Planet Fitness Q2 2025 Earnings Report

Planet Fitness EPS Results

• Actual EPS: $0.86
• Consensus EPS: $0.79
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $0.71

Planet Fitness Revenue Results

• Actual Revenue: $340.88 million
• Expected Revenue: $329.59 million
• Beat/Miss: Beat by +$11.29 million
• YoY Revenue Growth: +13.30%

Planet Fitness Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 8:00AM ET

Planet Fitness (NYSE:PLNT), together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.

Planet Fitness Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Robust Q2 financials: Systemwide same-club sales rose 8.2%, revenue increased 13.3% to $340.9 million, and adjusted EBITDA grew 15.8% year-over-year.
• Positive Sentiment: Club network expanded with 23 openings in Q2, bringing the total to 2,762 locations globally and serving 20.8 million members, while new clubs in Spain are ramping in line with U.S. performance.
• Negative Sentiment: The nationwide rollout of online membership management boosted convenience but caused a slight uptick in attrition, which is baked into the full-year same-club sales outlook.
• Positive Sentiment: Black Card penetration reached 65.8% (up 340 bps), and management plans to time a future Black Card price increase after assessing anniversary effects and cancel-online impacts.
• Positive Sentiment: Planet Fitness executed an asset-light move by selling eight California corporate clubs to a franchisee, allowing capital recycling and deeper focus on more efficient East Coast operations.

Presentation

[Operator]

Thank you for standing by. My name is JL, and I will be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter Planet Fitness Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

I would now like to turn the conference over to Stacy Carabella, VP of Investor Relations. You may begin.

[Stacey Caravella, Investor Relations at Planet Fitness]

Thank you, operator, and good morning, everyone. Speaking on today's call will be Planet Fitness chief executive officer, Colleen Keating, and chief financial officer, Jay Stas. They will be available for questions during the q and a session following the prepared remarks. Today's call is being webcast live and recorded for replay. Before I turn the call over to Colleen, I'd like to remind everyone that the language on forward looking statements included in our earnings release also applies to our comments made during the call.

[Stacey Caravella, Investor Relations at Planet Fitness]

Our release can be found on our investor website along with any reconciliation of non GAAP financial measures mentioned on the call with their corresponding GAAP measures. Now I will turn the call over to Colleen.

[Colleen Keating, CEO & Director at Planet Fitness]

Thank you, Stacy, and thank you everyone for joining us for the Planet Fitness second quarter earnings call. We're excited to be joining you from the New York Stock Exchange, where we will be ringing the closing bell today in celebration of our tenth anniversary as a public company. Over the past decade, through a steadfast commitment to our mission and purpose, we've added nearly 14,000,000 members, expanded our global footprint by more than 1,700 clubs, and established a presence in all 50 states and four additional countries.

[Colleen Keating, CEO & Director at Planet Fitness]

Today, we have 2,762 clubs and 20,800,000 members around the planet. We are proud of our accomplishments and confident in our even greater opportunity ahead. As consumers increasingly prioritize their health and well-being, Planet Fitness is uniquely positioned to meet that demand with our judgment free, high quality, and affordable fitness experience. Our reach is unparalleled with a Planet Fitness club within a twelve minute drive of a 170,000,000 people in The US. At the same time, with population growth and deurbanization over the past several years, we see increasing opportunities to bring Planet Fitness's high value offering to an ever growing community of fitness minded consumers in more geographies than ever before.

[Colleen Keating, CEO & Director at Planet Fitness]

Gen z continues to be the fastest growing segment of our membership. The ongoing success of initiatives like our high school summer pass, now in its fifth year and already outpacing last year's sign ups and workouts, highlights the continued strength and potential of our model. Gen z is highly fitness aware, and there are still three years of this population that aren't yet of age to join our clubs. In fact, we have twice the unaided awareness versus our next closest gym peer, and that gap is even greater among Gen z's. And the next generation, Gen Alpha, is expected to be even more focused on health and well-being.

[Colleen Keating, CEO & Director at Planet Fitness]

In the second quarter, we delivered strong financial performance and remain confident in our full year outlook for 2025. We ended the quarter with approximately 20,800,000 members and 8.2% system wide same club sales growth. We added 23 new clubs, ending the quarter with a global club count of twenty seven sixty two. I'd now like to review the progress we've made on our four strategic imperatives during the second quarter. As a reminder, these four strategic imperatives are redefining our brand promise and communicating it through our marketing, enhancing our member experience, refining our product and optimizing our format, and accelerating new club growth.

[Colleen Keating, CEO & Director at Planet Fitness]

Let me start with redefining our brand promise. In the second quarter, we continued with our we are all strong on this planet marketing campaign that highlights our best in class strength equipment, our welcoming atmosphere, and the supportive community that we offer. We continue to see strong Black Card penetration with 65.8% of our membership at that tier as of the end of the quarter, a 340 basis point increase from the second quarter of last year. Consumers continue to recognize the value of the black card with the gap between the classic and black card memberships only $10 That said, it's not a question of if, it's a question of when we implement a black card price increase. We wanted to anniversary the classic card price increase, and we'll evaluate the impact of the online cancel functionality before making a timing decision on a black card price change.

[Colleen Keating, CEO & Director at Planet Fitness]

Now to member experience and format optimization. Our commitment to providing a positive member experience starts with a member's very first interaction with our brand. For many young adults, that initial connection is being forged this summer. As I noted earlier, high school summer pass initial results are outpacing last year's. It's exciting to see so many young people embracing their fitness journeys, and even more so that they're choosing Planet Fitness to support them along the way.

[Colleen Keating, CEO & Director at Planet Fitness]

In line with our members first philosophy, we completed our national rollout of the online cancel functionality in May despite the federal appeals court ruling that blocked the quit to cancel rule. We are proud to lead by doing the right thing for our members and simplifying their ability to manage their membership with us. As a reminder, this was an option that we offered in more than 35% of our system before the end of q one, including all of our corporate clubs where we enabled it more than a year ago. We are seeing a higher attrition rate now that this functionality is live across our system. This is contemplated in our same club sales outlook that Jay will address in his comments.

