Xponential Fitness Ups Full-Year Guidance on YTD Performance

Article From：SGB Media

 

 

Xponential Fitness, Inc. reported third-quarter total revenue increased 26 percent to $80.4 million, up from $63.8 million in the prior-year period. This increase included a corresponding North America same-store sales increase of 15 percent.

 

North America system-wide sales increased 35 percent to $356.7 million.

North America same-store sales increased 15 percent, compared to growth of 17 percent in Q3 of 2022.

North America quarterly run-rate average unit volume (AUV) of $564,000, compared to $489,000 in Q3 last year.

“Our KPIs continue to trend well in Q4 and we are confident we will close the year out on a high note,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “We have begun implementing the movement away from company-owned transition studios that we discussed during our Analyst and Investor Day in September; the impact of this right-sizing on our profitability in 2024 will be material.”

 

The net loss for the quarter totaled $5.2 million, or earnings of 91 cents per basic share on 32.3 million shares of Class A Common Stock, compared to a net loss of $13.1 million, or a loss of $1.53 per basic share on a share count of 26.2 million shares of Class A Common Stock, in the prior-year period. The lower net loss was the result of an $18.2 million decrease in non-cash contingent consideration, primarily related to the Rumble acquisition, and a $0.7 million decrease in non-cash equity-based compensation expense; offset by $3.4 million of lower overall profitability, a $6.7 million increase in restructuring costs from company-owned transition studios, and $0.9 million increase in write-down of goodwill and brand assets.

 

Adjusted net income for the third quarter, which excludes the $1.9 million non-cash contingent consideration gain related primarily to the Rumble acquisition, $1.8 million related to the re-measurement of the company’s tax receivable agreement, $4.6 million related to the write-down of goodwill and brand assets, and $6.7 million related to restructuring charges, was $6.0 million, or adjusted earnings of 9 cents per basic share, on a share count of 32.3 million shares of Class A Common Stock.

 

Adjusted EBITDA, 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 related expenses, tax receivable agreement re-measurement, write-down of goodwill and brand assets, and restructuring charges, increased 33 percent to $26.5 million, up from $20.0 million in the prior year period.

 

Balance Sheet

The company had approximately $51.9 million of cash, cash equivalents and restricted cash and $329.7 million in total long-term debt at quarter-end. Net cash provided by operating activities was $38.2 million for the nine months ended September 30, 2023.

 

2023 Outlook

Based on the company’s performance year-to-date, Xponential reported it is increasing its full-year 2023 guidance for revenue and tightening the top-end ranges for new studio openings, system-wide sales and Adjusted EBITDA as follows:

 

New studio openings in the range of 550 to 560, or an increase of 9 percent at the mid-point as compared to full year 2022; this compares to previous guidance of 540 to 560;

North America system-wide sales in the range of $1.390 billion to $1.395 billion, or an increase of 35 percent at the mid-point as compared to full year 2022; this compares to previous guidance of $1.385 billion to $1.395 billion;

Revenue in the range of $305.0 million to $310.0 million, or an increase of 26 percent at the mid-point as compared to full year 2022; this compares to previous guidance of $295.0 million to $305.0 million; and

Adjusted EBITDA in the range of $104.5 million to $106.5 million, or an increase of 42 percent at the mid-point as compared to full year 2022; this compares to previous guidance of $102.5 million to $106.5 million.

Additional key assumptions for full year 2023 include:

 

Tax rate in the mid-to-high single digits; and

Share count of 31.7 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations. A full explanation of the company’s share count calculation and associated EPS and Adjusted EPS calculations can be found in the tables at the end of this press release; and $1.9 million in quarterly dividends paid related to the company’s Convertible Preferred Stock.