3 unchanged sentences
(amounts in thousands, except per share amounts)
−Removed: September 30,
Current assets:
9 unchanged sentences
Deferred costs, net of current portion
−Removed: Notes receivable from franchisees, net of current portion
Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)
14 unchanged sentences
Redeemable convertible preferred stock, $ 0.0001 par value, 400 shares authorized,
−Removed: 115 shares issued and outstanding as of September 30, 2025 and December 31, 2024
+Added: none issued and outstanding as of March 31, 2026 and December 31, 2025
Stockholders' equity (deficit):
Undesignated preferred stock, $ 0.0001 par value, 4,600 shares authorized, none issued and
−Removed: outstanding as of September 30, 2025 and December 31, 2024
+Added: outstanding as of March 31, 2026 and December 31, 2025
Class A common stock, $ 0.0001 par value, 500,000 shares authorized, 41,812 and 35,256 shares
−Removed: issued and outstanding as of September 30, 2025 and December 31, 2024, respectively
+Added: issued and outstanding as of March 31, 2026 and December 31, 2025, respectively
Class B common stock, $ 0.0001 par value, 500,000 shares authorized, 7,303 and 13,738 shares issued,
−Removed: and 13,663 and 14,664 shares outstanding as of September 30, 2025 and December 31, 2024,
+Added: and 7,228 and 13,663 shares outstanding as of March 31, 2026 and December 31, 2025,
Additional paid-in capital
1 unchanged sentence
Accumulated deficit
−Removed: Treasury stock, at cost, 75 shares outstanding as of September 30, 2025 and December 31, 2024
+Added: Treasury stock, at cost, 75 shares outstanding as of March 31, 2026 and December 31, 2025
Total stockholders' deficit attributable to Xponential Fitness, Inc.
6 unchanged sentences
(amounts in thousands, except per share amounts)
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Revenue, net:
8 unchanged sentences
Costs of franchise and service revenue
−Removed: Selling, general and administrative expenses (Note 10)
+Added: Selling, general and administrative expenses
Impairment of goodwill and other noncurrent assets
1 unchanged sentence
Marketing fund expense
−Removed: Acquisition and transaction expenses (income)
+Added: Acquisition and transaction income
Total operating costs and expenses
−Removed: Operating income (loss)
+Added: Operating income
Other expense (income):
1 unchanged sentence
Interest expense
−Removed: Other expense
+Added: Tax receivable agreement expense
Total other expense
21 unchanged sentences
Distributions paid to Pre-IPO LLC Members
−Removed: Preferred stock dividend
Balance at March 31, 2026
−Removed: Equity-based compensation
−Removed: Conversion of Class B shares to Class A shares
−Removed: Issuance of Class A common stock under stock-based compensation plans, net of shares withheld for taxes
−Removed: Loan to shareholder and accumulated interest
−Removed: Distributions paid to Pre-IPO LLC Members
−Removed: Preferred stock dividend
−Removed: Balance at June 30, 2025
−Removed: Equity-based compensation
−Removed: Issuance of Class A common stock under stock-based compensation plans, net of shares withheld for taxes
−Removed: Loan to shareholder and accumulated interest
−Removed: Distributions paid to Pre-IPO LLC Members
−Removed: Preferred stock dividend
−Removed: Balance at September 30, 2025
See accompanying notes to condensed consolidated financial statements.
12 unchanged sentences
Conversion of Class B shares to Class A shares
−Removed: Preferred stock dividend
−Removed: Adjustment of preferred stock to redemption value
Issuance of Class A common stock under stock-based compensation plans, net of shares withheld for taxes
−Removed: Distributions paid to Pre-IPO LLC Members
−Removed: Payment received from shareholder
Loan to shareholder and accumulated interest
−Removed: Balance at March 31, 2024
−Removed: Equity-based compensation
−Removed: Conversion of Class B shares to Class A shares
−Removed: Preferred stock dividend
−Removed: Adjustment of preferred stock to redemption value
−Removed: Issuance of Class A common stock under stock-based compensation plans, net of shares withheld for taxes
−Removed: Loan to shareholder and accumulated interest
Distributions paid to Pre-IPO LLC Members
−Removed: Balance at June 30, 2024
−Removed: Equity-based compensation
−Removed: Vesting of Class B shares
Preferred stock dividend
−Removed: Adjustment of preferred stock to redemption value
−Removed: Issuance of Class A common stock under stock-based compensation plans, net of shares withheld for taxes
−Removed: Loan to shareholder and accumulated interest
−Removed: Distributions paid to Pre-IPO LLC Members
−Removed: Balance at September 30, 2024
+Added: Balance at March 31, 2025
See accompanying notes to condensed consolidated financial statements.
2 unchanged sentences
(amounts in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash flows from operating activities:
−Removed: Adjustments to reconcile net loss to net cash provided by operating activities:
+Added: Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
8 unchanged sentences
Gain on disposal of assets and lease terminations
−Removed: Gain on divestitures
+Added: Change in contingent consideration receivable from Lindora
Impairment of goodwill and other noncurrent assets
10 unchanged sentences
Other liabilities
−Removed: Net cash provided by operating activities
+Added: Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment
−Removed: Proceeds from sale of assets
Purchase of intangible assets
1 unchanged sentence
Notes receivable payments received
−Removed: Proceeds from disposition of brands
−Removed: Acquisition of business
Net cash used in investing activities
Cash flows from financing activities:
−Removed: Borrowings from long-term debt
+Added: Borrowings from long-term debt, net of original discount issue
Payments on long-term debt
1 unchanged sentence
Payment of preferred stock dividend
−Removed: Payment of promissory note liability
Payments of contingent consideration
Payments for taxes related to net share settlement of restricted share units
−Removed: Proceeds from issuance of common stock in connection with stock-based compensation plans
−Removed: Payments for tax receivable agreement
Payments for distributions to Pre-IPO LLC Members
−Removed: Payment received from shareholder (Note 10)
−Removed: Reimbursement from shareholder (Note 10)
Net cash provided by (used in) financing activities
−Removed: Increase in cash, cash equivalents and restricted cash
+Added: Increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
4 unchanged sentences
(amounts in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Supplemental cash flow information:
4 unchanged sentences
Accrued tax withholding related to convertible preferred stock dividend
−Removed: Contingent consideration upon acquisition
Debt issuance costs paid-in-kind - long-term debt
Debt issuance costs exit fees - long-term debt
−Removed: Contingent consideration receivable
−Removed: Notes receivable
−Removed: Non-cash proceeds from sale of asset
−Removed: Preferred stock dividend paid-in-kind
See accompanying notes to condensed consolidated financial statements.
16 unchanged sentences
The Company consolidates XPO LLC on its condensed consolidated financial statements and records a noncontrolling interest related to the Class B units held by the Class B stockholders on its condensed consolidated balance sheet and statement of operations.
−Removed: As of September 30, 2025 , the Company’s portfolio of five brands consisted of:
+Added: As of March 31, 2026 , the Company’s portfolio of five brands consisted of:
“Club Pilates,” a Pilates facility franchisor;
4 unchanged sentences
The Company, through its boutique fitness brands, licenses its proprietary systems to franchisees who in turn operate studios to promote training and instruction programs to their club members within each vertical.
+Added: Prior to the divestitures of the CycleBar and Rumble brands in July 2025, the Company, through its ownership of the CycleBar and Rumble brands, franchised boutique fitness studios dedicated to indoor cycling and boxing disciplines, respectively.
Additionally, prior to the divestiture of the Lindora brand in September 2025, the Company, through its ownership of the Lindora brand, franchised clinics that provided medically guided wellness and metabolic health solutions to its members.
−Removed: In addition to franchised studios, the Company operated one company-owned transition studio as of September 30, 2025 and 2024.
−Removed: On July 3, 2025, the Company and Fit Commerce, a California Corporation (“FC”), entered into a Retail Supply Agreement (the “Agreement”) to be effective as of December 1, 2025 (the “Effective Date”).
−Removed: The Agreement relates to the outsourcing of the Company’s retail merchandising, including the manufacturing and distribution, of any retail item sold by a franchisee, subject to terms and conditions outlined in the Agreement.
−Removed: In addition, FC has agreed to purchase the Company’s existing retail inventory, subject to certain exceptions, no later than the Effective Date of the Agreement.
−Removed: This strategic initiative shifts management of the franchisee retail experience from in-house teams to a dedicated e-commerce provider, allowing the Company to focus on its core business priorities.
−Removed: Pursuant to the Agreement, FC will pay the Company domestic and foreign commissions as well as direct-to-customer commissions (each, a “Commission” and collectively, “Commissions”) in connection with the sale of products to the Company or the Company's franchisees.
−Removed: The domestic Commissions will be paid by FC to the Company based on each contract year (prorated for any partial contract year) in a minimum aggregate amount of approximately $ 50,000 over the five-year period subject to certain adjustments provided in the Agreement.
−Removed: Additionally, pursuant to the Agreement, FC is required to satisfy certain financing conditions (the “Financing Conditions”).
−Removed: The Company is in the process of confirming whether all of such Financing Conditions have been met.
+Added: In addition to franchised studios, the Company operated one company-owned transition studio as of March 31, 2026 and 2025.
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
+Added: On July 3, 2025, the Company and Fit Commerce, a California Corporation (“FC”), entered into a Retail Supply Agreement (the “Agreement”) effective as of December 1, 2025 (the “Effective Date”).
+Added: The Agreement relates to the outsourcing of the Company’s retail merchandising, including the manufacturing and distribution, of any retail item sold by a franchisee, subject to terms and conditions outlined in the Agreement.
+Added: In addition, FC agreed to purchase the Company’s existing retail inventory, which was completed in accordance with the terms of the agreement.
+Added: This strategic initiative shifted management of the franchisee retail experience from in-house teams to a dedicated e-commerce provider, allowing the Company to focus on its core business priorities.
+Added: Pursuant to the Agreement, FC will pay the Company domestic and foreign commissions as well as direct-to-customer commissions (each, a “Commission” and collectively, “Commissions”) in connection with the sale of products to the Company or the Company's franchisees.
+Added: The domestic Commissions will be paid by FC to the Company based on each contract year (prorated for any partial contract year) in aggregate amount of approximately $ 50,000 over the five-year period subject to certain adjustments provided in the Agreement, which includes an element of variability in the consideration to which the Company is entitled.
+Added: On November 10, 2025, the Company entered into an amendment to the Agreement, pursuant to which certain non-material modifications were made to the provisions governing the purchase of the Company's existing retail inventory.
On September 19, 2025, the Company divested the Lindora brand, including the intellectual property, franchise rights and franchise agreements for open studios.
On July 24, 2025, the Company divested the CycleBar and Rumble brands, including the intellectual property, franchise rights and franchise agreements for open studios.
−Removed: On February 13, 2024, the Company divested the Stride brand, including the intellectual property, franchise rights and franchise agreements for open studios.
−Removed: On May 20, 2024, the Company divested the Row House brand, including the intellectual property, franchise rights and franchise agreements for open studios.
−Removed: Additionally, during the three months ended September 30, 2024, the Company announced the wind down of AKT franchise operations.
See Note 3 for additional information.
4 unchanged sentences
Interim results of operations are not necessarily indicative of results of operations to be expected for a full year.
−Removed: On January 2, 2024, the Company acquired Lindora Franchise, LLC, a Delaware limited liability company, the franchisor of the Lindora wellness brand (the “Lindora Franchisor” or “Lindora”), and has included the results of operations of Lindora in its condensed consolidated statements of operations from the acquisition date through the divestiture date.
−Removed: See Note 4 for additional information.
−Removed: Reclassifications – To conform with current year presentation, the Company has reclassified gift card receivable of $ 5,809 from accounts receivable, net, to prepaid expenses and other current assets in the December 31, 2024 condensed consolidated balance sheet.
−Removed: The Company has reclassified certain prior period amounts to conform with the current period presentation on the condensed consolidated statements of cash flows.
−Removed: Specifically, within the condensed consolidated statements of cash flows, changes in tax receivable agreement liability which was previously included in other current liabilities is now reported separately.
−Removed: The reclassifications do not affect previously reported cash flows from operating activities in the condensed consolidated statements of cash flows.
Principles of consolidation – The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries.
2 unchanged sentences
Actual results could differ from these estimates under different assumptions or conditions.
−Removed: Note 2 – Correction of Previously Issued Financial Statements
−Removed: As previously disclosed in Note 2 of Notes to Consolidated Financial Statements within Part II, Item 8 “Financial Statements and Supplementary Data” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, subsequent to the issuance of the Company's condensed consolidated financial statements for the period ended September 30, 2024, the Company identified misstatements impacting previously issued financial statements.
−Removed: The Company concluded that the aggregate impact of all the errors did not result in a material misstatement of previously issued condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024.
−Removed: The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024, have been corrected from amounts previously reported.
−Removed: The Company has also corrected related amounts within the accompanying footnotes.
−Removed: The identified misstatements impacting the condensed consolidated financial statements for the three and nine months ended September 30, 2024 include the following, for which the amounts described below are the net impact:
−Removed: Rebates – Certain agreement terms had not been properly or timely communicated to be considered for their accounting impact resulting in an understatement of costs of product revenue of $ 223 for the nine months ended September 30, 2024.
−Removed: Additionally, there was an understatement of merchandise revenue of $ 39 and an overstatement of merchandise revenue of $ 74 for the three and nine months ended September 30, 2024, respectively.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: Revenues – The Company’s evaluation of certain revenue contracts did not appropriately evaluate the accounting for all key terms and conditions, resulting in:
−Removed: An understatement of other service revenue of $ 134 for the nine months ended September 30, 2024.
−Removed: An understatement of merchandise revenue of $ 537 and costs of product revenue of $ 429 for the nine months ended September 30, 2024.
−Removed: Cost of product revenue – Certain costs and fees related to inventory were not properly expensed in the appropriate period, resulting in an understatement of cost of product revenue of $ 217 and $ 374 for the three and nine months ended September 30, 2024, respectively.
−Removed: Impairment of assets – The Company did not properly assess the disposition of the Stride brand subsequent to the balance sheet date as an impairment indicator as of the balance sheet date, resulting in an overstatement of selling, general and administrative expenses of $ 338 and an understatement of costs of product revenue for inventory write downs of $ 64 for the nine months ended September 30, 2024.
−Removed: Legal Accruals – Certain legal liabilities had not been communicated to be considered for their accounting impact resulting in an overstatement of selling, general and administrative expenses of $ 328 for the nine months ended September 30, 2024.
−Removed: Equipment inventory – Equipment inventory which had been received by the Company was not properly recorded resulting in an understatement of costs of product revenue of $ 95 for the nine months ended September 30, 2024.
−Removed: Costs of product revenue – The Company improperly recognized deferred costs related to equipment resulting in an understatement of $ 273 of costs of product revenue for the nine months ended September 30, 2024.
−Removed: Invoices – The Company did not properly account for certain vendor invoices, including not recognizing expenses in the period incurred, resulting in an overstatement of costs of franchise and service revenue of $ 74 and an understatement of selling, general and administrative expenses of $ 128 for the nine months ended September 30, 2024.
