XPOF

Xponential Fitness faced a challenging second quarter, with management citing a difficult consumer environment and ongoing top-of-funnel pressure as key drivers behind the double-digit revenue decline and margin compression. CEO Michael Nuzzo highlighted weaker-than-expected same-store sales, particularly at Club Pilates, and continued headwinds in new customer acquisition. Merchandise transition challenges and increased marketing investments also weighed on profitability. Interim CFO Robert Julian acknowledged that elevated legal expenses and the transition to an outsourced merchandise model contributed to the quarter’s underperformance, stating, "We are actively implementing initiatives to improve execution and enhance performance, although the pace of the improvement has been slower than originally anticipated." Is now the time to buy XPOF? Find out in our full research report (it’s free). Revenue: $65.97 million vs analyst estimates of $64.39 million (13.4% year-on-year decline, 2.5% beat) Adjusted EPS: $0.02 vs analyst expectations of $0.13 (84.9% miss) Adjusted EBITDA: $21.94 million vs analyst estimates of $26.29 million (33.3% margin, 16.6% miss) EBITDA guidance for the full year is $94 million at the midpoint, below analyst estimates of $103.5 million Operating Margin: 14.4%, down from 19.5% in the same quarter last year Market Capitalization: $207.7 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. John Heinbockel (Guggenheim Partners) questioned how management plans to reverse negative comps at Club Pilates and whether flat or modestly positive comps are sufficient for franchisee health. CEO Michael Nuzzo responded that reliable studio economics and strong AUVs remain central, and double-digit comps are no longer required for attractive franchisee returns. John Heinbockel (Guggenheim Partners) also pressed on the normalization of SG&A and the outlook for positive cash flow as legal costs subside. Interim CFO Robert Julian explained that recurring SG&A is improving and projected cash flow should turn positive in 2027 as non-recurring legal expenses decline. Arpine Kocharyan (UBS) sought detail on assumptions for same-store sales trends in the second half and what is implied for Club Pilates. Julian stated that guidance assumes trends will remain similar to the first half, with no improvement embedded until results are visible. Arpine Kocharyan (UBS) further asked about net unit growth and the impact of closures. Nuzzo replied that closure rates are stable, and the focus is on supporting new studio openings, with most future growth coming from existing franchisees. Noah Zatzkin (KeyBanc Capital Markets) inquired about the timeline for merchandise revenue normalization and ROI on increased marketing. Nuzzo stated that marketing spend has boosted paid leads, and management aims to restore merchandise contribution to normal levels in the second half, but improvement is not yet certain. Looking ahead, the StockStory team will be closely monitoring (1) progress in stabilizing same-store sales through new digital and marketing initiatives, (2) resolution of outsourced merchandise execution issues and their impact on both franchisee and corporate profitability, and (3) the pace of domestic and international studio expansion, especially in light of the new Spartan Fitness Holdings partnership. Developments in the ongoing strategic alternatives review will also be an important area to watch. Xponential Fitness currently trades at $4.95, down from $6.36 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Investor Relations - Patricia Nir Chief Executive Officer - Mike Nuzzo Interim Chief Financial Officer - Robert Julian Operator: Good afternoon. Welcome to Xponential Fitness' Second Quarter 2026 Earnings Call. [Operator Instructions] Please note that this event is being recorded. I will now hand over to Patricia Nir of ADDO Investor Relations. Please go ahead. Patricia Nir: Thank you, operator. Good afternoon, and thank you all for joining our conference call to discuss Xponential Fitness' second quarter 2026 financial results. I am joined by Mike Nuzzo, Chief Executive Officer; and Robert Julian, Interim Chief Financial Officer. A recording of this call will be posted on the investors section of our website at investor.xponential.com. We remind you that during this conference call, we'll make certain forward-looking statements, including discussions of our business outlook and financial projections. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause our actual results to differ materially from such expectations. For a more detailed description of these risks and uncertainties, please refer to our most recent annual report on Form 10-K for the year ended December 31, 2025, filed with the SEC and subsequent filings with the SEC. We assume no obligations to update the information provided on today's call, except as required by applicable law. In addition, we will be discussing certain non-GAAP financial measures in this conference call. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures that we provide. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release that was issued earlier today prior to this call and in the investor presentation available on our website. We are not able to provide a quantitative reconciliation of forward-looking non-GAAP measures without unreasonable efforts to the most directly comparable GAAP financial measures due to the high variability, complexity, and low visibility with respect to certain items. Please note that all numbers reported in today's prepared remarks refer to global figures unless otherwise noted. As a reminder, in order to ensure period-over-period comparability and consistent with our reporting method since IPO, we report all KPIs on a fully pro forma basis. Meaning for the full KPI history presented, we only include brands that are under our ownership as of the current reporting period. For the period ended June 30, 2026, this includes BFT, Club Pilates, Pure Barre, StretchLab, and Yoga Six. I will now turn the call over to Mike Nuzzo, CEO of Xponential Fitness. Michael Nuzzo: Thanks, Patricia. Good afternoon, and thank you all for joining us today. Over the past decade, Xponential built the largest global boutique fitness platform through an exceptional franchise model with strong brand appeal. That growth was achieved largely through unit expansion and brand development. As we reach greater scale and the consumer environment shifts, our priorities have naturally evolved. Today, our focus is on optimizing the business, driving stronger organic growth, improving franchisee economics, and creating a more consistent member experience across our brands. To support this phase, we've assembled a leadership team with deep operating experience. As I introduced Robert, Eric, and Steph on our last call, I want to officially welcome Danielle Parra as President. Danielle brings extensive experience across all major franchise disciplines, including marketing, operations, and brand strategy, with previous leadership roles at GoTo Foods, Icon Automotive, and Caesars Entertainment. She has hit the ground running, and her early work is helping advance several important initiatives. She's leading efforts to strengthen franchisee relationships, accelerate studio expansion, improve brand positioning, and drive collaboration across our field operations team to deliver more coordinated support. Overall, the team that we've assembled over the past year asks the hard questions, challenges assumptions, and is relentlessly focused on collaboration, franchise support, and execution. Ultimately, our objective is straightforward. Build a healthier, more productive franchise system that delivers sustainable membership growth and long-term value creation. While we are focused on improving system-level execution, we continue to see strong evidence of the brand affinity and community engagement that underpin our long-term opportunity. The senior team and I witnessed this firsthand in June at the Pure Barre 25th anniversary event in Manhattan, where we hosted 211 franchise owners, members, teachers, media influencers, and partners. The event featured curated Pure Barre workouts, brand activations, and live stream experiences. Social media from the event drew over 1.8 million views. Moments like this reinforce the strength of our brands, the loyalty of our communities, and the meaningful impact they have on health and wellness routines. We are also finding new ways to expand our reach. In July, Club Pilates collaborated on the launch of Starbucks protein coffee drinks, giving us access to approximately 120,000 Starbucks and Pepsi employees through an exclusive introductory Club Pilates offer. Starbucks will also bring influencers into Club Pilates studios to experience the workout and highlight the lifestyle connection between Pilates, wellness, and Starbucks protein coffee. We view this as a strong example of the kind of consumer brand collaboration that can introduce more people to our brands. At the same time, we recognize there is more work ahead to enhance our execution and drive growth. We are focused on the areas that can most directly improve our business, strengthening top-of-funnel, enhancing the digital journey, improving our franchise support across key operating functions, and evaluating each brand's growth and positioning