7 unchanged sentences
Our actual results and timing may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the section titled “Factors Affecting Our Results of Operations” and “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2025.
−Removed: The following Management’s Discussion and Analysis gives effect to the correction of the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2024, as more fully described in Note 2 of Notes to Condensed Consolidated Financial Statements.
Xponential Fitness LLC (“XPO LLC”), the principal operating subsidiary of Xponential Fitness, Inc.
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We operate a diversified platform of five brands spanning across verticals including Pilates, barre, stretching, strength training and yoga.
−Removed: In partnership with its franchisees and master franchisees, XPO LLC offers energetic, accessible, and personalized workout experiences led by highly qualified instructors in studio locations throughout North America and internationally, with franchise, master franchise and international expansion agreements in 49 U.S.
−Removed: states, Puerto Rico and 30 additional countries as of September 30, 2025.
+Added: In partnership with its franchisees and master franchisees, XPO LLC offers energetic, accessible, and personalized workout experiences led by highly qualified instructors in studio locations throughout the North America Region and internationally, with franchise, master franchise and international expansion agreements in 49 U.S.
+Added: states, Puerto Rico and 28 additional countries as of March 31, 2026.
The Company's portfolio of brands includes Club Pilates, the largest Pilates brand in the United States;
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and BFT, a functional training and strength-based program.
−Removed: As of September 30, 2025, 2,575 studios were open in North America (consists of Canada, the United States and U.S.
+Added: As of March 31, 2026, 2,629 studios were open in the North America Region (consists of Canada, the United States and U.S.
Territories) and franchisees were contractually committed to open 789 additional studios under existing franchise agreements.
−Removed: In addition, as of September 30, 2025, we had 491 studios open internationally and our master franchisees were contractually obligated to sell licenses to franchisees to open an additional 746 new studios, of which master franchisees have sold 204 licenses for studios not yet opened as of September 30, 2025.
−Removed: During the nine months ended September 30, 2025 and 2024, we generated revenue outside the United States of $7.7 million and $10.9 million, respectively.
−Removed: As of September 30, 2025 and December 31, 2024, we did not have material assets located outside of the United States.
+Added: In addition, as of March 31, 2026, we had 508 studios open internationally and our master franchisees were contractually obligated to sell licenses to franchisees to open an additional 750 new studios, of which master franchisees have sold 182 licenses for studios not yet opened as of March 31, 2026.
+Added: During the three months ended March 31, 2026 and 2025, we generated revenue outside the United States of $2.2 million and $2.6 million, respectively.
+Added: As of March 31, 2026 and December 31, 2025, we did not have material assets located outside of the United States.
No franchisee accounted for more than 10% of our revenue.
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Recent Developments
−Removed: Appointment of new Chief Executive Officer and Director
−Removed: On August 7, 2025, we announced that our board of directors had unanimously appointed Mr.
−Removed: Mike Nuzzo as Chief Executive Officer effective August 7, 2025.
−Removed: Nuzzo also joined our board of directors.
−Removed: Nuzzo succeeds Mark King, who chose to retire from his position as Chief Executive Officer and as a member of our board of directors, also effective August 7, 2025.
−Removed: On July 30, 2025, we entered into an employment agreement with Mr.
−Removed: Nuzzo in connection with his appointment as Chief Executive Officer, to be effective as of August 7, 2025.
−Removed: Nuzzo brings more than 25 years of executive leadership in the retail and consumer services sectors across strategic, operational, financial, and growth-focused disciplines.
Lindora Divestiture
−Removed: On September 19, 2025, we entered into an agreement with a buyer to divest the Lindora 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: We will receive total consideration of up to $6.0 million based on 7% of the monthly cash-basis gross revenue of the legacy studio locations, which was recorded at the estimated fair value of $3.8 million at the divestiture date.
+Added: On September 19, 2025, we entered into an agreement with a buyer to divest the Lindora brand, including the intellectual property, franchise rights and franchise agreements for open studios, and retained certain liabilities, including liabilities related to litigation, pre-litigation, and disputes as of the closing of the divestiture.
+Added: We expect to receive total consideration of up to $6.0 million based on 7% of the monthly cash-basis gross revenue of the legacy studio locations, which was recorded at the estimated fair value of $3.8 million at the divestiture date.
We believe the divestiture allows us to better focus and utilize our resources on our core brands and other opportunities which better align with our long-term strategies.
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On July 24, 2025, we entered into an agreement with a buyer to divest the CycleBar and Rumble brands, 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: We will receive total consideration of $7.0 million, of which $2.0 million was received in the three months ended September 30, 2025.
+Added: We received total consideration of $7.0 million, consisting of $2.0 million received in the three months ended September 30, 2025, and a $5.0 million promissory note.
+Added: From the divestiture date through full repayment of the note, we also received franchise royalty payments from CycleBar and Rumble brands.
+Added: During the quarter ended December 31, 2025, we received total consideration of $4.7 million in cash and retained royalties of $0.4 million, which was applied against the promissory note, resulting in the note being paid in full.
We believe the divestiture allows us to better focus and utilize our resources on our core brands and other opportunities which better align with our long-term strategies.
Retail supply agreement
−Removed: On July 3, 2025, we 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”).
+Added: On July 3, 2025, we and Fit Commerce, a California Corporation (“FC”), entered into a Retail Supply Agreement (the “Agreement”) which became effective as of December 1, 2025 (the “Effective Date”).
The Agreement relates to the outsourcing of our 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 our 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 our in-house teams to a dedicated e-commerce provider, allowing us to focus on core business priorities.
+Added: In addition, FC purchased $4.5 million of our existing retail inventory on the Effective Date of the Agreement.
+Added: This strategic initiative shifted management of the franchisee retail experience from our in-house teams to a dedicated e-commerce provider, allowing us to focus on core business priorities.
Pursuant to the Agreement, FC will pay us 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 us or our franchisees.
−Removed: The domestic Commissions will be paid by FC to us based on each contract year (prorated for any partial contract year) in a minimum aggregate amount of approximately $50 million 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: We are in the process of confirming whether all of such Financing Conditions have been met.
+Added: The domestic Commissions will be paid by FC to us based on each contract year (prorated for any partial contract year) in 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 we are entitled.
+Added: We 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: We record 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.
Paused offering or selling franchises
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The Maryland matter is ongoing.
−Removed: We are aware of an investigation being conducted by the Office of the Attorney General of the State of New York, and we are in discussions with the Virginia Division of Securities and Retail Franchising, each regarding the Company’s compliance with applicable franchise laws.
−Removed: Additionally, we previously received notice of an investigation from the State of Washington's Department of Financial Institutions (“DFI”) related to our compliance with Washington state franchise laws.
+Added: Additionally, we previously received notice of investigation from the State of Washington's Department of Financial Institutions (“DFI”), the Virginia Division of Securities and Retail Franchising (“VDSRF”), and the Office of the Attorney General of the State of New York (“NYAG”) related to our compliance with relevant state franchise laws.
On August 12, 2025, without admission of wrongdoing, we entered into a consent order with DFI to resolve the matter.
−Removed: In March 2025, the 2025 Franchise Disclosure Documents (“FDDs”) were issued, and then amended in August 2025, for the BFT, Club Pilates, CycleBar, Pure Barre, Rumble, Stretch Lab, and Yoga Six franchise programs.
−Removed: The franchisors can offer and sell franchises in all states other than Illinois (in the case of Club Pilates only) and Maryland using the 2025 FDDs (except for Rumble and CycleBar due to the divestiture discussed above).
−Removed: The inability to sell licenses for an extended period has slowed growth and could result in a reduction in anticipated royalty or franchise revenue, which in turn may materially and adversely affect our business, results of operations, cash flows and financial condition.
+Added: Similarly, on February 12, 2026, without admission of wrongdoing, the Company signed a settlement order with VDSRF to resolve the matter, which the VDSRF will be countersigning shortly.