−Removed: The Company has also corrected certain other rounding and immaterial reclassifications that were identified.
−Removed: The impact of the correction of errors to the Company's condensed consolidated statement of operations for the three and nine months ended September 30, 2024 and the condensed consolidated statement of changes to stockholders' equity (deficit) and the condensed consolidated statement of cash flows for the nine months ended September 30, 2024 are presented below:
−Removed: Condensed Consolidated Statement of Operations
−Removed: Three Months Ended September 30, 2024
−Removed: As Previously Reported
−Removed: Revenue, net:
−Removed: Merchandise revenue
−Removed: Total revenue, net
−Removed: Operating costs and expenses:
−Removed: Costs of product revenue
−Removed: Selling, general and administrative expenses
−Removed: Impairment of goodwill and other assets
−Removed: Total operating costs and expenses
−Removed: Operating loss
−Removed: Loss before income taxes
−Removed: Net loss attributable to noncontrolling interests
−Removed: Net loss attributable to Xponential Fitness, Inc.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: Condensed Consolidated Statement of Operations
−Removed: Nine Months Ended September 30, 2024
−Removed: As Previously Reported
−Removed: Revenue, net:
−Removed: Merchandise revenue
−Removed: Other service revenue
−Removed: Total revenue, net
−Removed: Operating costs and expenses:
−Removed: Costs of product revenue
−Removed: A, B2, C1, C2, C4, C5
−Removed: Costs of franchise and service revenue
−Removed: Selling, general and administrative expenses
−Removed: C2, C3, C6, D
−Removed: Impairment of goodwill and other assets
−Removed: Total operating costs and expenses
−Removed: Operating loss
−Removed: Loss before income taxes
−Removed: Net loss attributable to noncontrolling interests
−Removed: Net loss attributable to Xponential Fitness, Inc.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: Condensed Consolidated Statement of Changes to Stockholders' Equity (Deficit)
−Removed: As Previously Reported
−Removed: Additional Paid-In Capital
−Removed: from Shareholder
−Removed: Noncontrolling Interests
−Removed: Total Equity (Deficit)
−Removed: Balance at December 31, 2023
−Removed: Conversion of Class B shares to Class A shares
−Removed: Payment received from shareholder
−Removed: Balance at March 30, 2024
−Removed: Conversion of Class B shares to Class A shares
−Removed: Balance at June 30, 2024
−Removed: Balance at September 30, 2024
−Removed: Additional Paid-In Capital
−Removed: from Shareholder
−Removed: Noncontrolling Interests
−Removed: Total Equity (Deficit)
−Removed: Balance at December 31, 2023
−Removed: Conversion of Class B shares to Class A shares
−Removed: Payment received from shareholder
−Removed: Balance at March 30, 2024
−Removed: Conversion of Class B shares to Class A shares
−Removed: Balance at June 30, 2024
−Removed: Balance at September 30, 2024
−Removed: Additional Paid-In Capital
−Removed: from Shareholder
−Removed: Noncontrolling Interests
−Removed: Total Equity (Deficit)
−Removed: Balance at December 31, 2023
−Removed: Conversion of Class B shares to Class A shares
−Removed: Payment received from shareholder
−Removed: Balance at March 30, 2024
−Removed: Conversion of Class B shares to Class A shares
−Removed: Balance at June 30, 2024
−Removed: Balance at September 30, 2024
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: Condensed Consolidated Statement of Cash Flows
−Removed: Nine Months Ended September 30, 2024
−Removed: As Previously Reported
−Removed: Reclassification
−Removed: Cash flows from operating activities:
−Removed: Adjustments to reconcile net loss to net cash provided by operating activities:
−Removed: Non-cash lease expense
−Removed: Change in tax receivable agreement liability
−Removed: Gain on disposal of assets
−Removed: Impairment of goodwill and other assets
−Removed: Changes in assets and liabilities, net of effect of acquisition:
−Removed: Accounts receivable
−Removed: Prepaid expenses and other current assets
−Removed: Operating lease liabilities
−Removed: Deferred costs
−Removed: Accounts payable
−Removed: Accrued expenses
−Removed: Other current liabilities
−Removed: Deferred revenue
−Removed: Other liabilities
−Removed: Net cash provided by operating activities
−Removed: Cash flows from financing activities:
−Removed: Payment received from shareholder
−Removed: Net cash provided by financing activities
Note 2 – Summary of Significant Accounting Policies
1 unchanged sentence
The Company's restricted cash consists of marketing fund restricted cash, which can only be used for activities that promote the Company’s brands and guarantee of standby letter of credit (See Note 14).
−Removed: Marketing fund restricte d cash was $ 15,857 and $ 15,312 at September 30, 2025 and December 31, 2024 , respectively.
+Added: Marketing fund restricte d cash was $ 8,503 and $ 11,406 at March 31, 2026 and December 31, 2025 , respectively.
The interest earned on marketing fund restricted cash accounts is also restricted for use.
−Removed: Total restricted cash was $ 16,645 and $ 16,063 at September 30, 2025 and December 31, 2024 , respectively.
−Removed: Accounts receivable and allowance for expected credit losses – Accounts receivable primarily consist of amounts due from franchisees and vendors.
+Added: Restricted cash was $ 9,291 and $ 12,194 at March 31, 2026 and December 31, 2025 , respectively.
+Added: Accounts receivable, notes receivable and allowance for expected credit losses – Accounts receivable primarily consist of amounts due from franchisees and vendors.
These receivables primarily relate to royalties, advertising contributions, equipment and product sales, training, vendor commissions and other miscellaneous charges.
2 unchanged sentences
however, the franchise agreements provide the Company the right to withdraw funds from the franchisee’s bank account or to terminate the franchise for nonpayment.
+Added: Notes receivable primarily consists of loans provided for the establishment of new or transferred franchise studios to various franchisees.
+Added: These loans have terms of up to ten years and bear interest at a stated fixed rate ranging from 0 % to 15 % or variable rates based on LIBOR plus a specified margin .
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
The Company’s accounts and notes receivable are recorded at net realizable value, which includes an allowance for expected credit losses.
3 unchanged sentences
Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
The following table provides a reconciliation of the activity related to the Company’s accounts receivable and notes receivable allowance for credit losses:
2 unchanged sentences
Balance at December 31, 2025
−Removed: Bad debt expense recognized during the period
+Added: Bad debt expense recognized during the year
Write-off of uncollectible amounts
−Removed: Balance at September 30, 2025
−Removed: Inventories – Inventories are comprised of finished goods including equipment and branded merchandise primarily held for sale to franchisees.
−Removed: Cost is determined using the first-in-first-out method.
−Removed: Management analyzes obsolete, slow-moving and excess merchandise to determine adjustments that may be required to reduce the carrying value of such inventory to the lower of cost or net realizable value.
−Removed: Write-down of obsolete or slow-moving and excess inventory charges are included in costs of product revenue in the condensed consolidated statements of operations.
−Removed: During the three months ended September 30, 2025, the Company evaluated the recoverability of certain inventory due to brand divestitures and the agreement related to outsourcing of the Company's retail merchandising, resulting in a $ 2,461 excess and obsolete inventory write-down r ecorded in costs of product revenue.
+Added: Balance at March 31, 2026
Revenue recognition – The Company’s contracts with customers consist of franchise agreements with franchisees.
−Removed: The Company also enters into agreements to sell merchandise and equipment, training, on-demand video services and membership to company-owned transition studios.
+Added: The Company also enters into agreements to sell merchandise and equipment, training, and on-demand video services.
The Company’s revenues primarily consist of franchise license revenues, other franchise related revenues including equipment and merchandise sales and training revenue.
5 unchanged sentences
Those services include initial development, operational training, preopening support and access to the Company’s technology throughout the franchise term.
−Removed: Fees generated related to the franchise license include development fees, royalty fees, marketing fees, technology fees and transfer fees.
+Added: Fees generated related to the franchise license include development fees, royalty fees, marketing fees, technology fees and transfer fees, which are discussed further below.
Variable fees are not estimated at contract inception, and are recognized as revenue when invoiced, which occurs monthly.
The Company has concluded that its franchise agreements do not contain any financing components.
+Added: In certain circumstances, a franchise agreement may be terminated prior to the expiration of the contractual terms, including in connection with termination of a studio.
+Added: Upon termination, the Company evaluates the remaining deferred franchise revenue associated with the terminated franchise agreement to determine whether its remaining performance obligations have been satisfied.
+Added: When the original franchise agreement is terminated, any remaining deferred initial franchise fee associated with that studio is generally recognized as revenue at the point in time the termination occurs, provided that the Company has no remaining material performance obligations under the terminated agreement.
Franchise development fee revenue – The Company’s earlier franchise agreements typically operate under ten-year terms with the option for up to two additional five-year successor or renewal terms .
3 unchanged sentences
Initial franchise fees are recorded as deferred revenue when received and are recognized on a straight-line basis over the franchise life, which the Company has determined to be ten years , as the Company fulfills its promise to grant the franchisee the rights to access and benefit from the Company’s intellectual property and to support and maintain the intellectual property.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
Prior to the second quarter of 2025, the Company would enter into an area development agreement with certain franchisees.
6 unchanged sentences
Development fees and franchise fees are generally recognized as revenue upon the termination of the development agreement with the franchisee.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Starting in the second quarter of 2025, the Company may enter into multi-unit agreements with certain franchisees.
23 unchanged sentences
Fees received by the Company for online class training are recognized as revenue over time for the 12-month period that the Company is obligated to provide access to online training content.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
+Added: Franchise marketing fund revenue – Franchisees are required to pay marketing fees of 2 % of their gross sales.
+Added: The marketing fees are collected by the Company on a monthly basis and are to be used for the advertising, marketing, market research, product development, public relations programs and materials deemed appropriate to benefit brands.
+Added: The Company’s promise to provide the marketing services funded through the marketing fund is considered a component of the Company’s performance obligation to grant the franchise license.
+Added: The Company bills and recognizes marketing fund fees as revenue each month as gross sales occur.
+Added: Marketing fund expenses are recorded as incurred, which may not occur in the same period as the recognition of franchise marketing fund revenue.
+Added: Equipment and merchandise revenue – The following revenues are generated as a result of transactions with or related to the Company’s franchisees.
+Added: Equipment revenue – The Company sells authorized equipment to franchisees to be used in the franchised studios.
+Added: Franchisees generally prepay for equipment, and in that circumstance, the revenue is deferred until delivery and installation.
+Added: Equipment revenue is recognized when control of the equipment is transferred to the franchisee, which is at the point in time when delivery and installation of the equipment at the studio is complete.
+Added: Merchandise revenue – Up to December 2025, the Company sold wholesale branded and non-branded merchandise to franchisees for retail sales to customers at studios.
+Added: For wholesale merchandise sales, the performance obligation was satisfied at the point in time of delivery of the ordered merchandise to the franchisee.
+Added: For such wholesale merchandise sales, the Company was the principal in the transaction as it controls the merchandise prior to it being delivered to the franchisee.
+Added: The Company recorded wholesale merchandise revenue and related costs upon delivery on a gross basis.
+Added: Customers had the right to return and/or receive credit for defective merchandise.
+Added: Returns and credit for defective merchandise were insignificant for the years ended December 31, 2025, 2024 and 2023.
+Added: Effective December 1, 2025, the Company entered into an agreement with FC to outsource its retail merchandising, including the manufacturing and distribution, of any retail item sold by a franchisee.
+Added: Pursuant to the Agreement, FC will pay the Company domestic and foreign commissions as well as direct-to-customer commissions in connection with the sale of products to the Company's franchisees.
+Added: The domestic Commissions will be paid by FC to the Company based on each contract year (prorated for any partial contract year) in an aggregate amount of approximately $ 50.0 million over the five-year period subject to certain adjustments provided in the Agreement, which includes an element of variability in the consideration to which the Company is entitled.
+Added: The Company recognizes revenue on the Commissions in the period in which the Commissions are earned, the consideration is deemed collectible, and the variability is resolved.
+Added: The Company records revenue related to the commissions within other service revenues on the condensed consolidated statements of operations.
+Added: On November 10, 2025, the Company entered into an amendment to the Agreement, pursuant to which certain non-material modifications were made to the provisions governing the purchase of the Company's existing retail inventory.
+Added: Other revenue – Service revenue – Historically, the revenue from company-owned transition studios has been very limited as the Company typically only owns a small number of studios and only for a short period of time pending the resale of the license to a franchisee.
+Added: For company-owned transition studios, the Company’s distinct performance obligation is to provide fitness classes to the customer.
+Added: The company-owned studios sell memberships by individual class and by class packages.
+Added: Revenue from the sale of classes and class packages for a specified number of classes are recognized over time as the customer attends and utilizes the classes.
+Added: Revenues from the sale of class packages for an unlimited number of classes are recognized over time on a straight-line basis over the duration of the contract period.
+Added: On-demand revenue – The Company grants a subscriber access to an online hosted platform, which contains a library of web-based classes that is continually updated, through monthly or annual subscription packages.
+Added: Revenue is recognized over time on a straight-line basis over the subscription period.
+Added: Other revenue – The Company earns commission income from certain of its franchisees’ use of certain preferred vendors.
+Added: In these arrangements, the Company is the agent as it is not primarily responsible for fulfilling the orders.
+Added: Commissions are earned and recognized at the point in time the vendor ships the product to franchisees.
+Added: In addition, the Company grants vendors access to franchisees' members to provide certain services to the members for a fee.
+Added: Revenue is recognized over time on a straight-line basis over the access period.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
+Added: Sales taxes, value added taxes and other taxes that are collected in connection with revenue transactions are withheld and remitted to the re spective taxing authorities.
+Added: As such, these taxes are excluded from revenue.
+Added: The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the goods.
+Added: Therefore, shipping and handling fees that are billed to franchisees are recognized in revenue and the associated shipping and handling costs are recognized in cost of product sold as soon as control of the goods transfers to the franchisee.
+Added: Shipping and handling fees – Shipping and handling fees billed to customers are recorded in merchandise and equipment revenues.
+Added: The costs associated with shipping goods to customers are included in costs of product revenue in the condensed consolidated statements of operations.
Comprehensive income – The Company does not have any components of other comprehensive income recorded within the consolidated financial statements and therefore does not separately present a consolidated statement of comprehensive income in the condensed consolidated financial statements.
3 unchanged sentences
Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates and yield curves), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
3 unchanged sentences
The carrying amounts of these financial instruments approximate fair value due to their short maturities, proximity of issuance to the balance sheet date or variable interest rate.
+Added: Recently adopted accounting pronouncements
+Added: Financial Instruments-Credit Losses – In July 2025, the FASB issued ASU 2025-05, “Financial Instruments-Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Accounts Receivable and Contract Assets.” This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC Topic 606, “Revenue from Contracts with Customers.” The standard is effective for fiscal years beginning after December 15, 2025, including interim periods within those annual periods.