[Colleen Keating, CEO & Director at Planet Fitness]

In alignment with our core values and commitment to integrity and excellence, we believe this is

[Stacey Caravella, Investor Relations at Planet Fitness]

the right thing to do,

[Colleen Keating, CEO & Director at Planet Fitness]

both to support our members and their experience and as the industry leader. In q two, we once again had a mid 30% rejoin rate and believe that allowing members to more easily manage their membership will only benefit us when they think about rejoining a club in the future. And finally, our efforts to accelerate new club growth. We are steadfastly focused on unit economics and believe that franchisee success fuels franchisor success. We continue to refine our product offering and operational efficiencies to maximize the economic value proposition while delivering the most relevant on brand experience for our members.

[Colleen Keating, CEO & Director at Planet Fitness]

Our goal is to drive the top line while enhancing the bottom line to realize the tremendous growth opportunity we have in The US and beyond. Internationally, Jay and I were in Spain in July to celebrate the opening of our ninth club located in Madrid, Xamarqin. The milestone came just a week after the one year anniversary of our first club in Spain. It was incredible to experience firsthand how the brand is being brought to life by the team in both newly built and a couple of conversion clubs. Seeing our brands continue to grow in new markets is extremely rewarding and a testament to our global appeal.

[Colleen Keating, CEO & Director at Planet Fitness]

Our success in bringing the brand to life in Europe is another proof point to support the long term club growth opportunities for Planet Fitness. We look forward to providing more insight into our strategy for both domestic and international growth at our Investor Day in November. Earlier this week, we executed an agreement for the sale of our eight corporate clubs in California to a franchisee in the market. This transaction reflects our commitment to recycling capital where appropriate and advancing our asset light model. This sale also allows us to focus our resources on our corporate owned clubs on the East Coast, where we are more densely concentrated and, therefore, can operate more efficiently. Now I will turn it over to Jay.

[Jay Stasz, CFO at Planet Fitness]

Thanks, Colleen. We're pleased to deliver another quarter of strong results, and we're on track to achieve our full year growth targets. We are well positioned for the long term to further expand our leading market share given the strength of our value proposition in the fitness industry combined with the proven resilience of our asset light business model. Demand for our offering is strong as evidenced by our sixteen straight quarters of mid single digit or higher same club sales growth. Before I review our second quarter financial performance, I'd like to address three topics, the rollout of online membership management, the agreement to sell our California clubs to a local franchisee in the market, and our latest banking on tariffs.

[Jay Stasz, CFO at Planet Fitness]

We remain committed to delivering a great member experience, and we wanna make the cancellation process as seamless as the joint process. As Colleen noted, we now provide our members the ability to manage their membership conveniently online. As you recall, more than 35% of our system had online cancel functionality before the '1, including all of our corporate clubs where we enabled it more than one year ago. As a reminder, generally, the largest impact to the attrition rate occurs in the first couple of months after implementing this functionality and diminishes as time goes on. We're seeing a slightly elevated cancel rate in both the clubs that had online cancel before q two and those that rolled out during the quarter.

[Jay Stasz, CFO at Planet Fitness]

The rate is up less in the legacy cohort of clubs compared to the others. These impacts are included in our outlook in same club sales growth guidance for the year. Now to the agreement to sell our California corporate clubs. We continue to believe in our asset light, highly franchised model and reiterate our plans to own approximately 10% of the fleet. To contextualize the impact from the sale of these clubs, we expected these clubs to contribute approximately $7,000,000 to our revenue and approximately $2,000,000 to our adjusted EBITDA for the balance of the year assuming an August close.

[Jay Stasz, CFO at Planet Fitness]

These impacts are also contemplated in our outlook for the year. Finally, given that we're fitness brand that sells and experience, we are generally less impacted by tariffs and have implemented mitigation plans such as leveraging our scale to negotiate with manufacturers, exploring alternative markets for producing products and bringing equipment into The U. S. On an accelerated basis. Now to our second quarter results.

[Jay Stasz, CFO at Planet Fitness]

All of my comments regarding our second quarter performance will be comparing Q2 twenty twenty five to Q2 of last year unless otherwise noted. We opened 23 new clubs compared to 18. We delivered system wide same club sales growth of 8.2% in the second quarter. Franchisee same club sales increased 8.3% and corporate same club sales increased 7%. Approximately 70% of our q two comp increase was driven by rate growth with the balance driven by net membership growth.

[Jay Stasz, CFO at Planet Fitness]

Black Card penetration was 65.8% at the end of the quarter, an increase of 340 basis points from the prior year, a sequential increase of approximately 90 basis points from q one. For the second quarter, total revenue was $340,900,000 compared to $300,900,000 an increase of 13.3%. The increase was driven by revenue growth across all three segments. An 11% increase in franchise segment revenue was primarily due to higher royalty revenue from increased same club sales as well as new clubs and increase in national ad funds as well as franchisee fees. For the second quarter, the average royalty rate was 6.7%, up from 6.6% in the prior year.

[Jay Stasz, CFO at Planet Fitness]

The 10.8% increase in revenue in the corporate owned club segment was primarily driven by increased same club sales as well as sales from new clubs. Equipment segment revenue increased 21.5%. The increase was primarily driven by higher revenue from replacement equipment sales. We completed 19 new club placements this quarter compared to 18 last year. For the quarter, replacement equipment accounted for 87% of total equipment revenue compared to 84%.

[Jay Stasz, CFO at Planet Fitness]

Our cost of revenue, which primarily relates to the cost of equipment sales to franchisee owned clubs, amounted to $59,400,000 compared to $51,900,000. Club operations expense, which relates to our corporate owned club segment, increased 10.4% to $77,400,000 from $70,200,000 The increase was primarily due to operating expenses from 25 new clubs opened since 04/01/2004. SG and A for the quarter was $35,500,000 compared to $31,600,000 while adjusted SG and A was $33,900,000 compared to $30,100,000 an increase of 12.4%. The primary driver of the increase to adjusted SG and A was higher compensation expense from recent executive hires. National advertising fund expense was $22,800,000 compared to $20,100,000 an increase of 6.7%.

