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]

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]

Company Performance - Madison Square Garden (MSGS) reported a quarterly loss of $0.59 per share, significantly missing the Zacks Consensus Estimate of $1.48, and down from earnings of $1.57 per share a year ago, representing an earnings surprise of -139.86% [1] - The company posted revenues of $424.2 million for the quarter ended March 2025, which was 0.77% below the Zacks Consensus Estimate and a decrease from $429.95 million in the same quarter last year [2] - Over the last four quarters, Madison Square Garden has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - Madison Square Garden shares have declined approximately 14.6% since the beginning of the year, compared to a 4.7% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.97 on revenues of $122.84 million, and for the current fiscal year, it is $0.32 on revenues of $961.41 million [7] - The estimate revisions trend for Madison Square Garden is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which Madison Square Garden belongs, is currently ranked in the bottom 30% 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 and stock performance [5]

Investment Rating - The report indicates a strong growth in private equity investing in sports and sports tech, shifting from trophy assets to lucrative investments [10][12]. Core Insights - The sports tech market has seen unprecedented activity in 2024, with over $86 billion in disclosed deal value across 1,152 transactions, marking a recovery from the previous year's lows [10][12]. - The report highlights a significant increase in the number of investors interested in the sports and sports tech ecosystems, indicating a robust market outlook [10][12]. - Major fundraising efforts have resulted in over $60 billion raised for sports and media acquisitions, with notable funds such as Arctos Capital and Shamrock Capital leading the way [10][12]. Summary by Sections Transaction Overview - In 2024, the total transaction value reached $86 billion, with 1,152 deals, including 17 transactions exceeding $1 billion [10][12]. - The report notes a decline in total transaction volume by 8.3% compared to the previous year, with early-stage financing accounting for over 80% of total deal volume [10][12]. M&A Activity - 2024 has been the strongest year for M&A activity in history, with disclosed deal values reaching $68 billion, which is 1.7 times that of 2023 [10][12]. - Key transactions include Silver Lake's $13 billion acquisition of Endeavor and Sky's $8.4 billion acquisition of Paramount [10][12]. Fundraising Trends - Over $4.5 billion was raised in 648 private placements, with significant investments in major sports tech companies like Riddell and Infinite Reality [10][12]. - The report emphasizes the continued influx of private capital, with notable funds focusing on sports franchises and growth equity investments [10][12]. Market Segmentation - The report categorizes transaction values by segments, highlighting strong activity in fan engagement, media and broadcasting, and wearables and performance enhancement [10][12]. - North America remains the leading region for transactions, followed by Europe and Asia [10][12]. Notable Transactions - The report lists top disclosed M&A transactions, including Endeavor's privatization and significant acquisitions in the media and sports sectors [10][12]. - It also details the largest fundraising rounds, showcasing the growing interest in sports tech and related sectors [10][12].