+Added: Early adoption is permitted.
+Added: The adoption of this guidance is applied prospectively.
+Added: The adoption of this accounting standard did not have an impact on the Company's consolidated financial statements.
Recently issued accounting pronouncements
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The Company has elected to use this extended transition period.
−Removed: Income Taxes Disclosures – In December 2023, the FASB issued ASU No.
−Removed: 2023-09, “Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.
−Removed: ASU 2023-09 is effective for annual periods beginning after December 15, 2024 for public business entities (“PBEs”) and December 15, 2025 for entities other than PBEs with early adoption permitted.
−Removed: The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
Income Statement Expense Disclosures – In November 2024, the FASB issued ASU No.
12 unchanged sentences
The Company is currently evaluating the impact this amended guidance may have but does not expect the adoption of the guidance to have a material impact on its condensed consolidated financial statements.
−Removed: Financial Instruments-Credit Losses – In July 2025, the FASB issued ASU 2025-05, “Financial Instruments-Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses for Accounts Receivable and Contract Assets.” This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC Topic 606, “Revenue from Contracts with Customers.” The standard is effective for fiscal years beginning after December 15, 2025, including interim periods within those annual periods.
−Removed: Early adoption is permitted.
−Removed: Upon adoption, the guidance will be applied prospectively.
−Removed: The Company is currently evaluating the impact this amended guidance may have but does not expect the adoption of the guidance to have a material impact on its condensed consolidated financial statements.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Intangibles-Goodwill and Other Internal-Use Softwar e – In September 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40):
6 unchanged sentences
The Company is evaluating the impact this amended guidance may have but does not expect it to have a significant impact on its condensed consolidated financial statements.
+Added: Interim Reporting (Topic 270) – In December 2025, the FASB issued ASU 2025-11,“ Interim Reporting (Topic 270):
+Added: Narrow-Scope Improvements” This standard improves the navigability of the required interim disclosures and clarifies when the guidance is applicable, as well as provides additional guidance on what disclosures should be provided in interim reporting periods.
+Added: The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2028.
+Added: The Company is evaluating the impact this the new standard may have, but does not expect it to have a significant impact on its consolidated financial statements.
Supplemental balance sheet information
−Removed: September 30,
Prepaid expenses and other current assets
Prepaid expenses and other
−Removed: Contingent consideration receivable
+Added: Contingent consideration receivable, current portion
Insurance receivable
9 unchanged sentences
Total accrued expenses
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
Other current liabilities
Lease liabilities, current portion
−Removed: Promissory note
−Removed: Tax receivable agreement liability, current portion
Gift card liability
3 unchanged sentences
Legal accruals, net of current portion
−Removed: Tax receivable agreement liability, net of current portion
Other liabilities
Total other liabilities
+Added: Three Months Ended March 31,
+Added: Impairment of goodwill and other noncurrent assets
+Added: Right-of-use assets
+Added: Total impairment of goodwill and other noncurrent assets
Note 3 – Acquisitions and Dispositions
The Company completed the following acquisitions and dispositions which contain Level 3 fair value measurements related to the recognition of goodwill and intangibles.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: During the nine months ended September 30, 2025 and 2024, the Company refranchised operations at 0 and 10 company-owned transition studios, respectively, received no proceeds in either period, and recorded a net loss of $ 0 and $ 122 on disposal of the studio assets, respectively.
−Removed: During the nine months ended September 30, 2025 and 2024, the Company also ceased operations at 0 and 11 company-owned transition studios, respectively.
−Removed: The Company refranchised or closed company-owned transition studios under its restructuring plan that started in the third quarter of 2023.
−Removed: See Note 17 for further discussion of the Company's restructuring plan.
+Added: During the three months ended March 31, 2026 and 2025, the Company operated one company-owned transition studio and did not close or refranchised this studio.
When the Company believes that a studio will be refranchised for a price less than its carrying value but does not believe the studio has met the criteria to be classified as held for sale, the Company reviews the studio for impairment.
1 unchanged sentence
For studio assets that are not deemed to be recoverable, the Company recognizes impairment for any excess of carrying value over the fair value of the studios, which is based on the expected net sales proceeds.
−Removed: During the three and nine months ended September 30, 2025 and 2024 , the Company did no t record any impairment charges related to studio assets.
+Added: During the three months ended March 31, 2026 and 2025 , the Company did no t record any impairment charges related to studio assets.
See Note 8 for discussion of impairment charges related to right-of-use assets.
−Removed: Lindora Acquisition
−Removed: On December 1, 2023 , the Company entered into an agreement to acquire Lindora Franchise, LLC, a Delaware limited liability company, the franchisor of the “Lindora” wellness brand (the “Lindora Franchisor”), for cash consideration of $ 8,500 .
−Removed: The transaction also includes up to $ 1,000 of contingent consideration which is subject to the achievement of certain milestones.
−Removed: Payment of additional consideration is contingent on Lindora reaching two milestones based on a certain gross sales target and the number of operating clinics during the 15-month and 24-month period following the acquisition date, respectively.
−Removed: At the acquisition date, the Company determined that the fair value of the estimated contingent consideration liability was $ 446 .
−Removed: The Lindora Franchisor was a subsidiary of Lindora Wellness, Inc.
−Removed: (“Lindora Wellness”).
−Removed: Lindora Wellness has owned and operated each of the Lindora clinics in California for at least 25 years and currently owns and operates 30 Lindora clinics in California and a single Lindora clinic in the state of Washington.
−Removed: Immediately prior to the execution of the purchase agreement on December 1, 2023, Lindora Wellness signed 31 franchise agreements with the Lindora Franchisor pursuant to which Lindora Wellness will continue to operate its Lindora Clinics as a franchisee of the Lindora Franchisor.
−Removed: The acquisition of the Lindora Franchisor was completed on January 2, 2024.
−Removed: The transaction was accounted for as a business combination using the acquisition method of accounting, which requires the assets acquired to be recorded at their respective fair value as of the date of the transaction.
−Removed: The Company determined the estimated fair values after review and consideration of relevant information as of the acquisition date, including discounted cash flows, quoted market prices and estimates made by management.
−Removed: The fair values assigned to intangible assets acquired are based on management's estimates and assumptions.
−Removed: The acquisition was not material to the results of operations of the Company.
−Removed: The following summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation:
−Removed: Franchise agreements
−Removed: Total assets acquired
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
−Removed: The goodwill recognized in this acquisition was attributable to the synergies that the Company expected to achieve.
−Removed: The fair values, which are Level 3 measurements, of the recognizable intangible assets are comprised of trademarks and franchise agreements.
−Removed: The fair value of the trademarks was estimated by the relief from royalty method and are considered to have an eleven-year life.
−Removed: The fair value of the franchise agreements was based on the excess earnings method and are considered to have a ten-year life.
−Removed: Inputs used in the methodologies primarily included sales forecasts, projected future cash flows, royalty rate and discount rate commensurate with the risk involved.
−Removed: Goodwill and intangible assets recognized from this acquisition are expected to be tax deductible.
−Removed: See Note 7 for discussion of impairment charges related to goodwill and intangible assets.
−Removed: The Co mpany did no t incur any transaction costs r elated to acquisitions during the three and nine months ended September 30, 2025.
−Removed: During the three and nine months ended September 30, 2024, the Company incurred $ 0 and $ 528 , respectively, of transaction costs related to acquisitions, which is included in acquisition and transaction expenses in the condensed consolidated statements of operations.
−Removed: Pro forma financial information and revenue from the date of acquisition have not been provided for these acquisitions as they are not material either individually or in the aggregate.
−Removed: Divestiture of Stride brand – On February 13, 2024, the Company entered into an agreement with a buyer, pursuant to which the Company divested the Stride brand, including the intellectual property, franchise rights and franchise agreements for open studios.
−Removed: The buyer of the Stride brand is a former member of management and shareholder of the Company.
−Removed: The Company received no con sideration from the divestiture of the Stride brand and will assist the buyer with transition support including cash payments of approximately $ 265 payable over the 12-month period following divestiture.
−Removed: The divestiture allows the Company to better focus and utilize its resources on its other brands.
−Removed: The Company recognized a gain on divestiture of $ 61 , which was included within selling, general and administrative expenses in the condensed consolidated statements of operations.
−Removed: The divested brand did not represent a strategic shift that has a major effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
−Removed: Divestiture of Row House brand – On May 20, 2024, the Company entered into an agreement with a buyer, pursuant to which the Company divested the Row House brand, including the intellectual property, franchise rights and franchise agreements for open studios, and retained certain liabilities, including liabilities related to known litigation, pre-litigation, and disputes as of the closing of the divestiture.
−Removed: The Company received no consideration from the divestiture of the Row House brand.
−Removed: The divestiture allows the Company to better focus and utilize its resources on its other brands.
−Removed: The Company recognized a loss on divestiture of $ 922 , which was included within selling, general and administrative expenses in the condensed consolidated statements of operations.
−Removed: The divested brand did not represent a strategic shift that has a major effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
−Removed: Wind down of AKT brand franchise operations – During the three months ended September 30, 2024, the Company announced the wind down of AKT franchise operations.
−Removed: As part of the wind down, the Company began terminating franchise agreements with existing AKT studios and signed a licensing agreement with a former franchisee for no consideration received.
−Removed: As a result of the ongoing wind down of the AKT brand, the Company recognized net charges of $ 1,136 for impairment of intangible assets, inventory write-downs, and other charges during the year ended December 31, 2024.
−Removed: The wind down of the AKT brand did not represent a strategic shift that has a major effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Divestiture of CycleBar and Rumble brands – On July 24, 2025, the Company entered into an agreement with a buyer, pursuant to which the Company divested the CycleBar and Rumble brands, including the intellectual property, franchise rights and franchise agreements for open studios, and retained certain l iabilities, including liabilities related to known litigation, pre-litigation, and disputes as of the closing of the divestiture.
−Removed: The Company will receive total consideration of $ 7,000 , consisting of $ 2,000 received in the three months ended September 30, 2025 , and a promissory note for $ 5,000 , which was included in notes receivable, net in the condensed consolidated balance sheet at September 30, 2025 .
−Removed: The promissory note bears interest at the annual rate of 14 %, increasing to 18 % if the note is not paid by the due date of September 22, 2025.
−Removed: The Company will receive royalty payments from franchisees associated with the divested brands from the divestiture date until the promissory note is paid in full.
−Removed: Such royalty payments are included in other income in the condensed consolidated statements of operations.
+Added: The Company received total consideration of $ 7,000 , consisting of $ 2,000 received in the three months ended September 30, 2025, and a promissory note for $ 5,000 .
+Added: The Company received royalty payments from franchisees associated with the divested brands from the divestiture date until the promissory note was paid in full.
+Added: During the quarter ended December 31, 2025, the Company received total consideration of $4,708 in cash and retained royalties of $440, which was credited to the buyer's promissory note.
The divestiture allows the Company to better focus and utilize its resources on its core brands and other opportunities which better align with its long-term strategies.
−Removed: The Company recognized a net gain on divestiture of $ 2,214 , including related fees, which was included within selling, general and administrative expenses in the condensed consolidated statements of operations.
The divested brand did not represent a strategic shift that has a major effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
2 unchanged sentences
Payments will continue until the earlier of receipt of $ 6,000 or seven years .
−Removed: At the disposition date the Company determined that the fair value of the estimated contingent consideration receivable was $ 3,764 , of which $ 456 and $ 3,308 is included with prepaid expenses and other current assets and other assets, respectively, in the condensed consolidated balance sheets at September 30, 2025 .
+Added: At the disposition date the Company determined that the fair value of the estimated contingent consideration receivable was $ 3,764 , of which $ 456 and $ 3,308 was included with prepaid expenses and other current assets and other assets, respectively.
+Added: The fair value of the estimated contingent consideration receivable was determined using probability weighted discounted cash flows through the seven year period.
The divestiture allows the Company to better focus and utilize its resources on its other brands.
−Removed: The Company recognized a net loss on divestiture of $ 1,015 , which was included within selling, general and administrative expenses in the condensed consolidated statements of operations.
The divested brand did not represent a strategic shift that has a major effect on the Company's operations and financial results, and, as such, it was not presented as discontinued operations.
+Added: The Company recorded additional contingent consideration receivable of $ 60 during the three months ended March 31, 2026, which was recorded as interest income and SG&A expenses in the condensed consolidated statements of operations, respectively.
+Added: The Company did not receive any consideration during the three months ended March 31, 2026.
+Added: At March 31, 2026 , contingent consideration receivable was $ 4,550 , of which $ 936 and $ 3,614 is included with prepaid expenses and other current assets and other assets, respectively, in the condensed consolidated balance sheets.
Note 4 – Contract Liabilities and Costs from Contracts with Customers
4 unchanged sentences
The Company classifies these contract liabilities as either current deferred revenue or non-current deferred revenue in the condensed consolidated balance sheets based on the anticipated timing of delivery.
−Removed: The following table reflects the change in franc hise, including area development and multi-unit agreements, and brand fee contract liabilities for the nine months ended September 30, 2025 .
+Added: The following table reflects the change in franc hise, including area development and multi-unit agreements and brand fee contract liabilities for the three months ended March 31, 2026 .
Other deferred revenue amounts of $ 11,184 are excluded from the table as the original expected duration of the contracts is one year or less.
2 unchanged sentences
Revenue recognized that was included in deferred revenue at the beginning of the year (1)
−Removed: Decrease in deferred revenue due to divestiture
Increase, excluding amounts recognized as revenue during the period
−Removed: Balance at September 30, 2025
−Removed: (1) Includes revenue recognized as a result of ter minations of $ 10,702 for the nine months ended September 30, 2025 .
+Added: Balance at March 31, 2026
+Added: (1) Includes revenue recognized as a result of ter minations of $ 420 for the three months ended March 31, 2026 .
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
−Removed: The following table illustrates estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of September 30, 2025.
+Added: The following table illustrates estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2026.
The expected future recognition period for deferred franchise and area development fees related to unopened studios is based on management’s best estimate of the beginning of the franchise license term for those studios.
4 unchanged sentences
The following table reflects the components of deferred revenue:
−Removed: September 30,
Franchise development fees
9 unchanged sentences
The associated expense is classified within costs of franchise and service revenue in the condensed consolidated statements of operations.
−Removed: At September 30, 2025 and December 31, 2024 , there were approximately $ 3,411 and $ 3,940 of current deferred commission costs and approximately $ 28,970 and $ 39,684 in non-current deferred commission costs, respectively.
−Removed: The Company recognized franchise sales commission expense of approximately $ 4,643 and $ 7,324 for the three and nine months ended September 30, 2025, respectively, and $ 2,690 and $ 8,827 for the three and nine months ended September 30, 2024 , respectively.
+Added: At March 31, 2026 and December 31, 2025 , there were approximately $ 3,324 and $ 3,301 of current deferred commission costs and approximately $ 23,750 and $ 24,744 in non-current deferred commission costs, respectively.
