Xponential Fitness (XPOF) Q2 2024 earnings summary

Executive summary

• Leadership transitioned to Mark King as CEO in June 2024, following the removal and resignation 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, winding down AKT, and no immediate plans for acquisitions or further divestitures.

• 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 attributable to Xponential Fitness for Q2 2024 was $13.7M (loss of $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 33%.

• Membership and visits grew 17% and 20% year-over-year, respectively.

Outlook and guidance

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

• 2024 revenue guidance lowered to $310M–$320M (down 1% at midpoint from 2023), versus previous $340M–$350M.

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

• Capex expected at $8M–$10M for the year, focused on Lindora integration and technology.

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