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increase in revenue: Fourth-quarter revenue increased 27% to $90.2 million, and full-year revenue increased 30% to $318.7 million.
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net loss: The company’s fourth-quarter net loss widened to $9.1 million from $400,000 a year earlier, bringing its full-year net loss to a total of $1.7 million, compared to 2022 net income of $2.9 million.
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Adjusted EBITDA: Fourth quarter adjusted EBITDA increased 38% to $30.7 million, and full year adjusted EBITDA increased 42% to $105.3 million.
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Same store sales: North American same-store sales increased 14% in the fourth quarter and 16% for the full year.
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Liquidity: As of December 31, 2023, XPOF had cash and equivalents of $37.1 million and long-term debt of $328.5 million.
Xponential Fitness Inc (NYSE:XPOF), the world’s largest franchisor of boutique fitness brands, released its 8-K report on February 29, 2024, for the fourth quarter and full year ended December 31, 2023. detailed financial results. The company, known for its diverse portfolio of fitness brands, has shown significant sales growth, with sales increasing quarterly and annually. However, this growth was offset by higher net losses, primarily due to higher restructuring costs and impairment of goodwill and other assets.
Financial performance and challenges
For the fourth quarter of 2023, XPOF reported a 27% year-over-year increase in revenue to $90.2 million, driven by a 14% increase in same-store sales in North America. Nevertheless, the company faced a net loss of $9.1 million, a significant increase from his $400,000 loss the previous year. This loss was due to an $8.8 million increase in restructuring costs related to our company-owned transition studio, a $6.6 million decrease in overall profitability, and a $4.9 million increase in impairment charges. However, these were partially offset by an $8.8 million decrease in non-cash contingent consideration and a $2.8 million decrease in non-cash stock-based compensation expense.
For the full year, XPOF’s revenue increased 30% to $318.7 million, with a corresponding 16% increase in North American same-store sales. Net loss for the year was $1.7 million and net income for 2022 was $2.9 million. The annual loss was affected by similar factors to the quarterly loss, including an increase in restructuring charges of $15.5 million and an increase in impairment charges of $13 million. This was offset by a $20.4 million decrease in non-cash contingent consideration and a $11.0 million decrease in non-cash stock-based compensation expense.
Adjusted EBITDA and net income
Adjusted EBITDA increased 38% to $30.7 million in the fourth quarter and increased 42% to $105.3 million for the full year. Adjusted net income for the fourth quarter was $4.2 million, or $0.05 per basic share, compared to $15.7 million, or $0.17 per basic share, for the full year. These numbers exclude various non-cash and one-time items and provide perspective on the company’s operating results.
Liquidity and capital resources
At the end of 2023, XPOF had cash and equivalents of $37.1 million and total long-term debt of $328.5 million. Net cash provided by operating activities for the year was $35.4 million.
Outlook for 2024
XPOF expects further momentum from 2023 and is optimistic about 2024. However, the company has not made a quantitative adjustment to full year 2024 Adjusted EBITDA due to the unpredictability of certain items.
conclusion
XPOF has shown solid revenue growth and same-store sales performance, but profitability is challenged by increased restructuring costs and asset impairments. The company is focused on streamlining its operations and leveraging its brand portfolio, which is expected to expand future margins and drive operating cash flow. Investors should consider both the growth potential and the operational challenges facing his XPOF when evaluating XPOF’s financial health and prospects.
Please refer to our original 8-K filings for more detailed financial statements and a complete reconciliation of GAAP and non-GAAP measures.
For more information, check out Xponential Fitness Inc’s full 8-K earnings release here.
This article first appeared on GuruFocus.