+Added: The NYAG matter is ongoing.
+Added: In March 2025, the 2025 Franchise Disclosure Documents (“FDDs”) were issued for the BFT, Club Pilates, CycleBar, Pure Barre, Rumble, Stretch Lab, and Yoga Six franchise programs, and then amended in August 2025 and again on February 19, 2026 for the BFT, Club Pilates, Pure Barre, Stretch Lab, and Yoga Six franchise programs.
+Added: As a result, offers and sales of franchises are temporarily paused in the following registration states-- California, Hawaii, Illinois, Minnesota, New York, North Dakota, Rhode Island, Virginia, and Washington —until each state completes its review and registration of the amended FDDs.
+Added: Pure Barre, however, may continue selling in Illinois and New York because it qualifies for an exemption.
+Added: Separately, offers in Maryland are paused due to an ongoing regulatory inquiry.
+Added: In all listed states, sales may proceed where an applicable exemption permits sales to persons who meet specific criteria.
+Added: In April 2026, we issued 2026 FDDs for the BFT, Club Pilates, Pure Barre, Stretch Lab, and Yoga Six franchise programs.
+Added: The franchisors can offer and sell franchises in most states using the 2026 FDDs and continue pursuit of registration of the FDDs from the few remaining states that still require registration.
+Added: In the remaining states that require registration of the FDDs, we will continue to pause all sales until registration is obtained from the relevant regulatory agencies, except in cases where an exemption permits sales to persons who meet specific criteria.
+Added: Sales will resume promptly following such approvals, subject to any applicable waiting periods.
+Added: Any inability to sell licenses for an extended period can result in slowed growth and could result in a reduction in anticipated royalty or franchise revenue, which in turn may materially and adversely affect our business, results of operations, cash flows and financial condition.
Restructuring Plan
In the third quarter of 2023, we began a restructuring plan that involves exiting company-owned transition studios and other measures designed to reduce costs to achieve our 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 our 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 our restructuring plan will depend on lease termination negotiations, which is expected to continue throughout 2026.
During the fourth quarter of 2023, our 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.
This refranchise termination resulted in us incurring losses for contract termination expenses, other expenses associated with exiting the studios, and loss contingencies related to the refranchisor’s unpaid payroll.
−Removed: During the three and nine months ended September 30, 2025, we recognized total restructuring charges of $6.3 million, net of gains, and $10.2 million, net of gains, respectively, primarily for contract termination and other associated costs, loss (gain) on lease terminations and sale or disposal of assets, impairment of right-of-use assets and other restructuring charges.
+Added: During the three months ended March 31, 2026 and 2025, we recognized total restructuring charges of $1.1 million, net of gains, and $2.4 million, net of gains, respectively, primarily for contract termination and other associated costs, loss (gain) on lease terminations and sale or disposal of assets, impairment of right-of-use assets and other restructuring charges.
We expect to recognize additional restructuring charges throughout 2026 totaling between approximately $9.2 million to $12.9 million for rent expense, including amortization of the right-of-use assets and accretion of the operating lease liability, lease termination gains or losses, and other variable lease costs related to company-owned transition studios and other restructuring charges.
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Cash outflows related to these lease terminations are expected to be incurred throughout 2026.
+Added: As of March 31, 2026, there were seven leases held by us related to divested brands that account for $5.6 million of our total lease liabilities.
Once completed, we estimate annualized savings of approximately $13.5 million to $15.5 million as a result of the restructuring plan.
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• International and domestic expansion.
−Removed: We continue to invest in increasing the number of franchisees outside of North America.
+Added: We continue to invest in increasing the number of franchisees outside of the North America Region.
We have developed strong relationships and executed committed development contracts with master franchisees to propel our international growth.
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While we believe that these metrics are useful in evaluating our business, other companies may not use similar metrics or may not calculate similarly titled metrics in a consistent manner.
−Removed: All metrics in this “Key Performance Indicators” section are presented on an adjusted basis to reflect historical information of Lindora prior to the acquisition by the Company in January 2024 and on an adjusted basis to remove historical information of Stride and Row House prior to their divestitures by the Company in February 2024 and May 2024, respectively, CycleBar and Rumble prior to their divestitures by the Company in July 2025, and Lindora prior to its divestiture in September 2025.
+Added: All metrics in this “Key Performance Indicators” section are presented on an adjusted basis to remove historical information of CycleBar and Rumble prior to their divestitures by the Company in July 2025 and Lindora prior to its divestiture in September 2025.
Historical information has not been adjusted to reflect the wind down of AKT.
All references to these metrics in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” use this same basis of reporting, unless noted otherwise.
−Removed: The following table sets forth our key performance indicators for the three and nine months ended September 30, 2025 and 2024:
−Removed: Three Months Ended September 30,
−Removed: Nine months ended September 30,
−Removed: ($ in thousands)
+Added: The following table sets forth our key performance indicators for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
($ in thousands)
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Same store sales growth
−Removed: The following tables present additional information related to our studio and license key performance indicators for the three and nine months ended September 30, 2025 and 2024:
−Removed: Three Months Ended September 30,
−Removed: North America
−Removed: International
−Removed: North America
+Added: The following tables present additional information related to our studio and license key performance indicators for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
+Added: North America Region
International
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Franchise licenses sold (total end of period)
−Removed: Studios obligated to open internationally under MFAs:
−Removed: September 30, 2025
−Removed: September 30, 2024
+Added: Development fee payments on future franchise licenses:
+Added: Development fee payments on future franchise licenses (total end of period) (1)
+Added: Studios obligated to open internationally under Master Franchise Agreements ("MFAs"):
+Added: March 31, 2026
Gross studios obligated to open under MFAs
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Licenses sold by master franchisees, net (2)
−Removed: (1) Reflects the number of licenses for studios which have already been sold, but not yet opened, by master franchisees under master franchise agreements, net of terminations.
−Removed: Nine Months Ended September 30,
−Removed: North America
−Removed: International
−Removed: North America
+Added: Three Months Ended March 31,
+Added: North America Region
International
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Franchise licenses sold (total end of period)
−Removed: Development fee payments on future franchise licenses:
−Removed: Development fee payments on future franchise licenses (total end of period) (1)
−Removed: Studios obligated to open internationally under MFAs:
−Removed: September 30, 2025
−Removed: September 30, 2024
+Added: Studios obligated to open internationally under Master Franchise Agreements ("MFAs"):
+Added: March 31, 2025
Gross studios obligated to open under MFAs
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(2) Reflects the number of licenses for studios which have already been sold, but not yet opened, by master franchisees under master franchise agreements, net of terminations.
+Added: (3) Reflects the new studio openings, net of terminations.
System-Wide Sales
−Removed: System-wide sales represent gross sales by all studios in North America.
+Added: System-wide sales represent gross sales by all studios in the North America Region.
System-wide sales includes sales by franchisees that are not revenue realized by us in accordance with GAAP.
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The number of studios that have temporarily suspended operations is an immaterial percentage of our total studio base.
−Removed: Please see the table in the “Same Store Sales” section, sub header “North America studios contributing to same store sales.” The line “studios without 13 months of consecutive sales as of the last month that had positive sales within the period being measured” is an indicator for the number of North America traditional location studios that are older than 13 months, and that have had a recent or current disruption in sales, but that are still included in the number of studios operating count.
−Removed: For the three and nine months ended September 30, 2025, this represented 0.2% and 0.1% of our North America studio base, respectively, compared to 0.6% and 0.5% for the three and nine months ended September 30, 2024, respectively.
−Removed: While nearly all our franchised studios are licensed to franchisees, from time to time we operate a limited number of company-owned transition studios (typically as we take possession of a studio following a franchisee ceasing to operate it and as we prepare it to be licensed to a new franchisee).