+Added: The Company recognized approximately $ 200 and $ 400 in costs as a result of terminations for the three months ended March 31, 2026 and 2025, respectively.
+Added: The Company recognized franchise sales commission expense of approximately $ 1,095 and $ 1,368 for the three months ended March 31, 2026 and 2025 , respectively.
Note 5 – Property and Equipment
Property and equipment consisted of the following:
−Removed: September 30,
Furniture and equipment
7 unchanged sentences
(amounts in thousands, except per share amounts)
−Removed: Depreciation expense for the three and nine months ended September 30, 2025 was $ 1,335 and $ 3,318 , respectively, and $ 1,509 and $ 4,587 for the three and nine months ended September 30, 2024, respectively.
−Removed: During the three and nine months ended September 30, 2025, the Company determined that the carrying amount of certain property and equipment assets exceeded their fair values and recorded an impairment of $ 764 and $ 2,234 , respectively.
−Removed: The impairment charges were primarily related to software assets of BFT, for which the Company no longer had established cash flows to support continued recognition of such assets.
+Added: Depreciation expense for the three months ended March 31, 2026 and 2025 w as $ 1,079 and $ 986 , respectively.
+Added: During the year ended December 31, 2025, the Company determined that the carrying amount of certain property and equipment assets exceeded their fair values and recorded an impairment of $ 2,306 .
+Added: The impa irment charges were primarily related to software assets of BFT, for which the Company no longer had established cash flows to support continued recognition of such assets.
The fair values of software assets were determined by assumptions that are considered Level 3 inputs.
−Removed: No impairment of property and equipment was recorded for the three and nine months ended September 30, 2024.
−Removed: Property and equipment impairment expenses are included within impairment of goodwill and other noncurrent assets in the Company's condensed consolidated statements of operations.
Note 6 – Goodwill and Intangible Assets
1 unchanged sentence
Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist.
−Removed: The carrying value of goodwill at September 30, 2025 and December 31, 2024, totaled $ 127,789 and $ 135,240 , respectively.
−Removed: Cumulative goodwill impairment was $ 55,371 and $ 47,920 at September 30, 2025 and December 31, 2024, respectively.
+Added: The carrying value of goodwill at both March 31, 2026 and December 31, 2025, totaled $ 127,789 .
+Added: Cumulative goodwill impairment was $ 55,371 at both March 31, 2026 and December 31, 2025.
The impairment charges are included within impairment of goodwill and other noncurrent assets in the Company's condensed consolidated statements of operations.
−Removed: During the quarter ended June 30, 2025, the Company determined it was necessary to re-evaluate goodwill of the BFT and Lindora reporting units for impairment due to indicators of potential impairment resulting from a decline in forecasted and actual cash flows.
−Removed: Therefore, the Company performed a quantitative assessment of the fair value of the reporting units using an income approach with assumptions that are considered Level 3 inputs and concluded that the carrying value of the BFT and Lindora reporting units exceeded their fair values, resulting in a goodwill impairment of $ 5,105 and $ 2,346 , respectively, and no goodwill remaining for the BFT and Lindora reporting units.
−Removed: The fair value of the reporting units were determined by discounting estimated future cash flows, which were calculated based on revenue and expense long-term growth assumptions ranging from 9.0 % to 22.0 %, at a weighted average cost of capital (discount rate) of 19.0 % for the BFT reporting unit and revenue and expense long-term growth assumptions ranging from 6.0 % to 16.0 %, at a weighted average cost of capital (discount rate) of 26.0 % for the Lindora reporting unit.
−Removed: The Company determined that the carrying value of the CycleBar trademark intangible asset was in excess of its fair value and recognized an impairment loss of $ 3,449 during the quarter ended June 30, 2025.
−Removed: The fair value was determined using Level 3 inputs.
−Removed: The Company determined that the carrying value of the BFT trademark, franchise agreement and deferred video production intangible assets were in excess of their fair value and recognized an aggregate impairment loss of $ 12,700 during the quarter ended September 30, 2025.
−Removed: The fair value of the trademark intangible asset was determined by the relief from royalty method using Level 3 inputs.
−Removed: The discount rate and royalty rate used in the relief from royalty valuation was 17.0 % and 0.5 %, respectively.
−Removed: The fair value of the franchise agreement intangible asset was determined by the excess earnings method, which represents the multi-period excessive earnings generated by the asset that remains after a deduction for a return on other contributory assets using Level 3 inputs.
−Removed: The discount rate used in the excess earning valuation was 14.0 %.
−Removed: At September 30, 2025 , the goodwill related to the Pure Barre reporting unit of $ 42,548 is at a heightened risk of future impairment if the fair value of the Pure Barre reporting unit, and its associated assets, decreases in value due to the amount and timing of expected future cash flows, an inability to execute management’s business strategies or general market conditions, such as economic downturns, and changes in interest rates, including discount rates.
+Added: At December 31, 2025, the goodwill related to the Pure Barre reporting unit of $ 42,548 is at a heightened risk of future impairment as the fair value of the Pure Barre reporting unit, and its associated assets, exceeded its carrying value by approximately 6 %.
+Added: This meaningful decline in the fair value cushion above the carrying value is driven by decreases to the amount and timing of expected future cash flows, an inability to execute management’s business strategies or general market conditions, such as economic downturns, and changes in interest rates, including discount rates.
Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates.
If the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: During the quarter ended June 30, 2024, the Company determined it was necessary to re-evaluate goodwill of the CycleBar reporting unit for impairment due to indicators of potential impairment resulting from a decline in forecasted and actual cash flows.
−Removed: Therefore, the Company performed a quantitative assessment of the fair value of the reporting unit using an income approach with assumptions that are considered Level 3 inputs and concluded that the carrying value of the CycleBar reporting unit exceeded its fair value, resulting in a goodwill impairment of $ 10,911 and no goodwill remaining for the CycleBar reporting unit.
−Removed: The fair value of the reporting unit was determined by discounting estimated future cash flows, which were calculated based on revenue and expense long-term growth assumptions ranging from ( 1.0 %) to 3.0 %, at a weighted average cost of capital (discount rate) of 16.0 %.
−Removed: In addition, the Company determined that the franchise agreements intangible assets related to the CycleBar reporting unit were also impaired and recognized an impairment loss of $ 1,178 in the second quarter of 2024.
−Removed: In connection with the wind down of the AKT brand, as discussed in Note 4, the Company determined that the deferred video production costs and web design and domain intangible assets related to AKT were impaired and recognized an impairment loss of $ 179 during the quarter ended September 30, 2024.
+Added: At March 31, 2026, the goodwill related to the Pure Barre Reporting unit remains at a heightened risk of future impairment.
+Added: At March 31, 2026 , the YogaSix and StretchLab reporting units had negative carrying values.
+Added: The goodwill related to the YogaSix and StretchLab reporting units were $ 3,927 and $ 2,770 , respectively, as of March 31, 2026.
Intangible assets consisted of the following:
−Removed: September 30, 2025
+Added: March 31, 2026
December 31, 2025
3 unchanged sentences
Deferred video production costs
+Added: Other intangible assets
Total definite-lived intangible assets
1 unchanged sentence
Total intangible assets
−Removed: Amortization expense wa s $ 2,344 and $ 6,290 , for the three and nine months ended September 30, 2025, respectively, and $ 2,717 and $ 8,592 for the three and nine months ended September 30, 2024, respectively.
−Removed: The anticipated future amortization expense of intangible assets is as follows:
−Removed: Remainder of 2025
−Removed: Note 8 – Debt
−Removed: On April 19, 2021, the Company entered into a Financing Agreement with Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto (the “Credit Agreement”), which consisted of a $ 212,000 senior secured term loan facility (the “Term Loan Facility”, and the loans thereunder, each a “Term Loan” and, together, the “Term Loans”).
−Removed: The Company’s obligations under the Credit Agreement are guaranteed by XPO Holdings and certain of the Company’s material subsidiaries and are secured by substantially all of the assets of XPO Holdings and certain of the Company’s material subsidiaries.
+Added: Amortization expense was $ 1,173 and $ 1,970 for the three months ended March 31, 2026 and 2025, respectively.
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
−Removed: Under the Credit Agreement, the Company is required to make:
+Added: The anticipated future amortization expense of intangible assets is as follows:
+Added: Remainder of 2026
+Added: Note 7 – Debt
+Added: On April 19, 2021, the Company entered into a Financing Agreement with Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto (the “Prior Credit Agreement”), which consisted of a $ 212,000 senior secured term loan facility (the “Term Loan Facility”, and the loans thereunder, each a “Term Loan” and, together, the “Term Loans”).
+Added: The Company’s obligations under the Prior Credit Agreement were guaranteed by XPO Holdings and certain of the Company’s material subsidiaries and were secured by substantially all of the assets of XPO Holdings and certain of the Company’s material subsidiaries.
+Added: Under the Prior Credit Agreement, the Company was required to make:
(i) monthly payments of interest on the Term Loans and (ii) quarterly principal payments equal to 0.25 % of the original principal amount of the Term Loans.
−Removed: Borrowings under the Term Loan Facility bear interest at a per annum rate of, at the Company’s option, either (a) the term secured overnight financing rate (“Term SOFR”) plus a Term SOFR Adjustment (as defined in the Credit Agre ement per the fifth amendment), plus a margin of 6.50 % or (b) the Reference Rate (as defined in the Credit Agreement) plus a margin of 5.50 % ( 10.8 % at September 30, 2025).
−Removed: The Credit Agreement also contains mandatory prepayments of the Term Loa ns with:
−Removed: (i) 50 % of XPO Holdings’ and its subsidiaries’ Excess Cash Flow (as defined in the Credit Agreement), subject to certain exceptions;
+Added: Borrowings under the Term Loan Facility bore interest at a per annum rate of, at the Company’s option, either (a) the term secured overnight financing rate (“Term SOFR”) plus a Term SOFR Adjustment (as defined in the Prior Credit Agreement per the fifth amendment), plus a margin of 6.50 % or (b) the Reference Rate (as defined in the Prior Credit Agreement) plus a margi n of 5.50 %.
+Added: The Prior Credit Agreement also contained mandatory prepayments of the Term Loans with:
+Added: (i) 50 % of XPO Holdings’ and its subsidiaries’ Excess Cash Flow (as defined in the Prior Credit Agreement), subject to certain exceptions;
(ii) 100 % of the net proceeds of certain asset sales and insurance/condemnation events, subject to reinvestment rights and certain other exceptions;
2 unchanged sentences
and (v) up to $ 60,000 of net proceeds in connection with an initial public offering of at least $ 200,000 , subject to certain exceptions.
−Removed: Unless agreed in advance, a ll voluntary prepayments and certain mandatory prepayments of the Term Loan made:
−Removed: (i) on or prior to the first anniversary of the closing date are subject to a 2.0 % premium on the principal amount of such prepayment and (ii) after the first anniversary of the closing date and on or prior to the second anniversary of the closing date are subject to a 0.50 % premium on the principal amount of such prepayment.
−Removed: Otherwise, the Term Loans may be paid without premium or penalty, other than customary breakage costs with respect to Term Loans.
−Removed: The Credit Agreement contains customary affirmative and negative covenants, including, among other things:
−Removed: (i) to maintain certain total leverage ratios, liquidity levels and EBITDA levels;
−Removed: (ii) to use the proceeds of borrowings only for certain specified purposes;
−Removed: (iii) to refrain from entering into certain agreements outside of the ordinary course of business, including with respect to consolidation or mergers;
−Removed: (iv) restricting further indebtedness or liens;
−Removed: (v) restricting certain transactions with affiliates;
−Removed: (vi) restricting investments;
−Removed: (vii) restricting prepayments of subordinated indebtedness;
−Removed: (viii) restricting certain payments, including certain payments to affiliates or equity holders and distributions to equity holders;
−Removed: and (ix) restricting the issuance of certain equity.
−Removed: Additionally, on March 10, 2025, the Company obtained a waiver related to EBITDA levels as the Credit Agreement did not contain active exceptions for non-recurring legal expenses.
−Removed: The waiver permits the exclusion of certain non-recurring legal expenses from the calculation of EBITDA through March 31, 2026.
−Removed: As of September 30, 2025, the Company was in compliance with these covenants.
−Removed: The Credit Agreement also contains customary events of default, which could result in acceleration of amounts due under the Credit Agreement.
−Removed: Such events of default include, subject to the grace periods specified therein, failure to pay principal or interest when due, failure to satisfy or comply with covenants, a change of control, the imposition of certain judgments and the invalidation of liens the Company has granted.
−Removed: On February 13, 2024, the Company entered into a sixth amendment (the “Sixth Amendment”) to the Credit Agreement.
−Removed: The Sixth Amendment provides for, among other things, additional term loans in an aggregate principal amount of approximately $ 38,701 , with an original issue discount of $ 4,059 , (the “Sixth Amendment Incremental Term Loans”).
−Removed: The original issue discount was paid-in-kind by increasing the principal amount of the Credit Agreement.
−Removed: The proceeds of the Sixth Amendment were used to repay an aggregate of $ 38,701 in existing term loans under the Credit Agreement and for the payment of fees, costs and expenses related to the making of the Sixth Amendment Incremental Term Loans.
−Removed: The Sixth Amendment, among other things, also (i) increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the Sixth Amendment Incremental Term Loans) commencing on June 30, 2024 to $ 1,287, (ii) included a prepayment premium on the Sixth Amendment Incremental Term Loans and (iii) extended the maturity date for all outstanding term loans under the Credit Agreement to March 15, 2026.
−Removed: In connection with the Sixth Amendment, the Company wrote off a pro rata portion of debt issuance costs related to the Term Loans of $ 23 and wrote off original issue discount of $ 452 related to the repayment of a portion of the Term Loans, which were included in interest expense for the three months ended March 31, 2024.
−Removed: On August 23, 2024, the Company entered into a seventh amendment (the “Seventh Amendment”) to the Credit Agreement.
−Removed: The Seventh Amendment provides for, among other things, (i) additional term loans in an aggregate principal amount of $ 25,000 , with an original issue discount of $ 750 , (the “Seventh Amendment Incremental Term Loans”), (ii) an increased amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the Seventh Amendment Incremental Term Loans) commencing on September 30, 2024 to $ 1,349 and (iii) a prepayment premium on the Seventh Amendment Incremental Term Loans.
+Added: On March 14, 2025, the Company entered into an eighth amendment (the “Eighth Amendment”) to the Prior Credit Agreement.
+Added: The Eighth Amendment extends the final maturity date under the Prior Credit Agreement to August 1, 2027 (the “Final Maturity Date”) and provides for, among other things, additional term loans in an aggregate principal amount of $ 10,000 (the “Eighth Amendment Incremental Term Loans”), an upfront fee, paid-in-kind, equal to 3 % of the (a) aggregate principal amount of term loans outstanding as of the amendment date and (b) the Eighth Amendment Incremental Term Loans funded on the funding date, which were capitalized and added to the outstanding loan principal, and an exit fee of approximately $ 7,248 payable upon the earlier of the Final Maturity Date or the date all loans under the Prior Credit Agreement have been repaid or prepaid.