for long-term health. This is an important time at the company as we set the course to maximize value for our shareholders, franchisees, and employees. I'll now turn to a more detailed discussion of the quarter. Domestically, we delivered net unit growth of 16, and internationally, net unit growth of 12. Year-to-date, we have grown net units by 39 domestically and 29 internationally and have a total of 3,165 open studios globally. We are also excited to announce a partnership with our largest Club Pilates franchisee, Spartan Fitness Holdings, through which we expect to open 117 total studios across Texas, Florida, Massachusetts, Connecticut, Missouri, Illinois, Indiana, Ohio, New Jersey, and Pennsylvania over the next six years. Partnerships like this, driven by the continued demand of Pilates, are a key element of our long-term growth and emphasize the strength of the Club Pilates brand. We continue to show momentum internationally as well. We now have over 500 international studios open, with Club Pilates opening its 200th studio in June, and we see great white space opportunity in both current and new markets across the globe. We again saw year-over-year increases in leads from paid media through the continued progress with our national marketing agency that helped partially offset year-over-year declines in organic leads. As in Q1, Q2 total company member retention improved, increasing 28 basis points year-over-year, continuing to reflect our strong member loyalty and affinity for our brands. Our Q2 same-store studio sales were down 6.8% overall and down 5% for Club Pilates, remaining below our expectations and modestly weaker than Q1 trends, with the primary impact coming from top-of-funnel pressure. The quarter also reflected a more challenging environment, consistent with the broader fitness and consumer discretionary sectors, where companies have pointed to more selective spending, higher promotional activity, and pressure on new customer acquisition heading into the summer months. Against this backdrop, we remained focused on our initiatives within our control. This includes several initiatives intended to support franchisee performance. On the digital front, we implemented our new StretchLab digital experience in July and completed our Club Pilates website redesign, which is now being programmed by our tech team for a Q3 launch. These exciting changes are expected to have a positive impact on same-store sales by improving member navigation, reducing friction in the member journey, and supporting higher lead submission. We also expanded our remodel program in Club Pilates, which we believe will elevate existing studios and have a positive impact on our member experience. All new Club Pilates studio openings will also feature our new design experience. Finally, we continue to expand our engagement with studio operators and our field support teams with a specific focus on improving lead-to-membership conversion. As an example, the Pure Barre and Yoga Six teams are using data tools to coach studios on adding more class types that drive the highest new member conversion. Overall, our focus remains on driving strong, durable, long-term unit growth while improving studio-level performance. We continue to see healthy development activity supported by a strong pipeline of new Club Pilates studios in various stages of development. Our teams are supporting franchisees in site identification, lease negotiation, and build-out planning. Importantly, our new studio growth runway is charted for the next five-plus years with a great mix of both smaller and larger scale franchise partners. Organic lead trends remain a key top-of-funnel opportunity. We are actively responding with dedicated AI SEO resources, technology tools designed to optimize organic lead flow, and updated website experiences across our brands. On a weekly basis, we are now producing compelling, unique content for each of our brands, targeting the most popular fitness AI search subjects. While these initiatives are still early, we believe improving the digital experience for customers will be an important way to support franchisees, since virtually all new members start their journey on our web and mobile digital properties. New member conversion from lead to subscription is another meaningful top-of-funnel opportunity to utilize technology and RDO field support in partnership with our franchisees. As I mentioned, our field teams are using new reporting and dashboards to coach franchisees on ways to optimize membership conversion. We are also supporting partnering franchisees who are piloting AI-enabled tools that interface with studio member management systems and provide more automated advanced CRM capabilities for both new member and retention efforts. We intend to provide technical leadership, guidance, and recommended solution options while allowing our franchisees to use the tool that matches their local needs best. Merchandise is a smaller part of our business, it remains a contributor to profitability and to the franchisee experience. That said, the recent transition to our outsourced logistics partner has created initial challenges in vendor operations, sourcing, and execution that have negatively impacted our results. Our supply chain team is working closely with this vendor on process fixes while also evaluating additional ways to improve reliability and performance over time. All these initiatives are progressing, they will take time to translate into financial results. As Robert will discuss in more detail, we are lowering our full year guidance primarily due to our second quarter performance, as well as our current expectations around same-store sales and merchandise revenue in the second half of the year. We will also continue with a level of elevated paid media and digital spend that will help bridge us to the expected improvement in organic lead performance later in the year. We also remain focused on identifying additional savings and efficiency opportunities, including ways to better leverage technology to support our efforts. We have effective leadership in place to drive action, we are committed to strengthening the business and creating long-term value. Before I hand the call over to Robert, I want to comment on our strategic alternatives review. As we shared in April, our board initiated this review to explore alternatives to maximize shareholder value, led by our independent directors and supported by Jefferies as financial advisor. The board remains actively engaged in a review of strategic alternatives designed to maximize long-term shareholder value, including strategic, financial, and operational alternatives. The process may include a sale of the company, a merger, or another strategic or financial transaction. The process is ongoing, we do not intend to comment further until it has concluded. We ask that you keep your questions during Q&A focused on the quarter. With that, I will turn the call over to Robert. Robert Julian: Thank you, Mike, and good afternoon, everyone. Let's begin with an overview of our second quarter performance and then discuss our 2026 guidance. I'd also like to mention that unless otherwise stated, all financial remarks refer to the second quarter of 2026, and all comparisons will be year-over-year comparisons versus the second quarter of 2025. With that, let's turn to the results. We ended the quarter with 3,165 global open studios. We opened 67 gross new studios during Q2, 47 in North America and 20 internationally. There were 39 global studio closures in the second quarter, in line with historic trends and concentrated primarily within StretchLab, Pure Barre, and BFT. We sold 53 licenses globally during Q2, including 43 internationally and 10 in North America. As of June 30, 2026, we had more than 690 licenses contractually obligated to open in North America and 730 international master franchise obligations. We generated slightly higher termination revenue and net income this quarter as we pursued terminations of inactive licenses and expect to continue to do so over the next couple of quarters. Second quarter North America system-wide sales of $437 million were flat year-over-year, and same-store sales were negative 6.8%, both on a pro forma basis, adjusting for divestitures. Growth in system-wide sales from net new studio openings was offset by the same-store sales decline. As Mike mentioned earlier, we have several initiatives underway to improve our same-store sales performance moving forward. On a consolidated basis, revenue for the quarter was $66.0 million, down $10.2 million or 13% compared to Q2 2025. Approximately $2.5 million of the year-over-year decline was related to equipment revenue, which correlates to new studio openings and is largely related to the timing of studio openings and installation schedules rather than changes in long-term development demand. Merchandise revenue declined $5.1 million compared to prior year. $3.9 million of the year-over-year decline is related to how revenue is recorded in our new outsourced merchandise model. You will recall that we no longer record the full sales value of merchandise sold as revenue, but rather only record the commission we earn on those merchandise sales now. We also continue to work through challenges related to our transition to this new business model. We are actively implementing