+Added: Please see the table in the “Same Store Sales” section, sub header “North America studios contributing to same store sales.” The line “studios without 13 months of consecutive sales as of the last month that had positive sales within the period being measured” is an indicator for the number of the North America Region traditional location studios that are older than 13 months, and that have had a recent or current disruption in sales, but that are still included in the number of studios operating count.
+Added: For the three months ended March 31, 2026, this represented 0.2% of our North America studio base, respectively, compared to 0.2% for the three months ended March 31, 2025, respectively.
+Added: While all our franchised studios are licensed to franchisees, we operate a company-owned transition studio under the Rumble brand, which was divested in the third quarter of 2025 (the table below excludes this studio).
+Added: Typically, when we take possession of a studio following a franchisee ceasing to operate it we prepare it to be licensed to a new franchisee.
Management reviews the number of studios operating at a given point in time in order to help forecast system-wide sales, franchise revenue and other revenue streams.
−Removed: The following tables contain information about changes in the number of our North America operating studios for the three and nine months ended September 30, 2025 and 2024, respectively:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: North America franchisee-owned studios
−Removed: Studios operated at beginning of period
−Removed: New studio openings
−Removed: Refranchised studios (1)
−Removed: Studios no longer operating
−Removed: Studios operated at end of period
−Removed: North America company-owned transition studios
−Removed: Studios operated at beginning of period
−Removed: Refranchised studios (1)
−Removed: Studios no longer operating
−Removed: Studios operated at end of period (2)
−Removed: Total North America studios
+Added: The following tables contain information about changes in the number of our North America operating studios for the three months ended March 31, 2026 and 2025.
+Added: respectively:
+Added: Three Months Ended March 31,
+Added: North America Region franchisee-owned studios
Studios operated at beginning of period
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Studios operated at end of period
−Removed: (1) Includes previously franchised company-owned transition studios that were converted to franchisee-owned studios in the period.
−Removed: (2) Excludes one company-owned transition studio operated at September 30, 2025 under the Rumble brand, which was divested in the third quarter of 2025.
−Removed: The following table sets forth the total number of operating studios internationally for 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 sets forth the total number of operating studios internationally for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
International studios
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Studios operated at end of period
−Removed: The following table sets forth the total number of operating studios globally for 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 sets forth the total number of operating studios globally for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
Total studios
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Licenses Sold
−Removed: The number of licenses sold in North America and globally reflect the cumulative number of licenses sold by us (or, outside of North America, by or to our master franchisees), since inception through the date indicated.
+Added: The number of licenses sold in the North America Region and globally reflect the cumulative number of licenses sold by us (or, outside of the North America Region, by or to our master franchisees), since inception through the date indicated.
The number of licenses sold is not reduced by terminations.
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Management reviews the number of licenses sold and the number of licenses contractually obligated to open to help monitor and forecast studio growth, system-wide sales and revenue streams.
−Removed: As of September 30, 2025, we estimate approximately 40% of our global license obligations are over 12 months behind the applicable development schedule due to various circumstances and are currently inactive.
+Added: As of March 31, 2026, we estimate approximately 35% of our global license obligations are over 12 months behind the applicable development schedule due to various circumstances and are currently inactive.
This delay in development has resulted in delays in studio openings and may also lead to increased terminations, which could have a negative long-term impact on our business and operating results.
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As part of a multi-unit agreement, franchisees purchase an initial franchise license and make nonrefundable development fee payments to reserve the right to open additional studios.
−Removed: The number of development fee payments on future franchise licenses sold in North America reflect the number of development fee payments received by us and unused as of period end.
+Added: The number of development fee payments on future franchise licenses sold in the North America Region reflect the number of development fee payments received by us and unused as of period end.
The number of development fee payments on future franchise licenses is not included in the licenses sold count.
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AUV is calculated by dividing sales during the applicable period for all studios contributing to AUV by the number of studios contributing to AUV.
−Removed: All traditional studio locations in North America are included in the AUV calculation, as long as they meet certain time since opening and sales criteria (as defined immediately below).
+Added: All traditional studio locations in the North America Region are included in the AUV calculation, as long as they meet certain time since opening and sales criteria (as defined immediately below).
In particular, AUV (LTM as of period end) and Quarterly AUV (run rate) are calculated as follows:
−Removed: • AUV (LTM as of period end) consists of the average sales for the trailing 12 calendar months for all traditional studio locations in North America that opened at least 13 calendar months ago as of the measurement date and that have generated positive sales for each of the last 13 calendar months as of the measurement date.
+Added: • AUV (LTM as of period end) consists of the average sales for the trailing 12 calendar months for all traditional studio locations in the North America Region that opened at least 13 calendar months ago as of the measurement date and that have generated positive sales for each of the last 13 calendar months as of the measurement date.
• Quarterly AUV (run rate) consists of average quarterly sales for all traditional studio locations in North America that had opened at least six calendar months ago as of the beginning of the respective quarter, and that have non-zero sales in the respective quarter (including nominal or negative sales figures;
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Management reviews AUV to assess studio economics.
−Removed: The following table reconciles our North America operating studios for the three and nine months ended September 30, 2025 and 2024, respectively, to the total studios contributing to both AUV (LTM as of period end) and Quarterly AUV (run rate):
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: North America studios contributing to AUV (LTM as of period)
+Added: The following table reconciles our North America Region operating studios for the three months ended March 31, 2026 and 2025, respectively, to the total studios contributing to both AUV (LTM as of period end) and Quarterly AUV (run rate):
+Added: Three Months Ended March 31,
+Added: North America Region studios contributing to AUV (LTM as of period)
Operating studios (end of period)
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studios without 13 months of consecutive sales as of measurement date
−Removed: North America studios contributing to Quarterly AUV (run rate)
+Added: North America Region studios contributing to Quarterly AUV (run rate)
Operating studios (end of period)
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non-traditional studio locations
+Added: studios with no sales in the period
Same Store Sales
Same store sales refer to period-over-period sales comparisons for the base of studios.
−Removed: We define the same store sales to include monthly sales for any traditional studio location in North America.
+Added: We define the same store sales to include monthly sales for any traditional studio location in the North America region.
If the studio has generated at least 13 months of consecutive positive sales and opened at least 13 calendar months ago as of any month within the measurement period, the respective comparable months will be included.
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Management reviews same store sales to assess the health of the franchised studios.
−Removed: The following table reconciles our North America operating studios for the three and nine months ended September 30, 2025 and 2024, respectively, to the total studios contributing to same store sales:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: North America studios contributing to same store sales
+Added: The following table reconciles our North America Region operating studios for the three months ended March 31, 2026 and 2025, respectively, to the total studios contributing to same store sales:
+Added: Three Months Ended March 31,
+Added: North America Region studios contributing to same store sales
Operating studios (end of period)
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Results of Operations
−Removed: The following table presents our condensed consolidated results of operations for 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 our condensed consolidated results of operations for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
(in thousands)
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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
Loss before income taxes
−Removed: The following table presents our condensed consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 as a percentage of revenue:
−Removed: Three Months Ended September 30,
−Removed: Nine Months Ended September 30,
−Removed: (As Corrected)
+Added: The following table presents our condensed consolidated results of operations for the three months ended March 31, 2026 and 2025 as a percentage of revenue:
+Added: Three Months Ended March 31,
Revenue, net:
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Marketing fund expense
−Removed: Acquisition and transaction expenses (income)
+Added: Acquisition and transaction income
Total operating costs and expenses
3 unchanged sentences
Interest expense
−Removed: Other expense
+Added: Tax receivable agreement expense
Total other expense
Loss before income taxes
−Removed: Comparison of the three months ended September 30, 2025 and 2024
−Removed: The following is a discussion of our consolidated results of operations for the three months ended September 30, 2025 versus the three months ended September 30, 2024.
−Removed: Three Months Ended September 30,
+Added: Comparison of the three months ended March 31, 2026 and 2025
+Added: The following is a discussion of our consolidated results of operations for the three months ended March 31, 2026 versus the three months ended March 31, 2025.
