Xponential Fitness (XPOF) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of $0.18. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -122.22%. A quarter ago, it was expected that this franchisor of boutique fitness brands would post earnings of $0.19 per share when it actually produced a loss of $0.03, delivering a surprise of -115.79%.Over the last four q ...

Financial Performance - System-wide sales reached $431.2 million in Q3 2024, an increase of 21% year-over-year[1] - The company reported a net loss of $18.0 million, or a loss of $0.29 per basic share, compared to a net loss of $5.2 million in the prior year[3] - Adjusted net loss for Q3 2024 was $0.2 million, or a loss of $0.04 per basic share, compared to adjusted net income of $6.0 million in the prior year[6] - Adjusted EBITDA for Q3 2024 was $31.0 million, up 17% from $26.5 million in the prior year[7] - Total revenue for the three months ended September 30, 2024, was $80,491,000, slightly up from $80,435,000 in the same period last year, representing a 0.07% increase[19] - Franchise revenue increased to $44,458,000 for the three months ended September 30, 2024, compared to $36,425,000 in the prior year, marking a 22.8% growth[19] - Net income for the three months ended September 30, 2024, was $(17,970) million, compared to $(5,183) million for the same period in 2023, indicating a significant decline[23] - Adjusted net income for the nine months ended September 30, 2024, was $9,670 million, down from $11,546 million in the same period of 2023, reflecting a decrease of approximately 16.2%[23] Guidance and Future Plans - The company is reiterating 2024 guidance for North America system-wide sales in the range of $1.705 billion to $1.715 billion, reflecting a 22% increase at the midpoint compared to 2023[9] - Revenue guidance for 2024 is set between $310.0 million and $320.0 million, indicating a decrease of 1% at the midpoint compared to 2023[9] - The company plans to open between 490 to 510 new studios in 2024, a decrease of 10% at the midpoint compared to 2023[9] Cash and Debt Management - As of September 30, 2024, the company had approximately $37.8 million in cash and $353.8 million in total long-term debt[8] - Total current assets decreased to $95,576,000 as of September 30, 2024, down from $97,248,000 at the end of 2023, reflecting a 1.73% decline[18] - Total liabilities decreased to $595,513,000 as of September 30, 2024, compared to $616,832,000 at the end of 2023, indicating a 3.45% reduction[18] - Cash and cash equivalents increased to $37,774,000 as of September 30, 2024, from $37,094,000 at the end of 2023, showing a 1.83% increase[18] - Long-term debt, net of current portion, increased to $342,038,000 as of September 30, 2024, from $319,261,000 at the end of 2023, reflecting a 7.13% increase[18] - The company’s accumulated deficit increased to $(654,095,000) as of September 30, 2024, compared to $(630,127,000) at the end of 2023, indicating a worsening of 3.8%[18] Operating Costs and Expenses - Operating costs and expenses for the three months ended September 30, 2024, totaled $86,917,000, up from $72,957,000 in the prior year, representing a 19.1% increase[19] - The company reported an impairment of goodwill and other assets of $4,502,000 for the three months ended September 30, 2024, compared to $4,671,000 in the same period last year[19] - The company incurred litigation expenses of $10,435 thousand for the three months ended September 30, 2024, compared to $1,511 thousand in the same period of 2023, representing a significant increase[22] Shareholder Information - The weighted average shares of Class A common stock outstanding for the three months ended September 30, 2024, was 32,177 thousand, compared to 32,260 thousand in the same period of 2023[21] - The weighted average shares of Class A common stock outstanding (diluted) for the three months ended September 30, 2024, was 32,177, compared to 56,811 in the prior year, indicating a significant reduction in share count[23] Sales and Performance Metrics - Quarterly average unit volume (AUV) was $631,000, growing 8% year-over-year, with total members increasing by 16% to 827,000[1] - System-wide sales growth is driven by new studio openings and increases in same store sales, with management reviewing these metrics weekly to assess performance[24] - Same store sales are measured for studios that have generated at least 13 months of consecutive positive sales, highlighting the performance of existing studios[26] - The company receives approximately 7% and 2% of franchisee sales as royalty and marketing fund revenue, respectively, which are critical for evaluating overall performance[24] Other Financial Activities - Total cash used in investing activities for the nine months ended September 30, 2024, was $13,934 thousand, compared to $8,595 thousand in the same period of 2023, indicating an increase of 62.5%[20] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $10,915 thousand, down from $38,194 thousand in the prior year, representing a decrease of approximately 71.4%[20] - Depreciation and amortization expenses for the nine months ended September 30, 2024, totaled $13,179 thousand, up from $12,701 thousand in the prior year, an increase of approximately 3.8%[20] - The company reported a bad debt expense of $2,270 thousand for the nine months ended September 30, 2024, compared to $850 thousand in the same period of 2023, indicating a rise of 167.1%[20] - Acquisition and transaction expenses for the three months ended September 30, 2024, were $3,664 million, compared to $(1,923) million in the prior year, showing a substantial increase in costs[23]

