Xponential Fitness Inc. reported sales grew 78 percent in the fourth quarter and 45 percent in the year ended December 31.
Xponential Fitness’ portfolio of brands includes Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble, and BFT.
Financial Highlights Q4 2021 Compared to Q4 2020
- Grew revenue 78 percent to $49.4 million;
- Increased North American system-wide sales1 by 76 percent to $213.0 million;
- Reported North American same-store sales growth of 53 percent, compared to a decline of 35 percent;
- Reported North American quarterly run-rate average unit volume (AUV) of $446,000, compared to $286,000;
- Posted net loss of $29.8 million, or $2.45 per share, on a share count of 22.6 million shares of Class A Common Stock compared to a net loss of $5.1 million;
- Posted Adjusted Net Loss of $6.1 million, or $0.21 per share, compared to an Adjusted Net Loss of $5.1 million; and
- Reported Adjusted EBITDA of $8.6 million compared to $3.3 million.
Financial Highlights FY 2021 Compared to FY 2020
- Grew revenue 45 percent to $155.1 million;
- Increased North American system-wide sales1 by 60 percent to $708.6 million;
- Reported North American same-store sales growth of 41 percent, compared to a decline of 34 percent;
- Posted net loss of $51.4 million, or $2.85 per share, on a share count of 22.4 million shares of Class A Common Stock compared to a net loss of $13.6 million;
- Posted Adjusted Net Loss of $24.4 million, or $0.80 per share, compared to an Adjusted Net Loss of $24.6 million; and
- Reported Adjusted EBITDA of $27.3 million, compared to $9.8 million.
“2021 was a milestone year for Xponential Fitness,” said Anthony Geisler, CEO, Xponential Fitness, Inc. “In addition to successfully completing our initial public offering in July, we reported record financial results. Our strong performance was driven largely by consistent growth in our membership base. Actively paying members and visitation rates grew by approximately 70 percent and 50 percent, respectively, in the fourth quarter compared to the prior year, as boutique fitness customers returned to the in-person fitness classes offered by our exceptional portfolio of ten complementary brands.”
Geisler continued, “Overall, in 2021, we were able to demonstrate the resilience of our business, and the momentum experienced in the fourth quarter places Xponential in a strong position in 2022. Our revenue and Adjusted EBITDA are significantly higher today than they were prior to the COVID-19 pandemic, up 20 percent and 66 percent, respectively, in 2021 vs. 2019. We enter 2022 with the largest studio count in our company’s history and we anticipate opening over 500 new studios this year. We look forward to continuing to drive revenue growth and margin expansion as we scale our platform in 2022.”
Results for the Fourth Quarter Ended December 31, 2021
(Information includes the contribution of BFT, Xponential’s tenth brand, from its acquisition in October 2021 onwards)
For the fourth quarter of 2021, total revenue increased $21.6 million, or 78 percent, to $49.4 million, up from $27.8 million in the prior-year period. This increase included a corresponding North American same-store sales increase of 53 percent.
Net loss totaled $29.8 million, or a loss of $2.45 per share, compared to a loss of $5.1 million in the prior-year period. The increase was the result of $2.8 million of higher overall profitability, offset by a $22.5 million increase in non-cash contingent consideration primarily related to the Rumble acquisition, and a $5.1 million increase in non-cash equity-based compensation expense. Please see the table at the back of the release for a calculation of the basic and diluted loss per share for the quarter ended December 31, 2021.
Consistent with previous periods, the Rumble acquisition non-cash contingent consideration earn-out liability is being marked-to-market based on Xponential’s share price. With the share price increase over 60 percent between September and December 2021, a corresponding increased earn-out liability was recorded. As part of this adjustment, Xponential’s total share count does not increase until the shares vest, which occurs at a weighted average share price of $61.90.
Adjusted Net Loss for the fourth quarter 2021, which excludes the $22.4 million non-cash contingent consideration related primarily to the Rumble acquisition and $1.3 million related to the re-measurement of the company’s tax receivable agreement, was $6.1 million, or $0.21 per share, on a share count of 22.6 million shares.
Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation, and amortization, adjusted for equity-based compensation, acquisition & transaction expenses, management fees, integration and related expenses, litigation expenses, employee retention credit and tax receivable agreement re-measurement, increased to $8.6 million, up from $3.3 million in the prior-year period.
Results for the Full Year Ended December 31, 2021
(Consistent with the fourth quarter of 2021, all information below includes the contribution of BFT, Xponential’s tenth brand, from its acquisition in October 2021 onwards.)
For the full year 2021, total revenue increased $48.5 million, or 45 percent, to $155.1 million, up from $106.6 million in 2020. This increase in revenue included a corresponding North American same-store sales increase of 41 percent year-over-year.
Net loss totaled $51.4 million, or a loss of $2.85 per share, compared to a loss of $13.6 million. The increase was the result of $6.8 million of higher overall profitability, a $36.6 million increase in non-cash contingent consideration related to the company’s Rumble acquisition, and a $7.9 million increase in non-cash equity-based compensation expense.
Adjusted Net Loss for the full year 2021, which excludes the $25.6 million non-cash contingent consideration related primarily to the Rumble acquisition and $1.4 million related to the re-measurement of the company’s tax receivable agreement, was $24.4 million, or $0.80 per share, on a share count of 22.4 million shares.
Adjusted EBITDA as defined above increased to $27.3 million, up from $9.8 million in the prior year.
Liquidity and Capital Resources
As of December 31, 2021, the company had approximately $21.3 million of cash and cash equivalents and $130.9 million in total debt. Net cash provided by operating activities was $14.5 million for the full year ended December 31, 2021.
Full-Year 2022 Outlook
- New studio openings in the range of 500-to-520, or an increase of 81 percent at the midpoint as compared to full-year 2021;
- North American system-wide sales in the range of $995.0 million to $1.005 billion, or an increase of 41 percent at the midpoint as compared to full-year 2021;
- Revenue in the range of $201.0 million to $211.0 million, or an increase of 33 percent at the midpoint as compared to full-year 2021; and
- Adjusted EBITDA in the range of $67.0 million to $71.0 million, or an increase of 153 percent at the midpoint as compared to full-year 2021.
Additional key assumptions for full-year 2022 include:
- Tax rate of approximately 5 percent;
- The share count of 22.6 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations; and
- $3.25 million in quarterly dividends paid related to the $200 million Convertible Preferred Stock issued in connection with the IPO.
Photo courtesy Xponential Fitness