On August 1, 2024, Xponential Fitness Inc (XPOF, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Xponential Fitness Inc, a leading global franchisor of boutique health and wellness brands, reported a decrease in total revenue and a net loss for the quarter, missing analyst estimates.
Company Overview
Xponential Fitness Inc is a curator of boutique fitness brands, including Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, Stride, Rumble, and BFT. The company's primary revenue source is franchise income.
Q2 2024 Financial Performance
For the second quarter of 2024, Xponential Fitness Inc reported total revenue of $76.5 million, a 1% decrease from $77.3 million in the same period last year. This decline was primarily due to a $6.5 million decrease in other service revenue, attributed to the company's strategic shift away from company-owned transition studios.
The company reported a net loss of $13.7 million, or $0.29 per basic share, compared to net income of $27.5 million, or $1.44 per basic share, in the prior year period. The net loss was driven by lower overall profitability, a significant decrease in acquisition and transaction income, increased restructuring charges, and impairment of goodwill and other assets.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $76.5 million | $77.3 million |
| Net Income (Loss) | $(13.7) million | $27.5 million |
| Adjusted EBITDA | $25.4 million | $25.3 million |
Liquidity and Capital Resources
As of June 30, 2024, Xponential Fitness Inc had approximately $26.0 million in cash, cash equivalents, and restricted cash, and $330.1 million in total long-term debt. Net cash provided by operating activities was $5.7 million for the six months ended June 30, 2024.
Challenges and Strategic Shifts
The company faced several challenges during the quarter, including retail softness, leadership transition, and regulatory investigations. These factors contributed to the financial shortfall and prompted the company to adjust its full-year 2024 guidance.
“We saw some of the same retail softness that other consumer companies experienced during the second quarter,” commented John Meloun, CFO of Xponential Fitness, Inc. “When taken together with the effects of our leadership transition and previously announced regulatory investigations, it makes sense to temper elements of our prior outlook.”
Conclusion
Xponential Fitness Inc's Q2 2024 financial results reflect the impact of strategic shifts and external challenges. While the company reported a net loss and a slight decrease in revenue, it maintained stable Adjusted EBITDA. Investors and stakeholders will be closely monitoring the company's performance and strategic adjustments in the coming quarters.
Explore the complete 8-K earnings release (here) from Xponential Fitness Inc for further details.