+Added: The exit fee is treated as additional interest expense and is accreted over the life of the loan using the effective interest method and is presented as a reduction to long-term debt in the condensed consolidated balance sheets.
+Added: The Eighth Amendment also increased the amount of the quarterly principal payments of the loans provided pursuant to the Prior Credit Agreement (including the Eighth Amendment Incremental Term Loans) commencing on March 31, 2025 to $ 1,374 .
+Added: On July 24, 2025, the Company entered into a ninth amendment (the “Ninth Amendment”) to the Prior Credit Agreement in connection with the divestiture of the Rumble and CycleBar brands.
+Added: The Ninth Amendment did not modify the terms of the Prior Credit Agreement.
+Added: Instead, the Ninth Amendment requires the Company to apply the net proceeds received from the divestiture of the Rumble and CycleBar brands to repayment of the outstanding loan principal.
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
−Removed: The proceeds of the Seventh Amendment will be used for general corporate purposes, including working capital, lease liabilities, and legal expenses arising from regulatory matters.
−Removed: On March 14, 2025, the Company entered into an eighth amendment (the “Eighth Amendment”) to the Credit Agreement.
−Removed: The Eighth Amendment extends the final maturity date under the Credit Agreement to August 1, 2027 (the “Final Maturity Date”) and provides for, among other things, additional term loans in an aggregate principal amount of $ 10,000 (the “Eighth Amendment Incremental Term Loans”), an upfront fee, paid-in-kind, equal to 3 % of the (a) aggregate principal amount of term loans outstanding as of the amendment date and (b) the Eighth Amendment Incremental Term Loans funded on the funding date, which were capitalized and added to the outstanding loan principal, and an exit fee of approximately $ 7,248 payable upon the earlier of the Final Maturity Date or the date all loans under the Credit Agreement have been repaid or prepaid.
−Removed: The exit fee is treated as additional interest expense and is accreted over the life of the loan using the effective interest method and is presented as a reduction to long-term debt in the condensed consolidated balance sheets.
−Removed: The Eighth Amendment also increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the Eighth Amendment Incremental Term Loans) commencing on March 31, 2025 to $ 1,374 .
−Removed: On July 24, 2025, the Company entered into a ninth amendment (the “Ninth Amendment”) to the Credit Agreement in connection with the divestiture of the Rumble and CycleBar brands.
−Removed: The Ninth Amendment did not modify the terms of the Credit Agreement.
−Removed: Instead, the Ninth Amendment requires the Company to apply the net proceeds received from the divestiture of the Rumble and CycleBar brands to repayment of the outstanding loan principal.
−Removed: The Company incurred debt issuance costs of $ 90 and $ 318 for the nine months ended September 30, 2025 and 2024 , respectively.
−Removed: Debt issuance cost amortization and write off amounted to $ 36 and $ 123 for the three and nine months ended September 30, 2025 , respectively, and $ 55 and $ 179 for the three and nine months ended September 30, 2024, respectively.
−Removed: Unamortized debt issuance costs as of September 30, 2025 and December 31, 2024, we re $ 265 and $ 297 , respectively, and are presented as a reduction to long-term debt in the condensed consolidated balance sheets.
−Removed: Unamortized original issue discount as of September 30, 2025 and December 31, 2024 , was $ 11,516 and $ 4,967 , respectively, and are presented as a reduction to long-term debt in the condensed consolidated balance sheets.
−Removed: Unamortized exit fees as of September 30, 2025 and December 31, 2024, were $ 5,576 and $ 0 , respectively, and are presented as a reduction to long-term debt in the condensed consolidated balance sheets.
−Removed: Principal payments on outstanding balances, including exit fee, of long-term debt as of September 30, 2025 were as follows:
+Added: On December 8, 2025 (the “ Closing Date”), the Company entered into a Financing Agreement with HPS Investment Partners LLC, as administrative agent and collateral agent, and the lenders party thereto (the “Credit Agreement”), which consisted of a term loan facility in a principal amount of $ 525,000 (the “ Closing Date Term Loans”) and a revolving credit facility in a principal amount of $ 25,000 (the “Revolving Loans”).
+Added: The Closing Date Term Loans and Revolving Loans will bear interest at a rate per annum based upon, at the Company’s option, either the Term SOFR or the Base Rate ( as defined in the Credit Agreement ), plus, in each case, a leverage-based margin ( 10.5 % at March 31, 2026).
+Added: The Company received net proceeds of $ 506,178 after deducting original issue discount equal to 3.4 % of the gross amount of the borrowings under the Credit Agreement.
+Added: The proceeds of the Closing Date Term Loans were used to (i) fund all outstanding indebtedness under the Prior Credit Agreement aggregating to $ 387,940 (including an exit fee, make whole premium and accrued interest) (ii) repurchase the convertible preferred shares and (iii) pay the Transaction Expenses ( as defined in the Credit Agreement ).
+Added: The proceeds of the Revolving Loans will be used by the Company for working capital and general corporate purposes.
+Added: In connection with the Credit Agreement, the Company wrote off a pro rata portion of debt issuance costs related to the Prior Credit Agreement of $ 249 and wrote off original issue discount of $ 15,538 related to the repayment of Prior Credit Agreement .
+Added: Commencing with the quarter ended Mar ch 31, 2026, and subject to customary adjustments, the Company is required to repay (a) on the last Business Day ( as defined in the Credit Agreement ) of each March, June, September and December (each a “Principal Payment Date”), an aggregate principal amount equal to (i) 0.25 % of the aggregate principal amount of all Closing Date Term Loans outstanding on the Closing Date, in respect of the first four Principal Payment Dates (commencing March 31, 2026), (ii) 0.75 % of the aggregate principal amount of all Closing Date Term Loans outstanding on the Closing Date, in respect of the next four Principal Payment Dates (i.e., commencing on March 31, 2027) and (iii) 1.25 % of the aggregate principal amount of all Closing Date Term Loans outstanding on the Closing Date, in respect of each Principal Payment Date thereafter (i.e., commencing on March 31, 2028).
+Added: The amount of the quarterly principal payments pursuant to the Credit Agre ement is $ 1,313 for the three months ended March 31, 2026 .
+Added: The Credit Agreement includes provisions requiring customary mandatory prepayments, including, without limitation, arising from the incurrence of new debt or the receipt of proceeds from certain dispositions or casualty events, in each case, subject to customary exceptions for facilities of this type.
+Added: In addition, the Credit Agreement includes subjective acceleration clauses, which could impact debt classification.
+Added: The Company believes that no events have occurred at March 31, 2026 that would trigger a subjective acceleration clause.
+Added: The obligations of the Company under the Credit Agreement are jointly and severally guaranteed by XPO Holdings and certain subsidiaries of Holding (collectively, the “Guarantors”, and together with the Company, the “Loan Parties”) and are secured by a first priority lien on substantially all of the Loan Parties assets, subject to customary exceptions.
+Added: The Credit Agreement contains various conditions to borrowing and certain customary affirmative and negative covenants, including, without limitation, covenants that restrict the ability of XPO Holdings, the Company and its certain subsidiaries to incur debt, grant liens, make investments, make restricted payments and dispose of assets.
+Added: The Credit Agreement includes a financial covenant requiring the Company to maintain a Total Net Leverage Ratio ( as defined in the Credit Agreement ) not to exceed a certain threshold (pursuant to the table as set forth in Section 7.12 of the Credit Agreement) as of the last day of each Test Period ( as defined in the Credit Agreement ) commencing with March 31, 2026.
+Added: The Credit Agreement also contains customary events of default.
+Added: The Closing Date Term Loans will mature five years after the Closing Date and the Revolving Loans will terminate five years after the Closing Date.
+Added: As of March 31, 2026, the Company was in compliance with these covenants.
+Added: The Company incurred debt issuance costs of $ 0 and $ 90 for the three months ended March 31, 2026 and 2025, respectively.
+Added: Debt issuance cost amortization and write off amounted to $ 78 and $ 50 for the three months ended March 31, 2026 and 2025, respectively, which were recorded as interest expense in the consolidated statements of operations.
+Added: Unamortized debt issuance costs as of March 31, 2026 and December 31, 2025 , were $ 1,394 and $ 1,538 , respectively, and are presented as a reduction to long-term debt in the condensed consolidated balance sheets.
+Added: Unamortized original issue discount as of March 31, 2026 and December 31, 2025 , was $ 17,045 and $ 18,626 , respectively, and is presented as a reduction to long-term debt in the condensed consolidated balance sheets.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
+Added: Principal payments on outstanding balances of long-term debt as of March 31, 2026 were as follows:
Remainder of 2026
−Removed: The carrying value of the Company’s long-term debt approximated fair value as of September 30, 2025 and December 31, 2024 , due to the variable interest rate, which is a Level 2 input.
+Added: The carrying value of the Company’s long-term debt approximated fair value as of March 31, 2026 and December 31, 2025 due to the variable interest rate, which is a Level 2 input.
Note 8 – Leases
3 unchanged sentences
See Note 14 of Notes to Condensed Consolidated Financial Statements for additional information.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Right-of-use (“ROU”) assets from operating leases are subject to the impairment guidance in ASC Topic 360, Property, Plant, and Equipment , and are reviewed for impairment when indicators of impairment are present.
3 unchanged sentences
When determining the fair value of the ROU asset, the Company estimates what market participants would pay to lease the assets assuming the highest and best use in the assets' current forms.
−Removed: The Company recognized ROU asset impairment charges of $ 3,906 and $ 6,379 during the three and nine months ended September 30, 2025 , respectively.
−Removed: The Company recognized ROU asset impairment charges of $ 4,323 during the three and nine months ended September 30, 2024, related to studio exits in conjunction with restructuring plans discussed in Note 17.
+Added: The Company recognized ROU asset impairment charges of $ 0 and $ 1,915 during the three months ended March 31, 2026 and 2025, related to studio exits in conjunction with its restructuring plan discussed in Note 15.
+Added: The impairment charges were recorded within impairment of goodwill and other assets in the condensed consolidated statements of operations.
Supplemental balance sheet information related to leases is summarized as follows:
1 unchanged sentence
Balance Sheet Location
−Removed: September 30, 2025
+Added: March 31, 2026
December 31, 2025
5 unchanged sentences
Lease liability
−Removed: The following table presents the components of lease expense during the three and nine months ended September 30, 2025 and 2024:
−Removed: Three months ended September 30,
−Removed: Nine Months Ended September 30,
+Added: The following table presents the components of lease expense during the three months ended March 31, 2026 and 2025:
+Added: Three months ended March 31,
Operating lease costs
Variable lease costs
−Removed: The following table presents the supplemental cash flow information related to operating leases during the three and nine months ended September 30, 2025 and 2024:
−Removed: Three months ended September 30,
−Removed: Nine Months Ended September 30,
+Added: The following table presents the supplemental cash flow information related to operating leases during the three months ended March 31, 2026 and 2025:
+Added: Three months ended March 31,
Cash paid for amounts included in the measurement of operating lease liabilities
−Removed: Lease liabilities arising from new ROU assets
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
The following table presents other information related to leases:
−Removed: September 30, 2025
+Added: March 31, 2026
December 31, 2025
1 unchanged sentence
Weighted average discount rate
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: Maturities of lease liabilities as of September 30, 2025 are summarized as follows:
+Added: Maturities of lease liabilities as of March 31, 2026 are summarized as follows:
Remainder of 2026
9 unchanged sentences
In 2023 and 2022, the Rumble Sellers borrowed an additional $ 4,400 and $ 5,050 , respectively, under the debt financing agreement which was recorded as receivable from shareholder within e quity.
−Removed: In 2025, the Rumble Sellers agreed to reimburse the Company for additional expenses of $ 162 , which was recorded as receivable from shareholder within equity.
−Removed: The Company recorded $ 678 and $ 1,460 of interest-in-kind during the three and nine months ended September 30, 2025 , respectively, and $ 373 and $ 1,082 during the three and nine months ended September 30, 2024, respectively, which was recorded as interest income and an increase to receivable from shareholder within equity.
+Added: As of March 31, 2026 and December 31, 2025 , the Rumble Sellers agreed to reimburse the Company for additional expenses of $ 0 and $ 249 , respectively, which was recorded as receivable from shareholder within equity.
+Added: The Company recorded $ 413 and $ 384 during the three months ended March 31, 2026 and 2025, respectively, which was recorded as interest income and an increase to receivable from shareholder within equity.
+Added: During the year ended December 31, 2025, the Company received $ 2,435 in cash as partial payment for the receivable from shareholder.
In December 2022, the Company entered into an agreement with the former owner of Row House, pursuant to which contingent consideration relating to the 2017 acquisition of Row House was settled in exchange for the issuance of 105 restricted stock units (“RSUs”), which vest in full on the fourth anniversary of the grant date.
2 unchanged sentences
The outstanding receivable from shareholder and the multi-tranche term loan are collateralized by 75 shares of Class B common stock held by the former owner, which were reclassified to treasury stock, and by the 105 RSUs.
−Removed: As of September 30, 2025 , the former owner of Row House borrowed $ 560 , which was recorded as a reduction to liability.
−Removed: In March 2023, Spartan Fitness Holdings, LLC (“Spartan Fitness”), which currently owns and operates 143 Club Pilates studios, entered into a unit purchase agreement with Snapdragon Spartan Investco LP (the “Spartan SPV”), a special purpose vehicle controlled and managed by a member of the Company’s board of directors, pursuant to which Spartan SPV agreed to invest in the equity of Spartan Fitness.
−Removed: In addition, the same member of the Company’s board of directors also invested as a limited partner in the Spartan SPV.
−Removed: Spartan Fitness intends to use the investment from Spartan SPV to fund the expansion of Club Pilates studios, among other concepts.
−Removed: Spartan Fitness also owns the rights to 75 Club Pilates licenses to open additional new units.
−Removed: The Company recorded franchise, equipment and marketing fund revenue aggregating $ 3,984 and $ 10,483 , during the three and nine months ended September 30, 2025 , respectively, and $ 3,261 and $ 7,710 , during the three and nine months ended September 30, 2024, respectively, from studios owned by Spartan Fitness.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: The Company previously earned revenues and had accounts receivable from a franchisee comprised of a former member of the Company's senior management together with their spouse, a former employee of the Company.
−Removed: The former member of the Company's senior management resigned from the Company effective November 4, 2024, ending the related party relationship, and the former member’s spouse resigned from the Company on April 4, 2025 .
−Removed: Revenues from this affiliate, consisting of franchise revenue, marketing fund revenue and merchandise revenue, were $ 94 and $ 209 for the three and nine months ended September 30, 2024 , respectively, and no accounts receivable were recorded as of December 31, 2024, for such sales.
−Removed: The Company provided $ 217 and $ 1,172 of studio support to this franchisee during the three and nine months ended September 30, 2024, respectively.
−Removed: Studio support to this franchisee included, among other things, cash payments, royalty relief, rent assistance, product and merchandise, and lease guarantees.
