Smartfit (SMFT3) Q3 2024 earnings summary

Executive summary

• Achieved record expansion with 285 new clubs in the last 12 months, totaling 1,591 clubs across 15 countries, and a member base surpassing 5.2 million, up 17–18% year-over-year.

• Net revenue for 3Q24 was R$1,422 million, up 31% year-over-year, with 9M24 net revenue reaching R$4.04 billion, driven by expansion and increased membership.

• Record EBITDA of R$442 million in 3Q24, up 35% year-over-year, with a margin of 31.1%; recurring net income reached R$124 million, up 22% year-over-year.

• Net income attributable to owners for the nine months ended September 30, 2024 was R$272 million, reflecting higher finance costs and depreciation.

• Cash position stood at R$3.0 billion at quarter end, supporting ongoing expansion and liquidity.

Financial highlights

• Net revenue for 3Q24 was R$1,422 million (+31% YoY, +5% QoQ); 9M24 net revenue: R$4,040 million (+30% YoY).

• EBITDA for 3Q24 was R$442 million (+35% YoY, +1% QoQ); 9M24 EBITDA: R$1.65 billion.

• Cash gross margin was 49.7% in 3Q24; mature clubs maintained a stable gross margin of 52% for the seventh consecutive quarter.

• Recurring net income margin was 8.7% in 3Q24; earnings per share (basic) were R$0.4640 for 9M24.

• Cash and cash equivalents at period end were R$1.52 billion, with a financial leverage ratio of 0.9x.

Outlook and guidance

• Raised 2024 guidance to 280–300 net club openings, a 35% increase over 2023, reflecting robust expansion and favorable real estate opportunities.

• Club network expected to grow 20% versus end-2023, supported by strong returns from recent openings and solid mature unit performance.

• Management continues to focus on expansion and maintenance of existing units across 15 countries, with approved budgets supporting future obligations.