Xponential Fitness, Inc. reported a challenging second quarter for 2024, with a net loss of $13.7 million compared to a net income of $27.5 million in the prior year. The company's total revenue slightly decreased by 1% to $76.5 million, primarily due to a decline in merchandise and other service revenues. In contrast, franchise revenue saw a solid increase of 22%, highlighting the resilience of their franchise model amidst broader operational adjustments.
The latest 10-Q filing from Xponential Fitness, Inc. for the quarter ended June 30, 2024, reveals a mixed bag of performance metrics that reflect both challenges and strategic initiatives aimed at revitalizing the company’s growth trajectory.
Xponential Fitness reported a net loss of $13.7 million for the second quarter of 2024, a significant reduction compared to a net income of $27.5 million in the same quarter of the previous year. The company’s total revenue slightly dipped by 1%, totaling $76.5 million. This decline is attributed mainly to decreased revenues from merchandise and other service offerings, offset by a robust 22% growth in franchise revenue.
Cash flow from operating activities decreased significantly to $5.7 million from $30.6 million year-over-year, driven by lower net income and unfavorable changes in working capital. The company reported cash and cash equivalents of $15 million, which, along with cash from operations, is expected to support ongoing operations and debt service requirements.
While Xponential Fitness faces a challenging environment with recent losses and operational restructurings, the strong growth in franchise revenue and strategic acquisitions may position the company for recovery and future growth. Investors should closely monitor the execution of the restructuring plan and the performance of newly acquired brands in the upcoming quarters.
Stay tuned for further updates as Xponential Fitness continues to navigate through this critical phase of its business journey.