Group 1: Stock Performance - Xponential Fitness (XPOF) shares increased by 23.2% to close at $9.19, following a notable trading volume compared to typical sessions, despite a 57% loss over the past four weeks [1] - The stock's rally is seen as a rebound from a 38.45% drop on March 14, 2025, due to a financial restatement announcement, with investors viewing the prior sell-off as an overreaction [2] Group 2: Financial Performance - The company is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 450%, while revenues are projected to be $80.61 million, down 10.6% from the previous year [3] - The consensus EPS estimate for the quarter has been revised 15.5% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [4] Group 3: Industry Context - Xponential Fitness operates within the Zacks Leisure and Recreation Services industry, where Target Hospitality (TH) also operates, closing the last trading session at $5.71 with a -38.2% return over the past month [4] - Target Hospitality's consensus EPS estimate has decreased by 80.8% over the past month to $0.06, representing a -79.3% change compared to the previous year [5]

Group 1 - Xponential Fitness, Inc. is under investigation for potential securities fraud and unlawful business practices involving its officers and directors [1] - The company reported an unexpected loss for Q4 2025 and a 7.7% year-over-year revenue decline, leading to a restatement of its financial statements for the fiscal year ended December 31, 2023 [2] - Following the financial announcements, Xponential's stock price dropped by $4.66 per share, or 38.45%, closing at $7.46 per share on March 14, 2025 [2] Group 2 - Pomerantz LLP is a prominent firm specializing in corporate, securities, and antitrust class litigation, with a history of recovering multimillion-dollar damages for victims of securities fraud and corporate misconduct [3]

Franchise Growth and Development - As of December 31, 2024, franchisees are contractually committed to open an additional 1,607 studios in North America, with approximately 30% of licenses over 12 months behind schedule[21] - The company has sold a cumulative total of 6,265 franchise licenses globally as of December 31, 2024, up from 5,865 licenses sold as of December 31, 2023[36] - The company expanded its franchised studio footprint in North America from 1,071 studios in December 2018 to 2,758 studios by December 2024, representing a CAGR of 17%[41] - As of December 31, 2024, the company had 1,648 franchisees and licenses for 1,607 studios contractually obligated to be opened under existing franchise agreements in North America[41] - The company sold 253 licenses in 2024, a decrease from 632 licenses in 2023 and 790 licenses in 2022[41] - The franchisee network grew from 985 to 1,648 franchisees from December 31, 2018, to December 31, 2024, representing a CAGR of 9%[73] - In 2024, franchisees opened 353 studios in North America and 111 studios internationally[86] Financial Performance and Revenue - The company achieved gross studio openings globally of 464 and 553 during the years ended December 31, 2024 and 2023, respectively, with a member base approximately 15% larger as of December 31, 2024 compared to the previous year[26] - In 2024, the company recorded a total of 60.0 million in-studio and live stream visits, representing a 19% increase over the prior year[31] - Active paying members increased by 15% from December 31, 2023 to December 31, 2024, with approximately 742,000 members on recurring membership packages[31] - Approximately 74% of the company's revenue in 2024 was considered recurring, with expectations for this percentage to increase over time[34] - The average unit volumes (AUVs) increased by 9% for the quarter ended December 31, 2024 compared to the same quarter in 2023[31] - As of December 31, 2024, the outstanding principal balance on the Credit Agreement was $352.4 million, subject to variable interest rates[452] - A hypothetical 1% change in interest rates on the outstanding debt would change the annual interest expense by approximately $3.5 million[452] - The company is exposed to potential interest rate risk and inflation risk, which may adversely impact financial condition and results of operations[451][453] Operational Strategy and Management - The management team, led by CEO Mark King, has a proven track record of scaling franchised brands, contributing to the company's growth and recognition in the industry[37] - The company aims to enhance operating margins by expanding its franchised studio base and leveraging shared services and platform[44] - The company is focusing on leveraging artificial intelligence and data analytics to enhance customer engagement and optimize franchisee operations[119] - The company has a strategic IT initiative aimed at enhancing cybersecurity, applications, and data analytics capabilities[118] - The company is actively monitoring supplier relationships to ensure competitive pricing and high-quality equipment for franchisees[107] Marketing and Brand Awareness - Marketing funds spent approximately $26.7 million, $22.7 million, and $17.3 million in 2024, 2023, and 2022, respectively, to increase brand awareness[98] - Franchise agreements require franchisees to contribute 2% of monthly gross sales to the marketing fund, supporting national advertising efforts[98] Regulatory and Compliance Issues - The company is subject to various federal and state regulations, including the FTC Franchise Rule, which governs the sale of franchises in the U.S.[126] - Compliance with future laws and regulations may require significant monetary expenditures, potentially increasing overhead costs[136] - The prescribing of compounded semaglutides is subject to changing FDA guidance, which may impact healthcare providers' ability to prescribe these medications[137] - The company faces aggressive price competition in the compounded GLP-1 market, which may affect franchisees' operations[137] - Future introduction of new services may necessitate compliance with additional, yet undetermined, laws and regulations[136] Studio Operations and Franchisee Support - The company operates 2,693 studios across eight brands in the United States, holding leading market share positions in several fitness verticals[29] - The initial franchisee investment averaged approximately $560,000 in 2024, with studios designed to be between 1,500 and 2,500 square feet[19] - The company has paused selling franchises in all states due to the ongoing update and renewal of Franchise Disclosure Documents (FDDs), which has slowed growth and may reduce anticipated royalty or franchise revenue[129] - The company requires franchisees to purchase most studio-related equipment from approved vendors to maintain quality and consistency[106] International Expansion - The company had 475 studios open internationally across 14 countries as of December 31, 2024, with master franchisees contractually obligated to sell licenses for an additional 1,043 studios[46] - Club Pilates, the largest Pilates brand, had 1,200 operational studios and 1,856 licenses sold globally as of December 31, 2024[50] - Pure Barre, the largest barre brand, had 626 operational studios and 800 licenses sold globally as of December 31, 2024[54] - StretchLab had 529 operational studios and 1,005 licenses sold globally as of December 31, 2024[56] - YogaSix, the largest franchised yoga brand, had 194 operational studios and 635 licenses sold globally as of December 31, 2024[58] - CycleBar, the largest indoor cycling brand, had 204 operational studios and 565 licenses sold globally as of December 31, 2024[64] - Lindora acquisition completed on January 2, 2024, with 30 operational clinics and 114 licenses sold globally as of December 31, 2024[66] Employee and Corporate Structure - As of December 31, 2024, the company had approximately 432 employees at its corporate headquarters, with about 145 being part-time employees[109] - The company has approximately 13 employees at its one company-owned transition studio, with about 12 being part-time employees[109] - The company owned approximately 91 registered trademarks and service marks in the United States and approximately 377 in other countries as of December 31, 2024[121] - The company has a 69.5% ownership interest in XPO LLC through Xponential Intermediate Holdings, LLC[139]

