Xponential Fitness(XPOF) - 2022 Q3 - Quarterly Report

Studio Operations and Expansion - As of September 30, 2022, the company had 2,219 studios open in North America and 266 studios open internationally, with franchisees contractually committed to open an additional 1,919 and 920 studios, respectively[197] - Open studios increased from 2,032 in Q3 2021 to 2,485 in Q3 2022, representing a growth of 22.3%[212] - The number of new studio openings for the nine months ended September 30, 2022, was 355, up from 236 in the same period of 2021, a growth of 50.4%[213] - The company is focused on international expansion and has developed relationships with master franchisees to drive growth outside North America[209] - The company has 920 remaining studios obligated to open internationally under master franchise agreements as of September 30, 2022[213] Financial Performance - System-wide sales for the three months ended September 30, 2022, were $264.8 million, a 37.4$192.7 million in the same period of 2021[211] - Total revenue for the three months ended September 30, 2022, was $63.8 million, an increase of$22.9 million or 56.0% compared to $40.9 million in the same period of 2021[232] - Total revenue for the nine months ended September 30, 2022, was$173.7 million, an increase of $68.0 million or 64.3$(13,056,000), compared to $(8,904,000) in Q3 2021, indicating a worsening financial position despite growth in other metrics[227] - Net loss for the three months ended September 30, 2022, was$13.1 million, compared to a net loss of $8.9 million in the same period of 2021[240] Revenue Breakdown - Franchise revenue increased to$30.0 million, up $10.0 million or 50.1$19.9 million in the prior year, driven by a 17% increase in same store sales and 453 new studio openings globally[233] - Equipment revenue rose to $11.8 million, a$5.0 million increase or 74.4% from $6.8 million in the previous year, with 136 global equipment installations compared to 76 in the prior year[234] - Other service revenue surged to$10.6 million, reflecting a $5.0 million increase or 90.2$5.5 million in the same quarter of 2021, primarily due to increased vendor commission revenue[237] - Franchise revenue increased to $83.1 million, up$31.6 million or 61.4% year-over-year, driven by a 28% increase in same store sales and 453 new studio openings[250] - Equipment revenue surged to $31.9 million, a 105.1$15.6 million in the prior year, attributed to 376 global equipment installations[251] Cost and Expenses - Total operating costs and expenses for the three months ended September 30, 2022, were $74.2 million, an increase of$30.0 million or 68.0% from $44.2 million in the same period of 2021[238] - Selling, general and administrative expenses increased to$32.8 million, up $8.6 million or 35.4$24.3 million in the prior year, largely due to increased legal expenses and impairment charges[241] - Acquisition and transaction expenses rose significantly to $16.3 million, compared to$2.9 million in the same quarter of 2021, reflecting non-cash changes in contingent consideration related to past acquisitions[244] - Total operating costs and expenses for the nine months ended September 30, 2022, were $162.8 million, an increase of$53.1 million or 48.5% compared to the previous year[256] Cash Flow and Financing - Cash provided by operating activities for the nine months ended September 30, 2022, was $37.5 million, a significant increase of$33.5 million compared to $3.9 million in the same period of 2021[282] - Cash used in investing activities increased to$11.6 million for the nine months ended September 30, 2022, compared to $4.0 million in the same period of 2021, primarily due to increased purchases of property and equipment[283] - Cash used in financing activities was$16.3 million for the nine months ended September 30, 2022, a decrease from cash provided of $14.3 million in the same period of 2021, reflecting a net increase in cash used of$30.6 million[284] - The company anticipates that its available cash and cash generated from operations will be sufficient to meet its debt service requirements and working capital needs for at least the next twelve months[268] - As of September 30, 2022, the company had $27.5 million in cash and cash equivalents, excluding$3.4 million in restricted cash for marketing purposes[267] Other Financial Metrics - Adjusted EBITDA for Q3 2022 was $20,003,000 compared to$6,829,000 in Q3 2021, reflecting a significant increase of 194%[227] - The average unit volume (AUV) for the last twelve months as of September 30, 2022, was $475, up from$355 in the same period of 2021, representing a 33.9% increase[211] - Same store sales increased by 17% for the three months ended September 30, 2022, compared to a 65% increase in the same period of 2021[211] - Average Unit Volume (AUV) growth is primarily driven by changes in same store sales and influenced by new studio openings[220] - Same store sales comparisons are made for studios open for at least 13 months, providing insights into existing studio performance[221]