Xponential Fitness (XPOF) Q2 2024 earnings summary

Executive summary

• Mark King was appointed CEO in June 2024, following a leadership transition and the removal of the prior CEO, with a focus on operational fine-tuning and franchisee support.

• Xponential Fitness operates nine boutique fitness brands with 3,102 studios globally as of June 30, 2024, and a pipeline of 2,858 additional studios contractually obligated to open.

• Q2 2024 saw 801,000 members (+17% YoY), 15.1M visits (+20% YoY), and North America system-wide sales of $421.5M (+24% YoY).

• Strategic shift to prioritize growth of existing brands, with no immediate plans for acquisitions or further divestitures; Lindora was acquired and Stride and Row House divested in Q2 2024.

• A restructuring plan to exit company-owned transition studios is underway, with $9.2M in charges YTD and expected annualized gross savings of $13.5–$15.5M.

Financial highlights

• Q2 2024 consolidated revenue was $76.5M, down 1% year-over-year, mainly due to lower equipment and merchandise sales and a $6.5M drop in other service revenue.

• North America system-wide sales reached $421.5M, up 24% year-over-year, driven by 7% same-store sales growth and new studio openings.

• Net loss for Q2 2024 was $13.7M (or $0.29 per share), compared to net income of $27.5M in Q2 2023; adjusted net income was $0.7M.

• Adjusted EBITDA was $25.4M, flat year-over-year, with a margin of approximately 33%.

• 3,102 global open studios at quarter-end, with 108 gross new openings and 85 closures.

Outlook and guidance

• 2024 global new studio openings expected at 500–520, down from prior guidance of 540–560 and 8% lower at midpoint versus 2023.

• Full-year revenue guidance lowered to $310M–$320M (from $340M–$350M), representing a 1% year-over-year decrease at midpoint.

• Adjusted EBITDA guidance reduced to $120M–$124M, still a 16% year-over-year increase at midpoint.

• North America system-wide sales guidance unchanged at $1.705B–$1.715B, a 22% increase at midpoint.

• Management expects annualized gross savings of $13.5–$15.5M from restructuring once complete.