+Added: Three Months Ended March 31,
Change from Prior Year
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Total revenue, net.
−Removed: Total revenue was $78.8 million in the three months ended September 30, 2025, compared to $80.5 million in the three months ended September 30, 2024, a decrease of $1.7 million, or 2%.
−Removed: The decrease in total revenue was primarily due to a decrease in equipment revenue due to a decrease in equipment installations and a decrease in merchandise revenue, partially offset by an increase in franchise revenue and franchise marketing fund revenue.
+Added: Total revenue was $60.7 million in the three months ended March 31, 2026, compared to $76.9 million in the three months ended March 31, 2025, a decrease of $16.2 million, or 21%.
+Added: The decrease in total revenue was primarily due to lower equipment revenue due to a decrease in equipment installations and lower merchandise revenue.
Franchise revenue.
−Removed: Franchise revenue was $51.9 million in the three months ended September 30, 2025, compared to $44.5 million in the three months ended September 30, 2024, an increase of $7.4 million, or 17%.
−Removed: Franchise revenue consisted of franchise royalty fees of $31.5 million, franchise territory fees of $13.7 million, technology fees of $3.6 million and training fees of $3.1 million in the three months ended September 30, 2025, compared to franchise royalty fees of $29.7 million, franchise territory fees of $7.5 million, technology fees of $4.3 million and training fees of $3.0 million in the three months ended September 30, 2024.
−Removed: The increase in franchise royalty fees was primarily due to a higher royalty rate for certain new studios, partially offset by a decrease due to brand divestitures in the current year.
−Removed: The increase in franchise territory fees is primarily attributed to an increase of $6.6 million, or 182%, in revenue recognized as a result of franchise agreement terminations year-over-year to $9.3 million in the three months ended September 30, 2025, compared to $2.7 million in the prior year period.
+Added: Franchise revenue was $41.2 million in the three months ended March 31, 2026, compared to $43.9 million in the three months ended March 31, 2025, an decrease of $2.7 million, or 6%.
+Added: Franchise revenue consisted of franchise royalty fees of $31.9 million, franchise territory fees of $3.3 million, technology fees of $3.3 million and training fees of $2.7 million in the three months ended March 31, 2026, compared to franchise royalty fees of $32.5 million, franchise territory fees of $3.9 million, technology fees of $4.4 million and training fees of $3.1 million in the three months ended March 31, 2025.
+Added: The decrease in franchise royalty fees was primarily due to a decrease in same store sales coupled with a decrease due to brand divestitures in 2025.
+Added: The decrease in franchise territory fees is primarily attributed to divestiture of brands in 2025, coupled with a decrease of $0.4 million, or 48%, in revenue recognized as a result of franchise agreement terminations year-over-year to $0.4 million in the three months ended March 31, 2026, compared to $0.8 million in the prior year period.
Equipment revenue.
−Removed: Equipment revenue was $7.5 million in the three months ended September 30, 2025, compared to $14.7 million in the three months ended September 30, 2024, a decrease of $7.2 million, or 49%.
+Added: Equipment revenue was $4.4 million in the three months ended March 31, 2026, compared to $11.1 million in the three months ended March 31, 2025, a decrease of $6.8 million, or 61%.
Most equipment revenue is recognized in the period when the equipment is installed.
−Removed: The decrease in equipment revenue was primarily due to a decrease in global equipment installations in the three months ended September 30, 2025, compared to the prior year period, driven by a decrease in studio openings compared to the prior year period and consistent with the decrease in franchise license sales in recent periods.
+Added: The decrease in equipment revenue was primarily due to a decrease in global equipment installations in the three months ended March 31, 2026, compared to the prior year period, driven by a decrease in studio openings compared to the prior year period and consistent with the decrease in franchise license sales in recent periods.
Merchandise revenue.
−Removed: Merchandise revenue was $4.8 million in the three months ended September 30, 2025, compared to $6.6 million in the three months ended September 30, 2024, a decrease of $1.8 million, or 27%.
−Removed: The decrease was primarily due to lower demand from studios and a decrease in vendor rebates compared to the prior period.
+Added: Merchandise revenue was $0.7 million in the three months ended March 31, 2026, compared to $6.3 million in the three months ended March 31, 2025, a decrease of $5.6 million, or 90%.
+Added: The decrease in merchandise revenue was primarily due to the change in strategy to outsource our retail merchandise inventory and lower overall demand from studios compared to the prior period.
Franchise marketing fund revenue.
−Removed: Franchise marketing fund revenue was $8.8 million in the three months ended September 30, 2025, compared to $8.6 million in the three months ended September 30, 2024, an increase of $0.3 million, or 3%.
−Removed: The increase was primarily due to an increase in number of operating studios in North America since September 30, 2024.
+Added: Franchise marketing fund revenue was $8.7 million in the three months ended March 31, 2026, compared to $9.3 million in the three months ended March 31, 2025, a decrease of $0.6 million, or 6%.
+Added: The decrease was primarily due to a decrease in same store sales and the impact of divested brands compared to the prior year period.
Other service revenue.
−Removed: Other service revenue was $5.9 million in the three months ended September 30, 2025, compared to $6.2 million in the three months ended September 30, 2024, a decrease of 6%.
−Removed: The decrease was primarily due to a $0.4 million decrease in other preferred vendor commission revenue and brand fee revenue.
+Added: Other service revenue was $5.8 million in the three months ended March 31, 2026, compared to $6.4 million in the three months ended March 31, 2025, a decrease of $0.5 million, or 8%.
+Added: The decrease was primarily due to a $0.3 million decrease in vendor commission and brand access fee revenues and less than $0.1 million decrease in package and memberships revenue.
Operating Costs and Expenses
−Removed: Three Months Ended September 30,
+Added: Three Months Ended March 31,
Change from Prior Year
6 unchanged sentences
Marketing fund expense
−Removed: Acquisition and transaction expense
+Added: Acquisition and transaction income
Total operating costs and expenses
Costs of product revenue.
−Removed: Costs of product revenue was $10.2 million in the three months ended September 30, 2025, compared to $17.3 million in the three months ended September 30, 2024, a decrease of $7.0 million, or 41%, compared to a decrease in related revenues of 42%.
−Removed: The decrease in cost of product revenue was partially attributable to a decrease in global equipment installations in the three months ended September 30, 2025, compared to the prior year period.
−Removed: Costs of product revenue as a percentage of related revenue increased to 84% in the three months ended September 30, 2025, from 81% in the comparable prior year period.
−Removed: The increase was primarily due to an increase in write downs of slow-moving inventory in the current year period.
+Added: Costs of product revenue was $3.6 million in the three months ended March 31, 2026, compared to $12.0 million in the three months ended March 31, 2025, a decrease of $8.3 million, or 70%, compared to a decrease in related revenues of 71%.
+Added: The decrease in cost of product revenue was primarily driven by a reduction in global equipment installations and strategic shift to outsource retail merchandise inventory during the three months ended March 31, 2026, compared to the prior year period.
+Added: Costs of product revenue as a percentage of related revenue increased to 73% in the three months ended March 31, 2026, from 69% in the comparable prior year period.
Costs of franchise and service revenue.
−Removed: Costs of franchise and service revenue was $7.0 million in the three months ended September 30, 2025, compared to $4.9 million in the three months ended September 30, 2024, an increase of $2.2 million, or 45%.
−Removed: The increase was primarily due to a $2.0 million increase in franchise sales commissions, including a $2.2 million increase in costs recognized as a result of franchise agreement terminations year-over-year.
−Removed: This increase is consistent with the increase in related franchise territory revenue.
+Added: Costs of franchise and service revenue was $3.3 million in the three months ended March 31, 2026, compared to $4.1 million in the three months ended March 31, 2025, a decrease of $0.8 million, or 20%.