initiatives to improve execution and enhance performance, although the pace of the improvement has been slower than originally anticipated. Franchise revenue was down $1.4 million versus the prior year, primarily due to the decrease in same-store sales, coupled with the brand divestitures in 2025. The remaining $1.4 million revenue shortfall was split evenly between marketing fund revenue and other services revenue. Adjusted EBITDA was $21.9 million in the second quarter, down $6.2 million, or 22%, compared to Q2 2025. Adjusted EBITDA margin was 33%, down from 37% in the prior year. Relative to our internal forecast, Q2 adjusted EBITDA came in below expectations, primarily due to lower merchandise contribution and higher marketing investment. Turning to the balance sheet. As of June 30, 2026, cash equivalents, and restricted cash were $25.0 million, down from $38.7 million as of June 30, 2025. As we've discussed over the past several quarters, we've made significant progress in resolving the vast majority of our regulatory matters. Importantly, this allows us to return our full focus and resources toward executing our strategic priorities and supporting long-term growth. During the second quarter, we made payments of $6.8 million related to our agreed settlements in the franchisee lawsuit, the FTC case, and the New York Attorney General case. For the remainder of the year, we anticipate approximately $11.4 million of additional payments related to the settlement of both the franchisee and FTC cases. Also, our franchise disclosure documents have now been substantially refreshed, reflecting the work we've done to strengthen our operations and providing prospective franchisees with a clearer, more current representation of our system. Total long-term debt was $522.4 million as of June 30, 2026, compared to $377.8 million as of June 30, 2025. The increase in total long-term debt is primarily due to retiring the convertible preferred security during the fourth quarter of 2025. Before discussing our outlook in greater detail, I want to address the primary drivers of our revised guidance. First, second quarter performance was below our internal expectations. Second, we anticipate continued pressure on merchandise revenue going forward. Finally, we have made more cautious assumptions for same-store sales growth in the second half of the year, reflecting Q2 trends and what we have seen so far in Q3. Although this lowers our full-year outlook, we believe it is appropriate to remain disciplined in our assumptions until we see sustained trend improvement. Our current guidance is as follows. We expect full-year global net new studio openings to be approximately 150. We expect North America system-wide sales to range from $1.70 billion to $1.75 billion. We expect total 2026 revenue to range from $250 million to $260 million. Full-year 2026 adjusted EBITDA is now expected to range from $91 million to $97 million. This translates to 36.9% adjusted EBITDA margin at the midpoint. In closing, we are taking decisive actions to improve same-store sales, strengthen merchandise execution, support our franchisees, maintain cost discipline, and allocate capital prudently. While there is still work ahead, we believe these actions can strengthen profitability and position the business to create long-term value. Thank you all for your time today. We will now open the call for any questions. Operator? Operator: [Operator Instructions] Our first question comes from John Heinbockel of Guggenheim Partners. Please go ahead. John Heinbockel: Mike, couple of things. When you think about reversing the comp trend at Club Pilates, how do you address that? I know you've said in the past that's less important when you think about the AUV, it's less important to franchisees than kind of maintaining that AUV number. Is that still fair? I guess, what does it take or what comp number would exert less pressure, much less pressure on your P&L? I don't know where that has to be. I guess it could be negative. Michael Nuzzo: John, thanks for your question. Let me start with what I'm pleased with relative to the Club Pilates brand in particular. First, we continue to open studios, have a really good process for it, and the new studio openings have been very strong and continue to be strong. I attribute a lot of that to the presale process. The team here does a great job of building a membership base at opening that drives some really strong AUVs. As far as the comp trend goes, I'm pleased with the continued member retention trend and, from a lead standpoint, I think we're starting to hit our groove with paid media leads. We are laser-focused on improving organic leads and the experience on our website. In particular, the work that we've done over the last couple of months on the Club Pilates website that is going into production, I think will have a very meaningful impact on our top of funnel. All that said, to your point, this is a brand that continues to generate great AUVs, and incredible economics for our franchisee base. As we continue to grow this brand, this idea of having perhaps double the number of studios we have today in the U.S., North America, and having those even be at a slightly lower AUV still represents an amazing business. From a comp standpoint, I think you're also right in your thinking. This is a business that has historically done double-digit comps. Going forward, we don't need double-digit comps. Anything from a modest positive to even flat would be really good. Again, that's with the inherent pressure that we'll have on AUVs as we continue to open new studios in fill-in markets. That's really the focus for us. How do we get that comp to get obviously closer to flat, modestly positive, but also continue to open strong studios and build a great brand. Robert Julian: Yes. I'll add to that, Mike, if that's okay. As Mike said, with the strategy to grow studios and to fill in studios, the AUV and the comp becomes less of a factor. It's not unimportant, but I would say that what is putting pressure on our P&L right now is actually more on the equipment sales and the merchandise revenue. That's transitory. We will continue to open studios, the equipment installations will increase, and we will fix the merchandise issue. I think there's sometimes a misconception and maybe a little too much focus on same-store sales comp, for example because it doesn't fully account for the total studio expansion and the total increase in system-wide sales that could still exist even with pressure on AUV and same-store sales going forward. John Heinbockel: My follow-up, maybe, Robert, can you talk about the path to normalization in SG&A as legal costs moderate? I think the number with including SBC is probably, I don't know, 110 or so. The path there and then also the path to cash flow generation. When you - maybe you get out to '27, you've also got the lease. You're still negotiating lease settlements. What is that path and when do we get there? It's sort of been pushed out a little bit. Robert Julian: Yes. I'll address that and the folks internally here know that I look at the P&L a little bit different, I bifurcated our SG&A expenses into two categories, the recurring SG&A, the impacts adjusted EBITDA, and the non-recurring or adjusted SG&A, which has been elevated. I bifurcate the two, if you look at our recurring SG&A, we're actually making good progress and continue to make progress. Even in the second half of the year this year versus first half, we're really doing a good job of managing recurring SG&A. We've had elevated non-recurring and adjusted SG&A legal expenses and so on. I actually think it's a little bit hidden in the total SG&A number. If you can look at it on a basis of what is normal, ongoing, recurring SG&A, we're doing pretty well and we're still working on that and becoming more efficient, but it's actually in better shape than what the total SG&A looks like when you don't exclude the unusual and adjust it out SG&A. On the second part of your question relative to cash flow. This year was under a tremendous amount of pressure. Cash flow is under a lot of pressure this year for both legal expenses and legal settlements to the tune of $40 million-ish. It's been that much in previous years as well. I mean, over the course of several years, the legal expenses and settlements approaches $100 million. It's put tremendous pressure on free cash flow. Our view is that, again, that is mostly behind us. We have a schedule for those expenses going forward. I project cash flow to be positive in the future. In 2027, that number will be positive and continue to improve. Frankly, I'm not concerned about the balance sheet or cash flow or liquidity. I just think that those. We had some unusual non-recurring items in the last couple of years that's really put a lot of pressure on cash. Operator: The next question comes from Arpine Kocharyan of UBS. Please go ahead. Arpine Kocharyan: On same-store growth, can you maybe give a little bit more detail on the declines you're assuming for Q3 versus Q4, and specifically, what kind of declines you're looking at for the back half for Club Pilates and what's implied for that brand for H2? Robert Julian: Sure. I'll start, and I'll let Mike fill in. We've seen fairly consistent same-store sales comp in the Q1, Q2, first half of the year has been roughly minus 6.5%, give or take 