Xponential Fitness, Inc. saw total first-quarter revenue increase 12 percent to $79.5 million, up from $70.7 million in the prior-year Q1 period. The increase was primarily due to the rise in the number of operating studios and a North America same-store sales increase of 9 percent.

  • The company reportedly increased first-quarter North America system-wide sales of 25 percent to $401.1 million.
  • North America same-store sales growth was 9 percent, cycling growth of 19 percent in the year-ago Q1 period.
  • Reported North America quarterly run-rate average unit volume (AUV)3 of $596,000, compared to $547,000 in Q1 last year.

Net loss for the quarter totaled $4.4 million, or a loss of 30 cents per basic share, compared to a net loss of $15.0 million, or a loss of $1.38 per basic share, in the prior-year Q1 period. The improvement in the net loss year-over-year was a result of $5.6 million of higher overall profitability, an $11.2 million decrease in acquisition and transaction expenses, which includes non-cash contingent consideration primarily related to the Rumble acquisition, and a $2.1 million decrease in non-cash equity-based compensation expense; offset by an $8.1 million increase in restructuring and related costs from company-owned transition studios and a $0.3 million increase in loss on brand divestiture.

Adjusted net income for the first quarter was $9.1 million, or earnings of 15 cents per basic share, on a share count of 31.1 million shares of Class A Common Stock and excludes the $4.5 million in acquisition and transaction expenses primarily related to the non-cash contingent consideration for the Rumble acquisition, $0.6 million expense related to the re-measurement of the company’s tax receivable agreement, a $0.3 million loss on brand divestiture, and $8.1 million related to restructuring and related charges.

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 (outside of the ordinary course of business), financial transaction fees and associated expenses, tax receivable agreement re-measurement, loss on brand divestiture, and restructuring and related charges, increased to $29.8 million in Q1, up 30 percent from $22.9 million in the prior-year Q1 period.

Liquidity and Capital Resources
XPO had approximately $27.2 million in cash, cash equivalents and restricted cash and $331.4 million in total long-term debt at quarter-end.

Net cash provided by operating activities was $2.7 million for the three months ended March 31, 2024.

“2024 is off to a strong start,” said CEO Anthony Geisler, Xponential Fitness, Inc. “Adjusted EBITDA margins in the first quarter expanded to 38 percent of revenue, fueled by continued growth in our studio footprint and leaner operating expenses.”

2024 Outlook
The company is re-affirming its full-year 2024 guidance, which compares to 2023 results as follows:

  • Gross new studio openings in the range of 540 to 560;
  • North America system-wide sales in the range of $1.705 billion to $1.715 billion;
  • Revenue in the range of $340.0 million to $350.0 million, or an increase of 8 percent at the midpoint, and
  • Adjusted EBITDA in the range of $136.0 million to $140.0 million, or an increase of 31 percent at the midpoint.

Additional key assumptions for the full year 2024 include:

  • Tax rate in the mid-to-high single digits;
  • 31.5 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations and
  • $1.9 million in quarterly dividends paid related to the company’s Convertible Preferred Stock.

XPO said it is not able to provide a quantitative reconciliation of the estimated full-year Adjusted EBITDA for the fiscal year ending December 31, 2024 without unreasonable efforts to the most directly comparable GAAP financial measure due to the high variability, complexity and low visibility of certain items such as taxes, TRA re-measurements and income and expense from changes in fair value of contingent consideration from acquisitions.

“We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors,” the company wrote in a press release.

All financial data refer to global numbers unless otherwise noted. All KPI information is presented on an adjusted basis to include historical information of Lindora before the company’s acquisition in January 2024 and excludes historical information of Stride prior to its divestiture by the company in February 2024.

Image courtesy Xponential Fitness, Inc.