+Added: The decrease was primarily due to a $0.3 million decrease in franchise sales commissions and a $0.3 million decrease in costs related to brand access fee revenue.
+Added: This decrease is consistent with the decrease in related franchise territory revenue.
Selling, general and administrative expenses.
−Removed: Selling, general and administrative expenses were $24.7 million in the three months ended September 30, 2025, compared to $46.2 million in the three months ended September 30, 2024, a decrease of $21.5 million, or 47%.
+Added: Selling, general and administrative expenses were $30.0 million in the three months ended March 31, 2026, compared to $45.5 million in the three months ended March 31, 2025, a decrease of $15.5 million, or 34%.
The decrease was primarily attributable to a decrease in legal expenses of $12.3 million (including nonrecurring insurance credits of $2.2 million in the current period) related to various legal matters including government investigations;
+Added: a decrease in salaries and wages of $1.7 million;
a decrease of $1.3 million in equity-based compensation expense due to an increase in forfeitures over the prior year period;
−Removed: lower restructuring and related charges of $7.0 million in the current year period;
−Removed: and an increase in gain on divestitures of brands of $1.5 million;
−Removed: partially offset by an $0.8 million increase in bad debt expense;
−Removed: an increase in salaries and wages of $0.7 million;
−Removed: a $0.7 million increase in loss on guaranty of franchisee third-party loans;
−Removed: and a net increase in other variable expenses of $1.6 million.
+Added: $0.1 million decrease in bad debt expense and a net decrease in other variable expenses of $1.0 million;
+Added: partially offset by a $0.4 million increase in loss on guaranty of franchisee third-party loans and higher restructuring and related charges of $0.5 million in the current year period.
Impairment of goodwill and other noncurrent assets.
−Removed: Impairment of goodwill and other noncurrent assets was $17.6 million in the three months ended September 30, 2025, compared to $4.5 million in the three months ended September 30, 2024, an increase of $13.1 million.
−Removed: The increase was due to $12.7 million impairment of trademark, franchise agreement and deferred video production intangible assets related to the BFT reporting unit and other noncurrent asset impairments of $4.9 million in the current year period, compared to write down of right-of-use assets and intangible assets of $4.5 million related to studio exits in conjunction with our restructuring plan and wind down of AKT franchise operations in the prior year period.
+Added: Impairment of goodwill and other noncurrent assets was $0.0 million in the three months ended March 31, 2026, compared to $1.9 million in the three months ended March 31, 2025, a decrease of $1.9 million due to impairment of right-of use assets.
Depreciation and amortization.
−Removed: Depreciation and amortization expense was $3.7 million in the three months ended September 30, 2025, compared to $4.2 million in the three months ended September 30, 2024, a decrease of $0.5 million, or 13%.
+Added: Depreciation and amortization expense was $2.3 million in the three months ended March 31, 2026, compared to $3.0 million in the three months ended March 31, 2025, a decrease of $0.7 million, or 24%.
The decrease was primarily due to a decrease in fixed assets related to impairment of software assets and a decrease in intangible assets due to impairments during the year ended December 31, 2025.
Marketing fund expense.
−Removed: Marketing fund expense was $9.0 million in the three months ended September 30, 2025, compared to $6.4 million in the three months ended September 30, 2024, an increase of $2.6 million, or 40%.
+Added: Marketing fund expense was $11.7 million in the three months ended March 31, 2026, compared to $9.4 million in the three months ended March 31, 2025, an increase of $2.3 million, or 25%.
+Added: The increase reflected the timing of incremental marketing spend, as the Company front-loaded more investment in the first quarter of 2026 compared with the first quarter of 2025.
Marketing fund expenses are recorded as incurred, which may not occur in the same period as the recognition of franchise marketing fund revenue.
−Removed: For the three months ended September 30, 2025, marketing fund revenue was $0.2 million lower than marketing fund expense.
−Removed: Acquisition and transaction expense.
−Removed: Acquisition and transaction expense was $3.1 million in the three months ended September 30, 2025, compared to $3.7 million in the three months ended September 30, 2024, a decrease of $0.6 million, or 16%.
+Added: For the three months ended March 31, 2026, marketing fund revenue was $3.0 million lower than marketing fund expense.
+Added: Acquisition and transaction expense (income).
+Added: Acquisition and transaction income was $3.2 million in the three months ended March 31, 2026, compared to $8.6 million in the three months ended March 31, 2025, a decrease of $5.5 million, or 63%.
These charges primarily represent the non-cash change in contingent consideration related to 2021 and 2024 business acquisitions.
Other (Income) Expense, net
−Removed: Three Months Ended September 30,
+Added: Three Months Ended March 31,
Change from Prior Year
2 unchanged sentences
Interest expense
−Removed: Other expense
+Added: Tax receivable agreement expense
Total other expense, net
Interest income.
−Removed: Interest income primarily consists of interest on notes receivable and interest income received from various interest-bearing bank accounts, which was $1.1 million in the three months ended September 30, 2025, compared to $0.5 million in the three months ended September 30, 2024.
−Removed: Other income.
−Removed: Other income consists of royalty payments from franchisees associated with the divested CycleBar and Rumble brands since the divestiture date, which was $1.1 million in the three months ended September 30, 2025, compared to $0 in the three months ended September 30, 2024.
−Removed: See Note 4 of Notes to Condensed Consolidated Financial Statements for additional information.
+Added: Interest income primarily consists of interest on notes receivable and interest income received from various interest-bearing bank accounts, which was $0.6 million in the three months ended March 31, 2026, compared to $0.6 million in the three months ended March 31, 2025.
Interest expense .
−Removed: Interest expense was $12.9 million in the three months ended September 30, 2025, compared to $11.8 million in the three months ended September 30, 2024, an increase of $1.1 million, or 9%.
+Added: Interest expense was $14.5 million in the three months ended March 31, 2026, compared to $11.4 million in the three months ended March 31, 2025, an increase of $3.1 million, or 27%.
Interest expense consists of interest on long-term debt, accretion of earn-out liabilities and amortization and write off of deferred loan costs and debt discount.
1 unchanged sentence
Other expense.
−Removed: Other expense consists of TRA expense, which was $0.6 million in the three months ended September 30, 2025, compared to $0.1 million in the three months ended September 30, 2024.
−Removed: Three Months Ended September 30,
+Added: Other expense consists of TRA expense, which was $0.0 million in the three months ended March 31, 2026, compared to $1.1 million in the three months ended March 31, 2025.
+Added: The decrease was due to the absence of TRA expense in the current period.
+Added: There is no TRA expense, as the Company recorded pretax book loss after discrete items for the three months ended March 31, 2026 , as compared to pretax book income for the three months ended March 31, 2025.
+Added: Three Months Ended March 31,
Change from Prior Year
1 unchanged sentence
Income taxes (benefit ) .
−Removed: Income taxes was (4.1%) of our share of pre-tax book income in the three months ended September 30, 2025, compared to (0.7%) of pre-tax book loss in the three months ended September 30, 2024.
−Removed: Comparison of the nine months ended September 30, 2025 and 2024
−Removed: The following is a discussion of our consolidated results of operations for the nine months ended September 30, 2025 versus the nine months ended September 30, 2024.
−Removed: Nine Months Ended September 30,
−Removed: Change from Prior Year
−Removed: ($ in thousands)
−Removed: Franchise revenue
−Removed: Equipment revenue
−Removed: Merchandise revenue
−Removed: Franchise marketing fund revenue
−Removed: Other service revenue
−Removed: Total revenue, net
−Removed: Total revenue.
−Removed: Total revenue was $231.9 million in the nine months ended September 30, 2025, compared to $237.1 million in the nine months ended September 30, 2024, a decrease of $5.2 million, or 2%.
−Removed: The decrease in total revenue was primarily due to a decrease in equipment revenue due to a decrease in equipment installations and a decrease in merchandise revenue, partially offset by an increase in franchise revenue and franchise marketing fund revenue.
