Smartfit (SMFT3) Q1 2025 earnings summary

Executive summary

• Achieved 20% year-over-year growth in club network, reaching 1,759 units across 15 Latin American countries, with 290 new units added in the last 12 months.

• Membership expanded to 5.3 million, up 16% year-over-year and 9% sequentially, driven by strong commercial performance and seasonality.

• Net revenue reached R$1.7 billion in 1Q25, a 33% increase year-over-year, supported by a 19% rise in average member base and successful pricing strategies.

• Record EBITDA of R$520 million in Q1 2025, up 32% year-over-year, with a margin of 31% and 95% conversion to operating cash flow.

• Recurring net income was R$141 million, a 22% increase year-over-year, with a recurring net margin of 8.4%.

Financial highlights

• Cash gross margin reached 50.7%, up 0.3 percentage points year-over-year and 0.6 sequentially; mature clubs reached a record 53%.

• Cash gross profit totaled R$851 million, up 34% year-over-year.

• Adjusted EBITDA before pre-operational expenses was R$538 million, up 31% year-over-year, with a margin of 32.1%.

• SG&A expenses were R$324 million, 19.3% of net revenue, with a 41% increase year-over-year.

• Adjusted net debt/EBITDA ratio improved to 1.09x (down from 1.16x in 4Q24), with leverage at 1.45x as of 1Q25.

Outlook and guidance

• Confirms guidance to open 340–360 new units in 2025, targeting 15% growth in total openings and 20–21% annual gym base growth.

• Pipeline includes 104 units under construction and 278 signed contracts for new units.

• Expansion strategy supported by favorable real estate market, strong demand drivers, and disciplined capital allocation.

• No immediate plans for price increases in Mexico; focus remains on improving inflows and cost management.

• External study identifies potential for over 1,500 additional clubs in Latin America.