Xponential Flexes Gains in Revenue, Sales, and Membership

Xponential Fitness

Xponential Fitness reported Q2’22 earnings on August 11. The boutique fitness franchisor raised full-year guidance on strong revenue growth and steady expansion.

By the numbers: 

  • Q2 revenue reached $59.6M, up 66% YoY.
  • North American systemwide sales were $249.8M, up from $171.6M in Q2’21.
  • Net income was $31.5M vs. a net loss of $8M in the same period last year.
  • It revised projected FY revenue from 33% growth to 39% growth.

Between the lines: Xponential’s eighth consecutive quarter of growth stems from a series of acquisitions, product rollouts, and international franchise agreements. Playing the long game, the company weathered the pandemic and accelerated once restrictions were lifted.

On the earnings call, CEO Anthony Geisler said visits to his company’s 10 fitness brands were “integral to our members’ lives” despite inflationary headwinds, adding:

“Xponential’s customers continue to prioritize their health as a necessary investment. Our customers do not view fitness as discretionary spend.”

More, more, more. Xponential makes money by licensing its brands to franchise owners, providing business processes and selling equipment while earning royalty fees in return. With small, low-overhead setups, the more studios the company opens, the more it stands to earn. On average, 70% of its overall revenue is recurring.

During the quarter, it sold 251 licenses and opened 128 new studios—reaching 4,935 and 2,357, respectively—including signing agreements to expand in the UK and Japan. Not slowing down, the company reaffirmed its goal of 500 to 520 openings this year.

Operation omnichannel. Adding two concepts to its portfolio in 2021—boxing workout Rumble and HIIT studio BFT—Xponential solved the dilemma of single-modality burnout when it introduced its subscription passport, XPASS, linking all 10 boutique concepts. A collective success, its total North American membership grew 32% YoY in Q2.

Bolstering its digital business, it relaunched its streaming platform XPLUS to include workout libraries from each concept while spinning out content deals with lululemon’s MIRROR.

Looking ahead: Xponential isn’t suffering the same fates as boutique competitors F45 Training and SoulCycle. By pulling the right operational levers and keeping customers engaged through the rockiest parts of the pandemic, $1B in systemwide sales is well within reach this year.

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