100 basis points or so. In our projections for the second half in our guidance, we are assuming more or less the same trend, not really much of a difference between Q3 and Q4. That may just be, I'm not going to say it's conservative because we're trying to be prudent in the financial assumptions that we're making in the inputs to our forecast and the guidance that we're giving. To answer your question, what's built into the forecast and the guidance is more or less the same trend through the end of the year, pretty consistent with what we've seen in the first half. Michael Nuzzo: Yes. That's right. I think we're holding ourselves to the discipline of, we've got a number of good initiatives going right now. We feel like they're targeted on bending the curve around same-store sales. Until you see it, we aren't going to build the financial structure around it. I appreciate Robert's thoughtfulness around the guidance there. Robert Julian: Yes, I have to admit, it's a bit of a philosophical forecasting philosophy that I've had throughout my career, it's more or less, I don't like to forecast a change in trend until I've seen a change in trend. We are doing everything we can and a lot of actions to see a change in trend, the forecast reflects what we've seen up until this point in the first half of the year. Arpine Kocharyan: Okay. That's helpful. Another question, maybe a two-part question. One is in terms of net unit growth, which has obviously changed today, adjusted down a little bit. Is there a change in your assumption for deletions versus sort of growth additions that you are looking at? Maybe can you remind us how different this year will be in terms of deletions as a percentage of footprint? I just wanted to go back to the idea of system growth existing even with declining same-store sales. Over a short period of time, that can very much be true, but how do you attract franchisee investment if the mature store is declining? How do you attract new money? Michael Nuzzo: Yes. Let me answer the real estate question first. In terms of, I think you were referring to closures. Our closure trend in the first half of 2026 actually mirrors the closure trend in the first half of 2025. Before we had a larger number of closures in Q4 of 2025, and again, around some brand work we were doing and divestitures and a lot of that. I think we're on a pretty decent run rate around closures. That is what we would have expected. The real focus is on the new studio openings. We feel really good about the pipeline. The real estate environment, and I'm in these meetings every week, and so is Robert. It feels like everybody is looking for strip centers in the 2,000 square foot range. Naturally, landlord negotiations and lease work, I think is a little tougher than it was just a few years ago. On the flip side of that, we're providing more support to the franchisees in the process I feel good that we're going to maximize the opportunities we have for 2026. We did dial in that number, as best as we could. I think we have a good chance to get out of the gate faster in 2027. I feel good about that. To your question about the messaging to the franchisees, I think there, it kind of gets back to the question we were talking about, or the issue we were talking about around AUV and studio-level economics. I think that as a franchisee, you're always looking for this as a long-term proposition. You're even more hyper-focused on what is a reliable revenue forecast for the studio itself. What are the expense structure items that I can count on, and what kind of four-wall profitability can I produce? From that perspective, the Club Pilates model has shown incredible durability and strength, and I feel good about continuing to have those discussions with our franchisee base. Having said all of that, one of the big advantages I think we have is that, especially in Club Pilates, we have an existing franchise base that can open most of our new studios as we go forward. Much of our territories are spoken for at this point, again, that gives us a very reliable growth engine into the future. Operator: The next question comes from Owen Rickert of Northland Capital Markets. Please go ahead. Unknown Analyst: This is [ Keyan ] on for Owen Rickert. Just one from us here. I think this is announcement with Spartan is kind of the second or third big, large deal you've done for Club Pilates partnerships. I guess, is there any benefit to them signing these larger partnerships, any deals they're getting on the equipment front? Then how do you think about the balance of the pipeline with these larger partners in? Is it leaning towards these larger partners or more independent franchisees? Michael Nuzzo: Good question. I think just to be specific, the nature of these deals is more around, the focus is more around the planning for the future expansion expectations that both we as the franchisor and the franchisee partner can hold us to. It's really great work, and it's not something that takes a couple of weeks. It usually takes quite a bit of time to put into place because our real estate team gets involved. We map out the geographies. We get very specific. That's why the number is very specific because it is linked to very laser-focused geographies. There aren't really elements of the deal that are vastly different than our core franchise arrangement. These are really advantageous to us. These are really great partners. They operate really good businesses. They often bring incremental resources to their management of studios. They serve as a really good group to test and pilot new initiatives that we develop here at corporate. Some of it comes from our ideas, some of it comes from their ideas. That tends to be really helpful. And we'll see. There are some geographies where some additional larger arrangements could work pretty well, but we'll have to kind of see how that plays out over time. Operator: [Operator Instructions] Our next question comes from Noah Zatzkin of KeyBanc Capital Markets. Please go ahead. Noah Zatzkin: I guess first, just on merchandise revenue, how are you thinking about the kind of timeframe for that to ramp back up after the changeover? On the marketing fund expense increase in the second quarter versus last year, any kind of results to point to or expectations for, I guess, when those investments could gain traction? Thanks. Michael Nuzzo: I'll take the second part first. The marketing investment in Q2 really helped produce higher paid leads, which was definitely a benefit to us because it helped offset the pressure that we were experiencing around organic leads. That did make that worthwhile. Our return on investment is actually pretty similar on the paid side. We're happy with where that sits. We just have to make up more ground on the organic side. As far as the merchandise arrangement goes, I can't get into much detail, but as we alluded to in the script, we're clearly having some challenges with our outsource partner, and we're working through it. We're exploring a host of improvement options. You called it out. This is not large, but it is a contributor to profitability for both us and our franchisees. And our goal is to get that back to a normal run rate in the second half of the year. Robert Julian: Yes. Noah, I guess I would add similar philosophy that I described around the same-store sales comp. We are being either conservative, realistic, however you look at it, in terms of what we're projecting in the second half of the year, which is similar to what we experienced in the first half of the year. Frankly, the largest elements to our change in guidance are a continuation of the same-store sales trend and a continuation of the merchandise through the end of the year. But we hope to, just like same-store sales comp, we're working very hard to fix that. We hope to do better than a continuation of those trends. That is effectively what's built into the forecast. Those two items, plus the shortfall in Q2 versus our internal expectations, entirely make up the change in our guidance. Operator: Ladies and gentlemen, with no further questions in the queue, we have reached the end of the Q&A. I will now hand back for closing remarks. Michael Nuzzo: Judith, thanks. Thank you all for your questions and your participation. We appreciate your time and look forward to updating you on our progress next quarter. Have a good day. Operator: Thank you. Ladies and gentlemen, that concludes this event. Thank you for attending. You may now disconnect your lines. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Xponential Fitness (XPOF) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Xponential Fitness, Inc.? Here are five stocks we like better. Weak second-quarter performance led Xponential Fitness to lower its 2026 outlook. North American same-store sales fell 6.8%, revenue declined 13% to $66 million, and adjusted EBITDA dropped 22% to $21.9 million. The company continues to expand its studio network, ending the quarter with 3,165 locations and pursuing a Club Pilates deal expected to add 117 studios over six years. However, management is shifting priorities toward organic membership growth, franchisee economics, digital marketing and operational consistency. Xponential is maintaining elevated paid-media spending while addressing merchandise and lead-generation challenges, and its board continues to review strategic alternatives, including a potential sale or merger. Management expects approximately $11.4 million in additional settlement payments during the rest of 2026 and cash flow to turn positive in 2027. 