−Removed: The Company provided additional services to this franchisee in the form of assistance from its internal special operations team which focuses on improving studio performance, for which the Company does not allocate any amounts to the franchisees for such employee salaries and bonuses.
−Removed: In May 2024, the Company’s board of directors approved the sale of one of the Company’s vehicles to the Company’s former Chief Executive Officer and board member, for $ 275 .
−Removed: The former Chief Executive Officer paid for the vehicle with a $ 275 reduction of Tax Receivable Agreement payments and partner distributions owed to him by the Company.
−Removed: The Company recognized an $ 18 gain on sale of asset during the nine months ended September 30, 2024 , which was included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations.
−Removed: Note 11 – Redeemable Convertible Preferred Stock
−Removed: On July 23, 2021, the Company issued and sold in a private placement 200 newly issued shares of Series A-1 Convertible Preferred Stock, par value $ 0.0001 per share (the “Convertible Preferred”), for aggregate cash proceeds of $ 200,000 , before deduction for offering costs.
−Removed: Holders of shares of Convertible Preferred are entitled to quarterly coupon payments at the rate of 6.50 % of the fixed liquidation preference per share, initially $ 1,000 per share.
−Removed: In the event the quarterly preferential coupon is not paid in cash, the fixed liquidation preference automatically increases at the Paid-in-Kind rate of 7.50 %.
−Removed: The Convertible Preferred has an initial conversion price equal to $ 14.40 per share, is mandatorily convertible in certain circumstances, and is redeemable at the option of the holder beginning on the date that is eight years from the IPO or upon change of control.
−Removed: At issuance, the Company assessed the Convertible Preferred for any embedded derivatives.
−Removed: The Company determined that the Convertible Preferred represented an equity host under ASC Topic 815, Derivatives and Hedging .
−Removed: The Company’s analysis was based on consideration of all stated and implied substantive terms and features of the hybrid financial instrument and weighing those terms and features on the basis of the relevant facts and circumstances.
−Removed: Certain embedded features in the Convertible Preferred require bifurcation.
−Removed: However, the fair value of such embedded features was immaterial upon issuance and as of September 30, 2025.
−Removed: The Convertible Preferred ranks senior to the Company’s common stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution and winding up.
−Removed: It is entitled to receive any dividends or distributions paid in respect of the common stock on an as-converted basis and has no stated maturity and will remain outstanding indefinitely unless converted into common stock or repurchased by the Company.
−Removed: Series A preferred stock will vote on an as-converted basis with the Class A and Class B common stock and will have certain rights to appoint additional directors, including up to a majority of the Company’s board of directors, under certain limited circumstances relating to an event of default or the Company’s failure to repay amounts due to the Convertible Preferred holders upon a redemption.
−Removed: Shares of Series A-1 preferred stock are non-voting;
−Removed: however, any shares of Series A-1 preferred stock issued to any of the lenders party to the Credit Agreement will convert on a one-to-one basis to shares of Series A preferred stock when permitted under relevant antitrust restrictions.
−Removed: At any time after July 23, 2029, upon a sale of the Company, or at any time after the occurrence and continuance of an event of default, holders of the Convertible Preferred have the right to require the Company to redeem all, but not less than all, of the Preferred shares then outstanding at a redemption price in cash equal to the greater of (i) the fair market value per share of Preferred Stock (based on the average volume-weighted average price per share of Class A common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the redemption notice), and (ii) the fixed liquidation preference, plus accrued and unpaid dividends.
−Removed: The Convertible Preferred is recorded as mezzanine equity (temporary equity) on the condensed consolidated balance sheets because it is not mandatorily redeemable but does contain a redemption feature at the option of the Preferred holders that is considered not solely within the Company’s control.
+Added: As of March 31, 2026 , the former owner of Row House borrowed $ 560 , which was recorded as a reduction to liability.
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
−Removed: During the three months ended June 30, 2024, the Company elected the paid-in-kind option for the Convertible Preferred quarterly preferential coupon resulting in an increase in the fixed liquidation preference of $ 2,150 , which was recorded as a decrease to additional paid-in-capital and was included in the calculation of earnings (loss) per share.
−Removed: At September 30, 2025 and December 31, 2024, the Company recognized the preferred maximum redemption val ue of $ 116,810 , which is the maximum redemption value on the earliest redemption date based on fair market value per share of Convertible Preferred (based on the average volume-weighted average price per share of Class A common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the redemption notice and 115 outstanding shares of Convertible Preferred at September 30, 2025 and December 31, 2024).
−Removed: The recording of the preferred maximum redemption value for the three and nine months ended September 30, 2025 , did not impact the calculation of earnings (loss) per share and did not result in any change to additional paid-in-capital.
−Removed: The recording of the preferred maximum redemption value was treated as deemed contribution, which was included in the calculation of earnings (loss) per share and resulted in a net increase of $ 6,094 and $ 0 to additional paid-in capital for the three and nine months ended September 30, 2024 , respectively.
+Added: In March 2023, Spartan Fitness Holdings, LLC (“Spartan Fitness”), which currently o wns and operates 165 Club Pilates studios, entered into a unit purchase agreement with Snapdragon Spartan Investco LP (the “Spartan SPV”), a special purpose vehicle controlled and managed by a member of the Company’s board of directors, pursuant to which Spartan SPV agreed to invest in the equity of Spartan Fitness.
+Added: In addition, the same member of the Company’s board of directors also invested as a limited partner in the Spartan SPV.
+Added: Spartan Fitness intends to use the investment from Spartan SPV to fund the expansion of Club Pilates studios, among other concepts.
+Added: Spartan Fitness also owns the rights to 68 Club Pilates licenses to open additional new units.
+Added: The Company recorded franchise, equipment and marketing fund revenue aggregating $ 4,218 and $ 3,113 , during the three months ended March 31, 2026 and 2025 , respectively, from studios owned by Spartan Fitness.
Note 10 – Stockholders' Equity (Deficit)
−Removed: Common stock – During the three and nine months ended September 30, 2025, pursuant to the Amended Limited Liability Company Agreement of XPO Holdings (“Amended LLC Agreement”), certain Continuing Pre-IPO LLC Members exchanged their LLC units for 0 and 1,001 , shares of Class A common stock on a one-for-one basis, respectively.
−Removed: During the three and nine months ended September 30, 2024 , pursuant to the Amended LLC Agreement, certain Continuing Pre-IPO LLC Members exchanged their LLC units for 0 and 476 s hares of Class A common stock on a one-for-one basis, respectively.
+Added: Common stock – During the three months ended March 31, 2026 and 2025, pursuant to the Amended Limited Liability Company Agreement of XPO Holdings (“Amended LLC Agreement” ), certain Continuing Pre-IPO LLC Members exchanged their LLC units for 6,435 and 1,000 shares of Class A common stock on a one-for-one basis, respectively.
Noncontrolling interests – Following the IPO, XPO Inc.
4 unchanged sentences
Future redemptions or exchanges of LLC Units by the Continuing Pre-IPO LLC Members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital.
−Removed: During the nine months ended September 30, 2025 and 2024, the Company experienced a change in noncontrolling interests ownership due to the conversion of Class B to Class A shares and as such, has rebalanced the related noncontrolling interests balance.
+Added: During the three months ended March 31, 2026 and 2025, the Company experienced a change in noncontrolling interests ownership due to the conversion of Class B to Class A shares and as such, has rebalanced the related noncontrolling interests balance.
The Company calculated the rebalancing based on the net assets of XPO LLC, after considering the preferred shareholders' claim on the net assets of XPO LLC.
The Company used the liquidation value of the preferred shares for such rebalancing.
−Removed: The following table summarizes the ownership of XPO LLC as of September 30, 2025:
+Added: The following table summarizes the ownership of XPO LLC as of March 31, 2026:
Ownership percentage
Noncontrolling interests
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Note 11 – Equity Compensation
−Removed: Equity classified restricted stock units – The following table summarizes aggregate activity for RSUs for the nine months ended September 30, 2025:
+Added: Equity classified restricted stock units – The following table summarizes aggregate activity for RSUs for the three months ended March 31, 2026:
Weighted Average
3 unchanged sentences
Forfeited, expired, or canceled
−Removed: Outstanding at September 30, 2025
+Added: Outstanding at March 31, 2026
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
RSUs are valued at the Company’s closing stock price on the date of grant and generally vest over a one - to four-year period.
Compensation expense for RSUs is recognized on a straight-line basis.
−Removed: The Company grants performance-based RSUs, which are included in the RSUs described above, to executive officers and other key employees that vests upon the achievement of specified market or internal performance goals.
−Removed: The performance-based RSUs are recognized as expense on a straight-line basis over the vesting period which is typically three to four years.
+Added: The total fair value of RSUs vested during the three months ended March 31, 2026 wa s $ 3,340 .
+Added: The Company grants performance-based restricted stock units (“PSUs”), which are included in the RSUs described above, to executive officers and other key employees that vests upon t he achievement of specified market or internal performance goals.
+Added: The PSUs are recognized as expense on a straight-line basis over the vesting period which is typically three years.
Management performs a regular assessment to determine the likelihood of meeting the related metrics and adjusts the expense recognized if necessary.
−Removed: During the nine months ended September 30, 2025, 29 performance-based RSUs were earned and issued and 262 performance based RSUs were forfeited.
−Removed: In addition, during the three months ended September 30, 2025, the Company granted 216 performance-based RSUs that contained market conditions, with weighted average grant-date fair value of $ 6.85 .
−Removed: To estimate the fair value of performance-based awards containing a market condition, the Company uses the Monte Carlo valuation model.
−Removed: For other performance-based awards, the fair value is generally based on the closing price of the Company’s Class A Common Stock as reported on the New York Stock Exchange on the date of grant.
−Removed: As of September 30, 2025, the achievement of remaining performance metrics is considered probable.
+Added: The following table summarizes aggregate activity for PSUs for the three months ended March 31, 2026:
+Added: Weighted Average
+Added: Grant Date Fair
+Added: Value per Share
+Added: Outstanding at December 31, 2025
+Added: Forfeited, expired, or canceled
+Added: Outstanding at March 31, 2026
+Added: During the three months ended March 31, 2026 , the Company granted 499 PSUs to executive officers.
+Added: The number of shares issuable as a result of grants of PSUs is determined based on market-based criteria and performance-based criteria.
+Added: For market-based criteria, the number of shares issuable as a result of grants of PSUs is determined based on achieving the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the common stock of a pre-defined industry peer-group.
+Added: At the end of the performance period, the number of actual shares to be awarded varies between 0 % and 200 % of target amounts.
+Added: The related compensation expense is recognized ratably over the term regardless of whether or not the market condition is satisfied, provided the requisite service is rendered.
+Added: These units are valued using a Monte Carlo simulation.
+Added: For performance-based criteria, the Company estimates the probability that the Company’s internally established performance criteria will be achieved at each reporting period and adjust compensation expense accordingly.
+Added: The fair value of these and other performance-based awards is generally based on the closing price of the Company’s Class A Common Stock as reported on the New York Stock Exchange on the date of grant.
+Added: As of March 31, 2026, the achievement of remaining performance metrics is considered probable.
The Monte Carlo simulation assumptions used for the period presented were as follows:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Risk free interest rate
−Removed: Expected volatility
+Added: Annualized volatility
Dividend yield
1 unchanged sentence
Stock-based compensation expense – Aggregate stock-based compensation expense recognized in the conden sed consolidated statements of operations was as follows:
−Removed: Three months ended September 30,
−Removed: Nine Months Ended September 30,
+Added: Three months ended March 31,
Selling, general and administrative
Total stock-based compensation expense, before tax
−Removed: Income tax expense
+Added: Income tax benefit
Total stock-based compensation expense, after tax
1 unchanged sentence
Due to the Company's full valuation allowance on its net deferred tax assets, there is no income tax benefit on the unvested RSUs.
−Removed: At September 30, 2025, the Company had $ 17,552 of total unamortized compensation expense related to non-vested RSUs.
+Added: At March 31, 2026, the Company had $ 16,236 of total unamortized compensation expense related to non-vested RSUs and PSUs.
That cost is expected to be recognized over a weighted-average period of 2.30 years.
12 unchanged sentences
statutory federal income tax rate of 21 % to income (loss) before income taxes due to XPO Holdings’ pass-through structure for U.S.
−Removed: income tax purposes, state taxes, preferred stock dividends, non-deductible expenses, change in fair value of contingent consideration, impairments which are not currently deductible, and the valuation allowance against the deferred tax asset.
−Removed: The effective tax rate for the three and nine months ended September 30, 2025 , was ( 4.1 %) and ( 15.2 %) , respectively, and ( 0.7 %) and ( 0.6 %) for the three and nine months ended September 30, 2024.
−Removed: During the three and nine months ended September 30, 2025 , the Company recognized income tax expense of $ 266 and $ 1,063 , respectively, on its share of pre-tax book income (loss), exclusive of the noncontrolling interest of 28.1 % .
−Removed: During the three and nine months ended September 30, 2024 , the Company recognized income tax expense of $ 131 and $ 216 , respectively, on its share of pre-tax book income (loss), exclusive of the noncontrolling interest of 33.3 % , respectively.
−Removed: As of September 30, 2025, management determined based on applicable accounting standards and the weight of all available evidence, it was not more likely than not (“MLTN”) that the Company will generate sufficient taxable income to realize its deferred tax assets including the difference in tax basis in excess of the financial reporting value for its investment in XPO Holdings.
−Removed: Consequently, the Company has established a full valuation allowance against its deferred tax assets as of September 30, 2025.
+Added: income tax purposes, state taxes, non-deductible expenses, change in fair value of contingent consideration, and the valuation allowance against the deferred tax asset.
+Added: The effective tax rate for the three months ended March 31, 2026 and 2025 , was ( 0.7 %) and ( 22.3 %) , respectively.
+Added: During the three months ended March 31, 2026 and 2025 , the Company recognized income tax expense of $ 6 and $ 485 , respectively, on its share of pre-tax book income (loss), exclusive of the noncontrolling interest of 14.9 % and 28.3 %, respectively.
+Added: As of March 31, 2026, management determined based on applicable accounting standards and the weight of all available evidence, it was not more likely than not (“MLTN”) that the Company will generate sufficient taxable income to realize its deferred tax assets including the difference in tax basis in excess of the financial reporting value for its investment in XPO Holdings.
+Added: Consequently, the Company has established a full valuation allowance against its deferred tax assets as of March 31, 2026.
In the event that management subsequently determines that it is MLTN that the Company will realize its deferred tax assets in the future over the recorded amount, a decrease to the valuation allowance will be made, which will reduce the provision for income taxes.
10 unchanged sentences
tax and related laws, including immediate expensing of certain capital expenditures and favorable impacts to the business interest expense limitation.
−Removed: The Company has incorporated the OBBBA changes in its income tax provision for the nine months ended September 30, 2025.
+Added: The Company has incorporated the OBBBA changes in its income tax provision for the three months ended March 31, 2026.
