Financial Data and Key Metrics Changes - The company ended Q1 2025 with 20.6 million members, an increase of approximately 900,000 from the end of 2024 [5] - System-wide same club sales grew by 6.1%, with franchisee same club sales increasing by 6.2% and corporate same club sales increasing by 5.1% [20] - Revenue for Q1 was $276.7 million, an increase of 11.5% from $248 million in the previous year [21] - Adjusted EBITDA was $117 million, reflecting a 10.1% year-over-year increase, with an adjusted EBITDA margin of 42.3% [25] Business Line Data and Key Metrics Changes - Franchise segment revenue increased by 10.7%, driven by higher royalty revenue from increased same club sales and new clubs [21] - Corporate-owned club segment revenue increased by 9.2%, primarily due to increased same club sales and sales from new clubs [22] - Equipment segment revenue increased by 28.7%, driven by higher revenue from replacement equipment sales [23] Market Data and Key Metrics Changes - Black Card penetration reached approximately 65%, a nearly 300 basis point increase from the previous year [9][21] - Members visited clubs an average of 6.7 times per month, the highest utilization in five years [10] 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 [7] - The company plans to open between 160 and 170 new clubs in 2025, with a focus on unit economics and franchisee sentiment [27] - The company is exploring new markets for international expansion, with positive performance noted in Spain and Australia [108] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate macroeconomic volatility, citing historical performance during economic downturns [6][41] - The company reiterated its growth targets for 2025, expecting continued strong performance despite potential tariff impacts [16][27] Other Important Information - The company is rolling out a "click to cancel" feature to enhance member experience, with over 50% of clubs already enabled [19] - The company is testing various promotional strategies, including a successful Black Card first month free promotion [9][33] Q&A Session Summary Question: Regarding Black Card penetration and pricing impact - Management noted that the increase in Black Card penetration is a result of a narrowed price gap and successful promotions [33][34] Question: Impact of macroeconomic conditions on business - Management indicated that the business remains resilient, with strong member growth and revenue despite macroeconomic challenges [41][45] Question: Future pricing strategies for Black Card - Management stated that pricing decisions for the Black Card will be evaluated after the Classic Card price increase anniversary [48][112] Question: Churn rates and click to cancel impact - Management confirmed that churn rates are in line with expectations and that the click to cancel feature may improve join conversions [82][56] Question: International development and franchisee sentiment - Management highlighted strong performance in international markets and positive franchisee sentiment regarding new openings [108][64]

Financial Data and Key Metrics Changes - The company ended Q1 2025 with 20.6 million members, an increase of approximately 900,000 from the end of 2024 [4] - Revenue for Q1 was $276.7 million, compared to $248 million in the same quarter last year, marking an increase of 11.5% [22] - Adjusted EBITDA was $117 million, an increase of 10.1% year over year, with an adjusted EBITDA margin of 42.3% [25] - Net income was $42.1 million, with adjusted net income at $50 million, reflecting strong financial performance [25] Business Line Data and Key Metrics Changes - System-wide same club sales grew by 6.1% in Q1, with franchisee same club sales increasing by 6.2% and corporate same club sales increasing by 5.1% [21] - Black Card penetration reached approximately 65%, a nearly 300 basis point increase from the previous year [9][22] - Equipment segment revenue increased by 28.7%, driven by higher revenue from replacement equipment sales [23] Market Data and Key Metrics Changes - The company opened 19 new clubs globally, bringing the total club count to 2,741 [4] - Member activity increased, with members visiting clubs an average of 6.7 times per month, the highest utilization in five years [10] - Gen Z continues to lead membership growth, being the fastest-growing demographic since 2021 [10] 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 [6] - The brand is positioned as a leader in the high-value, low-price fitness category, aiming to provide a judgment-free environment [5] - The company plans to continue testing various promotional strategies to drive membership growth [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate macroeconomic challenges, citing historical performance during economic downturns [5][42] - The company reiterated its growth targets for 2025, expecting to open between 160 and 170 new clubs [28] - Management acknowledged potential tariff impacts but indicated that current levels do not materially affect 2025 targets [15][27] Other Important Information - The company is implementing a click-to-cancel feature to enhance member experience, with over 50% of US clubs already enabled [20] - The company is exploring new equipment offerings and amenities for Black Card members, including red light therapy and spray tanning [88] Q&A Session Summary Question: Regarding Black Card penetration and pricing strategy - Management noted that the increase in Black Card penetration is a result of a successful promotion and the narrowing price gap between Classic and Black Card memberships [34][35] Question: Impact of macroeconomic conditions on business - Management indicated that the business remains resilient, with strong member growth and revenue despite macroeconomic volatility [42][45] Question: Future of franchise ownership and international development - Management highlighted positive franchisee sentiment and strong performance in international markets, particularly in Spain and Australia [106][108] Question: Churn rates and pricing impacts - Churn rates are in line with expectations, and management is monitoring the effects of price increases on member retention [82] Question: Development pipeline and big box availability - Management discussed varying availability of big box spaces across geographies and expressed confidence in the development pipeline despite macro concerns [94][96]