Holmes Place International (HLMS) Q2 2025 earnings summary

Executive summary

• Q2 2025 was significantly impacted by a 12-day military operation, resulting in 9 days of club closures and reduced activity, but also led to cost savings from furloughed staff and lower variable expenses.

• Operates 73 fitness and wellness clubs in Israel as of June 30, 2025, with 202,942 total subscribers across two main brands.

• The company continued expansion, opening new clubs and acquiring fitness businesses, including a 51% stake in a women's pilates studio chain, pending regulatory approval.

• No dividend was distributed for Q2 2025 due to the operation and acquisitions, though NIS 23 million was paid earlier in the year.

Financial highlights

• Q2 2025 revenue rose 4.75% year-over-year to NIS 141.4 million; EBITDA reached NIS 23.8 million, down 3.3% from Q2 2024.

• For H1 2025, revenue increased 7.9% to NIS 284.4 million, with EBITDA up 1.96% to NIS 48.1 million.

• Gross profit for H1 2025 was ₪143.3 million, compared to ₪69.6 million in H1 2024.

• Net income for Q2 2025 was NIS 4.96 million, a 49.9% decrease year-over-year; H1 2025 net income was ₪12.97 million.

• Net cash from operating activities for H1 2025 was ₪40.26 million, a decrease from ₪77.3 million in H1 2024.

Outlook and guidance

• The ARPU decline from new family club members is expected to persist, while the impact from the military operation is considered one-time and should normalize in the short term.

• Growth is expected to continue through expansion of family clubs and Pilates, which, despite lower ARPU, are among the most profitable.

• Plans to open 2–5 new clubs in 2025, with additional locations under negotiation.

• Management sees no material liquidity risk despite negative working capital, supported by strong cash flow and available credit lines.