Group 1 - Moore Law, PLLC is investigating potential claims against Xponential Fitness, Inc. due to allegations of misleading investors and financial mismanagement [1] - A report by short-seller Fuzzy Panda indicated that over 50% of Xponential's studios do not achieve positive financial returns and that more than 100 franchises were listed for sale at prices at least 75% lower than their initial costs [1] - Following the publication of the Fuzzy Panda report, Xponential's stock price dropped over 37%, from $25.11 to $15.72, a decline of $9.39 per share [2] Group 2 - An article by Businessweek reported that Xponential misled franchisees, leading to significant financial difficulties, which resulted in a further stock price decline of over 26% over two trading days [2] - The investigation by Moore Law is aimed at holding Xponential's officers and directors accountable for potential breaches of fiduciary duty and corporate misconduct [3]

For the quarter ended June 2024, Xponential Fitness (XPOF) reported revenue of $76.52 million, down 1.1% over the same period last year. EPS came in at -$0.03, compared to $0.07 in the year-ago quarter. The reported revenue represents a surprise of -8.84% over the Zacks Consensus Estimate of $83.93 million. With the consensus EPS estimate being $0.19, the EPS surprise was -115.79%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wal ...

Financial Data and Key Metrics Changes - North America run rate average unit volumes (AUVs) increased to $638,000 in Q2 2024, up 10% from $581,000 in the prior-year period [13] - Consolidated revenue for Q2 was $76.5 million, down 1% year-over-year, primarily due to declines in equipment and merchandise revenues [17] - The company recorded a net loss of $13.7 million in Q2 2024, compared to a net income of $27.5 million in the prior-year period [25] Business Line Data and Key Metrics Changes - Franchise revenue increased to $43 million, up 22% year-over-year, driven by higher royalties from increased system-wide sales [18] - Equipment revenue decreased to $12.9 million, down 10% year-over-year, attributed to a higher proportion of installations in less equipment-intensive brands [19] - Merchandise revenue fell to $5.9 million, down 30% year-over-year, due to a slowdown in retail purchases by members [19] Market Data and Key Metrics Changes - North America system-wide sales reached $421.5 million, up 24% year-over-year, with a 7% same-store sales increase [16] - The company ended Q2 with 3,102 global open studios, having opened 108 new studios during the quarter [15] - The company sold 87 licenses globally in Q2, trending lower due to approval delays and regulatory scrutiny [16] Company Strategy and Development Direction - The company will focus on growing its existing portfolio of brands rather than pursuing additional acquisitions [9] - The core focus will be on ensuring the health and profitability of franchisees, which is seen as the greatest determinant of future success [10] - The company plans to refine its operational processes to better support franchisees and improve overall efficiency [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term disruptions due to leadership changes and regulatory issues, impacting Q2 results and guidance [12] - Despite these challenges, management expressed confidence that these issues would not significantly affect long-term goals [11] - The company expects to see a normalization of same-store sales in the mid to high-single digits for the remainder of the year [49] Other Important Information - The company is winding down the AKT brand, which had eight open studios and was not a significant contributor to revenue [14] - Adjusted EBITDA for Q2 was $25.4 million, slightly up from $25.3 million in the prior-year period, with a margin of approximately 33% [27] - The company anticipates total revenue for 2024 to be between $310 million to $320 million, down from previous guidance [30] Q&A Session Summary Question: What fine-tuning opportunities do you see at Xponential? - Management noted the need for improved internal processes and better communication with franchisees to enhance operational efficiency [34] Question: What are the short-term disruptions affecting the business? - Management indicated a 90-day delay in expected performance due to leadership changes and consumer impacts [40] Question: How do you view international growth opportunities? - Management sees significant potential for brands like Club Pilates to expand internationally, emphasizing the importance of finding strong master franchise partners [37] Question: What is driving the recent decline in merchandise revenue? - Management attributed the decline to a general softness in consumer spending, which has not yet affected membership growth [19][53] Question: What is the outlook for studio openings? - Management expects a total of approximately 300 new studio openings in the second half of the year, with delays primarily due to distractions in Q2 [48] Question: How will pricing strategies affect future revenue? - Management plans to maintain current pricing strategies, with most price increases coming from new members rather than existing ones [68]