[Jay Stasz, CFO at Planet Fitness]

Net income was $58,300,000 adjusted net income was $72,600,000 and adjusted net income per diluted share was $0.86 Adjusted EBITDA was 147,600,000 an increase of 15.8% year over year, and adjusted EBITDA margin was 43.3% compared to $127,500,000 with adjusted EBITDA margin of 42.4%. By segment, franchise adjusted EBITDA was $86,500,000 and adjusted EBITDA margin increased from 71.9% to 72.3%. Corporate club adjusted EBITDA was $56,600,000 and adjusted EBITDA margin increased from 39.5% to 40.7%. Equipment adjusted EBITDA was $26,400,000 and adjusted EBITDA margin increased from 27.4% to 32.1%. Now turning to the balance sheet.

[Jay Stasz, CFO at Planet Fitness]

As of 06/30/2025, we had total cash, cash equivalents and marketable securities of $582,500,000 compared to $529,500,000 on 12/31/2024, which included $56,500,000 of restricted cash in each period. Moving on to our 2025 outlook, which we provided in our press release this morning. As I noted earlier, our outlook assumes tariffs at the current levels. We continue to expect between one hundred and sixty and one hundred and seventy new clubs, which include both franchise and corporate locations. We expect that the quarterly cadence will be weighted towards the 2025, even more so than last year.

[Jay Stasz, CFO at Planet Fitness]

We continue to expect between one hundred and thirty and one hundred and forty equipment placements in new franchise clubs, and again, we expect a similar cadence to our openings. Lastly, we are reiterating our growth targets with the exception of same club sales growth, which we are narrowing to approximately 6% growth from the previous 5% to 6% growth range. We continue to expect the following growth over fiscal year twenty twenty four results: revenue to grow approximately 10% adjusted EBITDA to grow approximately 10% adjusted net income to increase in the 8% to 9% range adjusted net income per diluted share to grow in the 11% to 12% range based on adjusted diluted weighted average shares outstanding of approximately 84,500,000.0, inclusive of approximately 1,000,000 shares we expect to repurchase in 2025 in line with what we've previously communicated. Let me speak to the drivers for the implied sequential slowdown in same club sales growth in the second half of the year. First, we rolled over the classic card price increase on June 28.

[Jay Stasz, CFO at Planet Fitness]

So while we will continue to get rate benefit from it given our subscription model and tenure of our members, the benefit moderates over this time. Second, we forecast an elevated attrition rate in the back half of the year since our national rollout of online cancellation. Lastly, the continuing volatile macroeconomic environment. Finally, we continue to expect that re equipped sales will make up approximately 70% of total equipment segment revenue, 2025 net interest expense of approximately $86,000,000 inclusive of the annualized impact of our 2024 refinancing, the D and A to be flat to 24 and CapEx to be up approximately 20%. I will now turn the call back to the operator to open it up for Q and A.

[Operator]

Thank you. The floor is now open for questions. Your you. First question comes from the line of Randy Konik of Jefferies. Your line is open.

[Randal Konik, Managing Director at Jefferies & Company Inc]

Yes, thanks and good morning everybody. I guess Colleen and Jay, maybe give us some perspective on where we stand with the proportion of clubs that have been kind of under the new layout with more strength equipment relative to cardio? And and and what trends or or items you may see that are different in those clubs versus the older format from an equipment perspective clubs, whether it be membership, black card penetration, attrition, etcetera. It'd be very helpful to understand as you're moving into this new format, or from a an equipment perspective, what trends are are the same or different from the the the older, more cardio focused floor floor, layout?

[Colleen Keating, CEO & Director at Planet Fitness]

Morning, Randy. Great to talk with you, and thanks for the question. So, by the end of this year, we will have more than 70% of our clubs on some version of format optimization. So some optimized floor plan and mix of equipment. As you know, at the end of last year, we had 65% of the estate opt in to add plate loaded equipment.

[Colleen Keating, CEO & Director at Planet Fitness]

So those were at least three new pieces of plate loaded equipment in the clubs, and then we've got even more, you know, in more clubs adding that this year. So we'll be well over 70%, not just with the plate loaded, but with the more balanced mix of cardio and strength. And to your question about the specific mix of equipment, it really is ish about a fifty fifty mix of cardio and strength. So we'll still have a strong car. We still do have a strong complement of cardio equipment in our clubs.

[Colleen Keating, CEO & Director at Planet Fitness]

We find many of our members like mixed modality. However, we've increased the amount of floor space dedicated dedicated to strength equipment and augmented that. So really seeing a more balanced mix of cardio and strength. And even within the the the cardio, you're adding things like more stair climbers because those are getting a high level of utilization. Treadmills still get a high level of utilization and dialing back things like, arc trainers, and ellipticals, where we'll still have a complement of them, but, you know, gearing it more toward, what we're seeing from a usage perspective from our members.

[Randal Konik, Managing Director at Jefferies & Company Inc]

Great. And then I know there was some talk in the past about adding new types of amenities to the, the black card, you know, kind of member area, whether it be red light, cold plunge, spray tan, etcetera. Can you can you update us on where we stand with that? And if any learnings, if any clubs have those amenities at all, if you're seeing anything that's different from a trend perspective versus clubs, obviously, that don't have those yet?

[Colleen Keating, CEO & Director at Planet Fitness]

So we've got a numb we have a number of our clubs where we're piloting some of these new black card amenities. So and and you're you're right. You cited many of the things that are that are in flight. So testing red light, also red light hybrid is in a number of our clubs, and we're also testing spray tanning as an alternative to to UV tanning. So too soon for us to to kinda call which ones we're going to move move forward, still in pilot phase and evaluating the utilization.

[Colleen Keating, CEO & Director at Planet Fitness]

However, we continue to see, that that recovery and renewal are important parts of, of our members' fitness routine. So we'll continue to, you know, to test and evaluate things that can enhance our members' experience.

[Operator]

Your next question comes from the line of John Heinbockel of Guggenheim. Your line is open.

