Xponential Fitness, Inc. showed a loss in the first quarter that ended March 31 but saw revenue jump 40 percent and raised its outlook for the year.

Financial Highlights Q1 2023 Compared to Q1 2022

  • Grew revenue 40 percent to $70.7 million;
  • Increased North America system-wide sales by 42 percent to $317.8 million;
  • Reported North America same-store sales growth of 20 percent compared to 47 percent growth in Q1 of 2022;
  • Reported North America quarterly run-rate average unit volume (AUV) of $542,000 compared to $450,000;
  • Posted net loss of $15.0 million, or a loss of $1.38 per basic share, on a share count of 30.8 million shares of Class A Common Stock, compared to a net loss of $15.2 million, or a loss of $1.51 per basic share, on a share count of 22.7 million shares of Class A Common Stock;
  • Posted adjusted net income of $1.3 million, or a loss of $0.02 per basic share, compared to an adjusted net loss of $5.3 million or a loss of $0.19 per basic share; and
  • Reported Adjusted EBITDA of $22.9 million, compared to $14.5 million.

“The growth in our North American AUVs and same-store sales during the quarter is compelling, indicating consumers continue to prioritize spending on our experiential offerings,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “The results speak to the strength of our brands, the quality of our franchisees, and the support they are receiving. We are seeing momentum continue through the first part of the second quarter; with this growth, we are raising our annual guidance expectations.”

Results For Q1 Ended March 31, 2023
For the first quarter of 2023, total revenue increased $20.3 million, or 40 percent, to $70.7 million, up from $50.4 million in the prior year period. The increase included a corresponding North America same-store sales increase of 20 percent.

Net loss totaled $15.0 million, or a loss of $1.38 per share, compared to a loss of $15.2 million, or a loss of $1.51 per share, in the prior year period. The decrease in net loss resulted from $2.8 million of lower overall profitability, a $6.2 million increase in non-cash contingent consideration primarily related to the Rumble acquisition, and a $9.2 million decrease in non-cash equity-based compensation expense. 

Consistent with previous periods, the Rumble acquisition non-cash contingent consideration liability is market-to-market based on Xponential’s share price, contributing to a $15.7 million liability increase in the first quarter of 2023.

Adjusted Net Income for the first quarter 2023, which excludes the $15.7 million non-cash contingent consideration related primarily to the Rumble acquisition and $0.6 million related to the re-measurement of the company’s tax receivable agreement, was $1.3 million, or a loss of $0.02 per basic share, on a share count of 30.8 million shares of Class A Common Stock.

Adjusted EBITDA, defined as net income (loss) before interest, taxes, depreciation and amortization, adjusted for equity-based compensation and related employer payroll taxes, acquisition and transaction expenses, litigation expenses, financial transaction fees and related expenses, and tax receivable agreement remeasurement, increased to $22.9 million, up from $14.5 million in the prior year period.

Liquidity and Capital Resources
As of March 31, 2023, the company had approximately $28.1 million in cash, cash equivalents, restricted cash, and $266.7 million in total long-term debt. Net cash provided by operating activities was $11.4 million for the three months ended March 31, 2023.

2023 Outlook
Based on the company’s performance in the first quarter and the beginning of the second quarter, Xponential increased its full-year 2023 guidance for system-wide sales, revenue and Adjusted EBITDA and re-affirmed guidance for net new studio openings as follows:

  • Net new studio openings in the range of 540 to 560, or an increase of 8 percent at the midpoint as compared to full year 2022;
  • North America system-wide sales in the range of $1.37 billion to $1.38 billion, or an increase of 33 percent at the midpoint as compared to full year 2022; this compares to previous guidance of $1.34 billion to $1.35 billion;
  • Revenue in the range of $290.0 million to $300.0 million, or an increase of 20 percent at the midpoint as compared to full year 2022; this compares to previous guidance of $285.0 million to $295.0 million; and
  • Adjusted EBITDA in the range of $102.0 million to $106.0 million, or an increase of 40 percent at the midpoint as compared to full year 2022; this compares to previous guidance of $101.0 million to $105.0 million.

Xponential Fitness’ boutiques include Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, Stride, Rumble, and BFT.

Photo courtesy Pure Barre