Xponential Fitness, Inc. reported total revenue for the fourth quarter of 2023 increased 27 percent to $90.2 million, up from $71.3 million in the prior-year corresponding period. The increase reportedly included a corresponding North America same-store sales increase of 14 percent.

  • North America system-wide sales increased 31 percent to $384.6 million for the quarter.
  • Reported North America same-store sales increased 14 percent, cycling growth of 17 percent in Q4 2022.
  • North America quarterly run-rate average unit volume (AUV) increased to $590,000 for Q4, compared to $522,000 in the prior-year quarter.

XPOF reported a net loss $9.1 million, or earnings of 10 cents per basic share, based on a share count of 30.9 million shares of Class A Common Stock, compared to a net loss of $0.4 million, or a loss of $1.13 per basic share, based on a share count of 26.8 million shares of Class A Common Stock in the prior-year period.

The higher net loss was the result of an $8.8 million increase in restructuring costs from the company-owned transition studios, $6.6 million of lower overall profitability, and a $4.9 million increase in impairment of goodwill and other assets; offset by an $8.8 million decrease in non-cash contingent consideration primarily related to the Rumble acquisition, and a $2.8 million decrease in non-cash equity-based compensation expense.

Adjusted net income for the fourth quarter, which excludes the $0.5 million non-cash contingent consideration gain related primarily to the Rumble acquisition, $0.1 million related to the re-measurement of the company’s tax receivable agreement, $4.9 million related to the impairment of goodwill and other assets, and $8.8 million related to restructuring and related charges, was $4.2 million, or earnings of 5 cents per basic share, on a share count of 30.9 million shares of Class A Common Stock.

Adjusted EBITDA, adjusted for equity-based compensation and related employer payroll taxes, acquisition and transaction expenses (income), employee retention credit, litigation expenses (outside of the ordinary course of business), financial transaction fees and related expenses, tax receivable agreement remeasurement, impairment of goodwill and other assets, and restructuring and related charges, increased to $30.7 million, up 38 percent from $22.2 million in the prior-year period.

Full Year Highlights

  • Xponential grew revenue 30 percent to $318.7 million;
  • North America system-wide sales increased 36 percent to $1.40 billion;
  • Reported North America same-store sales grew 16 percent, cycling growth of 25 percent in 2022;
  • Posted net loss of $1.7 million, or earnings of $1.18 per basic share, on a share count of 31.7 million shares of Class A Common Stock, compared to net income of $2.9 million, or a loss of 87 cents per basic share, on a share count of 25.3 million shares of Class A Common Stock;
  • Posted adjusted net income of $15.7 million, or earnings of 17 cents per basic share, compared to adjusted net income of $9.5 million, or a loss of 7 cents per basic share; and
  • Reported Adjusted EBITDA of $105.3 million, an increase of 42 percent, compared to $74.3 million.

“In 2023, we experienced substantial growth on both the top and bottom lines as members continued to demonstrate that they prioritize their health and wellness routines. We further streamlined our business and are operating from a position of strength as we leverage our operations,” said Anthony Geisler, CEO of Xponential. “We see this momentum carrying into 2024, and are confident that our optimized portfolio of global brands will deliver considerable margin expansion and operational cash flows.”

Liquidity and Capital Resources
As of December 31, 2023, the company had approximately $37.1 million of cash, cash equivalents and restricted cash and $328.5 million in total long-term debt.

Net cash provided by operating activities was $35.4 million for the full year ended December 31, 2023.

2024 Outlook
The company’s full-year 2024 outlook, 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, or an increase of 22 percent at the midpoint;
  • 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;
  • Share count of 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.

Image courtesy Xponential Fitness