F45 Training Reports $26.8 million in Q2 2021; Details New Concepts

F45 Training Holdings Inc., Austin, Texas, reported $26.8 million in second quarter 2021 revenue, a 54 percent increase from second quarter 2020 when revenue was $17.5 million, according to an announcement from the company. F45 Training also is developing three new fitness concepts, two of which target people over the age of 50.

On July 15, F45 Training began publicly trading on the New York Stock Exchange under the symbol FXLV. This is its first earnings report as a public company.

F45 reported a record 554 new franchises sold compared to 100 in second quarter 2020, with 68 net new studios opening during the quarter (compared to 33 in second quarter 2020), system-wide same-store sales growth of 126 percent. The company had an adjusted EBITDA growth of 7 percent to $10.7 million compared to $10 million in the same period last year.

Income from operations was $3.1 million in second quarter 2021 compared to $5.6 million in the same period last year. Net loss was $30.5 million, compared to net income of $5.9 million in the second quarter last year.

“Despite challenges posed by the COVID-19 pandemic, we grew our footprint and experienced minimal permanent closures during 2020, which really underscores the resilience of our business model,” F45 Training President, CEO and Chairman Adam J. Gilchrist said in a call with analysts

At the end of the second quarter, F45 had more than 2,800 total franchises sold and more than 1,500 total studios open in 65 countries. As of June 30, 2021, 91 percent of its network had reopened, Gilchrist said.

As of June 30, 2021, approximately 91 percent of F45 studios globally had reopened from COVID-19 mandated closures, but as of Aug. 21, about 70 percent of studios globally were open due to recently imposed COVID restrictions in Australia. In April, May and June, the company saw “strong” year-over-year membership growth, Payne said.

In the United States, virtually all F45 studios have re-opened after the temporary closures caused by COVID-19 restrictions. Revenues increased 84 percent in the United States, 68 percent in Australia and declined 2 percent in the rest of the world, according to Chris Payne, F45 Training chief financial officer.

Expansion Plans

The company has a footprint expansion opportunity in the United States and globally, Gilchrist shared in the call with analysts. As of June 20, F45 Training had 1,379 franchises sold and 556 open studios with long-term studio potential of more than 7,000 studios in the United States, Gilchrist said. Outside the country, the brand could open 16,000 studios due to the portability and easy deployment of its franchise model, he said.

The majority of its franchisees manage single locations, but the company is looking to develop multiunit franchise systems with select financial partners, he said. As of June 30, approximately 51 percent of its franchises sold were owned by multiunit franchisees, up from approximately 40 percent as of the end of 2019, which highlights the market demand for multiunit franchise opportunities and the ability to sell to existing franchisees.

New Channels

Gilchrist noted when the company went public that he sees expansion opportunities in partnerships with universities, high schools, corporations and military facilities. F45 has 29 studios located in major university campuses in the United States and in June opened its first studio in the government military base in Miramar, California.

The company recently developed a fitness concept in Australia called FS8, which integrates Pilates, yoga and tone to create a new workout style. In addition, it is developing Malibu Crew, a functional fitness studio clubhouse targeting men over the age of 50, and Avalon House, a studio sanctuary for women of a similar age.

2021 Outlook

Assuming no significant worsening of the COVID-19 pandemic, F45 Training expects full year revenue to be between $132 million and $137 million, full year net franchises sold to be between 800 to 850, full year net new franchise openings to be between 220 and 260, and adjusted EBITDA to be between $50 million and $52 million.