−Removed: Franchise revenue.
−Removed: Franchise revenue was $141.1 million in the nine months ended September 30, 2025, compared to $129.2 million in the nine months ended September 30, 2024 , an increase of $11.9 million, or 9%.
−Removed: Franchise revenue consisted of franchise royalty fees of $97.7 million, franchise territory fees of $21.8 million, technology fees of $12.5 million and training fees of $9.2 million in the nine months ended September 30, 2025, compared to franchise royalty fees of $85.6 million, franchise territory fees of $22.2 million, technology fees of $12.6 million and training fees of $8.8 million in the nine months ended September 30, 2024.
−Removed: The increase in franchise royalty fees was primarily due to an increase in the number of operating studios globally since September 30, 2024 (including studios related to the Lindora acquisition in the first quarter of 2024).
−Removed: The decrease in franchise territory fees is primarily attributed to divestiture of brands in 2024 and 2025, partially offset by an increase of $1.2 million, or 12%, in revenue recognized as a result of franchise agreement terminations year-over-year to $10.7 million in the nine months ended September 30, 2025, compared to $9.5 million in the prior year period.
−Removed: Equipment revenue.
−Removed: Equipment revenue was $28.1 million in the nine months ended September 30, 2025, compared to $41.5 million in the nine months ended September 30, 2024, a decrease of $13.4 million, or 32%.
−Removed: Most equipment revenue is recognized in the period when the equipment is installed.
−Removed: The decrease in equipment revenue was primarily due to by a decrease in global equipment installations in the nine months ended September 30, 2025, compared to the prior year period, driven by a decrease in studio openings compared to the prior year period and consistent with the decrease in franchise license sales in recent periods.
−Removed: Merchandise revenue.
−Removed: Merchandise revenue was $16.7 million in the nine months ended September 30, 2025 compared to $21.1 million in the nine months ended September 30, 2024, a decrease of $4.4 million, or 21%.
−Removed: The decrease was due primarily to a decrease in demand from studios and a decrease in vendor rebates compared to the prior period.
−Removed: Franchise marketing fund revenue.
−Removed: Franchise marketing fund revenue was $27.6 million in the nine months ended September 30, 2025, compared to $24.8 million in the nine months ended September 30, 2024, an increase of $2.8 million, or 11%.
−Removed: The increase was primarily due to an increase in number of operating studios in North America since September 30, 2024.
−Removed: Other service revenue.
−Removed: Other service revenue was $18.5 million in the nine months ended September 30, 2025, compared to $20.6 million in the nine months ended September 30, 2024, a decrease of $2.1 million, or 10%.
−Removed: The decrease was primarily due to a $1.6 million decrease in brand fee revenue and a $1.1 million decrease in package and memberships revenue due to a lower average number of company-owned transition studios, partially offset by a $1.1 million increase in other preferred vendor commission revenue.
−Removed: Operating Costs and Expenses
−Removed: Nine Months Ended September 30,
−Removed: Change from Prior Year
−Removed: ($ in thousands)
−Removed: Costs of product revenue
−Removed: Costs of franchise and service revenue
−Removed: Selling, general and administrative expenses
−Removed: Impairment of goodwill and other assets
−Removed: Depreciation and amortization
−Removed: Marketing fund expense
−Removed: Acquisition and transaction expenses (income)
−Removed: Total operating costs and expenses
−Removed: Costs of product revenue.
−Removed: Costs of product revenue was $32.7 million in the nine months ended September 30, 2025, compared to $45.8 million in the nine months ended September 30, 2024, a decrease of $13.1 million, or 29%, compared to a decrease in related revenues of 28%.
−Removed: The decrease in cost of product revenue was partially attributable to a decrease in global equipment installations in the nine months ended September 30, 2025, compared to the prior year period.
−Removed: Costs of product revenue as a percentage of related revenue was 73% in both the nine months ended September 30, 2025, and 2024.
−Removed: Costs of franchise and service revenue.
−Removed: Costs of franchise and service revenue was $15.1 million in the nine months ended September 30, 2025, compared to $15.7 million in the nine months ended September 30, 2024, a decrease of $0.6 million, or 4%.
−Removed: The decrease was primarily due to a $1.5 million decrease in franchise sales commissions, including a $0.5 million decrease in costs recognized as a result of franchise agreement terminations year-over-year.
−Removed: This decrease is consistent with the decrease in related franchise territory revenue.
−Removed: Selling, general and administrative expenses.
−Removed: Selling, general and administrative expenses were $94.3 million in the nine months ended September 30, 2025, compared to $119.8 million in the nine months ended September 30, 2024, a decrease of $25.5 million, or 21%.
−Removed: The decrease was primarily attributable to a decrease in legal expense of $6.2 million (including nonrecurring insurance credits of $34.8 million in the current period) related to various legal matters;
−Removed: a decrease in equity-based compensation expense of $4.8 million primarily due to a decrease in the number of equity-classified restricted stock units (“RSUs”) outstanding during the current year period and an increase in forfeitures over the prior year period;
−Removed: a decrease in marketing and advertising expenses of $2.2 million;
−Removed: a decrease in studio support expense of $1.1 million;
−Removed: a net increase in gain on divestiture of brands of $2.7 million;
−Removed: and lower restructuring and related charges of $15.3 million in the current year period;
−Removed: partially offset by an increase in consulting and accounting services of $1.3 million and $1.1 million, respectively;
−Removed: a $3.0 million increase in loss on guaranty of franchisee third-party loans;
−Removed: and a net increase in other variable expenses of $1.4 million.
−Removed: Impairment of goodwill and other assets.
−Removed: Impairment of goodwill and other assets was $32.4 million in the nine months ended September 30, 2025, compared to $16.6 million in the nine months ended September 30, 2024, an increase of $15.8 million, or 95%.
−Removed: The increase was due to impairments of goodwill of $5.1 million and $2.3 million related to the BFT and Lindora reporting units, respectively, impairment of trademark of $3.4 million related to the CycleBar reporting unit, impairment of trademark, franchise agreement and deferred video production cost intangible assets of $12.7 million related to the BFT reporting unit, and other noncurrent asset impairments of $8.9 million compared to write down of franchise agreement intangible asset and goodwill of $12.1 million related to the CycleBar reporting unit and a write down of right-of-use and other assets of $4.5 million in the prior year period.
−Removed: Depreciation and amortization.
−Removed: Depreciation and amortization expense was $9.6 million in the nine months ended September 30, 2025, compared to $13.2 million in the nine months ended September 30, 2024, a decrease of $3.6 million, or 27%.
−Removed: The decrease was primarily due to a decrease in fixed assets related to impairment of software assets and a decrease in intangible assets due to impairments during the year ended December 31, 2024.
−Removed: Marketing fund expense.
−Removed: Marketing fund expense was $27.2 million in the nine months ended September 30, 2025, compared to $20.8 million in the nine months ended September 30, 2024, an increase of $6.4 million, or 31% and is consistent with the increase in franchise marketing fund revenue.
−Removed: Marketing fund expenses are recorded as incurred, which may not occur in the same period as the recognition of franchise marketing fund revenue.
−Removed: For the nine months ended September 30, 2025, marketing fund revenue was $0.4 million higher than marketing fund expense.
−Removed: Acquisition and transaction expenses (income).
−Removed: Acquisition and transaction income was $7.5 million in the nine months ended September 30, 2025, compared to expense of $7.0 million in the nine months ended September 30, 2024, an increase in income of $14.4 million, or 207%.
−Removed: These amounts primarily represent the non-cash change in contingent consideration related to 2021 and 2024 business acquisitions.
−Removed: Nine Months Ended September 30,
−Removed: Change from Prior Year
−Removed: ($ in thousands)
−Removed: Interest income
−Removed: Interest expense
−Removed: Other expense
−Removed: Total other expense, net
−Removed: Interest income.