Core Viewpoint - Xponential Fitness, Inc. is under investigation for potential non-compliance with federal securities laws following the announcement of a restatement of its financial statements for the fiscal year ended December 31, 2023, which led to a decline in its stock price [1]. Group 1 - Xponential Fitness announced on March 13, 2025, that its Board of Directors determined the need to restate the Company's financial statements for the fiscal year ended December 31, 2023 [1]. - Following the announcement of the restatement, the stock price of Xponential Fitness experienced a drop [1]. Group 2 - Holzer & Holzer, LLC is investigating the compliance of Xponential Fitness with federal securities laws and encourages affected investors to reach out for legal consultation [2]. - Holzer & Holzer, LLC is recognized as a top-rated securities litigation law firm and has a history of recovering significant amounts for shareholders impacted by corporate misconduct [3].

Core Viewpoint - Xponential Fitness, Inc. is under investigation for potential securities law violations following a significant drop in its stock price due to the announcement of a restatement of its 2023 financial statements, which revealed material weaknesses in internal controls and potential accounting issues [2][4]. Group 1: Company Overview - Xponential Fitness, Inc. experienced a stock price decline of over 35% on March 14, 2025, after disclosing the need to restate its financial statements for 2023 [2]. - The company admitted to having material weaknesses in its internal controls and potential accounting issues, which triggered the investigation [2]. Group 2: Legal Actions and Investigations - Block & Leviton is investigating Xponential Fitness, Inc. for possible securities law violations and may file actions to recover losses for affected investors [4]. - Investors who have lost money on their Xponential Fitness investments are encouraged to contact Block & Leviton for potential recovery options [3][5]. Group 3: Investor Eligibility and Support - Any individual who purchased common stock of Xponential Fitness, Inc. and has experienced a decline in share value may be eligible for recovery, regardless of whether they have sold their shares [3]. - Block & Leviton is recognized as a leading securities class action firm, having recovered billions for defrauded investors and representing many top institutional investors [7].

