Financial Data and Key Metrics Changes - In 2025, same-club sales grew by 6.7%, revenue increased by 12%, adjusted EBITDA rose by 13%, and adjusted diluted EPS grew by 19% [4][5] - For Q4 2025, total revenue was $376.3 million, up from $340.5 million in Q4 2024, driven by growth across all segments [21][22] - Adjusted EBITDA for Q4 was $146.3 million, with an adjusted EBITDA margin of 38.9%, compared to 38.4% in the prior year [23] Business Line Data and Key Metrics Changes - The franchise segment saw a revenue increase of 9.6%, the corporate-owned club segment increased by 7.4%, and the equipment segment grew by 15.3% [21][22] - Black Card penetration reached an all-time high of 66.5%, an increase of 260 basis points from the previous year [21] Market Data and Key Metrics Changes - The company ended 2025 with approximately 20.8 million members and nearly 2,900 clubs globally [4][5] - The international market surpassed 1 million members, with over 200 international clubs [18] Company Strategy and Development Direction - The company focuses on four strategic imperatives: redefining brand promise, enhancing member experience, refining product offerings, and accelerating new club growth [6][7] - The company aims to leverage its scale to expand its presence in existing markets and enter new markets, with a disciplined approach to international expansion [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2026 would represent the lowest growth year in their three-year algorithm due to equipment replacement cycles and the sale of corporate-owned clubs [25] - The company expects system-wide same-club sales growth of 4%-5% and plans to open 180-190 new clubs in 2026 [26] Other Important Information - The company has returned nearly $800 million to shareholders through buybacks over the last two years while funding strategic investments for future growth [20] - The company received recognition as one of USA Today's America's Best Customer Service 2026, highlighting its commitment to exceptional service [19] Q&A Session Summary Question: Insights on 2026 guidance and growth expectations - Management indicated that 2026 would be the lowest growth year due to specific impacts, but they expect to return to growth targets in subsequent years [32][34] Question: Impact of January weather on join trends - Management noted that January join trends were healthy before a storm impacted volumes, but they have since rebounded [35][36] Question: Black Card penetration and pricing strategy - Management confirmed that Black Card penetration is at an all-time high and that a price increase will be rolled out after the peak join season [42][54] Question: Attrition rates and Click to Cancel implementation - Management stated that attrition rates have returned to expected levels and that the Click to Cancel feature has positively impacted member experience [58][60] Question: Join trends and member growth opportunities - Management expressed confidence in the ability to drive strong member growth, citing a 10% increase in net members in 2025 despite challenges [88][90]

Financial Data and Key Metrics Changes - The company reported a net member growth of 20.8 million members by the end of 2025, with 181 new unit openings, primarily domestic franchises [3][10] - The company achieved a same-store sales growth of 6.7% for the year [9] - The Classic Card price increase from $10 to $15 has been successful, contributing to overall revenue growth [13][18] Business Line Data and Key Metrics Changes - The company optimized its club formats, with about 80% of its estate on some version of an optimized format by the end of 2025, enhancing the balance of strength and cardio equipment [5][6] - The rejoin rate for members who lapse is consistently around mid-30%, indicating strong member retention [5] Market Data and Key Metrics Changes - The company noted a slight easing in real estate availability, with vacancies improving to 4.3%-4.4%, although it does not expect a significant increase in new openings [19][21] - The company is well-positioned to capitalize on retail space becoming available due to closures in other sectors, enhancing its growth potential [21] Company Strategy and Development Direction - The company aims for 6%-7% unit growth over the planning horizon, with expectations of accelerating unit openings in 2026 [22][25] - The company is focusing on international expansion, particularly in Spain, where it plans to refranchise operations to enhance growth [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fitness industry's growth, citing increased consumer awareness and participation in fitness activities [45][46] - The company is leveraging its brand awareness and marketing strategies to attract younger demographics, particularly Gen Z [46] Other Important Information - The company is committed to maintaining a capital-light model, with 90% of its operations being franchise-based [41] - The company has initiated a $350 million accelerated share repurchase program, reflecting its commitment to returning value to shareholders [44] Q&A Session Summary Question: How did the year-end metrics perform against internal expectations? - Management expressed satisfaction with the year-end metrics, including the strong net member growth and unit openings [8][10] Question: What is the outlook for January member growth? - Management refrained from discussing January specifics but emphasized confidence in their marketing strategies and brand messaging [11] Question: How does the company plan to handle price increases for the Black Card? - Management believes the Black Card price increase to $29.99 will be well-received due to strong consumer demand and the value offered [13][18] Question: What is the sentiment among franchisees regarding growth? - Franchisee sentiment is strong, as indicated by the significant growth in domestic franchise openings and ongoing investments in equipment [23][25] Question: What are the expectations for international market expansion? - The company plans to continue its international expansion thoughtfully, focusing on strong market presence and potential franchise partnerships [33][36]