurrent assets was $32.411 million for the nine months ended September 30, 2025, compared to $16.594 million in 2024[26] - The company reported an impairment of goodwill and other noncurrent assets amounting to $17,568 thousand for the three months ended September 30, 2025, compared to $4,505 thousand in 2024[30] - Restructuring and related charges (excluding impairments) amounted to $2,175 thousand for the three months ended September 30, 2025, down from $9,193 thousand in the same period of 2024[30] Shareholder Information - The weighted average shares of Class A common stock outstanding increased to 35,110 thousand for the three months ended September 30, 2025, from 32,177 thousand in 2024[24] - The weighted average shares of Class A common stock outstanding for the three months ended September 30, 2025, increased to 35,110 thousand from 32,177 thousand in 2024, reflecting a growth of 11.4%[30] - Adjusted net earnings per share - diluted for the three months ended September 30, 2025, was $0.34, compared to a loss of $0.05 in the same period of 2024[30] Revenue Guidance - Revenue guidance for 2025 is set between $300.0 million and $310.0 million, indicating a 5% decrease at the midpoint[11]

Core Insights - Lucky Strike Entertainment reported a quarterly loss of $0.12 per share, better than the Zacks Consensus Estimate of a loss of $0.15, and compared to earnings of $0.13 per share a year ago, resulting in an earnings surprise of +20.00% [1] - The company achieved revenues of $292.28 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.44% and up from $260.2 million year-over-year [2] - The stock has underperformed, losing about 17.7% since the beginning of the year, while the S&P 500 gained 16.5% [3] Financial Performance - Over the last four quarters, Lucky Strike has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $316.8 million, and for the current fiscal year, it is $0.01 on revenues of $1.28 billion [7] Market Outlook - The company's earnings outlook will be influenced by management's commentary on the earnings call and trends in earnings estimate revisions [4][5] - The Zacks Rank for Lucky Strike is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which Lucky Strike belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

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Core Viewpoint - Xponential Fitness, Inc. has completed the divestiture of Lindora to Next Health Management Group, allowing the company to concentrate on its core fitness modalities that significantly impact profitability [1] Company Focus - The divestiture of Lindora is aimed at enabling Xponential Fitness to allocate more time and capital towards its primary fitness brands [1] - CEO Mike Nuzzo emphasized that this strategic move will enhance the company's focus on areas with the greatest profitability potential [1]

Core Viewpoint - LeKe Fitness (HILEFIT) has surpassed 2000 stores and is ranked among the top five global fitness brands, with over 14 million registered members, indicating significant growth in the Chinese fitness market [3][4][5]. Group 1: Company Overview - LeKe Fitness has over 2000 stores across more than 40 cities in China, positioning itself as a leader in the fitness industry [3][9]. - The company is the only Chinese brand to enter the top five global fitness brands, with a store count of over 1800 as of the end of 2024 [4][5]. - LeKe's membership base exceeds 14 million, ranking second globally, behind Planet Fitness [4]. Group 2: Market Dynamics - The global fitness market is evolving, with traditional gyms facing challenges due to reliance on long-term prepaid memberships, leading to a trust crisis among consumers [5]. - LeKe's introduction of a monthly payment system addresses market pain points, allowing users more flexibility and potentially leading to a healthier business model [5][6]. - The fitness market in China is described as undergoing a "value return," focusing on creating real value for users, with LeKe's rise seen as a positive signal for industry transformation [7]. Group 3: Business Model and Strategy - LeKe is redefining small gyms and coaching services, aiming to rebuild trust through a digital management platform and a multi-brand strategy [6]. - The company has launched a brand matrix that includes various sub-brands catering to different fitness needs, from basic to advanced levels [9]. - LeKe's "New Decade for Fitness Coaches" initiative offers six career development paths for coaches, addressing high turnover rates in the industry [6].