Xponential Fitness (XPOF) came out with a quarterly loss of $0.03 per share versus the Zacks Consensus Estimate of $0.19. This compares to earnings of $0.07 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -115.79%. A quarter ago, it was expected that this franchisor of boutique fitness brands would post earnings of $0.18 per share when it actually produced earnings of $0.16, delivering a surprise of -11.11%. Over the last four ...

Revenue Performance - Revenue decreased by 1% to $76.5 million in Q2 2024, down from $77.3 million in Q2 2023[3] - Total revenue for Q2 2024 was $76.5 million, a decrease of 1.1% compared to $77.3 million in Q2 2023[20] - Franchise revenue increased to $43.0 million in Q2 2024, up 22.0% from $35.1 million in Q2 2023[20] Profitability and Loss - Net loss totaled $13.7 million, or a loss of $0.29 per basic share, compared to net income of $27.5 million, or earnings of $1.44 per share in the prior year[4] - Net loss attributable to Xponential Fitness, Inc. was $9.1 million in Q2 2024, compared to a net income of $18.4 million in Q2 2023[20] - Operating loss for Q2 2024 was $2.4 million, a significant decline from an operating income of $36.5 million in Q2 2023[20] - Adjusted net income was $0.7 million, or a loss of $0.03 per basic share, compared to adjusted net income of $4.2 million, or earnings of $0.05 per share[5] - Adjusted net income attributable to Xponential Fitness, Inc. was $710 thousand for Q2 2024, down from $4,208 thousand in Q2 2023[23] - The diluted earnings per share for Q2 2024 was $(0.03), compared to $0.07 in Q2 2023, highlighting a decline in profitability[23] Cash Flow and Debt - The company reported a net cash provided by operating activities of $5.7 million for the six months ended June 30, 2024[7] - The company generated $5,696 thousand in net cash from operating activities for the six months ended June 30, 2024, a decrease of 81.4% from $30,565 thousand in the prior year[21] - Cash used in investing activities totaled $11,761 thousand for the six months ended June 30, 2024, compared to $5,613 thousand in the prior year[21] - The company borrowed $38,701 thousand from long-term debt during the six months ended June 30, 2024, down from $126,100 thousand in the same period of 2023[21] - As of June 30, 2024, the company had approximately $26.0 million in cash and $330.1 million in total long-term debt[7] Asset and Liability Management - Total assets decreased to $475.2 million as of June 30, 2024, from $528.7 million at the end of 2023[19] - Total liabilities decreased to $576.0 million as of June 30, 2024, from $616.8 million at the end of 2023[19] - Goodwill decreased to $163.0 million as of June 30, 2024, from $171.6 million at the end of 2023[19] - The company reported an impairment of goodwill and other assets of $12.1 million in Q2 2024, compared to $7.2 million in Q2 2023[20] - The company incurred an impairment of goodwill and other assets amounting to $12,089 thousand for the six months ended June 30, 2024, up from $7,238 thousand in the prior year[21] Operational Metrics - Quarterly run-rate average unit volume (AUV) was $638,000, a 10% increase year-over-year[1] - System-wide sales growth is driven by new studio openings and increases in same store sales, with franchisees contributing approximately 7% and 2% of sales as royalty and marketing fund revenue, respectively[24] - Same store sales are defined as studios generating positive sales for at least 13 consecutive months, providing insight into existing studio performance[25] - Average Unit Volume (AUV) growth is primarily influenced by same store sales and new studio openings, reflecting studio economics[26] - The company expects gross new studio openings to be in the range of 500 to 520, a decrease of 8% at the midpoint compared to 2023[9] Restructuring and Charges - Restructuring and related charges amounted to $2,325 thousand in Q2 2024, with no charges reported in the same period last year, reflecting ongoing restructuring efforts[23]

