Xponential Fitness, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, total revenue was $80.5 million, a slight increase of $56,000 (0.1%) from $80.4 million in Q3 2023. Franchise revenue surged to $44.5 million, up 22.1% from $36.4 million in the prior year, driven by higher same-store sales and an increase in operating studios. Equipment revenue also rose to $14.7 million, a 16.8% increase from $12.6 million in Q3 2023. However, total operating costs and expenses increased significantly to $86.9 million from $73.0 million, leading to an operating loss of $6.4 million, a stark contrast to the operating income of $7.5 million reported in Q3 2023. The net loss for the quarter was $18.0 million, compared to a net loss of $5.2 million in the same period last year.

For the nine months ended September 30, 2024, total revenue increased to $236.5 million, up 3.5% from $228.5 million in 2023. Franchise revenue for this period rose 24% to $129.2 million, while equipment revenue increased by 4% to $41.5 million. Despite the revenue growth, the company reported a net loss of $36.0 million for the nine months, a significant decline from the net income of $7.4 million in the same period of 2023.

Strategically, Xponential Fitness has made notable acquisitions and divestitures. The company acquired Lindora Franchise, LLC for $8.5 million in January 2024, enhancing its brand portfolio. Additionally, it divested the Stride and Row House brands in early 2024, with no financial consideration received. The company also announced the winding down of AKT franchise operations during Q3 2024, which included the termination of franchise agreements.

The company has been undergoing a restructuring plan initiated in Q3 2023, aimed at exiting company-owned transition studios and reducing costs. Restructuring charges for the nine months ended September 30, 2024, totaled $21.4 million, compared to $6.3 million in the same period of 2023. The restructuring is expected to yield annualized savings of approximately $13.5 million to $15.5 million.

As of September 30, 2024, Xponential Fitness reported total current assets of $95.6 million, down from $97.2 million at the end of 2023, while total liabilities decreased to $595.5 million from $616.8 million. The total stockholders' deficit attributable to the company increased to $(155.7 million) from $(125.2 million) at the end of 2023. The company continues to focus on expanding its franchise operations, with a commitment to open additional studios both domestically and internationally.