There is no material impact to the Company's effective income tax rate and net deferred income tax assets, as the Company maintains a full valuation allowance on the deferred tax assets of XPO Inc.
Tax receivable agreement – In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) pursuant to which the Company is generally required to pay to the other parties thereto in the aggregate 85% of the amount of cash savings, if any, in U.S.
−Removed: federal, state and local income tax or franchise tax that the Company actually realizes as a result of (i) certain favorable tax attributes acquired from H&W Investco Blocker II, LP (the “Blocker Company”) in the merger of the Blocker Company with and into XPO Inc.
+Added: federal, state and local income tax or franchise tax that the Company actually realizes as a result of:
+Added: (i) certain favorable tax attributes acquired from H&W Investco Blocker II, LP (the “Blocker Company”) in the merger of the Blocker Company with and into XPO Inc.
(including net operating losses and the Blocker Company’s allocable share of existing tax basis);
15 unchanged sentences
The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, the TRA will not terminate but the Company’s or the Company’s successor’s obligations with respect to tax benefits would be based on certain assumptions, including that the Company or the Company’s successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the TRA.
−Removed: As of September 30, 2025 , the Company has concluded, based on applicable accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized.
−Removed: Therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets.
−Removed: Except for $ 11 and $ 1,331 of the current and non-current portions of the TRA, respectively, $ 85,827 of the TRA liability was not recorded as of September 30, 2025 .
+Added: As of March 31, 2026 , the Company has concluded, based on applicable accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized.
+Added: Therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets and accordingly $ 116,527 of the TRA liability was not recorded as of March 31, 2026 .
If utilization of the deferred tax asset subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements of operations.
3 unchanged sentences
by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
+Added: On July 23, 2021, the Company issued and sold in a private placement 200 newly issued shares of Series A-1 Convertible Preferred Stock.
+Added: On January 9, 2023, pursuant to a stock repurchase agreement, the Company subsequently repurchased 85 shares of preferred stock and on December 8, 2025, in connection with a refinancing agreement, the Company repurchased the remaining 115 shares of preferred stock.
+Added: Holders of shares of convertible preferred stocks were entitled to quarterly coupon payments at the rate of 6.50 % of the fixed liquidation preference per share.
+Added: In the event the quarterly preferential coupon was not paid in cash, the fixed liquidation preference automatically increased at the Paid-in-Kind rate of 7.50 %.
Because a portion of XPO Holdings is owned by parties other than the Company, those parties participate in earnings and losses at the XPO Holdings level.
1 unchanged sentence
In order to maintain the one-to-one ratio, the preferred stock issued at the XPO Inc.
−Removed: level also exists at the XPO Holdings level.
+Added: level also existed at the XPO Holdings level.
The Company applies the two-class method to allocate undistributed earnings or losses of XPO Holdings, and in doing so, determines the portion of XPO Holdings’ income or loss that is attributable to the Company and accordingly reflected in income or loss available to common stockholders in the Company’s calculation of basic earnings (loss) per share.
−Removed: Due to the attribution of only a portion of the preferred stock dividends issued by XPO Holdings to the Company in first determining basic earnings (loss) per share at the subsidiary level, the amounts presented as net income (loss) attributable to noncontrolling interests and net income (loss) attributable to XPO Inc.
+Added: For the three months ended Mach 31, 2025, due to the attribution of only a portion of the preferred stock dividends issued by XPO Holdings to the Company in first determining basic earnings (loss) per share at the subsidiary level, the amounts presented as net income (loss) attributable to noncontrolling interests and net income (loss) attributable to XPO Inc.
presented below will not agree to the amounts presented on the condensed consolidated statement of operations.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
Diluted earnings (loss) per share attributable to common stockholders adjusts the basic earnings or losses per share attributable to common stockholders and the weighted average number of shares of Class A common stock outstanding to give effect to potentially dilutive securities.
The potential dilutive impact of redeemable Convertible Preferred shares and Class B common stock is evaluated using the as-if-converted method.
−Removed: Weighted average shares of Class B common stock were 13,664 and 13,928 for the three and nine months ended September 30, 2025, respectively, and 16,016 and 16,242 for the three and nine months ended September 30, 2024, respectively.
+Added: Weighted average shares of Class B common stock were 11,676 and 14,464 for the three months ended March 31, 2026 and 2025, respectively.
The potentially dilutive impact of RSUs is calculated using the treasury stock method.
Because the Company reported net losses for the periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of diluted net loss per share.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
−Removed: The following table presents the calculation o f basic and diluted loss per share of Class A common stock:
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: The following table presents the calculation of basic and diluted loss p er share of Class A common stock:
+Added: Three months ended March 31,
Net loss attributable to XPO Inc.
1 unchanged sentence
dividends on preferred shares
−Removed: deemed contribution (dividend)
Net loss attributable to XPO Inc.
16 unchanged sentences
As of the end of each applicable reporting period, the Company reviews each of its legal proceedings and, where it is probable that a liability has been incurred, the Company accrues for all probable and reasonably estimable losses.
−Removed: The Company accrued for estimated legal liabilities, where appropriate, or settlement agreements to resolve legal disputes and recorded an aggregate accrual of $ 29,545 , and $ 14,717 , which was included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.
+Added: The Company accrued for estimated legal liabilities, where appropriate, or settlement agreements to resolve legal disputes and recorded an aggregate accrual of $ 36,819 and $ 44,793 , which was included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively.
+Added: During the three months ended March 31, 2026 and 2025 , the Company recorded legal expenses and settlement costs of $ 5,129 and $ 17,458 , respectively, which were net of insurance receivable of $ 2,200 and $ 5,000 , respectively.
+Added: These legal expenses were recorded within selling, general and administrative expenses in the condensed consolidated statements of operations.
Xponential Fitness, Inc.
3 unchanged sentences
When losses exceed the applicable policy deductible and realization of recovery of the loss from existing insurance policies is deemed probable, the Company records receivables from the insurance company for the excess amount.
−Removed: The Company recorded an insurance receivable of $ 10,000 , which was included in prepaid expenses and other current assets in the condensed consolidated balance sheet as of September 30, 2025.
−Removed: Additionally, during the nine months ended September 30, 2025 , the Company received proceeds of $ 24,750 in connection with its claims for insurance reimbursement for previous legal expenses.
−Removed: Both the insurance receivable as of September 30, 2025 and the cash proceeds received during the nine months ended September 30, 2025 were recognized within selling, general and administrative expenses in the condensed consolidated statements of operations for the nine months ended September 30, 2025.
+Added: The Company recorded an insurance receivable of $ 7,200 and $ 5,000 , which was included in prepaid expenses and other current assets in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively.
+Added: Additionally, during the three months ended March 31, 2026 and 2025 , the Company received proceeds of $ 0 and $ 9,750 , respectively, in connection with its claims for insurance reimbursement for previous legal expenses.
+Added: Both the insurance receivable as of March 31, 2026 and December 31, 2025 and the cash proceeds received during the three months ended March 31, 2026 and 2025 were recognized within selling, general and administrative expenses in the condensed consolidated statements of operations.
Various factors could affect the timing and amount of recovery and it is reasonably possible that the Company will need to adjust the estimate for insurance receivable or receive additional proceeds, exceeding its current estimated insurance receivable, based on new or additional information.
8 unchanged sentences
On September 25, 2025, the parties filed the Second Amended Complaint with exhibits containing the settlement structure and agreement and the parties are currently awaiting approval.
−Removed: The Company recorded an accrual in anticipation of this settlement, which was included in accrued expenses in the condensed consolidated balance sheets as of September 30, 2025.
+Added: The Company recorded an accrual in anticipation of this settlement, which was included in accrued expenses in the condensed consolidated balance sheets as of March 31, 2026.
On February 9, 2024, a federal securities class action lawsuit was filed against the Company and certain of the Company’s officers in the United States District Court for the Central District of California.
7 unchanged sentences
Instead of opposing Defendants’ motion to dismiss, on May 6, 2025, plaintiffs filed an amended consolidated complaint, which, among other things, adds three new entity defendants to the claim under Section 20(a) of the Exchange Act.
−Removed: The Company filed a motion to dismiss the amended consolidated complaint on July 1, 2025 that is scheduled for hearing on December 3, 2025, as of the date of this Quarterly Report on Form 10-Q.
+Added: The Company filed a motion to dismiss the amended consolidated complaint on October 14, 2025.
+Added: A hearing took place on December 3, 2025, but no decision has been rendered to date.
The litigation is preliminary in nature and involves substantial uncertainties, and the Company believes that a loss is not probable or estimable at this time.
4 unchanged sentences
On March 10, 2024, a shareholder derivative lawsuit was filed in the United States District Court for the Central District of California by Gideon Akande, allegedly on behalf of Xponential Fitness, Inc., against certain current officers and directors as defendants, and Xponential Fitness, Inc., as nominal defendant, for alleged wrongdoing committed by the individual defendants from July 26, 2021 to December 7, 2023.
−Removed: Plaintiff alleges claims for breach of fiduciary duty, unjust enrichment, gross mismanagement, abuse of control, waste of corporate assets, violations of Section 14(a) of the Exchange Act, violations of Sections 20(a) and 10(b) and Rule 10b-5 of the Exchange Act, and against Anthony Geisler, the Company's former Chief Executive Officer, and John Meloun, the Company's Chief Financial Officer, for contribution or indemnification under Sections 10(b) and 21D of the Exchange Act.
+Added: Plaintiff alleges claims for breach of fiduciary duty, unjust enrichment, gross mismanagement, abuse of control, waste of corporate assets, violations of Section 14(a) of the Exchange Act, violations of Sections 20(a) and 10(b) and Rule 10b-5 of the Exchange Act, and against Anthony Geisler, the Company's former Chief Executive Officer, and John Meloun, the Company's former Chief Financial Officer, for contribution or indemnification under Sections 10(b) and 21D of the Exchange Act.
Plaintiffs seek, inter alia, damages with pre- and post-judgment interest, and an order directing the Company and the individual defendants to improve the Company’s corporate governance, and restitution by the individual defendants.
4 unchanged sentences
On March 31, 2025, the court consolidated the Nelson action with the previously consolidated Akande and Ayers action.
−Removed: On July 21, 2025, the Company received a shareholder demand making allegations similar to those made by Ayers, Akande and Nelson.
−Removed: The litigation is preliminary in nature and involves substantial uncertainties and the Company believes that a loss is not probable or estimable at this time.
+Added: On July 21, 2025, the Company received a demand from a purported shareholder making allegations similar to those made by Ayers, Akande and Nelson.
+Added: The litigation and related demands are preliminary in nature and involve substantial uncertainties and the Company believes that a loss is not probable or estimable at this time.
However, there can be no assurance that such legal proceedings will not have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.
3 unchanged sentences
On January 7, 2025, plaintiffs added 50 additional current and former franchisees to their prior list.
−Removed: On April 22, 2025, as a result of mediation, the parties agreed in principle to settle this matter, on behalf of a class of all non-opt-out franchisees for $ 25,000 .
−Removed: The parties remain in negotiations regarding the proposed settlement structure and other material terms, including the final settlement amount.
−Removed: The Company recorded an accrual in anticipation of this settlement, which is included in the Company’s aggregate accrual discussed above.
+Added: On April 22, 2025, as a result of mediation, the parties agreed in principle to settle this matter.
+Added: This matter was settled on December 29, 2025 for $ 22,750 , which settlement amount will be paid in four installments, commencing in fiscal year 2026 and concluding in fiscal year 2028.
+Added: A total of 509 current and former franchisees are party to the settlement agreement.
+Added: During the three months ended March 31, 2026 , the first installment of $ 12,500 was paid.
On February 21, 2025, the Company received a complaint on behalf of a putative nationwide class alleging violations of the Telephone Consumer Protection Act.
The matter was settled on June 24, 2025 for $ 18 .
−Removed: Government investigations – On December 5, 2023, the Company was contacted by the Securities and Exchange Commission (the “SEC”), requesting that the Company provide it with certain information and documents.
+Added: Government investigations – On July 29, 2024, the Company received a civil investigative demand from the United States Federal Trade Commission (the “FTC”) regarding the Company’s compliance with Section 5(a) of the FTC Act, 15 U.S.C.
+Added: § 45(a), and of the FTC’s Franchise Rule.
+Added: On December 12, 2025, the Company received a letter from the staff of the FTC (the “FTC Staff”) stating that the FTC Staff was prepared to recommend the filing of a complaint against the Company seeking injunctive and monetary relief and civil penalties.
+Added: On February 24, 2026, the FTC Staff indicated they will recommend the FTC Commissioners enter into a stipulated consent agreement (the “FTC Consent Order”) to fully resolve all of the FTC's claims.
+Added: As part of the proposed FTC Consent Order, the Company has agreed, without any admission of liability, to pay $ 17,000 over the course of twelve months, and to desist and refrain from violating applicable laws.
+Added: The FTC Consent Order was approved by the FTC Commissioners on March 18, 2026 and approved by the United States District Court for the Central District of California on April 2, 2026.
+Added: The FTC Consent Order is subject to approval by the FTC Commissioners and the court.
+Added: The Company recorded an accrual of $ 17,000 , which was included in accrued expenses in the condensed consolidated balance sheet as of December 31, 2025.
+Added: Subsequent to the three months ended March 31, 2026 , the Company paid $ 5,000 toward the settlement.
The Company received notice on May 7, 2024 of an investigation by the U.S.
Attorney’s Office for the Central District of California (the “USAO”).
−Removed: On July 29, 2024, the Company received a civil investigative demand from the United States Federal Trade Commission (the “FTC”).
−Removed: On December 12, 2024, the Company received a subpoena from the Office of the Attorney General of the State of New York (the “NYAG”).
−Removed: On July 1, 2025, the SEC informed the Company that it had concluded its investigation without action.
−Removed: The Company intends to cooperate fully with the USAO, FTC, and NYAG in these investigations, and the Company has incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with matters relating to or arising from these investigations.
+Added: The Company is cooperating fully with the USAO in this investigation, and the Company has incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with matters relating to or arising from this investigation.
At this stage, the Company is unable to assess whether any material loss or adverse effect is reasonably possible as a result of these investigations or estimate the range of any potential loss.
−Removed: Other regulatory matters – As previously disclosed, the Company received notice of an investigation from the State of Washington's Department of Financial Institutions (“DFI”) related to the Company's compliance with Washington state franchise laws.
−Removed: On August 12, 2025, without admission of wrongdoing, the Company entered into a Consent Order with DFI to resolve the matter.
−Removed: As part of the Consent Order, the Company paid $ 5 to reimburse DFI for investigation costs (which was the only monetary component of the settlement) and agreed to desist and refrain from violating applicable franchise laws.
−Removed: In addition, the Office of the Attorney General of the State of Maryland (“MAG”) and the Virginia Division of Securities and Retail Franchising (“VDSRF”) have previously contacted the Company regarding compliance with applicable franchise laws.
−Removed: Discussions with MAG and VDSRF are ongoing.
Xponential Fitness, Inc.
