XPOF Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Revenue: $60.7 million, down 21% year-over-year.
Adjusted EBITDA: $20.4 million, a decrease of 25% from the previous year, with an EBITDA margin of 34%.
System-wide Sales: $437 million in North America, up 2% year-over-year, but same-store sales declined by 6.2%.
Studio Count: 3,137 global studios, with 66 new openings in Q1, but 26 closures primarily in StretchLab, BFT, and Pure Barre.
Cash Position: Cash, cash equivalents, and restricted cash decreased to $21.5 million from $42.6 million year-over-year.

2. Strategic Updates and Business Highlights

Leadership changes included the appointment of Robert Julian as Interim CFO and Eric Quaid as CIO, with a new CMO starting in May.
Continued focus on integrated operations across marketing, technology, and brand building.
Club Pilates secured commitments for 160 future studio openings and expanded internationally into Mexico, Belgium, and Thailand.
Marketing initiatives included a new digital agency partnership and a CRM program aimed at improving member retention and lead conversion.

3. Forward Guidance and Outlook

Reaffirmed 2026 guidance:
- Expecting 150 to 170 net new studio openings.
- Projected North America system-wide sales between $1.72 billion and $1.8 billion.
- Total revenue forecasted between $260 million and $270 million, with Adjusted EBITDA expected to range from $100 million to $110 million.

4. Bad News, Challenges, or Points of Concern

Declining Same-Store Sales: Same-store sales down 6% overall and 4% for Club Pilates, attributed to tough year-over-year comparisons and challenges in lead generation.
Marketing Challenges: Decreased digital traffic due to changes in advertising algorithms at Meta and Google, impacting lead generation and conversion rates.
Increased Debt: Long-term debt rose to $523.7 million, primarily due to the retirement of convertible preferred securities.
Cash Flow Concerns: Drawn $10 million from a credit facility to maintain operational flexibility amid legal settlements and cash flow pressures.

5. Notable Q&A Insights

Member Retention: Strong retention rates were highlighted, with improvements noted in member loyalty and frequency of visits, particularly in Club Pilates.
Marketing Strategy: Emphasis on adjusting marketing strategies to improve lead generation and conversion, with a focus on organic traffic and targeted campaigns.
Franchisee Dynamics: No significant loss of franchisees reported; instead, efforts are being made to strengthen relationships with larger franchise partners.
Future Pricing Strategy: Planned modest price adjustments to align with market conditions, focusing on reducing the number of pricing tiers and eliminating excessive discounts.

Overall, while Xponential Fitness faced challenges in Q1 2026, particularly with same-store sales and marketing effectiveness, the company remains focused on strategic growth initiatives and reaffirmed its financial outlook for the year.

XPOF — Xponential Fitness, Inc.