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 Data and Key Metrics Changes - North American system-wide sales reached $474 million, up 12% year over year [11][28] - North American quarterly run rate average unit volumes increased by 3% to 659,000 [11][28] - Total members at quarter end stood at 863,000, reflecting an 8% year-over-year increase [11] - Same store sales increased by 1% [11][28] - Consolidated revenue for the quarter was $76.2 million, down 1% from the prior year [28] - Adjusted net income for the second quarter was $14.5 million, or $0.26 per basic share [37] - Adjusted EBITDA was $28.1 million, up 14% compared to the prior year period [37] Business Line Data and Key Metrics Changes - Franchise revenue for the quarter was $45.4 million, up 5% year over year, driven by an 8% increase in actively paying memberships [29] - Equipment revenue declined by 26% year over year to $9.5 million, primarily due to a 39% decrease in global installations [29] - Merchandise revenue was down 8% year over year to $5.6 million [30] - Franchise marketing fund revenue increased by 13% year over year to $9.5 million [31] Market Data and Key Metrics Changes - Club Pilates reached record high utilization, with plans to enhance monetization strategies [17] - Pure Barre is planning major marketing campaigns for its 25th anniversary, anticipating further growth [18] - Yoga Six continues to perform well with new teacher training programs and innovative class offerings [19] - StretchLab is exploring solutions to support franchisees and improve average unit volumes [20] Company Strategy and Development Direction - The company is focusing on strengthening its core brands, including Club Pilates, Pure Barre, Yoga Six, and StretchLab, while divesting from underperforming brands like Cycle Bar and Rumble [12][10] - A new retail partnership with Fit Commerce aims to enhance service and reduce costs, with expected benefits starting in 2026 [14][30] - The company is committed to increasing marketing spend, particularly for Club Pilates and StretchLab, to drive growth [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the company and the fitness industry, highlighting the momentum in boutique fitness [8][9] - The company anticipates a more conservative revenue outlook due to recent brand divestitures and macroeconomic headwinds [39] - Management expects to see improvements in overall portfolio health and a reduction in closure rates with a more focused brand strategy [12] Other Important Information - The company ended the quarter with 3,327 global open studios, with 86 new openings during Q2 [25] - There were 57 global studio closures in the second quarter, with nearly half attributed to Cycle Bar and Rumble [25] - The company has over 1,400 studios in North America and over 1,000 international master franchise obligations [27] Q&A Session Summary Question: What drove the change in same store sales trend? - Management noted that same store sales decreased from 4% in Q1 to 1% in Q2, primarily due to performance in Club Pilates and StretchLab [47][48] Question: What is the status of the 40% backlog behind schedule? - The backlog includes brands like Rumble and Cycle Bar, with some contributions from Club Pilates, StretchLab, and Yoga Six [49][50] Question: What are the plans for pricing at Club Pilates? - Management confirmed intentions to implement pricing and monetization strategies to drive same store sales growth [51] Question: When should we expect the closure rate to stabilize? - Management anticipates the closure rate to trend down to around 5% by the end of 2025, with improvements expected in 2026 [52][53] Question: Can you elaborate on the four items impacting profitability in 2025? - Management discussed the impact of brand divestitures, system-wide sales adjustments, increased marketing spend, and the new CEO's strategic alignment [56][60] Question: What is the outlook for the FDD renewal process? - Management expects to resume license sales in the second half of the year following necessary amendments due to the CEO transition [64][66] Question: What is the strategy for non-core brands like Lindora and BFT? - Management confirmed ongoing evaluation of Lindora while expressing confidence in BFT's international growth [68][69] Question: What is the expected impact of the FitCommerce partnership? - The partnership is expected to provide significant cost savings and cash flow benefits starting in 2026 [95][96]

Financial Performance - System-wide sales reached $474 million, a 12% year-over-year increase[15] - Run-Rate Average Unit Volume (AUV) was $659,000, up 3% year-over-year[15] - Total revenue was $76 million, a 1% year-over-year decrease[21] - Adjusted EBITDA was $28 million, a 14% year-over-year increase, with a 37% margin[21, 32] - Adjusted net earnings per share were $026[29] Studio and License Growth - The company has 3,327 global studios, a 7% year-over-year increase[26] - The company has 6,344 global licenses, a 4% year-over-year increase[26] Strategic Initiatives - The company completed the divestitures of Rumble and CycleBar brands[14] - The company entered into a Fit Commerce agreement, guaranteeing a minimum of $50 million in commissions over a 5-year contract[10, 24] Full Year 2025 Guidance - The company expects between 170 and 190 net new studio openings globally[34] - The company expects system-wide sales to be between $178 billion and $18 billion[34] - The company expects revenue to be between $300 million and $310 million[34] - The company expects Adjusted EBITDA to be between $106 million and $111 million[34]

Core Insights - Extraordinary Brands has acquired CycleBar and Rumble from Xponential Fitness, expanding its portfolio to four fitness modalities: cycling, boxing, rowing, and barre [1][2] - The acquisition is seen as a transformative expansion for both the company and the fitness industry, marking a new era [2] Company Strategy - The CEO of Extraordinary Brands, Paul Flick, emphasized that the acquisition is a defining moment, aiming to elevate franchisees through a platform that offers consistency, support, and shared services [3] - The company is focused on creating a shared services infrastructure that includes centralized marketing, streamlined operations, and unified franchise business coaching, redefining franchise partnerships in wellness [3] Franchisee Support - The Director of Marketing, Marley Delaney, highlighted the importance of consistent operations and marketing support across the portfolio to help franchisees achieve sustainable growth [4] - The company is committed to investing in franchisees by prioritizing transparency, profitability, and collaborative planning [5] Long-Term Vision - Extraordinary Brands aims to reduce fixed overhead, build cohesive brand strategies, and optimize programming to enhance member experiences in the coming months [6] - The company is serious about the future of boutique fitness, viewing the acquisitions as a long-term commitment to franchisee success and brand revitalization [7] Company Background - Founded in 2022, Extraordinary Brands specializes in boutique fitness and wellness concepts, empowering entrepreneurs through a shared services model [8] - The expanding portfolio includes CycleBar, Rumble, Row House, and Neighborhood Barre, with plans for growth in various fitness verticals [8]

Company Highlights - Xponential Fitness boasts over $1.7 billion in system-wide sales[20] - The company reported $318 million in revenue[20] - Adjusted EBITDA reached $114 million[20] - The company has over 850,000 members[20] System-Wide Sales Breakdown - StretchLab accounts for 57% of system-wide sales[21] - Club Pilates contributes 10% to system-wide sales[21] - Pure Barre represents 15% of system-wide sales[21] - YogaSix makes up 13% of system-wide sales[21] - All other brands collectively account for 5% of system-wide sales[21] International Expansion - International business currently accounts for 4% of revenue and 5% of Adjusted EBITDA, projected to grow to 8% and 10% respectively in 5 years[69] Financial Targets - The company targets 10% annual growth in net new studio openings and Adjusted EBITDA[117] - The company is aiming for a 40%-45% Adjusted EBITDA margin[117] - The company is aiming for a 50%-60% Levered Free Cash Flow Conversion of Adjusted EBITDA[117]

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]