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Earnings Call Report: Xponential Fitness Ends Q1 ’22 with 99 New Studios

Earnings Call Report: Xponential Fitness Ends Q1 ’22 with 99 New Studios

A recap of May 2022 earnings call for Xponential Fitness, a global franchisor of boutique fitness brands

Xponential Fitness, which owns studio brands Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble, and BFT, reviewed its first quarter 2022 financial highlights in an earnings call on May 13. 

The boutique fitness franchisor has been rapidly expanding, ending the quarter with over 2,200 global studios overall, marking the largest studio count in Xponential’s history. Xponential also recently announced a partnership with Lululemon to develop original fitness programming for Mirror.


Here are some key takeaways from the recent Xponential Fitness earnings call.

Looking ahead: total 2022 revenue is anticipated to be between $201 million – $211 million

Xponential Fitness reports that it expects its total 2022 global new studio openings to be in the range of 500-520. 

“This represents the highest number of studio openings in our company’s history. We project North American systemwide sales to range from $995 million to $1.005 billion or $1 billion at the midpoint, which represents a 41% increase from the prior year and the highest North American systemwide sales in our history,” John Meloun, Chief Financial Officer, stated. 

Xponential says its total 2022 revenue is expected to be between $201 million to $211 million.

April’s secondary offering of Class A common stock increased public float by nearly 50%

Last month, Xponential Fitness offered 4.5 million shares of its Class A common stock by affiliates of Snapdragon Capital Partners, existing stockholders. 

BofA Securities and Jefferies acted as joint lead bookrunners for the offering, which closed on April 11, 2022 and increased public float by nearly 50%, according to Meloun. Xponential Fitness didn’t receive any proceeds from the sale. “Given the company is cash flow positive, there is no current need to raise capital to support our long-term growth strategy,” Meloun shared. 

Xpoenntial says its “straightforward” business model is insulated from macroeconomic pressures as people prioritize health

Anthony Geisler, Chief Executive Officer of Xponential Fitness, reiterated that his company’s business model is “straightforward” and said he’s pleased with the company’s financial and operation execution in the first quarter, noting that Xponential entered 2022 with “great momentum.” 

“While we are in a period of unprecedented inflation and macroeconomic pressures, our member counts are increasing, both overall and at the individual studio level as our customers continue to prioritize their health,” Geisler said on the call. 

“We believe our model is more insulated from macroeconomic pressures as our customers who, in general, are on reoccurring membership packages –  do not view fitness as discretionary spend. And our membership fees tend to be a relatively small piece of their overall budgets,” he continued.

Xponential’s actively paying members and visitation rates in North America each increased by 17% in Q1 ’22 against Q4 ’21.

XPOF’s expansion plans in North America & beyond

Xponential says it will increase its franchise studio base across its brands in North America and internationally, reporting that there has been a strong demand for its franchise licenses – selling 260 globally in Q1 ’22. 

“In North America, we have over 1,800 licenses sold and contractually obligated to open and have a replenishing pipeline of organic new studio expansion offering us 4 to five years of visibility into our long-term growth,” Geisler shared. 

Xponential’s partnership with LA Fitness is also driving its growth. The partnership, which gives Xponential the exclusive rights to open its brand studios in LA Fitness locations, is seeing “strong interest,” Geisler noted. 

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Xponential Fitness also added Mexico and the UK to its international locations and has named Dan Adelstein as Senior Vice President of International Development. Adelstein, who served as SVP of International Development at Orangetheory Fitness, will support real estate development and studio openings. 

“Beginning with our in-person offering, XPASS provides subscribers access across our U.S. studio locations under a single monthly recurring subscription. XPASS has been a powerful engagement platform for us, helping us attract new, retain existing and reengage previously churned consumers. XPASS does this by offering a comprehensive fitness program with flexibility across premium fitness modalities and geographies,” reads the earnings call transcript.

“XPASS officially launched nationwide in Q4 of last year, and its primary goal is to fill underutilized classes. By driving more bookings into existing classes, XPASS helps our studios increase revenue and profit.”

The success of XPASS & the future of XPLUS 

XPASS, which launched last year, has helped drive bookings into classes and attracted new consumers while helping to retain and re-engage others. Xponential shared that 15% of account holders are new and coming into studios for the first time, whereas 60% had previously lapsed but are returning. 

“In Q1 2022, the first full quarter of XPASS being fully rolled out, we significantly reduced our customer acquisition cost and simultaneously increased customer order values with the introduction of new plans,” reported Sarah Luna, President of Xponential Fitness. 

Luna also shared that XPLUS, which launched in April, has given “greater access” to its fitness portfolio. 

“XPLUS is highly conducive to B2B subscription options and direct marketing partnerships. We believe we are ideally suited to help our corporate partners maximize their health and wellness programs and we are enthusiastic about the opportunity to access a large number of new customers efficiently and at scale,” Luna said.

Luna also highlighted Xponential’s recent collaboration with Lululemon, saying that the partnership will help increase brand awareness.

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