[John Heinbockel, Senior MD & Equity Research Analyst at Guggenheim Securities]

Hey, Collie, I wanted to start with the 170,000,000 person TAM, right, that you're within twelve minutes of. How think do about density? And then is the opportunity being density in some of those existing more urban markets versus maybe less dense rural markets or kind of out there. So how do you balance the two? I assume you want to do more densification in urban, but but let me know.

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. So, John, good morning.

[John Heinbockel, Senior MD & Equity Research Analyst at Guggenheim Securities]

Great.

[Colleen Keating, CEO & Director at Planet Fitness]

Thanks for the question. So so, yes, you know, we we've seen that probably the urbanization and, and growth in the suburbs give us new market opportunities, you know, where we have the, the population to support our traditional 20,000 square foot club. At the same time, we've been testing some additional, additional smaller footprint in infill locations Mhmm. And also more more rural rural locations so that we're able to bring a Planet Fitness experience to to even more prospective members around planet.

[John Heinbockel, Senior MD & Equity Research Analyst at Guggenheim Securities]

Okay. And and maybe a follow-up. I know you you're in the early stages of what you wanna do with the with your marketing structure. But, you know, is there any thought or have you given any thought to, you know, how you want local, national to kinda be, set up? You know.

[John Heinbockel, Senior MD & Equity Research Analyst at Guggenheim Securities]

And I because I think the idea was, you know, maybe do more national, a little less local, and then there's a marketing savings, longer term. But we I don't I don't know if there's been any update on that.

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. So from a marketing standpoint, we, you know, we launched our new campaign this year. And based on what we've seen, you know, from our from our member join numbers, we're we're confident that the new marketing messaging is landing. So, you know, you've you've seen the campaign around we're all strong on this planet and, and growing stronger together. That messaging is very much resonating.

[Colleen Keating, CEO & Director at Planet Fitness]

I will say specifically, you know, we're doing doing more national marketing driving the brand, and bringing the brand promise to life. And at the at the local and hyper local level, we felt still believe that's a that's an important complement to to the national marketing. So so very much in balance. I mentioned that we're seeing increased participation, increased volume, as well as utilization with high school summer pass this summer. And there is an example of where we amped up, marketing with influencers to, to target this particular, customer demographic.

[Colleen Keating, CEO & Director at Planet Fitness]

And it's, you know, it's proven it's proven quite successful in the in the numbers we're seeing with the high school summer pass participation this summer. So, you know, with our new chief marketing officer who just came aboard in February, you'll start to you'll start to see us experimenting with with the new marketing mix. Again, balance of, of local and national. And at the national level, we do think there's an opportunity for us to buy more efficiently and aggregate our spend.

[Operator]

Your next question comes from the line of Max Rakutenko of TD Cowen. Your line is open.

[Max Rakhlenko, Managing Director at TD Cowen]

Great. Thanks a lot. So first, Jay, can you speak to, maintaining the the comps guide? I know you provided some color, but just any additional comments because shouldn't churn normalize in 3Q given your prior comments on click to cancel? And then you should still see a benefit from the classic card price increase given how churn works.

[Max Rakhlenko, Managing Director at TD Cowen]

And then I do think that the headwind from one q's black card promo should, I believe, continue to, reverse. So just any more color on the conservatism for the two h guy?

[Jay Stasz, CFO at Planet Fitness]

Yeah, Max. Thanks for the question. And yeah, mean to your point, obviously, the classic card price increase will continue to get that benefit. We will continue to get that, but it diminishes over time over the tenure of the membership. To your point on click to cancel, as we said, what we're seeing is slightly elevated than what we had initially modeled.

[Jay Stasz, CFO at Planet Fitness]

Now we've recast that and it is baked into our full year outlook and the comp guidance. And as far as it moderating, we would expect that. I mean, it is still early. We're still within the first three months of the full rollout. So we're still in the early phases of that.

[Jay Stasz, CFO at Planet Fitness]

But we've updated our forecast and we've contemplated that. So we think what we've got in there is appropriate. And then the last pillar, just given the macroeconomic environment, we do think it makes sense to maintain some level of conservatism in the guide, going forward. So all that culminated in what we, spoke about today.

[Max Rakhlenko, Managing Director at TD Cowen]

Got it. That's helpful. And then, Colleen, I saw that you recently announced that you're looking to add a director of franchise sales. So your franchise space has been shrinking, and I believe you've been close to new entrants for many years now as the white space has been divvied off, and there has been m and a inside the system. So what's the mechanism to add new franchisees into the fold besides new ones entering through m and a, such as the Flint group and others?

[Max Rakhlenko, Managing Director at TD Cowen]

And is it more for US or international franchisees? And just how should we think about the acceleration in the openings, from this?

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. Max, one of the things, you know, we've said is that to, you know, over the longer term, to achieve our full growth ambition, we, you know, we believe we'll need more franchisees in the system. We also know that there are several of our can you still hear me, ma'am?

[Operator]

Yes. You can be heard.

[Colleen Keating, CEO & Director at Planet Fitness]

Perfect. So I I I'll start again in case, case it it was disrupted. So, you know, and to to achieve our longer term growth ambition, we believe we need more franchisees in the system. And we also know that there are several of our larger franchisees that are approaching the end of of their fund horizon and maybe looking to transact, and in support of those franchisees as well. You know, we wanna be cultivating prospective new franchisee relationships who might wanna, you know, might wanna come into the system and and grow with, grow Planet Fitness.

[Operator]

Your next question comes from the line of Rahul Krotepali of JPMorgan. Your line is open.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Good morning, guys. Thanks for taking the question. Colleen, as we think about the TAM and going into the Analyst Day, like, how do you think about the local and regional HVLP competition? And, I mean, we are seeing some of the incumbent brands fit with very well capitalized operators and backers coming into the market. Curious to hear your thoughts, and I have a follow-up.

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. So, Hyrule, Nice to hear from you. Gosh. When I think about when I think about the TAM, I think about the the growth of Gen z and how fitness minded they are and that they are the the fastest growing segment of our membership and the fact that, you know, several years of Gen z haven't even aged into our membership opportunity yet. So I think the if, you know, the the TAM is going to continue to grow.