3 gym stocks to cash in on dieters’ New Year's resolutions Xponential Fitness (NYSE:XPOF) reported second-quarter results that fell below its internal expectations, prompting the boutique fitness franchisor to lower its full-year outlook as same-store sales declined, merchandise operations remained pressured and the company continued to invest in paid marketing and digital initiatives. Chief Executive Officer Mike Nuzzo said the company is shifting its emphasis from the unit expansion and brand development that characterized its prior growth toward improving organic growth, franchisee economics, operating execution and consistency in the member experience. → No Hangover: Revisiting Microsoft One Week After Earnings Can Planet Fitness Stock Regain its Pump? “Our objective is straightforward,” Nuzzo said. “Build a healthier, more productive franchise system that delivers sustainable membership growth and long-term value creation.” Xponential ended the second quarter with 3,165 open studios globally. The company opened 67 gross new studios during the quarter, including 47 in North America and 20 internationally, while 39 studios closed. Net unit growth was 16 domestically and 12 internationally during the quarter. Year to date, the company added 39 net domestic studios and 29 net international studios. → MarketBeat Week in Review – 08/03 - 08/07 Will Xponential Fitness Recover From a Short Seller Knockout? The company sold 53 licenses globally in the quarter, including 43 internationally and 10 in North America. As of June 30, Xponential had more than 690 North American licenses contractually obligated to open, along with 730 international master franchise obligations. Club Pilates remained a focal point of the growth strategy. Xponential announced a partnership with Spartan Fitness Holdings, its largest Club Pilates franchisee, that is expected to result in 117 studio openings across 10 states over the next six years. Nuzzo said the arrangement is centered on detailed geographic planning and does not materially differ from the company’s core franchise arrangement. → Why the Landlord of the AI Boom Could Outlast the Chipmakers Internationally, Xponential now has more than 500 studios open, with Club Pilates opening its 200th international studio in June. However, North America system-wide sales were flat year over year at $437 million, as sales from net new studios were offset by a 6.8% decline in same-store sales. Club Pilates same-store sales declined 5% during the quarter. Nuzzo said the results were modestly weaker than first-quarter trends and were primarily affected by pressure at the top of the customer funnel. Management pointed to a more challenging consumer environment, including selective consumer spending, higher promotional activity and pressure on new-customer acquisition entering the summer months. Total company member retention nevertheless improved 28 basis points year over year in the second quarter. Consolidated second-quarter revenue was $66 million, down $10.2 million, or 13%, from the prior-year period. Interim Chief Financial Officer Robert Julian said approximately $2.5 million of the decline was related to equipment revenue tied to the timing of studio openings and installation schedules. Merchandise revenue declined $5.1 million from a year earlier. Of that amount, $3.9 million reflected the company’s new outsourced merchandise model, under which Xponential records its commission rather than the full merchandise sales value as revenue. The company also cited operational challenges with its outsourced logistics partner involving vendor operations, sourcing and execution. Franchise revenue declined $1.4 million, primarily because of lower same-store sales and brand divestitures completed in 2025. The remaining revenue decline was split between marketing fund revenue and other services revenue, Julian said. Second-quarter adjusted EBITDA was $21.9 million, down $6.2 million, or 22%, year over year. Adjusted EBITDA margin was 33%, compared with 37% in the prior-year quarter. Cash equivalents and restricted cash totaled $25 million as of June 30, compared with $38.7 million a year earlier. Total long-term debt was $522.4 million, compared with $377.8 million a year earlier, primarily due to the retirement of a convertible preferred security in the fourth quarter of 2025. Julian said adjusted EBITDA was below the company’s internal forecast because of lower merchandise contribution and higher marketing investment. Xponential said it is responding to top-of-funnel pressure through paid media, website redesigns, artificial intelligence-focused search engine optimization efforts and new data tools for franchisees. The company implemented a new StretchLab digital experience in July and completed a redesign of the Club Pilates website, which management expects to launch in the third quarter after programming is completed. Nuzzo said the redesigned digital experiences are intended to improve navigation, reduce friction in the member journey and support more lead submissions. The company is also using reporting dashboards to help franchisees improve conversion from leads to memberships. Pure Barre and YogaSix teams, for example, are using data tools to coach studios on adding class types associated with higher new-member conversion. Xponential is also supporting franchisees that are piloting AI-enabled customer relationship management tools. Paid-media leads increased year over year, helping offset declines in organic leads. Nuzzo said the company will maintain elevated paid media and digital spending while working to improve organic lead generation later in the year. On merchandise, management said it is working with its outsourced partner on process improvements while evaluating other ways to improve reliability and performance. Nuzzo said the company’s goal is to return merchandise to a normal operating run rate during the second half, though Julian said the company’s guidance assumes pressure continues through year-end. Xponential lowered its 2026 guidance due to second-quarter performance, expectations for continued merchandise pressure and more cautious assumptions for same-store sales in the second half. Management said its forecast assumes same-store sales trends remain broadly consistent with the first half rather than forecasting an improvement before it is visible in results. Global net new studio openings are expected to be approximately 150. North America system-wide sales are projected at $1.70 billion to $1.75 billion. Total 2026 revenue is expected to be $250 million to $260 million. Adjusted EBITDA is forecast at $91 million to $97 million, representing a 36.9% margin at the midpoint. Julian said the company made $6.8 million in second-quarter payments associated with agreed settlements in franchisee litigation, the Federal Trade Commission case and the New York Attorney General case. It expects approximately $11.4 million of additional settlement payments for the remainder of 2026 related to the franchisee and FTC cases. The company said it has made significant progress resolving most of its regulatory matters and has substantially refreshed its franchise disclosure documents. Julian said legal expenses and settlements have placed substantial pressure on cash flow in recent years, but he expects cash flow to turn positive in 2027. Nuzzo also reiterated that Xponential’s board is continuing its strategic alternatives review, which may include a sale, merger or another strategic or financial transaction. The company said it does not intend to comment further on the process until it is complete. Xponential Fitness is a leading franchisor and operator of boutique fitness studios headquartered in Irvine, California. The company specializes in developing, marketing, and supporting a portfolio of fitness brands that deliver low-impact cardio, strength training, and mindful movement workouts. Through its asset-light franchise model, Xponential provides entrepreneurs with proprietary studio designs, branded equipment, digital support, and comprehensive training programs to ensure consistent member experiences. Its portfolio comprises core brands such as Club Pilates, Pure Barre, CycleBar, StretchLab, YogaSix, Row House, Rumble, AKT, and STRIDE. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Xponential Fitness Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Xponential Fitness (XPOF) reported $65.97 million in revenue for the quarter ended June 2026, representing a year-over-year decline of 13.4%. EPS of $0.02 for the same period compares to $0.26 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $65.15 million, representing a surprise of +1.26%. The company delivered an EPS surprise of -77.78%, with the consensus EPS estimate being $0.09. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Xponential Fitness performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue- Franchise: $43.99 million versus $40.77 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -3% change. Revenue- Franchise marketing fund: $8.73 million compared to the $9.05 million average estimate based on three analysts. The reported number represents a change of -7.7% year over year. Revenue- Merchandise: $0.54 million versus the three-analyst average estimate of $2.18 million. The reported number represents a year-over-year change of -90.3%. Revenue- Other service: $5.64 million versus the two-analyst average estimate of $5.79 million. The reported number represents a year-over-year change of -10%. Revenue- Equipment: $7.06 million compared to the $6.43 million average estimate based on two analysts. The reported number represents a change of -25.8% year over year. View all Key Company Metrics for Xponential Fitness here>>> Shares of Xponential Fitness have returned -0.9% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Xponential Fitness, Inc. (XPOF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Xponential Fitness (XPOF) came out with quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -77.78%. A quarter ago, it was expected that this franchisor of boutique fitness brands would post earnings of $0.11 per share when it actually produced a loss of $0.04, delivering a surprise of -136.36%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Xponential Fitness, which belongs to the Zacks Leisure and Recreation Services industry, posted revenues of $65.97 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.26%. This compares to year-ago revenues of $76.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Xponential Fitness shares have lost about 18.4% since the beginning of the year versus the S&P 500's gain of 12.8%. While Xponential Fitness has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Xponential Fitness was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.16 on $67.25 million in revenues for the coming quarter and $0.40 on $262.83 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Leisure and Recreation Services is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Target Hospitality (TH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +33.3%. The consensus EPS estimate for the quarter has been revised 13.6% higher over the last 30 days to the current level. Target Hospitality's revenues are expected to be $79.27 million, up 28.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Xponential Fitness, Inc. (XPOF) : Free Stock Analysis Report Target Hospitality Corp. (TH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

North America system-wide sales1 of $437.3 million were flat year-over-year Opened 67 gross new studios and sold 53 franchise licenses in Q2 2026 IRVINE, Calif., August 06, 2026--(BUSINESS WIRE)--Xponential Fitness, Inc. (NYSE: XPOF) ("Xponential" or the "Company"), one of the leading global franchisors of boutique health and wellness brands, today reported financial results for the second quarter ended June 30, 2026. Financial Highlights: Q2 2026 Compared to Q2 2025 Revenue of $66.0 million decreased 13%. North America system-wide sales1 of $437.3 million were flat. North America same store sales2 decreased 6.8%, compared to growth of 2.4%. North America quarterly run-rate average unit volume (AUV)3 of $659,000, compared to $686,000. Net loss of $4.8 million, or a loss of $0.10 per basic share, on a share count of 42.0 million shares of Class A Common Stock, compared to a net income of $1.3 million, or loss per share of $0.01, on a share count of 35.0 million shares of Class A Common Stock. Adjusted net income4 of $0.8 million, or an adjusted net income of $0.02 per basic share4, compared to $14.5 million, or $0.26 per basic share4. Adjusted EBITDA5 of $21.9 million, compared to $28.1 million. "While our second quarter results were below expectations, we continued to make progress against the priorities we believe are most important to strengthening Xponential for the long term, including continued studio growth, both domestically and internationally, enhanced digital capabilities, and elevated franchisee studio support," said Mike Nuzzo, Chief Executive Officer of Xponential Fitness. "These efforts, led by a strong management team working collaboratively across brands and functions, are laser focused on driving long term, sustainable growth and success for our franchisees." Operating Results for the Second Quarter Ended June 30, 2026 Total revenue was $66.0 million, down 13% from the prior year period. The decline in total revenue was expected and driven primarily by fewer equipment installations, and lower merchandise revenue following the Company’s transition to the new outsourced logistics arrangement. Franchise revenue was $44.0 million, down 3% year-over-year. This decline was driven primarily by a decrease in same store sales, coupled with brand divestitures completed in 2025. Equipment revenue was $7.1 million, down 26% year-over-year. This decrease was primarily the result of fewer global equipment installations, driven by fewer studio openings and lower franchise license sales. Merchandise revenue was $0.5 million, down 90% year-over-year. The decrease was primarily driven by the change in the business model due to the Company’s transition from an in-house wholesale model to an outsourced retail model, as well as challenges related to the transition. Franchise marketing fund revenue was $8.7 million, down 8% year-over-year. The decrease was primarily due to lower system-wide sales stemming from divested brands. Other service revenue was $5.6 million, down 10% year-over-year, primarily driven by lower vendor commission and brand access fee revenues. Selling, general and administrative expenses were $32.0 million, up 33% year-over-year, primarily driven by an increase in legal expenses. Marketing fund expenses were $11.4 million, up 29% year-over-year. This increase reflected the timing of incremental marketing spend, as the Company front-loaded more investment in the second quarter of 2026 compared with the second quarter of 2025. Net loss totaled $4.8 million, or a loss of $0.10 per basic share, compared to net income of $1.3 million, or a loss of $0.01 per basic share, in the prior year period. Adjusted net income4 was $0.8 million, or adjusted net income of $0.02 per basic share4, compared to adjusted net income4 of $14.5 million, or adjusted net income of $0.26 per basic share4. Adjusted EBITDA5 was $21.9 million, down 22% from $28.1 million in the prior year period. Liquidity and Capital Resources As of June 30, 2026, the Company had approximately $25.0 million of cash, cash equivalents and restricted cash and $522.4 million in total long-term debt. Net cash used in operating activities was $25.7 million for the quarter ended June 30, 2026. All financial data included in this release refer to global numbers, unless otherwise noted. All KPI information is presented on an adjusted basis to include full historical data for all brands in the brand portfolio as of June 30, 2026, and to exclude all information for all brands not owned as of June 30, 2026. Definitions for the non-GAAP measures and a reconciliation to the corresponding GAAP measures are included in the tables that accompany this release. 2026 Outlook The Company is revising its full year 2026 outlook, which compares to 2025 results as follows: Net new studio openings of approximately 150, or a decrease of 25%. This compares to previous guidance of 150 to 170; North America system-wide sales1 in the range of $1.70 billion to $1.75 billion, or a decrease of 1% at the midpoint. This compares to previous guidance of $1.72 billion to $1.80 billion; Revenue in the range of $250.0 million to $260.0 million, representing a decrease of 19% at the midpoint. This compares to previous guidance of $260.0 million to $270.0 million; and Adjusted EBITDA5 in the range of $91.0 million to $97.0 million, representing a decrease of 16% at the midpoint. This compares to previous guidance of $100.0 million to $110.0 million. Additional key assumptions for full year 2026 include: Tax rate in the mid-to-high single digits; Share count of 41.0 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations. A full explanation of the Company’s share count calculation and associated EPS and Adjusted EPS calculations can be found in the tables at the end of this press release. The Company is not able to provide a quantitative reconciliation of the estimated full year Adjusted EBITDA for fiscal year ending December 31, 2026 without unreasonable efforts to the most directly comparable GAAP financial measure due to the high variability, complexity and low visibility with respect to certain items such as taxes, tax receivable agreement remeasurements, and income and expense from changes in fair value of contingent consideration from acquisitions. