8-K: Xponential Fitness Reports Mixed Q3 2025 Results

Xponential Fitness, Inc. announced its third quarter 2025 financial results, reporting a 10% increase in North America system-wide sales but a 2% decrease in reported revenue and a 1% decline in North America same store sales.

Summary

• North America system-wide sales increased 10% year-over-year to $432.2 million in Q3 2025.
• Quarterly Average Unit Volume (AUV) (run rate) grew 2% year-over-year to $668,000 in Q3 2025.
• Total members reached 796,000, an increase of 7% year-over-year.
• The company opened 78 gross new studios during Q3 2025.
• Reported revenue decreased 2% to $78.8 million in Q3 2025, down from $80.5 million in Q3 2024.
• North America same store sales decreased 1% in Q3 2025, compared to a 6% growth in Q3 2024.
• Net loss improved to $6.7 million, or a loss of $0.18 per basic share, from a net loss of $18.1 million, or $0.29 per basic share, in Q3 2024.
• Adjusted net income was $19.3 million, or adjusted net earnings of $0.36 per basic share, compared to an adjusted net loss of $0.3 million, or $0.05 per basic share, in Q3 2024.
• Adjusted EBITDA increased 9% to $33.5 million in Q3 2025, up from $30.8 million in Q3 2024.
• As of September 30, 2025, cash, cash equivalents and restricted cash totaled $41.5 million, with total long-term debt at $376.4 million.
• Net cash provided by operating activities was $17.6 million for the nine months ended September 30, 2025.
• The company reiterated its full-year 2025 guidance for net new studio openings (170-190), revenue ($300.0 million-$310.0 million), and Adjusted EBITDA ($106.0 million-$111.0 million), while updating North America system-wide sales guidance to $1.730 billion-$1.750 billion.

Sentiment

Score: 5

Explanation: The results are mixed. While adjusted profitability metrics improved and system-wide sales grew, reported revenue declined, same-store sales turned negative, and the full-year guidance for several key metrics (net new studio openings, revenue, adjusted EBITDA) indicates a projected decline compared to the prior year. The CEO's comments acknowledge "significant potential for improvement across our operations."

Positives

• North America system-wide sales increased 10% year-over-year to $432.2 million in Q3 2025, indicating strong brand demand.
• Quarterly AUV (run rate) grew 2% year-over-year to $668,000, reflecting continued studio performance.
• Total members increased 7% to 796,000, demonstrating customer acquisition and retention.
• Net loss significantly improved to $6.7 million in Q3 2025 from $18.1 million in Q3 2024.
• Adjusted net income turned positive at $19.3 million in Q3 2025, compared to an adjusted net loss of $0.3 million in the prior year.
• Adjusted EBITDA increased 9% to $33.5 million, showing improved operational efficiency on an adjusted basis.
• The company opened 78 gross new studios in Q3 2025, continuing its expansion strategy.

Negatives

• Reported revenue decreased 2% to $78.8 million in Q3 2025, primarily due to lower equipment and merchandise revenue.
• North America same store sales decreased 1% in Q3 2025, a significant deceleration from 6% growth in Q3 2024.
• Full-year 2025 guidance for net new studio openings projects a decrease of 37% at the midpoint compared to 2024.
• Full-year 2025 guidance for revenue projects a decrease of 5% at the midpoint compared to 2024.
• Full-year 2025 guidance for Adjusted EBITDA projects a decrease of 7% at the midpoint compared to 2024.
• The company carries $376.4 million in total long-term debt as of September 30, 2025.

Risks

• The outcome of ongoing and any future government investigations and litigation to which the company is subject.
• The ability to retain key senior management and key employees.
• Relationships with master franchisees, franchisees, and international partners.
• Difficulties and challenges in opening studios by franchisees.
• The ability of franchisees to generate sufficient revenues.
• Risks relating to expansion into international markets.
• Loss of reputation and brand awareness.
• Geopolitical uncertainty, including the impact of the presidential administration in the U.S., trade policies and tariffs, and the ongoing U.S. federal government shutdown.
• General economic conditions and industry trends.
• Other risks as described in SEC filings, including the Annual Report on Form 10-K for the full year ended December 31, 2024.
• High variability, complexity, and low visibility with respect to certain items such as taxes, TRA remeasurements, and income and expense from changes in fair value of contingent consideration from acquisitions, which could unpredictably and significantly impact future GAAP financial results.