[Colleen Keating, CEO & Director at Planet Fitness]

And with Jen also coming up behind, you know, by all accounts today, you know, going to be at least as if not more focused on, health and wellness and well well-being. And when I, you know, when I think about the the landscape and I tend to say peers in the space. You know, you're right that there are there are a lot of local and regional players when you think about the 31,000 gyms and clubs that are in The US today, if you take us and our next largest peer in the space combined, we were, you know, together only about slightly more than 10% of that. So, you know, it's a big landscape. And at the same time, I think our biggest competitor is fear of walking in the front door.

[Colleen Keating, CEO & Director at Planet Fitness]

And that's what makes Planet Fitness so uniquely positioned. You know, coming into, you know, coming into any any market, uniquely positioned is our our welcoming environment, no gym intimidation, and that we're uniquely positioned to meet, to meet members wherever they're at on their fitness journey, whether they're a beginner, or whether they're, you know, an advanced, an advanced gym goer who's, you know, training for a marathon.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Appreciate the color. I want want to pick up a little more on the Spain, side. Appreciate the update. How are the unit economics shape shaping up relative to The US given you have a gym auto with almost a year in? And then also if you can share any color on an update on the franchise on refranchising situation there. Thank you.

[Colleen Keating, CEO & Director at Planet Fitness]

Up issues. So from a from a Spain perspective, we are we are thrilled with the way the clubs are ramping in Spain. And in particular, you mentioned the first club that, you know, has just been open a year. It was a year in July. When we look at that club's ramp and we compare it to a domestic ramp, the the the Spain clubs, inclusive of that first one that opened, are are ramping like like our domestic clubs, which is quite remarkable, considering we only brought the brand to Spain just a year ago.

[Colleen Keating, CEO & Director at Planet Fitness]

So we're feeling really good about our entree into Europe, really good about the Spain performance, and we're in the very, very, very early days of having some some conversation about about transacting Spain, but it is our intention to recycle that capital, to, you know, to bring a franchise partner into Spain. We built it on our balance sheet as a proof of concept, and it's proven really well.

[Operator]

Your next question comes from the line of Jonathan Komp of Baird. Your line is open.

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

Yeah. Hi. Good morning. I just want to follow-up. I know you mentioned, Jay, in the back half.

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

Now assuming higher churn continues, could you maybe just talk about some plans you're embedding to help offset that, whether there's some demand centric initiatives that can help near term and then longer term? Just what are the key initiatives you're looking at to help drive unit economics still higher here?

[Jay Stasz, CFO at Planet Fitness]

Yes. So I think that's a broad question. When we think about it, I think this is a bit of a moment in time. If we step back and think about click to cancel or the ability to manage your membership online. Look, we're about putting the members first.

[Jay Stasz, CFO at Planet Fitness]

We think it's the right thing to do. Taking this step even though it wasn't mandated is the right thing and then align with our core values. So from that standpoint, makes all the sense in the world, and we think it makes sense to be the leader, since we're the leader in the industry in this space. As we think about opportunity, we've talked about it before. It's too early to comment on it further, but the ability to market this further in the joint flow, we've done some testing, and we've seen lifts.

[Jay Stasz, CFO at Planet Fitness]

Colleen touched on the high school summer pass, which has been, you know, a nice program that we think will be continuing to be successful and meaningful going forward. And I think as is evidenced by our our comps and our results for the second quarter, the marketing is landing and the shift in our clubs with the equipment is landing to the full spectrum of of, Jim Covers. So we're pleased with all that. Click to cancel. We're managing it.

[Jay Stasz, CFO at Planet Fitness]

And, it's you know, we're talking tens of basis points, compared to what we originally thought or originally thought. It is baked in our outlook and our comp guide, so we feel good about where we're at.

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

Okay. Thank you. And then just two follow ups as we think about the next few months here. Any opportunity to better monetize and convert the high school summer pass? And then, Colleen, just on pricing, I think, know, we're within a window of a few months where you'd probably make the decision for this year or not.

[Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co]

You know, what what else do you need to see, or what are you looking at specifically as you as collectively make that decision? Thanks again. Again.

[Colleen Keating, CEO & Director at Planet Fitness]

Absolutely. So so, yeah, I think from a conversion standpoint on high school summer pass, we saw last year that we converted higher we had a higher conversion percentage than we did the year prior. And what we're seeing this year, you know, too soon to get into real specifics, we'll see the conversion in the fall, but, all indicators are that the both the utilization and the participation are both up markedly this year versus last. So yeah. So that will be very you know, should be favorable, I guess, I should say, you know, if we assume even a even a flat conversion percentage, much less, you know, potentially an an increase in conversion like we saw last year.

[Colleen Keating, CEO & Director at Planet Fitness]

So, remains to be seen in the fall, but, the indicators there are, you know, I think are are really strong. Oh, and black card pricing. So, you know, we said last last quarter that we it wasn't a matter of if. It was a matter of when, But we wanted to get on the other side of anniversarying the classic card price increase, which we did at the '2. And, we also wanted to get through the rollout of, you know, of online membership management, what we're now calling click to cancel because it really is about empowering our members to, to manage their membership.

[Colleen Keating, CEO & Director at Planet Fitness]

Given that we've seen, you know, as as Jay said, a slight elevation, and I don't wanna overplay that. You know, we're talking in the tens of basis points. This is not in the hundreds of basis points. Slight elevation in churn, since that rollout. You know, we'd like to give that a a minute to moderate.

[Colleen Keating, CEO & Director at Planet Fitness]

As we've as we've seen in test environments in other markets in the past, there is a moderation, after that rollout. So we wanna, you know, we wanna take a minute and and get on the other side of that rollout as well, before we make an an absolute decision on the the timing of the black card price increase.

[Operator]

Your next question comes from the line of Joe Altobello of Raymond James. Your line is open.

[Joseph Altobello, Managing Director at Raymond James Financial]

Thanks. Good morning, guys. Just wanted to follow-up, Colleen, on that last answer you gave I I I it's still early, obviously, but do you have data on how quickly quickly cancel rates actually, you know, go back to normal after the implementation of click to cancel, or do they stay slightly elevated permanently?

