Financial Data and Key Metrics Changes - The company reported total revenue of $340.9 million for the second quarter, an increase of 13.3% compared to $300.9 million in the same quarter last year [21] - Adjusted EBITDA increased by 15.8% year-over-year to $147.6 million, with an adjusted EBITDA margin of 43.3% compared to 42.4% in the prior year [25] - Net income was $58.3 million, with adjusted net income at $72.6 million, translating to an adjusted net income per diluted share of $0.86 [25] Business Line Data and Key Metrics Changes - System-wide same club sales growth was 8.2%, with franchisee same club sales increasing by 8.3% and corporate same club sales rising by 7% [20] - Black Card membership penetration reached 65.8%, a 340 basis point increase from the previous year [10] - Equipment segment revenue increased by 21.5%, primarily driven by higher revenue from replacement equipment sales [22] Market Data and Key Metrics Changes - The company ended the quarter with approximately 20.8 million members, having added 23 new clubs, bringing the total to 2,762 clubs globally [9] - The company has a club within a twelve-minute drive of 170 million people in the U.S., indicating strong market penetration [7] Company Strategy and Development Direction - The company is focused on four strategic imperatives: redefining brand promise, enhancing member experience, refining product offerings, and accelerating new club growth [9] - The company is committed to an asset-light model, planning to own approximately 10% of its fleet while focusing on franchisee success [18] - International expansion is a priority, with the opening of a new club in Spain and plans for further growth in Europe [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year growth targets and highlighted strong demand for their offerings, evidenced by consistent same club sales growth [16] - The company anticipates a slight increase in attrition rates due to the rollout of online membership management, but expects this to moderate over time [66][77] - The macroeconomic environment remains volatile, prompting a conservative approach to guidance [50] Other Important Information - The company completed a national rollout of online cancellation functionality, which has led to a higher attrition rate but is expected to benefit future rejoining rates [12][66] - The company is exploring new amenities for Black Card members, including red light therapy and spray tanning, currently in pilot testing [34][35] Q&A Session Summary Question: What is the proportion of clubs with the new layout focusing on strength equipment? - Management indicated that over 70% of clubs will have some version of format optimization by the end of the year, with a balanced mix of cardio and strength equipment [31][32] Question: Any updates on new amenities for Black Card members? - Management confirmed that several clubs are piloting new amenities, including red light therapy and spray tanning, but results are still being evaluated [34][35] Question: How does the company view market density and opportunities? - Management noted that urbanization and growth in suburbs provide new market opportunities, while also testing smaller footprints in rural areas [40] Question: What are the plans to offset higher churn rates? - Management acknowledged that churn rates are slightly elevated but are expected to normalize over time, with ongoing marketing initiatives to drive membership [66][77] Question: How is the company performing in Spain compared to the U.S.? - Management reported that clubs in Spain are ramping up similarly to domestic clubs, indicating strong performance in the new market [62] Question: What is the outlook for membership growth in the back half of the year? - Management indicated that historically, the third quarter is not a large net member addition quarter, but they are optimistic about maintaining trends [103]