Xponential Fitness Q3 Earnings Call Highlights

Key Points

• Q3 results weakened: Revenue fell 21% to $62.3 million and adjusted EBITDA declined 27% to $24.3 million. Same-studio sales were down 7.5%, amid lower merchandise revenue and softer boutique fitness demand.
• 2026 outlook was adjusted: Xponential narrowed its adjusted EBITDA forecast to $91 million–$94 million and lowered expected net studio openings to 124–130, while maintaining its revenue and North America systemwide sales forecasts.
• The company ended the quarter with 3,185 open studios and said growth remains central to increasing systemwide sales and royalty revenue. Its board is continuing a strategic alternatives review that could include a sale or merger.

Xponential Fitness NYSE: XPOF reported a 21% decline in third-quarter revenue as same-studio sales fell and the boutique fitness franchisor faced lower equipment and merchandise revenue. The company also narrowed its full-year adjusted EBITDA outlook and reduced its expectation for net studio openings.

Revenue fell to $62.3 million from $78.8 million a year earlier, while adjusted EBITDA declined 27% to $24.3 million. North America systemwide sales fell 2% to $424 million on a pro forma basis.

Same-studio sales declined 7.5% overall and 5.6% at Club Pilates, the company’s largest growth focus. CEO Mike Nuzzo said lower merchandise sales, affected by the transition to an outsourced logistics partner, also pressured comparable sales.

Nuzzo said attracting new members is the company’s biggest focus for improving comparable sales, while retention has remained strong. He also pointed to credit card data showing a slowdown across boutique fitness in the third quarter compared with the first half of 2026.

Club Pilates and studio growth

Xponential ended the quarter with 3,185 open studios globally. It opened 54 studios and closed 34, with closures concentrated primarily at StretchLab, BFT and Pure Barre. Domestic net unit growth was one for the quarter, while international net growth was 19.

The company sold 58 licenses during the quarter, including 43 internationally. At September 30, it had 618 licenses contractually obligated to open in North America and 741 international master franchise obligations.

Nuzzo said Club Pilates had reached more than $1 million in average unit volume and that some moderation from that level was expected. The company’s long-term objective is to grow the brand to more than 2,000 locations over the next five years.

Asked whether the franchisor could operate economically with lower average unit volumes and same-studio sales, Nuzzo said it could, provided the studio base continues to grow. “As long as we’re continuing to grow total studios, total system-wide sales will increase, and total royalty revenue will increase,” he said.

Nuzzo declined to discuss fourth-quarter comparable sales. He said the company had seen a double-digit percentage increase in lead-form submissions and first-class appointment conversion since launching a new Club Pilates website at the end of September. A similar website redesign is planned for Pure Barre and other brands.

Revenue pressures and guidance

Interim Chief Financial Officer Robert Julian said franchise revenue fell $8.5 million, primarily because less revenue was recognized from franchise agreement terminations. Royalty fees also declined, reflecting lower same-store sales and brand divestitures in 2025.

Equipment revenue fell $3.2 million as installations and studio openings declined. Merchandise revenue decreased $4.4 million, reflecting both a change in reporting under a new business model and challenges associated with the transition, Julian said.

For 2026, Xponential now expects adjusted EBITDA of $91 million to $94 million and global net new studio openings of 124 to 130. It maintained its revenue forecast of $250 million to $260 million and North America systemwide sales outlook of $1.70 billion to $1.75 billion.

Nuzzo characterized the adjusted EBITDA change as a narrowing of the guidance range. On openings, he cited a more difficult real estate environment for the approximately 2,000-square-foot spaces the company seeks, as well as more selective site assessments. He said those factors did not reflect reduced franchisee intent to open locations.

Strategic review and leadership change

Nuzzo said the board remains engaged in the strategic alternatives review announced in April. The process could include a company sale, merger or another strategic or financial transaction, he said. The company does not plan further comment until the review concludes.

The call also marked Julian’s last as interim CFO. Jennifer Ryu has joined as CFO, and Nuzzo said one of her initial priorities will be reviewing the company’s cost structure, including its use of technology and relationships with vendors.

Xponential reported $27.2 million in cash, equivalents and restricted cash at September 30, alongside $521.1 million in long-term debt. Julian said the debt increase from a year earlier primarily reflected borrowing connected with the retirement of convertible preferred stock in late 2025. The company also had $10 million drawn on its $25 million revolving credit facility.

About Xponential Fitness (NYSE:XPOF)

Xponential Fitness, Inc is a franchisor of boutique health and wellness businesses. Founded in 2017 and headquartered in Irvine, California, the company develops and supports specialized fitness concepts that operate through franchised studios and licensed locations.

Its portfolio has included Club Pilates, CycleBar, StretchLab, YogaSix, Pure Barre, AKT, Rumble, STRIDE Fitness and BFT, which offer services such as Pilates, indoor cycling, assisted stretching, yoga, barre, dance-based workouts, boxing-inspired training and group fitness.

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