[Colleen Keating, CEO & Director at Planet Fitness]

Generally speaking, generally speaking, after ish about twelve weeks, they moderate. Now there have been a couple of, you know, couple of exceptions. We've talked about Tennessee. A couple of exceptions where it's remained a bit elevated for a longer period of time. But generally speaking, we see a moderation about twelve weeks after rollout.

[Colleen Keating, CEO & Director at Planet Fitness]

The difference here is that this is a nationwide rollout as opposed to, you know, in in smaller cohorts as we've done in the past. So, you know, remains to be seen if this behaves like the the prior test and, you know, prior rollout environments. But, we're still in that window because it was mid May, so we're still within that twelve week window of rollout, and we'll we'll monitor it.

[Joseph Altobello, Managing Director at Raymond James Financial]

Okay. And then just to follow-up on the comp, the 8.2%. I know you've talked about kind of getting more feedback to more of a fifty fifty split between member and rate growth. How quickly do you think you can you can get there you can get there? Yeah.

[Jay Stasz, CFO at Planet Fitness]

Joe, this is Jay. And and as we said on the call, it's $70.30.

[Jay Stasz, CFO at Planet Fitness]

We're not guiding beyond 25. And I think, especially right now, as we think about the back half of the year, we're going to be more consistent with the seventythirty versus getting back to an even split. And as we think about Q3, it's historically not a large increase in membership type of quarter. So I would expect in Q3 for that seventy-thirty to even be more skewed. And we'll give longer term guidance at our Investor Day in November.

[Operator]

Your next question comes from the line of Chris O'Cull of Stifel Financial Corp. Your line is open.

[Chris O'cull, MD - Restaurants & Franchised Businesses at Stifel Financial Corp]

Thanks. Good morning, guys. Colleen, I was hoping you could provide an update on the progress in reducing investment costs for new units.

[Colleen Keating, CEO & Director at Planet Fitness]

Me too. So as you know, the the more balanced cardio and strength package, for starters, reduce the build cost for our franchisees. We've also done things like shrinking the lobby, where we're today seeing well over 80% of our joins come either online or through the app. You know, we we determined determined that that we we don't need as large a lobby because we're not doing the sign ups in the lobby. So, you know, dedicating more of that space to the gym floor and shrinking the lobby reduces the build cost because, obviously, tile is expensive.

[Colleen Keating, CEO & Director at Planet Fitness]

You were looking at locker room sizes and and shrinking the locker room sizes a bit to dedicate more space to the gym floor. That too reduces build cost. Building a smaller front desk, which we think actually creates a more welcoming environment, you know, for for our members. So, things, you know, structurally, that we're able to do in in from a construction cost standpoint are, you know, are are are helping the unit economics. But at the end of the day, the biggest thing is this business is a top line play.

[Colleen Keating, CEO & Director at Planet Fitness]

And when we drive the top line for our franchisees, that's the thing we do that's most accretive to their unit economics. So, you know, we're really encouraged by the joint volume that we've seen this year. We're really encouraged that our marketing is landing, and that our product offering is really resonating with consumers, you know, particularly Gen z, a younger consumer as we think about kind of longer term lifetime value.

[Chris O'cull, MD - Restaurants & Franchised Businesses at Stifel Financial Corp]

Makes sense. And then do you believe adding some of these high value services like trade painting could unlock the potential for an additional pricing tier?

[Colleen Keating, CEO & Director at Planet Fitness]

We're not talking about additional pricing tiers, you know, right now. What we what we are talking about is is potentially, you know and and the timing of which is not potentially when when we will take, an increase to the black card pricing. And we're always going to be thoughtful about making sure that, you know, you've heard me say leaning into when we think about HVLP, making sure that we're thinking about the h b in capital letters and the l p in lowercase, that we're delivering, you know, an an incredibly high value, for our members. So always thinking about the offering, wanting to stay most relevant, and then, you know, pricing in a way that, enhances the economics of our franchisees while at the same time delivers incredibly high value for our members.

[Operator]

Your next question comes from the line of Yan Xu of BNP. Your line is open.

[Xian Siew, Vice President at BNP Paribas]

Guys. Thanks for the question. I want to follow-up maybe on Gen Z in terms of the differences and of how they behave versus other, demographics. Are you seeing them tend to join at more white card versus black card? Any differences in utilization or churn? Just kinda curious on on how they, look.

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. So, you know, while while we, we haven't really dissect we or we don't dissect or deconstruct, the utilization by generational cohort, you know, we we have, shared that we're seeing utilization increase. So where we we used to see our, our active members or members that utilize our club in a given month, you know, use the club six times a month or 6.1 times a month. You know, we're seeing that in the high sixes, mid to high sixes today. So, you know, that is an indication.

[Colleen Keating, CEO & Director at Planet Fitness]

You can drop you can glean from that, as as Gen Zs are becoming, you know, the are are the fastest growing segment of our member membership, you know, compound that with the with the increased utilization. And then I talked about high school summer pass this morning, and that's all Gen Z. And, you know, I shared with you that not only is the participation up, the utilization is also up as well. So, you know, those are indications you can drop off.

[Xian Siew, Vice President at BNP Paribas]

Okay. That's helpful. And then may you know, unit economics a couple of times.

[Xian Siew, Vice President at BNP Paribas]

And to your point, with the pricing and the formatting of the stores and the marketing, it seems like unit economics are getting better. I'm just curious, like, if you're if you're hearing feedback from franchisees maybe looking to they're seeing the better unit economics and maybe wanting to accelerate opening into the next next year next year.

[Colleen Keating, CEO & Director at Planet Fitness]

First, you I'm curious.

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. One of the beautiful things about our franchise business is the opportunity to partner with our franchisees. And our new chief development officer has been, has been out on the road a lot, meeting with our franchisees and talking talking with them about the changes in format, the structural changes that we can be making to, to enhance the build cost or improve the build cost, and then, of course, you know, our our new chief marketing officer really driving the top line. The other thing I'll say that we're, you know, we're seeing and I'm sure you're seeing as well, is improvements in the availability of, of retail real estate, particularly shopping, shopping center real estate. So, you know, we had, we've had, you know, strong, strong positive absorption over the last several years.

