Xponential Fitness, Irvine, California, brought in revenue of $49.4 million in fourth quarter 2021, a 78 percent increase over the same period in 2020, the public company announced on March 3.
In addition, the company reported full-year 2021 revenue of $155.1 million, a 45 percent increase over 2020. North American system-wide sales increased 60 percent for the year compared to 2020.
Xponential owns 10 brands: Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble and BFT.
“2021 was a milestone year for Xponential Fitness,” Xponential Fitness CEO Anthony Geisler said in a media release. “In addition to successfully completing our initial public offering in July, we reported record financial results. Our strong performance was driven largely by consistent growth in our membership base. Actively paying members and visitation rates grew by approximately 70 percent and 50 percent, respectively, in the fourth quarter compared to the prior year, as boutique fitness customers returned to the in-person fitness classes offered by our exceptional portfolio of 10 complementary brands.”
The company’s approach to adding brands to its portfolio has provided it with a replenishing pipeline of organic, new studio expansion, offering the company four to five years of visibility into its long-term growth, Geisler shared on a call with analysts.
Based on a white space study, Xponential has the white space for approximately 7,900 studios in the United States alone, which is nearly quadruple its current number of open studios, Geisler said.
The company has 2,100 global studios with more than 175 of them operating outside of North America.
Xponential sold 846 franchise licenses and opened 282 studios in 2021.
It has almost 1,000 studios obligated to be opened internationally. For 2022, Xponential expects 81 percent growth in new studio openings.
Xponential’s master franchise agreements are structured to provide Xponential with virtually 100 percent margin flow through, Geisler said.
Another organic studio growth driver for Xponential is its nationwide partnership with LA Fitness, which the company announced in October. Through this partnership, Xponential has the exclusive right to open Xponential Fitness brand studios within LA Fitness locations, with a minimum development commitment of 350 franchise locations over five years.
Existing franchisees who have an LA Fitness location within their protective territory have an opportunity to open another Xponential studio within that specific gym location. The company has already opened its first few initial studios within LA Fitness locations.
Fourth Quarter 2021 Highlights
In addition to total revenue increasing 78 percent in fourth quarter, the company’s North American system-wide sales grew by 76 percent to $213 million while North American same-store sales grew by 53 percent.
The North American quarterly run-rate average unite volume for the quarter was $446,000 compared to $286,000 in fourth quarter 2020.
The company posted a net loss of $29.8 million for the quarter compared to a net loss of $5.1 million in fourth quarter 2020. Its adjusted net loss was $6.1 million compared to an adjusted net loss of $5.1 million in fourth quarter 2020.
Adjusted EBITDA for the quarter was $8.6 million compared to $3.3 million.
2021 Highlights
Xponential’s full-year 2021 revenue of $155.1 million included North American system-wide sales of $708.6 million, a 60 percent increase over 2020 and North American same-store sales growth of 41 percent compared to a decline in 2020 of 34 percent.
The company posted a net loss for the year of $51.4 million compared to a net loss of $13.6 million in 2020. Its adjusted net loss was $24.4 million compared to $24.6 million in 2020.
Adjusted EBITDA for the year was $27.3 million compared to $9.8 million in 2020.
The company’s revenue and adjusted EBITDA were higher in 2021 than they were prior to the COVID-19 pandemic, up 20 percent and 66 percent, respectively, in 2021 vs. 2019.
As of Dec. 31, 2021, Xponential had approximately $21.3 million of cash and cash equivalents and $130.9 million in total debt. Net cash provided by operating activities was $14.5 million for 2021.
2022 Outlook
In 2022, Xponential anticipates new studio openings of 500 to 520, or an increase of 81 percent at the midpoint as compared to full year 2021.
North American system-wide sales are anticipated to be in the range of $995 million to $1.005 billion, or an increase of 41 percent at the midpoint as compared to full year 2021.
It anticipates revenue in the range of $201 million to $211 million, or an increase of 33 percent at the midpoint as compared to full year 2021 with adjusted EBITDA in the range of $67 million to $71 million, or an increase of 153 percent at the midpoint as compared to full year 2021.
“The asset-light nature of our franchise model together with the many benefits we experienced because of our scale and shared services platform has supported our margins today,” Geisler said.