An Industry Player's Expected Results Among the stocks in the Zacks Leisure and Recreation Services industry, Marriott Vacations Worldwide (VAC) is soon expected to post earnings of $1.99 per share for the quarter ended June 2024. This estimate indicates a year-over-year change of -9.1%. This quarter's revenue is expected to be $1.22 billion, up 3.3% from the yearago quarter. Over the last 30 days, the consensus EPS estimate for Marriott Vacations Worldwide has been revised 0.1% down to the current level. N ...

Financial Data and Key Metrics Changes - Adjusted EBITDA margins expanded to 38% of revenue, up from 32% in Q1 2023, driven by growth in studio footprint and leaner operating expenses [7][28] - Net revenues totaled $79.5 million, a 12% increase year-over-year [9] - Adjusted EBITDA was $29.8 million, up 30% from $22.9 million in the prior-year period [28] - The company recorded a net loss of $4.4 million, significantly improved from a net loss of $15 million in Q1 2023 [25] Business Line Data and Key Metrics Changes - North American system-wide sales increased by 25% to over $400 million, with same-store sales up 9% [8][20] - The company ended the quarter with 3,156 global open studios, having opened 111 new studios during Q1 [10] - Franchise revenue grew by 27% year-over-year to $41.8 million, driven by increased royalty revenue [20] Market Data and Key Metrics Changes - Total members in North America grew 17% year-over-year to 783,000, with total studio visits increasing by 18% to 14.9 million [8] - International business accounted for 31% of license sales and 23% of new openings in Q1 [12] Company Strategy and Development Direction - The acquisition of Lindora is expected to enhance access to the broader health and wellness market, with a total addressable market (TAM) in the U.S. estimated at approximately 8,400 studios [11] - The company is focused on optimizing its portfolio of brands and remains open to acquisition and divestiture opportunities [11] - The company aims to reach 40% adjusted EBITDA margins this year and grow to 45% by 2026 [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the initial demand for Lindora franchises, with nearly 40 licenses sold since March [7] - The company anticipates same-store sales will normalize to mid-to-high single-digit percentages in 2024 [20] - Management expects gradual increases in revenue and adjusted EBITDA throughout the year, similar to 2023 [32] Other Important Information - The company has approximately $160 million in federal and state net tax loss carry-forwards, resulting in a minimal cash tax burden for the coming years [29] - Total long-term debt increased to $331.4 million as of March 31, 2024, primarily due to share repurchases [31] Q&A Session Summary Question: Free cash flow conversion and debt reduction focus - The company expects around $65 million in free cash flow for 2024, prioritizing debt reduction over stock buybacks [37][38] Question: Lindora's market potential and franchisee interest - Management indicated no cannibalization of franchisee interest from Lindora, expecting the TAM to grow significantly over the next few years [39][40] Question: Same-store sales expectations and quarterly cadence - Same-store sales for Q1 were slightly lower than expected, with management anticipating normalization to high single digits by Q4 [44][45] Question: Changes in opening mix by brand - Club Pilates had the highest number of openings in Q1, with expectations for a similar mix throughout 2024 [50][66] Question: Full-year profit outlook and adjusted EBITDA margin progression - Management expects adjusted EBITDA margins to reach around 40% for the year, with a gradual increase in subsequent quarters [53][54]

| --- | --- | --- | --- | --- | --- | --- | |-------|--------------|---------|------------|-------|-------|---------| | | | | | | | | | AI、T | CLUB PILATES | lindora | pure barre | | | YOGASIX | LEGAL DISCLAIMER 2 The information contained in this presentation is provided solely for the purpose of acquainting the readers with Xponential Fitness, Inc. (the "Company," "Xponential" or "we") and its business operations, strategies and financial performance. This presentation and any accompanying oral statements ...