Future Outlook

The company reiterated its guidance for net new studio openings, revenue, and adjusted EBITDA, and updated guidance for system-wide sales for full year 2025. The outlook projects 170 to 190 net new studio openings, North America system-wide sales of $1.730 billion to $1.750 billion, revenue of $300.0 million to $310.0 million, and Adjusted EBITDA of $106.0 million to $111.0 million. This guidance implies a decrease at the midpoint for net new studio openings (37%), revenue (5%), and Adjusted EBITDA (7%) compared to 2024, while system-wide sales are projected to increase by 12% at the midpoint.

Management Comments

• "Over my first 90 days, I've gained a much clearer picture of our strengths and opportunities ahead. This time has only reinforced my confidence in both the power of our brands and the commitment of our franchisees." Mike Nuzzo, CEO of Xponential Fitness, Inc.
• "That said, it is clear that there is significant potential for improvement across our operations, and I'm excited to work with the team to unlock and realize that value for all stakeholders." Mike Nuzzo, CEO of Xponential Fitness, Inc.

Industry Context

Xponential Fitness operates as a leading global franchisor of boutique health and wellness brands, including Pilates, barre, stretching, strength training, and yoga. The reported results reflect a mixed environment within the boutique fitness sector. While strong system-wide sales growth and member additions indicate continued consumer demand for specialized fitness experiences, the decline in reported revenue and negative same-store sales growth suggest challenges in equipment and merchandise sales, and potentially increased competition or market saturation impacting existing studio performance. The CEO's comments acknowledge the need for operational improvements, aligning with broader industry trends where differentiation and efficient operations are crucial for sustained growth.

Comparison to Industry Standards

• NA

Legal Proceedings

• The company is subject to ongoing and any future government investigations and litigation, the outcome of which could impact the business.

Stakeholder Impact

• Shareholders: Mixed financial results and a cautious full-year outlook could lead to volatility in investor sentiment and share price. Improved adjusted profitability is positive, but declining revenue and same-store sales present challenges.
• Franchisees: Continued system-wide sales growth and new studio openings indicate ongoing network expansion opportunities. However, the decline in same-store sales could signal operational pressures or increased competition for existing franchisees, necessitating support from the franchisor.
• Employees: The CEO's focus on "unlocking and realizing value for all stakeholders" and "significant potential for improvement across our operations" may imply future operational restructuring or efficiency initiatives that could impact employees.
• Customers: Growth in total members suggests continued appeal of the company's boutique fitness brands, but a decline in same-store sales could indicate varying customer engagement or satisfaction across the existing studio base.

Next Steps

• Host a conference call on November 6, 2025, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to discuss Q3 2025 financial results.
• Provide a telephonic replay of the conference call until 11:59 p.m. ET on Thursday, November 20, 2025.
• Include details of the corrections of 2024 financials in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.

Key Dates

Recommendation

The company exhibits mixed performance with strong system-wide sales growth and improved adjusted profitability, which are positive indicators. However, the decline in reported revenue and North America same-store sales, coupled with a full-year guidance that projects decreases in net new studio openings, revenue, and Adjusted EBITDA compared to the prior year, signals underlying operational challenges. The CEO's acknowledgment of "significant potential for improvement" suggests a turnaround effort is underway. Given these conflicting signals and the need for the new CEO's strategy to unfold, a "hold" recommendation is appropriate for investors to observe future performance and the effectiveness of management's initiatives before making a more definitive move.

Keywords

Xponential Fitness, XPOF, Q3 2025, financial results, earnings, system-wide sales, AUV, boutique fitness, franchising, health and wellness, Club Pilates, StretchLab, YogaSix, Pure Barre, BFT