Smartfit (SMFT3) Q2 2025 earnings summary

Executive summary

• Achieved 19% year-over-year growth in club network, reaching 1,818 units across 15 countries, with guidance for 340–360 new openings in 2025 and 80% expected to be owned units.

• Net revenue rose 32% year-over-year to R$1.8 billion in 2Q25, driven by a 16% increase in average member base and a 10% rise in average ticket price.

• Record EBITDA of R$576 million, up 32% year-over-year, with a 32.1% margin and 90% conversion to operating cash flow.

• Recurring net income reached R$189 million, a 32% increase year-over-year, with a recurring net margin of 10.6%.

• TotalPass business unit continues to gain scale and profitability, narrowing the gap between check-ins and revenue.

Financial highlights

• Net revenue for 2Q25 was R$1.8B, up 32% vs. 2Q24 and 7% sequentially from 1Q25.

• EBITDA margin was 32.1% in 2Q25, stable year-over-year and up 1.1 p.p. sequentially.

• Cash gross margin reached a record 50.9% in 2Q25, up 0.9 p.p. year-over-year.

• Operating cash flow was R$521M in 2Q25, with 90% EBITDA conversion.

• Recurring net income margin increased to 10.6% in 2Q25, up 2.2 p.p. year-over-year.

Outlook and guidance

• Guidance for 2025 remains 340–360 new club openings, with 80% as owned units, a 15% increase over 2024.

• Expansion is supported by strong financial position, disciplined capital allocation, and favorable market conditions.

• CapEx reduction initiatives in Brazil are being extended to Mexico and other countries for long-term growth.

• No acceleration planned for franchise buybacks; focus remains on opening new stores to increase capillarity.

• The gap between TotalPass check-ins and revenue is expected to continue narrowing through year-end, though not to zero.