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. Second Quarter 2026 Conference Call The Company will host a conference call today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to discuss its second quarter 2026 financial results. Participants may join the conference call by dialing 1-877-407-9716 (United States) or 1-201-493-6779 (International). A live webcast of the conference call will also be available on the Company’s Investor Relations site at https://investor.xponential.com/. For those unable to participate in the conference call, a telephonic replay of the call will be available shortly after the completion of the call, until 11:59 p.m. ET on Thursday, August 20, 2026, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 13761232. About Xponential Fitness, Inc. Xponential Fitness, Inc. (NYSE: XPOF) is one of the leading global franchisors of boutique health and wellness brands. Through its mission to deliver the talents, assets, and capabilities necessary for successful franchise growth, the Company operates a diversified platform of five brands spanning modalities including Pilates, barre, stretching, strength training, and yoga. In partnership with its franchisees, and master franchisees, Xponential offers energetic, accessible, and personalized workout experiences led by highly qualified instructors in studio locations throughout the U.S. and internationally, with franchise, master franchise and international expansion agreements in 49 U.S. states, Puerto Rico, and 29 additional countries. Xponential’s portfolio of brands includes Club Pilates, the largest Pilates brand in the United States; StretchLab, a concept offering one-on-one and group stretching services; YogaSix, the largest franchised yoga brand in the United States; Pure Barre, a total body workout that uses the ballet barre to perform small isometric movements, and the largest barre brand in the United States; and BFT, a functional training and strength-based program. For more information, please visit the Company’s website at xponential.com. Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe non-GAAP financial measures are useful in evaluating our operating performance. We use certain non-GAAP financial information, such as EBITDA, Adjusted EBITDA, adjusted net income (loss), and adjusted net earnings (loss) per share, which exclude certain non-operating or non-recurring items, including but not limited to, equity-based compensation expenses and related employer payroll taxes, acquisition and transaction expenses (income) (including change in contingent consideration), litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business net of insurance reimbursements), financial transaction fees and related expenses (including costs related to strategic alternatives and other contemplated corporate transactions), tax receivable agreement remeasurement, impairment of goodwill and other noncurrent assets, loss and expenses due to brand divestitures (excluding impairments) (including expenses directly related to the divested brands for arrangements that existed prior to divestiture, outsourcing of our retail merchandising and change in contingent consideration receivable related to a divested brand) executive transition costs (consisting of executive recruiting costs and other related costs), transformation initiative costs (primarily consisting of third-party professional consulting fees related to modifications of our business strategy and cost saving initiatives), and charges incurred in connection with our restructuring plan that we believe are not representative of our core business or future operating performance, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively with comparable GAAP financial measures, is helpful to investors because it provides consistency and comparability with past financial performance and provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We seek to compensate such limitations by providing a detailed reconciliation for the non-GAAP financial measures to the most directly comparable financial measures stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business. For a reconciliation of non-GAAP to GAAP measures discussed in this release, please see the tables at the end of this press release. Forward-Looking Statements This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management’s judgment, beliefs, current trends, and anticipated financial performance. Forward-looking statements include, without limitation, statements relating to expected growth of our business; expected benefit of the changes in management; projected number of new studio openings; profitability; anticipated industry trends; projected financial and performance information such as system-wide sales and Adjusted EBITDA; and other statements under the section "2026 Outlook"; our competitive position in the boutique fitness and broader health and wellness industry; and ability to execute our business strategies and our strategic growth drivers. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to: franchisees’ ability to generate sufficient revenues; our ability to anticipate and satisfy consumer preferences; risks related to loss of reputation and brand awareness; our ability to manage changes in executive leadership; our ability to attract and retain key senior management and key employees; risks relating to expansion into international markets; macroeconomic conditions or economic downturns; geopolitical uncertainty, including, but not limited to, the impact of the presidential administration in the U.S. trade policies and tariffs and the ongoing conflicts in Europe and the Middle East; general economic conditions and industry trends; risks relating to our review of strategic alternatives, including that such review may not result in a transaction and could adversely affect our business, operations and stock price; and other risks as described in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the full year ended December 31, 2025, filed by Xponential with the SEC on March 4, 2026, and other periodic reports filed with the SEC. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today’s date, unless otherwise stated, and Xponential undertakes no duty to update such information, except as required under applicable law. Note: The above adjusted net income (loss) per share is computed by dividing the adjusted net income (loss) attributable to holders of Class A common stock by the weighted average shares of Class A common stock outstanding during the period. Total share count does not include potential future shares vested upon achieving certain earn-out thresholds. Net income, however, continues to take into account the non-cash contingent liability primarily attributable to Rumble. Footnotes 1. System-wide sales represent gross sales by all North America studios (which includes the United States, U.S. territories and Canada). System-wide sales include sales by franchisees that are not revenue realized by us in accordance with GAAP. While we do not record sales by franchisees as revenue, and such sales are not included in our consolidated financial statements, this operating metric relates to our revenue because we receive approximately 7% and 2% of the sales by franchisees as royalty revenue and marketing fund revenue, respectively. We believe that this operating measure aids in understanding how we derive our royalty revenue and marketing fund revenue and is important in evaluating our performance. System-wide sales growth is driven by new studio openings and increases in same store sales. Management reviews system-wide sales weekly, which enables us to assess changes in our franchise revenue, overall studio performance, the health of our brands and the strength of our market position relative to competitors. 2. Same store sales refer to period-over-period sales comparisons for the base of studios. We define the same store sales to include monthly sales for any traditional studio location in North America. If the studio has generated at least 13 months of consecutive positive sales and opened at least 13 calendar months ago as of any month within the measurement period, the respective comparable months will be included. We measure same store sales based solely upon monthly sales as derived through the designated point-of-sale system. This measure highlights the performance of existing studios, while excluding the impact of new studio openings. Management reviews same store sales to assess the health of the franchised studios. 3. AUV is calculated by dividing sales during the applicable period for all studios contributing to AUV by the number of studios contributing to AUV. All traditional studio locations in North America are included in the AUV calculation, so long as they meet certain time since opening and sales criteria (as defined immediately below). In particular, AUV (LTM as of period end) and Quarterly AUV (run rate) are calculated as follows: AUV (LTM as of period end) consists of the average sales for the trailing 12 calendar months for all traditional studio locations in North America that opened at least 13 calendar months ago as of the measurement date and that have generated positive sales for each of the last 13 calendar months as of the measurement date. Quarterly AUV (run rate) consists of average quarterly sales for all traditional studio locations in North America that had opened at least six calendar months ago as of the beginning of the respective quarter, and that have non-zero sales in the respective quarter (including nominal or negative sales figures; the only figures excluded are exact $0 amounts in the quarter), multiplied by four. We measure sales for AUV based solely upon monthly sales as derived through the designated point-of-sale system. AUV is impacted by changes in same store sales, studio openings, and studio closures. Management reviews AUV to assess studio economics. 