[Colleen Keating, CEO & Director at Planet Fitness]

And in the first two quarters of this year, q one and q two, negative absorption. Also, a moderation in rent escalation. So rent growth has been, has been below inflation in 2025. So those are also good indicators for improved unit economics for our franchisees. So we're looking at top line, which is most important.

[Colleen Keating, CEO & Director at Planet Fitness]

We're looking at build cost in partnership with our franchisees and then trying to also lean in and help them with the availability of real estate.

[Jay Stasz, CFO at Planet Fitness]

Yeah. And I agree. Just to add on, specifically, we do look at, the new cohorts of clubs that we've, opened both the franchisees and ours since the new growth model and, you know, some of the evolution in the marketing and the floor plan. And from a top line standpoint, we're very pleased with the way those are trending, in terms of a a unit economics view.

[Operator]

Your next question comes from the line of Alex Perry of Bank of America. Your line is open.

[Alexander Perry, Director - Equity Research at Bank of America]

Hi. Thanks for taking my questions here and congrats on a strong quarter. I just wanted to follow-up sort of on the guidance. So you narrowed the same store sales range toward the high end. You sort of mentioned that click to cancel attrition is, I think, is a little bit higher than expected.

[Alexander Perry, Director - Equity Research at Bank of America]

So I guess what is the offset? Are you seeing better black card penetration than you were expecting? Or or, you know, what else is sort of going on that that's maybe offsetting some of this higher click to cancel attrition? Thanks.

[Jay Stasz, CFO at Planet Fitness]

Yes. So, as we said, we had a wider range 5% to six We've narrowed that range. We obviously came off a good quarter. So, part of it is just actualizing Q2. And then as we think about the guide, the click cancel, right, we had some of that embedded in.

[Jay Stasz, CFO at Planet Fitness]

We've moderated that slightly. And then otherwise, it's just the things that we've talked about, right, Continuing the benefit on the classic card price increase, right, we'll still get that, although not to the extent that we have. That was modeled in before. And then just some level of conservatism with the macroeconomic environment.

[Alexander Perry, Director - Equity Research at Bank of America]

Perfect. And then I guess just my follow-up. As we think about memberships in the back half, anything to call out there? I think seasonally on a per club basis, you normally see declines in the third and fourth quarter. Is that how we should be thinking about it as we look at this year?

[Alexander Perry, Director - Equity Research at Bank of America]

Is there anything else we should be considering given all the moving parts? Thanks.

[Jay Stasz, CFO at Planet Fitness]

Yes. We don't really guide, to membership. But to your point, when we think about the third quarter historically, that's not been a large, net member ad, quarter. You know? But, we're gonna continue to do our best.

[Jay Stasz, CFO at Planet Fitness]

And then if you look at the trends that we've had in the last four quarters, you can see we have had some slight, membership uptick.

[Operator]

Your next question comes from the line of Sharon Zackfia of William Blair. Your line is open.

[Sharon Zackfia, Group Head–Consumer at William Blair & Company, L.L.C]

Good morning. I I wanted to kinda go back to the increase in strength training at at a lot of the clubs at this point. Is there any way to compare and contrast kind of member engagement or visitation patterns at those clubs with the added strength versus kind of where they were before or, kind of a a base cohort?

[Colleen Keating, CEO & Director at Planet Fitness]

So as I shared, you know, shared a little bit, we we are seeing we're seeing utilization up and the number of visits per club increasing as well, which is an indication that the format, you know, the format and format optimization, is is landing, is resonating with our members. We do have some clubs that, that have some some monitor monitoring data, that gives us some some granular line of sight, but, you know, probably too soon for us to talk about that as, as a trend. So, so we are measuring utilization. But, again, we're, you know, really just rolling out the the plate loaded equipment just went in in the first you know, right before the first quarter. Probably too soon for us to to really talk about it as a trend yet. But, generally, Michelle

[Sharon Zackfia, Group Head–Consumer at William Blair & Company, L.L.C]

Yes, sir. Is it is it, a big enough trend though where you might need to go back and add even more equipment on the strength side?

[Colleen Keating, CEO & Director at Planet Fitness]

That's Sharon, that's one of the things that we're evaluating, and it may not be broadly all strength. It may be certain specific pieces of equipment, that we're we're hearing member feedback that, you know, that may indicate we wanna add more of it. I'll give you one example in particular. We have significantly increased the the complement of stair climbers in our clubs. That was based on data that we showed, you know, from a member utilization standpoint.

[Colleen Keating, CEO & Director at Planet Fitness]

And the same will will hold true with strength equipment as we hear from our members, the pieces of equipment they're or or see, you know, that they're using more, you know, could help could help inform, our equipment packages going forward. And and the other thing that we've noticed is, the utilization of floor space for functional training. So we've been intentional in our clubs about opening up floor space, so that our our members have space to do functional training. That's that's another trend that we've, we've been responding to.

[Jay Stasz, CFO at Planet Fitness]

Yeah. And as we've talked about before, we have, NPS now fully rolled out across our system. So that's a great area for us to get feedback across the entire, fleet of clubs.

[Operator]

Your next question comes from the line of Marni Lysat of Macquarie Capital. Your line is open.

[Marni Lysaght, VP - Equity Research at Macquarie Group]

Hi, guys. Thanks for taking my questions. I just got some questions maybe pertaining to more just some cash flow nuances. Just noticed that the, your accounts receivable balance is quite elevated compared to more recent history as of June. And it's kind of, you know, ratcheting up to what it was in December on the back of some of those reequipped dynamics. Is there anything you can kind of unpack there?

[Marni Lysaght, VP - Equity Research at Macquarie Group]

Is there any potentially any inflation coming through on, on equipment?

[Jay Stasz, CFO at Planet Fitness]

No. I think there's nothing unusual there. It's just, standard timing differences.

[Marni Lysaght, VP - Equity Research at Macquarie Group]

Okay. Okay. And just kind of moving on on you've obviously spoken to the the deal in California. Are you seeing any changes in the appetite of franchiser groups for these kind of deals in the current climate, or is it is it still kind of, like, business as usual?