−Removed: Interest income primarily consists of interest on notes receivable and interest income received from various
−Removed: interest-bearing bank accounts, which was $2.4 million in the nine months ended September 30, 2025, compared to $1.2 million in the nine months ended September 30, 2024.
−Removed: Other income.
−Removed: Other income consists of royalty payments from franchisees associated with the divested CycleBar and Rumble brands since the divestiture date, which was $1.1 million in the nine months ended September 30, 2025, compared to $0 in the nine months ended September 30, 2024.
−Removed: Interest expense .
−Removed: Interest expense was $37.3 million in the nine months ended September 30, 2025, compared to $34.6 million in the nine months ended September 30, 2024, an increase of $2.6 million, or 8%.
−Removed: Interest expense consists of interest on long-term debt, accretion of earn-out liabilities and amortization of deferred loan costs and debt discount.
−Removed: The increase was primarily due to higher average debt balances in the current year period, partly offset by lower average interest rates on our credit agreement.
−Removed: Other expense.
−Removed: Other expense consists of TRA expense, which was $1.3 million in the nine months ended September 30, 2025, compared to $0.9 million in the nine months ended September 30, 2024.
−Removed: Nine Months Ended September 30,
−Removed: Change from Prior Year
−Removed: ($ in thousands)
−Removed: Income taxes .
−Removed: Income taxes were (15.2%) of pre-tax book income (loss) in the nine months ended September 30, 2025, compared to (0.6%) in the nine months ended September 30, 2024.
+Added: Income taxes was (0.7%) of our share of pre-tax book income in the three months ended March 31, 2026, compared to (22.3%) of pre-tax book loss in the three months ended March 31, 2025.
Non-GAAP Financial Measures
1 unchanged sentence
We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes.
−Removed: We believe that non-GAAP financial information, when collectively taken, is helpful to investors because it provides consistency and comparability with past financial performance.
+Added: We believe that non-GAAP financial information, when taken collectively, is helpful to investors because it provides consistency and comparability with past financial performance.
In addition, our management uses non-GAAP measures to compare our performance relative to forecasts and to benchmark our performance externally against competitors.
6 unchanged sentences
We define adjusted EBITDA as EBITDA (net income/loss before interest, taxes, depreciation and amortization), adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance.
−Removed: These items include equity-based compensation and related employer payroll taxes, acquisition and transaction expenses (income) (including change in contingent consideration and transaction bonuses), litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business net of insurance reimbursements), fees for financial transactions, such as secondary public offering expenses for which we do not receive proceeds (including bonuses paid to executives related to completion of such transactions) and other contemplated corporate transactions, expense related to the remeasurement of our TRA obligation, expense related to loss on impairment or write down of goodwill and other noncurrent assets, loss and expenses related to brand divestitures and wind down (including expenses directly related to the divested or wound down brands for arrangements that existed prior to divestiture or wind down), transformation initiative costs (primarily consisting of third-party professional consulting fees related to modifications of our business strategy and cost saving initiatives), other income (consisting of royalties received from divested brands), and restructuring and related charges incurred in connection with our restructuring plan that we do not believe reflect our underlying business performance and affect comparability.
−Removed: For the nine months ended September 30, 2025, loss and expenses due to brand divestitures and wind down (excluding impairments) represents net gain on divestiture of $1.2 million and certain other expenses recorded primarily in connection with brand divestitures and outsourcing of our retail merchandising, including write-off of accounts receivable determined no longer collectable of $1.3 million, write-off of inventory of $2.5 million, loss on franchisee loan guarantees of $0.8 million, severance costs of $0.3 million, and certain other costs of $0.3 million.
+Added: These items include equity-based compensation and related employer payroll taxes, acquisition and transaction expenses (income) (including change in contingent consideration and transaction bonuses), litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business net of insurance reimbursements), fees for financial transactions, such as secondary public offering expenses for which we do not receive proceeds (including bonuses paid to executives related to completion of such transactions) and other contemplated corporate transactions, expense related to the remeasurement of our TRA obligation, expense related to loss on impairment or write down of goodwill and other noncurrent assets, loss and expenses related to brand divestitures and wind down (including expenses directly related to the divested or wound down brands for arrangements that existed prior to divestiture or wind down), transformation initiative costs (primarily consisting of third-party professional consulting fees related to modifications of our business strategy and cost saving initiatives), and restructuring and related charges incurred in connection with our restructuring plan that we do not believe reflect our underlying business performance and affect comparability.
+Added: For the three months ended March 31, 2026, loss and expenses due to brand divestitures and wind down (excluding impairments) primarily represents net expenses of $0.2 million in connection with brand divestitures and outsourcing of our retail merchandising and loss on franchisee loan guarantees of $0.8 million related to divested brands.
EBITDA and adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.
We believe that adjusted EBITDA, viewed in addition to, and not in lieu of, our reported GAAP results, provides useful information to investors regarding our performance and overall results of operations because it eliminates the impact of other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors in comparing the core performance of our business from period to period.
−Removed: The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to adjusted EBITDA for 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 a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to adjusted EBITDA for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
(in thousands)
3 unchanged sentences
Employer payroll taxes related to equity-based compensation
−Removed: Acquisition and transaction expenses (income)
−Removed: Litigation expenses (benefit)
+Added: Acquisition and transaction income
+Added: Litigation expenses
Financial transaction fees and related expenses
2 unchanged sentences
Loss and expenses due to brand divestitures and wind down (excluding impairments)
−Removed: Executive transition costs
−Removed: Non-recurring rebranding expenses
Transformation initiative costs
2 unchanged sentences
Liquidity and Capital Resources
−Removed: As of September 30, 2025, we had $24.9 million of cash and cash equivalents, excluding $16.6 million of restricted cash consisting of marketing fund restricted cash of $15.9 million and a standby letter of credit guarantee.
+Added: As of March 31, 2026, we had $12.2 million of cash and cash equivalents, excluding $9.3 million of restricted cash consisting of marketing fund restricted cash of $8.5 million and a standby letter of credit guarantee.
We principally require cash to fund day-to-day operations, finance capital investments, service our outstanding debt and address our working capital needs.
Additionally, we require cash to fund the investments in our data warehouse project and other investments to become a data driven company.
−Removed: Based on our current level of operations, we believe that our available cash balance and the cash generated from our operations will be adequate to meet our anticipated debt service requirements and obligations under our TRA, capital expenditures, payment of tax distributions and working capital needs for at least the next twelve months beginning October 1, 2025 and beyond such twelve month period based on our current business plans.
+Added: Based on our current level of operations, we believe that our available cash balance and the cash generated from our operations will be adequate to meet our anticipated debt service requirements and obligations under our TRA, capital expenditures, payment of tax distributions and working capital needs for at least the next twelve months beginning May 8, 2026 and beyond such twelve month period based on our current business plans.
Our ability to continue to fund these items and continue to reduce debt could be adversely affected by the occurrence of any of the events described under “Risk Factors”, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
2 unchanged sentences
Credit Facility
−Removed: On April 19, 2021, we 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 million senior secured term loan facility (the “Term Loan Facility”, and the loans thereunder, each a “Term Loan” and together, the “Term Loans”).
−Removed: Affiliates of the lenders also separately purchased 200,000 shares of our 6.50% Series A Convertible Preferred Stock for $200 million.
−Removed: Our obligations under the Credit Agreement are guaranteed by Xponential Intermediate Holdings, LLC and certain of our material subsidiaries, and are secured by substantially all of the assets of Xponential Intermediate Holdings, LLC and certain of our material subsidiaries.
−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 (in each case, as discussed further in the Credit Agreement);
−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 our affiliates;
−Removed: (vi) restricting investments;
−Removed: (vii) restricting prepayments of subordinated indebtedness;
−Removed: (viii) restricting certain payments, including certain payments to our affiliates or equity holders and distributions to equity holders;
−Removed: and (ix) restricting the issuance of equity.