4. Adjusted net income (loss) is a non-GAAP financial measure that excludes certain amounts and is used to supplement net income (loss). Adjusted net income (loss) assumes that all net income (loss) is attributable to Xponential Fitness, Inc., which assumes the full exchange of all outstanding Class B common stock for shares of Class A common stock of Xponential Fitness, Inc., adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. Adjusted net income (loss) per share, diluted, is calculated by dividing adjusted net income (loss) by the total weighted-average shares of Class A common stock outstanding plus any dilutive securities and assuming the full conversion of all outstanding Class B common stock. Total share count does not include potential future shares vested upon achieving certain earn-out thresholds. 5. We define Adjusted EBITDA as EBITDA (net income/loss before interest, taxes, depreciation and amortization), adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include equity-based compensation and related employer payroll taxes, acquisition and transaction expenses (income) (including change in contingent consideration), litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business net of insurance reimbursements), financial transaction fees and related expenses (including costs related to strategic alternatives and other contemplated corporate transactions), tax receivable agreement remeasurement, impairment of goodwill and other noncurrent assets, loss and expenses due to brand divestitures (excluding impairments) (including expenses directly related to the divested brands for arrangements that existed prior to divestiture, outsourcing of our retail merchandising and change in contingent consideration receivable related to a divested brand) executive transition costs (consisting of executive recruiting costs and other related costs), transformation initiative costs (primarily consisting of third-party professional consulting fees related to modifications of our business strategy and cost saving initiatives),and restructuring and related charges incurred in connection with our restructuring plan that we do not believe reflect our underlying business performance and affect comparability. View source version on businesswire.com: https://www.businesswire.com/news/home/20260806810781/en/ Contacts Addo Investor [email protected]

Norwegian Cruise Line (NCLH) came out with quarterly earnings of $0.48 per share, beating the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +23.08%. A quarter ago, it was expected that this cruise operator would post earnings of $0.15 per share when it actually produced earnings of $0.23, delivering a surprise of +53.33%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Norwegian Cruise Line, which belongs to the Zacks Leisure and Recreation Services industry, posted revenues of $2.64 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $2.52 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Norwegian Cruise Line shares have lost about 7% since the beginning of the year versus the S&P 500's gain of 6.9%. While Norwegian Cruise Line has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Norwegian Cruise Line was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.91 on $2.89 billion in revenues for the coming quarter and $1.71 on $10.13 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Leisure and Recreation Services is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Xponential Fitness (XPOF), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This franchisor of boutique fitness brands is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -65.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Xponential Fitness' revenues are expected to be $65.15 million, down 14.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report Xponential Fitness, Inc. (XPOF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

IRVINE, Calif., July 23, 2026--(BUSINESS WIRE)--Xponential Fitness, Inc. (NYSE: XPOF) ("Xponential" or the "Company"), one of the leading global franchisors of boutique health and wellness brands, today announced that it will release its second quarter 2026 financial results on Thursday, August 6, 2026, after the market closes. Xponential Fitness management will host a conference call to discuss the results the same day at 1:30 p.m. PT / 4:30 p.m. ET. To access the event by telephone, please dial +1 (877) 407-9716 and provide conference ID 13761232. International callers should dial +1 (201) 493-6779 and provide the same conference ID. The call will also be broadcast live over the Internet and can be accessed in the Investor Relations section of Xponential Fitness’ website at https://investor.xponential.com/. For those unable to join for the live presentation, a replay of the call will be available after the live presentation through August 20, 2026. To access the replay, dial +1 (844) 512-2921 (U.S. and Canada) or +1 (412) 317-6671 (International) and enter the pin number: 13761232. A replay of the webcast also will be available for six months following the event, accessible in the Investor Relations section of Xponential Fitness’ website at https://investor.xponential.com/. About Xponential Fitness, Inc. Xponential Fitness, Inc. (NYSE: XPOF) is one of the leading global franchisors of boutique health and wellness brands. Through its mission to deliver the talents, assets, and capabilities necessary for successful franchise growth, the Company operates a diversified platform of five brands spanning modalities including Pilates, barre, stretching, strength training, and yoga. In partnership with its franchisees, and master franchisees, Xponential offers energetic, accessible, and personalized workout experiences led by highly qualified instructors in studio locations throughout the U.S. and internationally, with franchise, master franchise and international expansion agreements in 49 U.S. states, Puerto Rico, and 28 additional countries. Xponential’s portfolio of brands includes Club Pilates, the largest Pilates brand in the United States; StretchLab, a concept offering one-on-one and group stretching services; YogaSix, the largest franchised yoga brand in the United States; Pure Barre, a total body workout that uses the ballet barre to perform small isometric movements, and the largest barre brand in the United States; and BFT, a functional training and strength-based program. For more information, please visit the Company’s website at xponential.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20260723895586/en/ Contacts Addo Investor [email protected]

Xponential Fitness's first quarter results fell short of Wall Street’s expectations, with revenue and non-GAAP earnings both missing consensus estimates. Management attributed the underperformance to lower digital traffic, which was impacted by significant changes in advertising platforms like Meta and Google. CEO Michael Nuzzo noted that these digital shifts reduced the company's ability to generate new member leads, while ongoing brand divestitures also played a role. On the positive side, Nuzzo pointed to improving member retention, stating, “March marked our best member retention month since Q1 2024,” and highlighted the company’s focus on new studio openings and operational upgrades. Is now the time to buy XPOF? Find out in our full research report (it’s free). Revenue: $60.71 million vs analyst estimates of $64.01 million (21% year-on-year decline, 5.1% miss) Adjusted EPS: -$0.04 vs analyst estimates of $0.13 (significant miss) Adjusted EBITDA: $20.41 million vs analyst estimates of $25.1 million (33.6% margin, 18.7% miss) EBITDA guidance for the full year is $105 million at the midpoint, in line with analyst expectations Operating Margin: 21.5%, up from 12.6% in the same quarter last year Market Capitalization: $213.6 million While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. John Heinbockel (Guggenheim Partners) asked about Club Pilates member retention and when comps might return to flat. CEO Michael Nuzzo emphasized strong member loyalty and said improved digital lead flow is key to better comps. Richard Magnuson (B. Riley Securities) pressed for updates on CRM tools targeting specific audiences. Nuzzo highlighted automated email campaigns showing early conversions and a focus on tailoring outreach by brand and cohort. Chris O’Cull (Stifel) inquired about the timeline for resolving Meta and Google marketing issues and future marketing spend. Nuzzo expects meaningful progress in the coming quarters and said ROI will determine the pace of additional investment. Chris O’Cull (Stifel) also asked about Club Pilates franchisee consolidation. Nuzzo noted stronger ties with larger franchisees, which help with growth and operational consistency, but said a mix of large and small partners remains healthy. Daren Sesikan (UBS, for Arpine Kocharyan) questioned the drivers behind negative same-store sales versus prior expectations. Nuzzo cited new member acquisition shortfalls as the primary factor, with pricing changes playing a smaller role. In the next few quarters, the StockStory team will be watching (1) the impact of AI-driven website and marketing upgrades on new member acquisition, (2) the effectiveness of pricing adjustments and reduced legacy discounting on studio-level profitability, and (3) the pace and success of studio refresh initiatives across brands. Execution on franchisee support efforts and CRM-driven conversion improvements will also be important indicators of progress. Xponential Fitness currently trades at $5.32, down from $6.54 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.