Financial Data and Key Metrics Changes - North America system-wide sales reached $465 million, up 21% year over year [10] - North America quarterly run rate average unit volumes increased to $668,000, up 9% year over year [40] - Total members at quarter end stood at 813,000, up 15% year over year [10] - Adjusted EBITDA for 2024 was $116.2 million, up 16% compared to the prior year [58] - Net loss for the fourth quarter was $62.5 million, compared to a net loss of $12.3 million in the prior year [55] Business Line Data and Key Metrics Changes - Franchise revenue for the quarter was $45.3 million, up 17% year over year [43] - Equipment revenue declined by 22% year over year to $12.7 million [44] - Merchandise revenue was down 34% year over year to $6.1 million [45] - Franchise marketing fund revenue increased by 23% year over year to $9.2 million [46] Market Data and Key Metrics Changes - System-wide sales for 2024 increased approximately 23% to $1.7 billion from $1.4 billion in 2023 [40] - Same-store sales for the full year were 7% [40] - The volume of licenses sold was lower due to a pause in sales while updating franchise disclosure documents [39] Company Strategy and Development Direction - The company is focused on building a senior management team to scale operations profitably [13] - Plans to expand international footprint, particularly for Club Pilates, with leadership in Europe and Asia [21] - Emphasis on innovation and data-driven decision-making to enhance member experience and operational efficiency [24][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the business, including operational issues and a need for structural changes [26][29] - 2025 is viewed as a year for foundation building, with expectations for growth to reaccelerate in subsequent years [30] - The company aims to improve franchisee profitability and is reviewing its brand portfolio for better capital allocation [31][112] Other Important Information - The company restated 2023 financial statements due to accounting errors related to inventory and compliance [33][34] - Total long-term debt increased to $352.4 million as of December 31, 2024, from $328.5 million the previous year [68] Q&A Session Summary Question: Can you help us understand the comp performance that is embedded in the 2025 system sales guidance? - The guidance assumes mid single-digit comp growth, with Club Pilates historically performing better [79] Question: Can you provide an update on the franchise recruiting process? - A new Chief Development Officer has been hired, and functions are now unified under one leadership [81] Question: What is your assessment of StretchLab in terms of negative comps? - Management is actively reviewing StretchLab's model and exploring ways to improve franchisee communication and marketing [91][95] Question: Can you clarify thoughts around studio closures? - The company is taking a conservative approach to underperforming studios, aiming for a healthier system [103] Question: What are the expectations for international expansion? - The company plans to have on-the-ground leadership in Europe and Asia to support franchise operations [99]

Core Insights - Xponential Fitness reported a revenue of $83.22 million for the quarter ended December 2024, reflecting a year-over-year decline of 7.7% and an EPS of -$0.18 compared to $0.08 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $80.61 million by 3.24%, while the EPS fell short of the consensus estimate of $0.44 by 140.91% [1] Revenue Breakdown - Franchise revenue was $45.29 million, surpassing the average estimate of $44.30 million, with a year-over-year increase of 15.9% [4] - Franchise marketing fund revenue reached $9.21 million, exceeding the average estimate of $8.66 million, marking a year-over-year increase of 22.5% [4] - Merchandise revenue was $6.12 million, slightly below the average estimate of $6.36 million, showing a significant year-over-year decline of 39.6% [4] - Other service revenue totaled $9.91 million, exceeding the average estimate of $6.42 million, with a year-over-year decrease of 42% [4] - Equipment revenue was reported at $12.69 million, below the average estimate of $14.63 million, reflecting a year-over-year decline of 22.5% [4] Stock Performance - Xponential Fitness shares have decreased by 29.9% over the past month, compared to a 7.4% decline in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Xponential Fitness (XPOF) Q4 2024 Earnings Call March 13, 2025 04:30 PM ET Company Participants Avery Wannemacher - Vice PresidentMark King - CEO & DirectorJohn Meloun - Chief Financial OfficerChris O’Cull - Managing Director - Restaurants, Franchised BusinessesRandal Konik - Managing DirectorJoseph Altobello - Managing DirectorRichard Magnusen - Senior Research Associate Conference Call Participants John Heinbockel - SMD & Equity Research AnalystJonathan Komp - Senior Research AnalystOwen Rickert - Senior ...

