Xponential Fitness Reports Q1 2025 Sales Growth but Faces Revenue Decline
Krissy Vann | Host, All Things Fitness and Wellness
Xponential Fitness Inc. released its Q1 2025 earnings on May 8, reporting strong system-wide sales growth but a year-over-year decline in revenue and profitability. The company’s stock dropped 9.2% in after-hours trading following the announcement, closing at $7.91.
System-wide sales in North America reached $466.8 million for the quarter, an 18% increase compared to Q1 2024. Membership grew to 865,000, up 12%, while average unit volume on a quarterly run-rate basis increased 8% to $659,000. Xponential opened 116 gross new studios during the period.
Despite these gains, total revenue declined 4% year-over-year to $76.9 million. The company reported a net loss of $2.7 million, or $0.10 per basic share, missing analyst expectations. Adjusted net loss was $7.7 million, compared to adjusted net income of $9.2 million in the same quarter last year. Adjusted EBITDA for the quarter was $27.3 million, a decrease of 9% from $29.9 million in Q1 2024.
The revenue drop was attributed to decreases in merchandise, equipment, and other service revenues, which offset gains in franchise and marketing fund income. The company’s revenue model includes royalties and marketing fees from franchisees, which typically amount to about 9% of studio-level sales. This limits the proportion of system-wide sales that flows through to corporate revenue.
Increased litigation expenses—up $15.5 million year-over-year—along with a $1.9 million impairment of goodwill and noncurrent assets, weighed on profitability. Additional expenses included transformation initiatives and restructuring costs. These were partially offset by reduced acquisition-related charges, particularly tied to the Rumble brand.
CEO Mark King described 2025 as a “stabilization year” during the company’s earnings call. He noted that Xponential is focusing on operational efficiencies and strengthening internal processes. The company has brought in new leadership across key departments and is in the process of renewing its Franchise Disclosure Documents.
As of March 31, Xponential had $42.6 million in cash, cash equivalents, and restricted cash. Long-term debt totaled $379.1 million. Net cash provided by operating activities was $5.8 million for the quarter.
Xponential is maintaining full-year 2025 guidance for revenue and adjusted EBITDA but is reducing its projection for net new studio openings. The company now expects between 160 and 180 new studios this year, down from 239 in 2024. Management reiterated expectations for system-wide sales to reach between $1.935 billion and $1.955 billion in 2025. Revenue is forecast to remain flat year-over-year, ranging between $315 million and $325 million. Adjusted EBITDA is expected to fall between $120 million and $125 million, reflecting modest year-over-year growth.
Xponential ended the quarter with 3,298 global studios and 6,286 total licenses. The company emphasized its continued focus on international expansion, including a more selective approach through qualified master franchisees.
Credit: Xponential Fitness