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, +2% QoQ).

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

• Record adjusted EBITDA of R$437 million in 2Q24 (+29% YoY), with a margin of 32.2%.

• Recurring net income reached R$143 million in 2Q24 (+19% YoY, +24% QoQ), with a net margin of 10.5%.

• Maintained leadership in Latin America, operating in 15 countries and surpassing 1,500 clubs.

Financial highlights

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

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

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

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

• Operating cash flow: R$473 million in 2Q24 (+24% YoY), with 108% conversion from adjusted EBITDA.

Outlook and guidance

• Confident in guidance to open 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.

• Expansion supported by strong returns from recent openings and favorable real estate opportunities.