Financial Performance - System-wide sales reached $464.7 million in Q4 2024, a 21% increase year-over-year[6] - Reported revenue for Q4 2024 was $83.2 million, a decrease of 7% from $89.3 million in Q4 2023[8] - For the full year 2024, total revenue increased by $2.4 million, or 1%, to $320.3 million[12] - Total revenue for the year ended December 31, 2024, was $320.346 million, a slight increase from $317.937 million in 2023[29] - Franchise revenue increased to $174.524 million in 2024 from $143.247 million in 2023, representing a growth of 21.8%[29] Net Loss and Earnings - Net loss for Q4 2024 totaled $62.5 million, or a loss of $1.36 per basic share, compared to a net loss of $12.3 million in the prior year[9] - Full year net loss was $98.7 million, or a loss of $2.27 per basic share, compared to a net loss of $6.4 million in 2023[13] - The net loss attributable to Xponential Fitness, Inc. for the year ended December 31, 2024, was $67.658 million, compared to a net loss of $4.001 million in 2023[29] - The net loss for Q4 2024 was $62.454 million, compared to a net loss of $12.290 million in Q4 2023, representing a significant increase in losses[33] - The adjusted net loss attributable to Xponential Fitness, Inc. for Q4 2024 was $4.804 million, compared to an adjusted net income of $0.460 million in Q4 2023[36] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was $30.8 million, up 13% from $27.2 million in the prior year[11] - Adjusted EBITDA for the full year 2024 increased to $116.2 million, up 16% from $100.3 million in the prior year[15] - Adjusted EBITDA for the year ended December 31, 2024, was $116.217 million, up from $100.321 million in 2023, indicating a growth of approximately 15.5%[33] Impairment and Expenses - The company reported an impairment of goodwill and other assets amounting to $62.551 million for the year ended December 31, 2024[29] - The company incurred $45.957 million in impairment of goodwill and other assets during Q4 2024, compared to $4.841 million in Q4 2023, reflecting a substantial increase in impairment charges[36] - Acquisition and transaction expenses for the year ended December 31, 2024, totaled $8.886 million, a significant recovery from an income of $18.464 million in 2023[36] - The company reported a significant increase in litigation expenses, totaling $18.054 million in Q4 2024, compared to $0.984 million in Q4 2023[33] Studio Openings and Future Projections - The company plans to open 200 to 220 new studios in 2025, a decrease of 12% at the midpoint[22] - 2025 revenue is projected to be in the range of $315.0 million to $325.0 million, representing no change at the midpoint[22] Assets and Liabilities - Cash, cash equivalents, and restricted cash decreased to $32.739 million as of December 31, 2024, down from $37.094 million in 2023[30] - Total assets decreased to $403.397 million in 2024 from $529.534 million in 2023, reflecting a decline of 23.7%[27] - Total liabilities decreased slightly to $597.402 million in 2024 from $624.406 million in 2023[27] - The company’s total current liabilities increased to $107.887 million in 2024 from $102.234 million in 2023[27] Share Information - The weighted average shares of Class A common stock outstanding for the year ended December 31, 2024, was 31,999, compared to 31,742 in 2023[29] - The weighted average shares of Class A common stock outstanding for Q4 2024 were 32.879 million, an increase from 30.900 million in Q4 2023[36] Operating Income - Operating income (loss) for the year ended December 31, 2024, was a loss of $53.614 million, compared to an operating income of $34.906 million in 2023[29] Unit Volume and Membership - Quarterly average unit volume (AUV) was $668,000 in Q4 2024, growing 9% year-over-year, with total members increasing by 15% to 813,000[6] Earnings Per Share - The adjusted earnings per share (basic) for Q4 2024 was $(0.19), compared to $(0.02) in Q4 2023, indicating a decline in earnings performance[36] Restructuring Charges - The company’s restructuring and related charges (excluding impairments) amounted to $6.884 million in Q4 2024, compared to $9.089 million in Q4 2023, showing a decrease in restructuring costs[36]

Xponential Fitness, Inc. (XPOF) is scheduled to report fourth-quarter 2024 results on March 13.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, XPOF registered a negative earnings surprise of 122.2%.Trend in Estimate Revision of XPOFThe Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) is pegged at 39 cents, indicating an improvement of 387.5% from 8 cents reported in the year-ago quarter.For revenues, the consensus mark is pegged at $ ...