Smartfit (SMFT3) Q2 2024 earnings summary

Executive summary

• Added 270 clubs in the last 12 months, reaching 1,529 units in 15 countries, with 4.6 million club members (+17% YoY), maintaining leadership in Latin America.

• Net revenue grew 30% year-over-year to R$1.36 billion in 2Q24 and R$2,617.6 million for 6M24, driven by network expansion and higher average ticket.

• Record adjusted EBITDA of R$437 million in 2Q24 (+29% YoY), with strong operating cash flow of R$473 million and 108% conversion.

• Recurring net income reached R$143 million in 2Q24 (+19% YoY), with a net margin of 10.5%.

• Maintained guidance to open 240–260 clubs in 2024, with at least 80% as own clubs.

Financial highlights

• Net revenue: R$1,358 million in 2Q24 (+30% YoY); 6M24 net revenue: R$2,618 million (+29% YoY); LTM net revenue at R$4.8 billion.

• Adjusted EBITDA: R$437 million in 2Q24 (+29% YoY), margin of 32.2%.

• Cash gross profit: R$678 million in 2Q24 (+30% YoY), cash gross margin at 50.0%.

• Capex: R$365 million in 2Q24, mainly for network expansion.

• Gross profit for 6M24 was R$1,078.8 million, up from R$818.9 million YoY.

Outlook and guidance

• Confident in opening 240–260 clubs in 2024, with at least 80% as own clubs.

• Expansion pipeline includes 102 added, 99 under construction, and 95 signed contracts as of July 2024.

• Recent acquisitions and investments are expected to contribute to future revenue growth and market share.

• The company maintains a solid cash position and access to credit facilities to support ongoing growth.