−Removed: Additionally, on March 10, 2025, we 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, we were in compliance with these covenants.
−Removed: On March 14, 2025, we 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 $10.0 million (the “Eighth Amendment Incremental Term Loans”), an upfront fee 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 will be capitalized and added to the outstanding loan principal, and an exit fee of approximately $7.2 million 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 proceeds of the Eighth Amendment will be used for general corporate purposes.
−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 $1.4 million.
−Removed: On July 24, 2025, we 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 us to apply the net proceeds received from the divestiture of the Rumble and CycleBar brands to repayment of the outstanding loan principal.
−Removed: The total principal amount outstanding on the Term Loans, including exit fee, was $376.4 million at September 30, 2025.
−Removed: See Note 8 of Notes to Condensed Consolidated Financial Statements for additional information about our debt.
+Added: On December 8, 2025 (the “Closing Date”), we 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 million (the “ Closing Date Term Loans”) and a revolving credit facility in a principal amount of $25 million (the “Revolving Loans”).
+Added: Our obligations under the Credit Agreement are jointly and severally guaranteed by XPO Holdings and certain subsidiaries of XPO Holdings (collectively, the “Guarantors”, and together with the us, the “Loan Parties”) and are secured by a first priority lien on substantially all of our assets, subject to customary exceptions.
+Added: The net proceeds from the Credit Agreement was used (i) to repay all outstanding indebtedness under the prior credit agreement, (ii) to repurchase all outstanding shares of the redeemable convertible preferred stock and (iii) to 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: The Credit Agreement contains various conditions to borrowing and certain customary affirmative and negative covenants, including, without limitation, covenants that restrict our ability to incur debt, grant liens, make investments, make restricted payments and dispose of assets.
+Added: The Credit Agreement includes a financial covenant requiring us to maintain a Total Net Leverage Ratio (as discussed further 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 and the Revolving Loans will both mature five years after the Closing Date.
+Added: As of March 31, 2026 the Company was in compliance with these covenants.
+Added: Commencing with the fiscal quarter ending March 31, 2026, and subject to customary adjustments, we will be 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 Agreement was $1.3 million during the three months ended March 31, 2026.
+Added: The total principal amount outstanding on the Closing Date Term Loans was $523.7 million at March 31, 2026.
+Added: See Note 7 of Notes to Consolidated Financial Statements for additional information about our debt.
Material Cash Requirements
−Removed: At September 30, 2025, there had been no material changes in our cash requirements from known contractual and other obligations as disclosed in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2024.
−Removed: The following table presents summary cash flow information for the nine months ended September 30, 2025 and 2024:
−Removed: Nine Months Ended September 30,
+Added: At March 31, 2026, there had been no material changes in our cash requirements from known contractual and other obligations as disclosed in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2025.
+Added: The following table presents summary cash flow information for the three months ended March 31, 2026 and 2025:
+Added: Three Months Ended March 31,
(in thousands)
4 unchanged sentences
Cash Flows from Operating Activities
−Removed: In the nine months ended September 30, 2025, cash provided by operating activities was $17.6 million, compared to $10.9 million in the nine months ended September 30, 2024, an increase in cash provided of $6.7 million.
−Removed: Of the increase, $20.9 million was due to higher net income after adjustments to reconcile net loss to net cash provided by operating activities and $37.2 million in unfavorable changes in working capital related to accounts payable, accrued expenses, inventories, prepaid expenses and other current assets, deferred revenue, and other current liabilities, partially offset by $23.0 million in favorable changes in working capital related to accounts receivable, deferred costs, other assets and other liabilities in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
+Added: In the three months ended March 31, 2026, cash used in operating activities was $21.7 million, compared to cash provided by operating activities of $5.8 million in the three months ended March 31, 2025, a decrease in cash provided of $27.5 million.
+Added: Of the change, $1.1 million was due to higher net income after adjustments to reconcile net loss to net cash provided by (used in) operating activities and $7.6 million in favorable changes in working capital related to accounts receivable, prepaid expenses and other current assets, deferred costs and deferred revenue, offset by $36.2 million in unfavorable changes in working capital related to inventories, accounts payable, accrued expenses, other current liabilities and other assets in the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Cash Flows from Investing Activities
−Removed: In the nine months ended September 30, 2025 and 2024, cash used in investing activities was $2.3 million and $13.9 million, respectively.
−Removed: The change year over year of $11.6 million was primarily attributable to cash used of $8.5 million for acquisition of Lindora in the prior year and the decrease in cash used to purchase property and equipment of $1.7 million in the current year and cash received of $2.0 million from the divestiture of CycleBar and Rumble brands in the current year.
+Added: In the three months ended March 31, 2026 and 2025, cash used in investing activities was $0.6 million and $1.0 million, respectively.
+Added: The change year over year of $0.4 million was primarily attributable to the decrease in cash used to issue notes receivable of $0.2 million in the current year and increase in cash received of $0.2 million from notes receivable collections in the current year.
Cash Flows from Financing Activities
−Removed: In the nine months ended September 30, 2025, cash used in financing activities was $6.6 million, compared to cash provided of $3.7 million in the nine months ended September 30, 2024, representing a year over year deterioration of $10.3 million.
−Removed: The increase in cash used was primarily attributable to net borrowings on long-term debt of $5.8 million in the current year compared to $20.1 million in the prior period year, a decrease in cash used for payments of tax receivable agreement of $2.3 million and a decrease in payments for distributions to Pre-IPO Members of $6.5 million, partially offset by increased payments of $2.3 million for taxes related to net share settlement of restricted share units in the current year.
+Added: In the three months ended March 31, 2026, cash used in financing activities was $2.1 million, compared to cash provided of $5.0 million in the three months ended March 31, 2025, representing a year over year deterioration of $7.1 million.
+Added: The decrease in cash provided was primarily attributable to net borrowings on long-term debt of $8.5 million and cash used for payments of preferred stock dividend of $1.8 million in the prior year.
+Added: In addition, in the current period compared to the prior period, cash used decreased due to lower payments for distributions to Pre-IPO Members of $0.2 million and lower payments for taxes related to net share settlement of restricted share units of $0.3 million.
Off-Balance Sheet Arrangements
−Removed: As of September 30, 2025, our off-balance sheet arrangements consisted of guarantees of lease agreements for certain franchisees.
+Added: As of March 31, 2026, our off-balance sheet arrangements consisted of guarantees of lease agreements for certain franchisees.
Our potential obligation under these agreements is approximately $4.4 million and would only require payment upon default by the primary obligor.
−Removed: We determined the fair value of these guarantees at inception was not material, and as of September 30, 2025 a $1.2 million accrual has been recorded for our potential obligation under the guaranty arrangements.
+Added: We determined the fair value of these guarantees at inception was not material, and as of March 31, 2026 no accrual has been recorded for our potential obligation under the guaranty arrangements.
See Note 14 of Notes to Condensed Consolidated Financial Statements for more information regarding these operating leases and guarantees.
1 unchanged sentence
In addition, we issued a $0.8 million standby letter of credit in connection therewith, which represents a portion of our potential aggregate liability under the guaranty.
−Removed: The standby letter of credit is contingent upon the failure of our franchisees to perform according to the terms of underlying contracts with the third party.
+Added: The standby letter of credit is contingent upon the failure of franchisees to perform according to the terms of underlying contracts with the third party.
We deposited cash in a restricted account as collateral for the standby letter of credit.
−Removed: The estimated fair value of these guarantees at inception was not material, and as of September 30, 2025, a $0.8 million accrual has been recorded for our potential obligation under this guaranty arrangement.
+Added: The estimated fair value of these guarantees at inception was not material, and as of March 31, 2026, a $1.8 million accrual has been recorded for our potential obligation under this guaranty arrangement.
See Note 14 of Notes to Condensed Consolidated Financial Statements for more information.
2 unchanged sentences
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.