Xponential Fitness (XPOF) Q3 2024 earnings summary

Executive summary

• Membership base grew to 827,000 and studio visits rose 19% year-over-year, reflecting strong demand for health and wellness experiences.

• System-wide sales in North America reached $431.2 million in Q3 2024, up 21% year-over-year, with 3,178 global studios open and 125 new openings.

• Leadership is shifting to a franchisee-first, marketing and operations-driven culture, with new executive hires and a five-pillar vision for growth.

• CEO transition occurred in June 2024, with Mark King appointed to lead the company.

• Divestitures of Stride and Row House and wind down of AKT franchise operations to focus on core brands.

Financial highlights

• Q3 2024 revenue was $80.5 million, flat year-over-year, with franchise revenue up 22% to $44.5 million and equipment revenue up 17% to $14.7 million.

• Adjusted EBITDA rose 17% to $31.0 million (38% margin), while net loss widened to $18.0 million ($0.29 per share); adjusted net loss was $0.2 million.

• Merchandise revenue declined 23% to $6.5 million; other service revenue dropped 61% to $6.2 million due to fewer company-owned transition studios.

• Operating loss was $6.4 million in Q3 2024, compared to operating income of $7.5 million in Q3 2023.

• Interest expense increased to $11.8 million in Q3 2024, reflecting higher debt balances and rates.

Outlook and guidance

• 2024 system-wide sales guidance for North America is $1.705–$1.715 billion, up 22% year-over-year.

• Total 2024 revenue expected at $310–$320 million, a 1% year-over-year decrease; adjusted EBITDA guidance is $120–$124 million, up 16% year-over-year.

• Gross new studio openings guidance for 2024 is 490–510, a 10% decrease from 2023 and below previous guidance.

• SG&A expected at $145–$160 million, higher due to legal and restructuring costs; excluding one-time items, $120–$135 million.

• Capex for 2024 anticipated at $8–$10 million, focused on technology and integration.