FORM 10-Q Filing Information [Filing Details](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section details the Form 10-Q filing for Xponential Fitness, Inc. for the period ended June 30, 2025, covering registrant status and stock information - Filing Type: Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934[2](index=2&type=chunk) - Period Ended: June 30, 2025[2](index=2&type=chunk) - Registrant Status: Accelerated filer and Emerging growth company[3](index=3&type=chunk) - Outstanding Shares as of July 31, 2025: Class A common stock: **35,097 thousand shares**; Class B common stock: **13,738 thousand shares**[3](index=3&type=chunk) Securities Registered | Securities Registered | | :-------------------- | | Class A common stock, par value $0.0001 per share | | Trading Symbol: XPOF | | Exchange: New York Stock Exchange | PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes to stockholders' equity, and cash flows, with corrections for prior misstatements [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a slight decrease in total assets and liabilities from December 31, 2024, to June 30, 2025, with an increased stockholders' deficit - Cash, cash equivalents and restricted cash increased from **$32,739 thousand** at December 31, 2024, to **$38,679 thousand** at June 30, 2025[8](index=8&type=chunk) - Goodwill decreased from **$135,240 thousand** to **$127,789 thousand**, and intangible assets, net, decreased from **$100,944 thousand** to **$94,350 thousand**[8](index=8&type=chunk) Metric (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total assets | $399,815 | $403,397 | | Total liabilities | $596,171 | $597,402 | | Total stockholders' deficit | $(313,166) | $(310,815) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported net income of $1,346 thousand, a significant improvement from a net loss in the prior year, driven by increased operating income and reduced costs - Franchise revenue increased by **5.4%** for the three months and **5.3%** for the six months ended June 30, 2025, compared to the prior year periods[10](index=10&type=chunk) - Selling, general and administrative expenses decreased by **34.9%** for the three months and **5.4%** for the six months ended June 30, 2025, primarily due to reduced legal expenses and equity-based compensation[10](index=10&type=chunk) Metric (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Total revenue, net | $76,208 | $76,903 | | Total operating costs and expenses | $61,385 | $79,992 | | Operating income (loss) | $14,823 | $(3,089) | | Net income (loss) | $1,346 | $(14,343) | | Net loss per share of Class A common stock (Basic) | $(0.01) | $(0.30) | Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Total revenue, net | $153,091 | $156,596 | | Total operating costs and expenses | $128,589 | $151,691 | | Operating income (loss) | $24,502 | $4,905 | | Net income (loss) | $(1,313) | $(18,093) | | Net loss per share of Class A common stock (Basic) | $(0.11) | $(0.59) | [Condensed Consolidated Statements of Changes to Stockholders' Equity (Deficit)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20to%20Stockholders'%20Equity%20(Deficit)) The statements detail changes in stockholders' equity (deficit) for the six months ended June 30, 2025 and 2024, showing an overall increase in total stockholders' deficit - Total stockholders' deficit increased from **$(310,815) thousand** at December 31, 2024, to **$(313,166) thousand** at June 30, 2025[13](index=13&type=chunk) - Equity-based compensation contributed **$3,281 thousand** and **$2,666 thousand** for the periods ended March 31, 2025, and June 30, 2025, respectively[13](index=13&type=chunk) - Net income of **$969 thousand** was recorded for the period ended June 30, 2025, contrasting with a net loss of **$(1,923) thousand** for the period ended March 31, 2025[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased, cash used in investing activities significantly decreased, and cash provided by financing activities improved - The increase in operating cash flow was primarily due to higher net income after adjustments and favorable changes in working capital[19](index=19&type=chunk) - Investing cash flow improved by **$8.9 million**, mainly due to the absence of a business acquisition (Lindora in prior year) and reduced purchases of property and equipment[19](index=19&type=chunk) Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $8,341 | $5,682 | | Net cash used in investing activities | $(2,860) | $(11,761) | | Net cash provided by (used in) financing activities | $459 | $(4,998) | | Increase (decrease) in cash, cash equivalents and restricted cash | $5,940 | $(11,077) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's business, accounting policies, corrections to prior financial statements, acquisitions, debt, leases, related party transactions, equity, income taxes, earnings per share, contingencies, litigation, restructuring, and segment information [Note 1 – Nature of Business and Operations](index=10&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business%20and%20Operations) Xponential Fitness, Inc. operates as a holding company, franchising boutique health and wellness brands, with a portfolio of eight brands as of June 30, 2025, following recent divestitures and an acquisition - Portfolio of eight brands as of June 30, 2025: Club Pilates, CycleBar, StretchLab, YogaSix, Pure Barre, Rumble, BFT, and Lindora[26](index=26&type=chunk) - Lindora, a provider of medically guided wellness and metabolic health solutions, was acquired on **January 2, 2024**[26](index=26&type=chunk)[31](index=31&type=chunk) - Divested Stride brand on **February 13, 2024**, and Row House brand on **May 20, 2024**, and announced the wind down of AKT franchise operations during Q3 2024[27](index=27&type=chunk) [Note 2 – Correction of Previously Issued Financial Statements](index=11&type=section&id=Note%202%20%E2%80%93%20Correction%20of%20Previously%20Issued%20Financial%20Statements) The company identified and corrected misstatements in its previously issued condensed consolidated financial statements for the three and six months ended June 30, 2024, impacting various revenue and expense items - Misstatements identified impacting previously issued financial statements for the three and six months ended June 30, 2024[35](index=35&type=chunk) - Corrections included adjustments for rebates, revenue recognition issues, improper expense recognition for inventory-related costs, asset impairment assessment, legal accruals, and unrecorded equipment inventory[36](index=36&type=chunk)[40](index=40&type=chunk) Impact on Net Loss Attributable to Xponential Fitness, Inc. (in thousands) | Period | As Previously Reported | Adjustments | As Corrected | | :----- | :--------------------- | :---------- | :----------- | | 3 Months Ended June 30, 2024 | $(9,102) | $(461) | $(9,563) | | 6 Months Ended June 30,

Core Insights - Xponential Fitness reported revenue of $76.21 million for the quarter ended June 2025, reflecting a year-over-year decline of 0.4% and an EPS of $0.26 compared to -$0.03 a year ago, indicating a significant improvement in profitability [1] - The revenue fell short of the Zacks Consensus Estimate of $77.16 million by 1.23%, while the EPS exceeded the consensus estimate of $0.19 by 36.84% [1] Financial Performance Metrics - Same store sales were reported at 1%, significantly lower than the estimated 3.9% by analysts [4] - Franchise revenue was $45.35 million, slightly below the average estimate of $45.58 million, but showed a year-over-year increase of 5.4% [4] - Franchise marketing fund revenue reached $9.46 million, surpassing the $9.32 million estimate, with a year-over-year growth of 12.9% [4] - Merchandise revenue was $5.61 million, slightly above the estimate of $5.56 million, but represented a year-over-year decline of 4.6% [4] - Other service revenue was $6.27 million, close to the estimated $6.29 million, showing a minor year-over-year decrease of 0.6% [4] - Equipment revenue was reported at $9.51 million, below the $9.77 million estimate, marking a significant year-over-year decline of 26.4% [4] Stock Performance - Xponential Fitness shares have returned +3.6% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]