1 unchanged sentence
(amounts in thousands, except per share amounts)
+Added: Other state regulatory matters – The Maryland Securities Commissioner (the “Commissioner”) has previously contacted the Company regarding compliance with applicable Maryland franchise laws.
+Added: On March 18, 2026, the Company and the Commissioner reached an agreement‑in‑principle to resolve and conclude the Commissioner’s investigation of the Company’s alleged violations of the Maryland franchise laws.
+Added: On April 14, 2026, the related Consent Order was fully executed and entered by the Commissioner.
+Added: Pursuant to the Consent Order, the Company agreed, among other things, to cease and desist from violating the Maryland franchise laws, pay an administrative penalty and make certain disclosures in its franchise disclosure documents.
+Added: In addition, the Company agreed to offer to terminate certain area development and franchise agreements with, and refund initial fees to, certain Maryland franchisees with unopened outlets.
+Added: The administrative penalty was paid on March 31, 2026, and subsequent to quarter-end, the Company made a refund payment to one franchisee.
+Added: The Company also accrued for potential refunds in connection with this matter, which was included in accrued expenses in the condensed consolidated balance sheet as of March 31, 2026.
+Added: In addition, the Office of the Attorney General of the State of Maryland (“MAG”) has previously contacted the Company regarding compliance with applicable franchise laws.
+Added: The Company is cooperating fully with the MAG in this investigation.
+Added: The Company has recorded an accrual in connection with potential settlement of this matter, which was included in accrued expenses in the condensed consolidated balance sheet as of March 31, 2026.
+Added: On December 12, 2024, the Company received a subpoena from the Office of the Attorney General of the State of New York (the “NYAG”).
+Added: The Company is cooperating fully with the NYAG in this investigation.
+Added: The Company has recorded an accrual in connection with potential settlement of this matter, which was included in accrued expenses in the condensed consolidated balance sheet as of March 31, 2026.
Contingent consideration from acquisitions – In connection with the Reorganization Transactions, the Parent merged with and into the Member.
2 unchanged sentences
The fair value of the contingent consideration is measured at estimated fair value using a Monte Carlo simulation analysis, which represents a Level 3 measurement.
−Removed: During the three and nine months ended September 30, 2025 , the Company recorded an increase (decrease) of $ 3,072 and $ ( 7,503 ) to contingent consideration, respectively, which was recorded as acquisition and transaction expense (income).
−Removed: During the three and nine months ended September 30, 2024 the Company recorded an increase of $ 3,797 and $ 7,042 to contingent consideration, respectively, which was recorded as acquisition and transaction expense (income).
−Removed: At September 30, 2025 and December 31, 2024 , contingent consideration of $ 9,802 and $ 17,305 was recorded as contingent consideration from acquisitions in the condensed consolidated balance sheets, respectively.
+Added: The Monte Carlo simulation assumptions used for the periods presented were as follows:
+Added: Three Months Ended March 31,
+Added: Risk free interest rate
+Added: Expected volatility
+Added: Expected term (in years)
+Added: During the three months ended March 31, 2026 and 2025 , the Company recorded a decrease of $ 3,187 and $ 8,661 , respectively, which was recorded as acquisition and transaction expense (income).
+Added: At March 31, 2026 and December 31, 2025 , contingent consideration of $ 7,122 and $ 10,309 was recorded as contingent consideration from acquisitions in the condensed consolidated balance sheets, respectively.
In connection with the October 2021 acquisition of BFT, the Company agreed to pay contingent consideration to the Seller consisting of quarterly cash payments based on the sales of the franchise system and equipment packages in the U.S.
2 unchanged sentences
At the acquisition date, the Company determined that the fair value of the estimated contingent consideration liability was $ 9,388 .
−Removed: The Company recorded a change to contingent consideration of $ 0 and $ 2 during the three and nine months ended September 30, 2025, respectively, and $ 31 and $ 108 during the three and nine months ended September 30, 2024, respectively, which was recorded as interest expense.
−Removed: The Company recorded additional contingent consideration of $ ( 1 ) and $ 5 during the three and nine months ended September 30, 2025 , respectively, and $ ( 302 ) and $ ( 950 ) during the three and nine months ended September 30, 2024 , respectively, which was recorded as acquisition and transaction expense (income).
−Removed: The Company paid no contingent consideration during the three and nine months ended September 30, 2025 and 2024.
−Removed: At September 30, 2025 and December 31, 2024, contingent consideration was $ 131 and $ 124 recorded as accrued expenses, respectively, in the condensed consolidated balance sheets.
+Added: The Company recorded a change to contingent consideration of $ 0 and $ 2 during the three months ended March 31, 2026 and 2025, respectively, which was recorded as interest expense.
+Added: The Company recorded additional contingent consideration of $ 0 and $ 6 during the three months ended March 31, 2026 and 2025 , respectively, which was recorded as acquisition and transaction expense.
+Added: The Company paid $ 133 during the quarter ended December 31, 2025, via an offset of contingent liability due to the Seller with an accounts receivable balance of $ 133 owed from the Seller as the Company determined that a right of offset existed as of December 31, 2025.
+Added: As of December 31, 2025, the contingent consideration obligation related to the BFT acquisition was fully settled.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
In connection with the January 2024 acquisition of Lindora, the Company agreed to pay contingent consideration to the seller subject to the achievement of certain milestones.
1 unchanged sentence
At the acquisition date, the Company determined that the fair value of the estimated contingent consideration liability was $ 446 .
−Removed: The contingent consideration remains payable notwithstanding the divestiture of the brand.
−Removed: The Company recorded additional contingent consideration of $ 16 and $ 62 during the three and nine months ended September 30, 2025, respectively, and $ 27 and $ 61 during the three and nine months ended September 30, 2024, respectively, which was recorded as interest expense.
−Removed: The Company recorded a change to contingent consideration of $ 1 and $ 16 during the three and nine months ended September 30, 2025 , respectively, and $ 169 and $ 342 during the three and nine months ended September 30, 2024, respectively, which was recorded as acquisition and transaction expense.
−Removed: In addition, the Company paid contingent consideration of $ 500 during the nine months ended September 30, 2025, and $ 0 during the nine months ended September 30, 2024.
−Removed: At September 30, 2025 and December 31, 2024, contingent consideration was $ 460 and $ 457 recorded as accrued expenses, respectively, and $ 0 and $ 424 recorded as contingent consideration from acquisitions, respectively, in the condensed consolidated balance sheets.
+Added: The contingent consideration remained payable notwithstanding the divestiture of the brand.
+Added: The Company recorded additional contingent consideration of $ 0 and $ 31 during the three months ended March 31, 2026 and 2025, respectively, which was recorded as interest expense.
+Added: The Company recorded a change to contingent consideration of $ 0 and $ 17 during the three months ended March 31, 2026 and 2025, respectively, which was recorded as acquisition and transaction expense.
+Added: In addition, the Company paid contingent consideration of $ 500 during the three months ended March 31, 2025.
+Added: During the three months ended March 31, 2026 , the Company settled the remaining contingent consideration obligation of $ 500 through a non-cash offset, whereby the contingent liability payable to the seller was reduced and a corresponding reduction was recorded to accounts receivable due from the seller.
+Added: At December 31, 2025, contingent consideration of $ 500 was recorded as accrued expenses in the condensed consolidated balance sheet.
+Added: As of March 31, 2026, the contingent consideration obligation related to the Lindora acquisition was fully settled.
Letter of credit – In July 2022, the Company entered into an agreement with a third-party financing company, who provides loans to the Company's qualified franchisees, pursuant to which the Company serves as guarantor for such loans.
2 unchanged sentences
The Company deposited cash in a restricted account as collateral for the standby letter of credit.
−Removed: The Company has determined the fair value of these guarantees at inception was not material, and as of September 30, 2025 and December 31, 2024 , a $ 815 and $ 150 accrual has been recorded for the Company’s probable obligation under its guaranty arrangement, respectively, which is included in accrued expenses in the condensed consolidated balance sheets.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
+Added: The Company has determined the fair value of these guarantees at inception was not material, and as of March 31, 2026 and December 31, 2025 , a $ 1,781 and $ 1,348 accrual has been recorded for the Company’s probable obligation under its guaranty arrangement, respectively, which is included in accrued expenses in the condensed consolidated balance sheets.
Lease guarantees – The Company has guaranteed lease agreements for certain franchisees.
−Removed: The Company’s potential obligation, as a result of its guarantees of leases, is approximately $ 3,501 and $ 3,617 as of September 30, 2025 and December 31, 2024, respectively, and would only require payment upon default by the primary obligor.
−Removed: The Company has determined the fair value of these guarantees at inception is not material, and as of September 30, 2025 and December 31, 2024 , a $ 1,179 and $ 2,034 accrual has been recorded for the Company’s potential obligation under its guaranty arrangement, respectively.
+Added: The Company’s potential obligation, as a result of its guarantees of leases, is approximately $ 4,386 and $ 4,560 as of March 31, 2026 and December 31, 2025, respectively, and would only require payment upon default by the primary obligor.
+Added: The Company has determined the fair value of these guarantees at inception is not material, and as of March 31, 2026 and December 31, 2025 , a $ 0 and $ 0.3 accrual has been recorded for the Company’s potential obligation under its guaranty arrangement, respectively.
Note 15 – Restructuring
In the third quarter of 2023, the Company began a restructuring plan that involves exiting company-owned transition studios and other measures designed to reduce costs to achieve the Company’s long-term margin goals and focus on pure franchise operations.
−Removed: The plan was approved and initiated in the third quarter of 2023 and is expected to continue throughout 2025;
−Removed: however, the ultimate timing of the completion of the restructuring plan will depend on lease termination negotiations.
+Added: The plan was approved and initiated in the third quarter of 2023 and was expected to conclude in 2025;
+Added: however, the ultimate timing of the completion of the restructuring plan will depend on lease termination negotiations, which is expected to continue throughout 2026.
During the fourth quarter of 2023 the Company's restructuring plan was expanded due to the addition of Rumble company-owned transition studios to the restructuring plan and a refranchising plan that was terminated by the Company due to the refranchisor’s non-compliance with the franchise agreements and the subsequent closure of certain studios.
2 unchanged sentences
The Company is negotiating lease terminations for operating leases for certain studios for which the Company has lease liabilities recorded and the expected cash payments and expenses to exit the lease may be greater than expected rent expense for that period, depending on the outcome of lease termination negotiations.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
The components of the restructuring charges were as follows:
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
Impairment and accelerated amortization of right-of-use assets
4 unchanged sentences
(1) Loss on lease termination and sale or disposal of assets represents net losses on studio lease terminations and sales or disposal of studio assets primarily related to studio property and equipment.
−Removed: Amount for the three and nine months ended September 30, 2025 is net of, among other things, a $ 4,448 and $ 5,142 gain, respectively, on lease termination related to a lease for which the Company had previously recognized an impairment on the related right-of-use asset.
−Removed: Amount for the three and nine months ended September 30, 2024 is net of, among other things, a $ 0 and $ 4,057 gain, respectively, on lease termination related to a lease for which the Company had recognized accelerated right-of-use asset amortization.
+Added: Amount for the three months ended March 31, 2026 and 2025 is net of, among other things, a $ 376 and $ 0 gain, respectively, on lease termination related to a lease for which the Company had previously recognized an impairment on the related right-of-use asset.
The restructuring charges are recorded within the following financial statement captions on the Company’s condensed consolidated statements of operations:
−Removed: Three months ended September 30,
−Removed: Nine months ended September 30,
−Removed: Costs of product revenue
+Added: Three months ended March 31,
Selling, general and administrative expenses
2 unchanged sentences
The following table provides the components of and changes in the Company’s restructuring charges, included in accounts payable and accrued expenses on the condensed consolidated balance sheets:
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
Balance at December 31, 2025
Charges incurred
−Removed: Balance at September 30, 2025
+Added: Balance at March 31, 2026
Note 16 – Segment Information
1 unchanged sentence
The Company’s Chief Executive Officer is the Company’s CODM.
−Removed: The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.
+Added: The CODM regularly reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.
As such, the Company has determined that it operates in one reportable and operating segment.
2 unchanged sentences
The CODM uses consolidated net income (loss) predominantly in the annual budget and forecasting process and to monitor budget-to-actual variances on a mo nthly basis in order to assess performance and allocate resources.
−Removed: The Company generated $ 2,384 and $ 7,732 of revenue outside of the United States during the three and nine months ended September 30, 2025, respectively, and $ 3,808 and $ 10,898 during the three and nine months ended September 30, 2024, respectively.
+Added: The Company generated $ 2,162 and $ 2,617 of revenue outside of the United States during the three months ended March 31, 2026 and 2025, respectively.
Revenue generated outside of the United States is primarily from franchise development fees and franchise royalty fees earned from master franchisees.
−Removed: As of September 30, 2025 and 2024, the Company did not have material assets located outside of the United States.
+Added: As of March 31, 2026 and 2025, the Company did not have material assets located outside of the United States.
+Added: Xponential Fitness, Inc.
+Added: Notes to Condensed Consolidated Financial Statements
+Added: (amounts in thousands, except per share amounts)
The following table presents the financial information for the Company’s one reportable and operating segment:
−Removed: Three Months Ended September 30,
−Removed: Nine months ended September 30,
+Added: Three Months Ended March 31,
Total revenue, net
6 unchanged sentences
Marketing fund expense
−Removed: Acquisition and transaction expenses (income)
+Added: Acquisition and transaction income
Other segment items (1)
5 unchanged sentences
Segment net income (loss)
−Removed: (1) Other segment items include restructuring e xpenses of $ 1,318 and $ 2,376 for the three and nine months ended September 30, 2025, respectively, and $ 5,542 and $ 10,472 for the three and nine months ended September 30, 2024 , respectively.
−Removed: Other segment items also include travel expenses, insurance expense, TRA expense, and other selling, general and administrative expenses.
−Removed: Xponential Fitness, Inc.
−Removed: Notes to Condensed Consolidated Financial Statements
−Removed: (amounts in thousands, except per share amounts)
+Added: (1) Other segment items include restructuring expenses of $ 765 and $ 151 for the three months ended March 31, 2026 and 2025 , respectively.
+Added: Other segment items also include travel expenses, insurance expenses, TRA expenses, and other selling, general and administrative expenses.
Note 17 – Subsequent events
−Removed: In October 2025, the Rumble Sellers made a partial paym ent of $ 2,435 toward receivable from share holder.
−Removed: In October 2025, the Company initiated a headcount related Reduction in Force ( “RIF”) that is designed to reduce operating costs, drive efficiencies and enable investment for potential long-term growth.
−Removed: The Company expects to incur approximately $ 850 of costs in the fourth quarter of 2025, primarily related to termination charges arising from severance obligations.
−Removed: In November 2025, the $ 5,000 note receivable related to the divestiture of CycleBar and Rumble brands was collected in full.
+Added: Subsequent to the three months ended March 31, 2026 , the Company borrowed $ 10,000 on the revolving credit facility.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.