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Jun 30, 2024
Xponential Fitness Q2 2024 Earnings Report
Xponential Fitness's financial performance in Q2 2024 was marked by a revenue decrease of 1%, a net loss, but growth in North America system-wide sales and AUV.
Key Takeaways
Xponential Fitness reported a slight decrease in revenue and a net loss for Q2 2024, but experienced growth in North America system-wide sales and average unit volume. The company sold 87 franchise licenses and opened 108 new studios. Guidance for studio openings, revenue, and Adjusted EBITDA was lowered due to a second quarter shortfall and current business conditions.
Revenue decreased by 1% to $76.5 million.
North America system-wide sales increased by 24% to $421.5 million.
North America same store sales grew by 7%, compared to 15% growth in the prior year.
Net loss was $13.7 million, or a loss of $0.29 per basic share.
Xponential Fitness
Xponential Fitness
Xponential Fitness Revenue by Segment
Revenue by Segment
Franchise Revenue
CapyFin.comEquipment Revenue
CapyFin.comMerchandise Revenue
CapyFin.comFranchise Marketing Fund Revenue
CapyFin.comOther Service Revenue
CapyFin.com Forward Guidance
Xponential Fitness adjusted its full year 2024 guidance due to current business conditions and a second quarter shortfall. The updated guidance includes reduced expectations for gross new studio openings and revenue, while maintaining the North America system-wide sales outlook.
Positive Outlook
- North America system-wide sales are projected to increase by 22% compared to full year 2023.
- Adjusted EBITDA is expected to increase by 16% compared to full year 2023.
- Tax rate is expected to be in the mid-to-high single digits.
- Company anticipates $1.9 million in quarterly dividends paid related to the Company’s Convertible Preferred Stock, or $2.2 million if paid-in-kind.
- Share count of 31.8 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations.
Challenges Ahead
- Gross new studio openings are projected to be in the range of 500 to 520, a decrease of 8% at the midpoint compared to full year 2023.
- Revenue is projected to be in the range of $310.0 million to $320.0 million, a decrease of 1% at the midpoint compared to full year 2023.
- Adjusted EBITDA is projected to be in the range of $120.0 million to $124.0 million, compared to previous guidance of $136.0 million to $140.0 million.
- Retail softness impacted the second quarter.
- Leadership transition and previously announced regulatory investigations tempered the prior outlook.
Revenue & Expenses
Visualization of income flow from segment revenue to net income