Q2 2026 Xponential Fitness Inc Earnings Call Transcript
Key Points
- Xponential Fitness Inc (XPOF) reported strong global net unit growth, adding 28 net new studios in Q2 2026, bringing the total to 3,165 open studios globally.
- The company announced a significant partnership with Spartan Fitness Holdings to open 117 new Club Pilates studios over the next six years, highlighting the brand's continued demand and long-term growth runway.
- Member retention improved for the second consecutive quarter, with total company retention increasing by 28 basis points year-over-year, reflecting strong brand loyalty.
- The company is actively investing in growth initiatives, including new website redesigns for Club Pilates and StretchLab, AI-driven SEO tools, and paid media campaigns that have successfully increased lead generation.
- Management highlighted that the vast majority of regulatory and legal matters have been resolved, allowing the company to refocus its resources on strategic priorities and long-term growth.
- The company is seeing strong performance from new studio openings, particularly Club Pilates, which continue to generate strong average unit volumes (AUVs) and franchisee economics.
- Xponential Fitness Inc (XPOF) reported a significant decline in same-store sales, down 6.8% overall and 5% for Club Pilates, which was below expectations and weaker than Q1 trends.
- The company lowered its full-year 2026 guidance for revenue, adjusted EBITDA, and net new studio openings due to weaker-than-expected Q2 performance and cautious assumptions for the second half of the year.
- The transition to an outsourced merchandise logistics partner has created operational challenges, negatively impacting revenue and profitability, with the pace of improvement slower than anticipated.
- Total revenue declined 13% year-over-year to $66.0 million, driven by lower equipment revenue, a $5.1 million decline in merchandise revenue, and a decrease in franchise revenue.
- Adjusted EBITDA fell 22% year-over-year to $21.9 million, with margins contracting to 33% from 37%, due to lower merchandise contribution and higher marketing investments.
- The company continues to face top-of-funnel pressure with declines in organic leads, which have not yet been fully offset by increases in paid media leads, impacting new member acquisition.
Good afternoon. Welcome to Exponential Fitness second quarter 2026 earnings call. (Operator Instructions) Please note that this event is being recorded. I will now hand over to Patricia Neer of Edu Investor Relations. Please go ahead.
Thank you, operator. Good afternoon and thank you all for joining our conference call to discuss Exponential Fitness's 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 investor section of our website at investor.exponential.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
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