Xponential Fitness’ Q3 Revenues Vault 60 Percent

Xponential Fitness Inc. reported revenue grew 60 percent in the third quarter with North American system-wide sales ahead 93 percent year over year.

Xponential Fitness’ portfolio of brands includes Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble, and BFT.

Financial Highlights: Q3 2021 Compared to Q3 2020

  • Grew revenue 60 percent year-over-year to $40.9 million.
  • Increased North American system-wide sales by 93 percent year-over-year to $192.4 million.
  • Reported North American same-store sales growth of 65 percent from the prior-year period.
  • Posted net loss of $8.9 million, or $0.38 per share, compared to a net loss of $1.9 million in the prior-year period.
  • Posted Adjusted Net Loss of $5.8 million, or $0.31 per share on a share count of 22.1 million shares, compared to an Adjusted Net Loss of $7.0 million in the prior-year period.
  • Reported Adjusted EBITDA of $6.8 million, compared to $1.5 million in the third quarter of 2020.

Q3 2021 Operating Highlights

  • Opened 68 new studios, increasing total studio count to 1,907 at the end of the third quarter of 2021.
  • Sold 248 franchise licenses, compared to 50 in the third quarter of 2020.
  • Reported fifth consecutive quarter of sequential North American system-wide sales improvement, representing consistent system recovery since the second quarter of 2020.
  • Nearly 90 percent North American run-rate average unit volume (AUV) recovery compared to January 31, 2020.

“Xponential achieved strong results for the third quarter 2021, including net revenues of $40.9 million, an increase of 60 percent year-over-year and up 14 percent sequentially,” said Anthony Geisler, Chief Executive Officer of Xponential Fitness, Inc. “We are thrilled with the continued momentum of our business, with third quarter actively paying members and visitation rates increasing by approximately 60 percent and 70 percent, respectively, year-over-year. Brick-and-mortar gyms are back, and boutique fitness customers are excited to return to in-person fitness across our growing franchised studio base.”

“Our strong financial performance, combined with our operational excellence, have paved the way for continued momentum in the fourth quarter. We were thrilled to welcome our 10th brand, BFT, in early October. BFT has transformed our global growth trajectory, adding over 130 new international locations, and bringing a new modality, functional training, to our family of brands. In addition, we recently announced a strategic partnership with LA Fitness, providing our franchisees with even greater opportunities to expand within their protected geographic territories by opening studios within over 500 LA Fitness and City Sports Club locations. I’d like to thank the entire Xponential Fitness team and all of our franchisees for their hard work and dedication to our business,” Geisler concluded.

Results for the Third Quarter Ended September 30, 2021

Please note that all information discussed herein does not include contributions from acquisitions or partnerships made subsequent to the third quarter, including the Company’s newest brand BFT, which was acquired in October 2021, and its partnership with Fitness International, for which studio build out will not begin until Q1 2022.

For the third quarter 2021, total revenue increased $15.3 million, or 60 percent, to $40.9 million, up from $25.6 million in the prior-year period. This increase in revenue included a corresponding North American same store sales increase of 65 percent year-over-year.

Net loss totaled $8.9 million, or a loss of $0.38 per share, compared to a loss of $1.9 million in the prior-year period. The increase in net loss year-over-year was the result of $4.1 million of higher overall profitability, offset by a $3.1 million increase in non-cash equity-based compensation expense and an $8.0 million increase in non-cash contingent consideration related to Xponential’s acquisitions.

Adjusted Net Loss for the third quarter 2021, which excludes the $2.9 million non-cash contingent consideration and $0.2 million related to tax receivable agreement (TRA) remeasurement, was $5.8 million, or $0.31 per share on a share count of 22.1 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, and TRA remeasurement, increased to $6.8 million, up from $1.5 million in the prior-year period.

Liquidity and Capital Resources

As of September 30, 2021, the Company had approximately $25.5 million of cash and cash equivalents and $94.0 million in total debt. Net cash provided by operating activities was $3.9 million for the nine months ended September 30, 2021.

2021 Outlook

Based on current business conditions, the BFT acquisition, and future expectations as of the date of this release, the Company is increasing its outlook for the fiscal year ending December 31, 2021.

Full year 2021 guidance is as follows:

  • New studio openings in the range of 230 to 250; this compares to previous guidance of 215 to 235 studio openings;
  • North America system-wide sales in the range of $690.0 million to $700.0 million, or an increase of 57 percent at the midpoint as compared to full year 2020;
  • Revenue in the range of $147.0 million to $148.5 million, or an increase of 39 percent at the midpoint as compared to full year 2020; this compares to previous guidance of $135.5 million to $137.0 million; and
  • Adjusted EBITDA in the range of $25.0 million to $26.0 million, or an increase of 160 percent at the midpoint as compared to full year 2020; this compares to previous guidance of $22.0 million to $23.0 million.

 

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