Xponential Fitness Reports $98.7 Million Net Loss and $320.3 Million Revenue for 2024

Xponential Fitness, Inc. (XPO Inc.) reported a net loss of $98.7 million for the year ended December 31, 2024, compared to a net loss of $6.4 million in 2023. Total revenue for 2024 was $320.3 million, a slight increase of 0.8% from $317.9 million in 2023. This increase was primarily driven by a rise in franchise revenue (22% increase to $174.5 million), partially offset by decreases in equipment, merchandise, and other service revenues. The company attributed the decrease in other service revenue to a lower average number of company-owned transition studios and decreased vendor commission and brand access fee revenues.

Significant changes in the company's financial performance compared to the previous fiscal year included a substantial increase in operating costs and expenses (32.1% increase to $373.9 million), largely due to impairments of goodwill and other assets ($62.6 million in 2024 compared to $16.8 million in 2023), increased legal expenses and settlement accruals, and restructuring charges. The company also noted a decrease in cash provided by operating activities ($11.7 million in 2024 versus $32.7 million in 2023). The company divested its Stride and Row House brands in 2024, receiving no consideration for either divestiture. Additionally, the company announced the wind-down of AKT franchise operations.

During 2024, XPO Inc. experienced a significant leadership transition, with Mark King appointed as Chief Executive Officer in June 2024, replacing Brenda Morris who had served as interim CEO. Further, the company announced the resignation of its Chief Operating Officer and President in late 2024. In January 2025, four new senior executives were appointed, including a new President of North America, Chief Operating Officer of North America, Chief Technology Officer, and Chief Development Officer. The company also completed the acquisition of Lindora, a medically guided wellness and metabolic health solutions provider, on January 2, 2024, for $8.5 million in cash consideration plus up to $1 million in contingent consideration.

As of December 31, 2024, XPO Inc. had 2,758 studios operating in North America and 475 internationally. The company's member base increased by 15% year-over-year, and total in-studio and live stream visits reached 60 million, a 19% increase from 2023. Run-rate AUVs increased by 9% in the quarter ended December 31, 2024, compared to the same period in 2023. The company also highlighted its franchisee base, which grew to 1,648 franchisees in North America by December 31, 2024, and the 6,265 franchise licenses sold globally. The company's employee headcount at corporate headquarters was approximately 432 as of December 31, 2024.

The company acknowledged several risk factors, including dependence on franchisee performance, challenges in implementing its growth strategy, competition within the boutique fitness industry, and the impact of government investigations into its compliance with franchise disclosure laws. The company also noted that it had incurred operating losses in the past and may not achieve or maintain profitability in the future. The company stated that it believes its existing cash and cash equivalents will be sufficient to meet its anticipated cash needs for at least the next twelve months.