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. I think, you know, I think it's that was mentioned on one of the questions earlier about how frequently when when assets transact, when clubs transact in our system, it's an incumbent franchisee, you know, who's who's looking to purchase. And in the sale of the California clubs, you know, we had we had multiple multiple bids on that portfolio of clubs and, you know, once again, strong interest from inside the system, to to purchase the the additional clubs. So no diminution in appetite for sure.

[Operator]

Your next question comes from the line of Logan Reich of RBC Capital Markets. Your line is open.

[Logan Reich, Equity Analyst - Restaurants & Leisure at RBC Capital Markets]

Hey. Good morning. Thanks for taking my question. I had a question on the black card pricing test. You've been doing it for for a little while now.

[Logan Reich, Equity Analyst - Restaurants & Leisure at RBC Capital Markets]

Was just wondering if you can share any observations or or differences you guys are seeing in the test relative to broader store portfolio and maybe in relation to black card mix, retention, net add, anything you would be able to share on the black card test? Thanks.

[Colleen Keating, CEO & Director at Planet Fitness]

Well, then I'll start. So when we went in and I I probably, you know, I wouldn't call it a test at this point. I think we've evaluated it. Now it's about you know, we've made a decision. It's just about the right timing.

[Colleen Keating, CEO & Director at Planet Fitness]

But at any rate, when when we were in the test, we wanted to see two things. You know, was there headroom on price, and was that headroom at $27.99 or $29.99? The second was, you know, did we see elevated churn? And then the third was, did we you know, was it more accretive, to enjoy did did we see an, increased black card penetration? And net net, on price, there was not a material difference between the $27.99 and the twenty nine twenty nine ninety nine price test, which is why, you know, we've anchored to the 2999.

[Colleen Keating, CEO & Director at Planet Fitness]

From a churn perspective. We do not see a material difference in churn, at at the different price point. And from a black card penetration, we've been talking about that. Gosh. We're, you know, we're up 340 basis points in black card penetration quarter, you know, quarter to prior year, and and that's been a trend that we've been seeing.

[Colleen Keating, CEO & Director at Planet Fitness]

So with the gap between classic and black, we've had significant being the narrowest that it's been, since the inception of the black card at a $10 price delta. We've definitely enjoyed increased black card penetration that has been, you know, has been accretive.

[Logan Reich, Equity Analyst - Restaurants & Leisure at RBC Capital Markets]

Got it. Super helpful. And just a quick follow-up. How many stores have the $30 or, how many gyms have the $30, black card price today?

[Colleen Keating, CEO & Director at Planet Fitness]

Yeah. We have it in two geographies today. It's in our New York market and our Charlotte market market today.

[Operator]

Your last question comes from the line of Brian McNamara of Canaccord Genuity. Your line is open.

[Madison Callinan, Equity Research Associate at Canaccord Genuity - Global Capital Markets]

Hi. This is Madison Callonan on for Brian. Thanks for taking our question. We were just curious why net new unit guidance hasn't been adjusted as we would have figured visibility would be much higher today on that front compared to May. Also, is there, like, an internal time line when you expect to surpass the 200 plus net new unit growth number that the company did pre pandemic? Thanks.

[Jay Stasz, CFO at Planet Fitness]

Yeah. So I I can I can, start on that? As far as the 200 number and what what we've talked about, I mean, Colleen is a fan of a big number, and, so we appreciate that. You know, we want to continue to, do the right things. And what that will allow for is continued steady growth in the units, right?

[Jay Stasz, CFO at Planet Fitness]

We don't want the year with the bumper crop, but, we think doing the work that we're doing on all fronts will eventually lead us back to that, and that includes both domestic and international. And then from a net growth standpoint to your point, right, we have had a couple of closures. Some of that was related to lease terms, and some of that was just natural lease ending. The you know, it's just part of the normal course of the business, nothing unusual, and we can, you know, refine that going forward.

[Colleen Keating, CEO & Director at Planet Fitness]

I think too, we also know that we've got, you know, because of the nature of the business, there's seasonal favorability to a q four opening. It's a very profitable quarter to open because you're right in front of the strong Q1 joint volume. The flip side of that is that it's a race to the finish when you've got a lot of the openings back end loaded in the in the last quarter of the year. So we felt we felt confident, in the range that we guided, and we feel confident that we have a great line of sight to, to those openings. However, at the same time, there are a lot in q four.

[Sharon Zackfia, Group Head–Consumer at William Blair & Company, L.L.C]

Thank you very much.

[Colleen Keating, CEO & Director at Planet Fitness]

Sure.

[Operator]

That concludes our q and a session. I'll now turn the conference back over to CEO, Colleen Keating, for closing remarks.

[Colleen Keating, CEO & Director at Planet Fitness]

Thank you. In closing, I am encouraged by our performance during the 2025. We continue to be a highly attractive franchisee franchise system that generates strong and stable free cash flow for long term sustainable growth and increased shareholder value. Thank you.

[Operator]

This concludes today's conference call. You may now disconnect.

Participants

Executives

• Stacey Caravella, Investor Relations
• Colleen Keating, CEO & Director
• Jay Stasz, CFO

Analysts

• Randal Konik, Managing Director at Jefferies & Company Inc
• John Heinbockel, Senior MD & Equity Research Analyst at Guggenheim Securities
• Max Rakhlenko, Managing Director at TD Cowen
• Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan
• Jonathan Komp, Senior Research Analyst at Robert W. Baird & Co
• Joseph Altobello, Managing Director at Raymond James Financial
• Chris O'cull, MD - Restaurants & Franchised Businesses at Stifel Financial Corp
• Xian Siew, Vice President at BNP Paribas
• Alexander Perry, Director - Equity Research at Bank of America
• Sharon Zackfia, Group Head–Consumer at William Blair & Company, L.L.C
• Marni Lysaght, VP - Equity Research at Macquarie Group
• Logan Reich, Equity Analyst - Restaurants & Leisure at RBC Capital Markets
• Madison Callinan, Equity Research Associate at Canaccord Genuity - Global Capital Markets