Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $330.3 million, an increase of 13% compared to $292.2 million in Q3 2024 [16] - Adjusted net income was $67 million, with adjusted net income per diluted share at $0.80, reflecting a growth of 16-17% range [20] - Adjusted EBITDA increased by 14.4% to $140.8 million, with an adjusted EBITDA margin of 42.6% compared to 42.1% in the previous year [18] Business Line Data and Key Metrics Changes - System-wide Same Club sales growth was 6.9%, with franchisee Same Club sales increasing by 7.1% and corporate Same Club sales rising by 6.0% [15] - Equipment segment revenue surged by 27.8%, driven by higher revenue from equipment sales, including new equipment and re-equips [17] - Black Card penetration reached 66.1%, a 300 basis point increase from the prior year [16] Market Data and Key Metrics Changes - The company ended Q3 with approximately 20.7 million members, consistent with expectations, and added 35 new clubs, bringing the total to 2,795 [3][14] - The High School Summer Pass program saw record participation, with over 3.7 million teens completing more than 19 million free workouts, reflecting a 30% increase from the previous year [4] 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 [5] - Plans to raise the Black Card price to $29.99 after the peak join season in 2026, while testing new amenities to enhance the Black Card offering [8] - The company aims to open between 160 and 170 new clubs in 2025, with a focus on maximizing economic value for franchisees [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's momentum and the effectiveness of strategic imperatives, leading to an increase in the 2025 outlook [21] - The company noted that elevated attrition rates were not out of line with historical levels and expected moderation in the future [33] - Management highlighted the importance of community and member experience in driving retention and loyalty [10] Other Important Information - The company received recognition as one of Fortune's 100 fastest-growing companies and ranked 22nd in Franchise Times Top 400 [12] - The marketing strategy has shifted to include more digital and influencer marketing, particularly targeting younger consumers [4] Q&A Session Summary Question: Thoughts on marketing split between local and national - Management indicated that the shift from local to national advertising would enhance digital marketing efforts and improve media buying efficiency [25] Question: Density and market opportunities for new clubs - Management noted opportunities in less dense areas due to population growth and deurbanization, with plans to develop smaller club prototypes [26] Question: Churn rates and future member growth - Management confirmed that while attrition rates were elevated year-over-year, they were consistent with historical trends and expected moderation [33] Question: Confidence in guidance raise and Black Card pricing - Management attributed increased confidence to strong Q3 results and positive trends in equipment business and franchisee engagement [39] Question: Competitive landscape and new store openings - Management expressed satisfaction with join trends and noted positive indicators for increased availability of retail space for new clubs [48] Question: Strategic brand partnerships - Management highlighted ongoing efforts to cultivate brand partnerships that benefit members, with significant redemption rates for perks [61] Question: Use of AI for membership retention - Management discussed plans to leverage AI for personalized member experiences and targeted marketing [63] Question: Insights on Black Card Spa services - Management is measuring utilization and gathering feedback on new services to optimize the Black Card Spa offering [67]