Q2 FY2026
Filed Aug 6, 2026Revenue of $66.0 million decreased 13%; North America system-wide sales of $437.3 million were flat year-over-year; adjusted EBITDA was $21.9 million.
Revenue declined 13%, North America same store sales decreased 6.8%, the Company reported a net loss of $4.8 million, adjusted EBITDA declined 22%, and full-year revenue and adjusted EBITDA outlook were revised lower.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $66.0 million | – | decreased 13% |
| North America system-wide salesother | $437.3 million | – | flat |
| North America same store salesother | decreased 6.8% | – | – |
| North America quarterly run-rate average unit volume (AUV)other | $659,000 | – | – |
| Gross new studios openedother | 67 | – | – |
| Franchise licenses soldother | 53 | – | – |
| Selling, general and administrative expensesGAAP | $32.0 million | – | up 33% |
| Marketing fund expensesGAAP | $11.4 million | – | up 29% |
| Net lossGAAP | $4.8 million | – | – |
| Loss per basic shareGAAP | $0.10 per basic share | – | – |
| Share countGAAP | 42.0 million shares of Class A Common Stock | – | – |
| Adjusted net incomenon-GAAP | $0.8 million | – | – |
| Adjusted net income per basic sharenon-GAAP | $0.02 per basic share | – | – |
| Adjusted EBITDAnon-GAAP | $21.9 million | – | down 22% |
| Net cash used in operating activitiesGAAP | $25.7 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Franchise revenueThe decline was driven primarily by a decrease in same store sales, coupled with brand divestitures completed in 2025. | $44.0 million | – | down 3% year-over-year |
| Equipment revenueThe decrease was primarily the result of fewer global equipment installations, driven by fewer studio openings and lower franchise license sales. | $7.1 million | – | down 26% year-over-year |
| Merchandise revenueThe decrease was primarily driven by the change in the business model due to the Company’s transition from an in-house wholesale model to an outsourced retail model, as well as challenges related to the transition. | $0.5 million | – | down 90% year-over-year |
| Franchise marketing fund revenueThe decrease was primarily due to lower system-wide sales stemming from divested brands. | $8.7 million | – | down 8% year-over-year |
| Other service revenuePrimarily driven by lower vendor commission and brand access fee revenues. | $5.6 million | – | down 10% year-over-year |
full year 2026 outlook
- Revenue$250.0 million to $260.0 million
- Tax ratemid-to-high single digits
- NoteNet new studio openings of approximately 150, or a decrease of 25%.
- NoteNorth America system-wide sales in the range of $1.70 billion to $1.75 billion, or a decrease of 1% at the midpoint.
- NoteAdjusted EBITDA in the range of $91.0 million to $97.0 million, representing a decrease of 16% at the midpoint.
- NoteShare count of 41.0 million shares of Class A Common Stock for the GAAP EPS and Adjusted EPS calculations.
What drove it
- Total revenue declined primarily because of fewer equipment installations and lower merchandise revenue following the transition to the new outsourced logistics arrangement.
- Franchise revenue declined primarily due to lower same store sales and brand divestitures completed in 2025.
- Marketing fund expenses increased because the Company front-loaded more investment in the second quarter of 2026 compared with the second quarter of 2025.
- Selling, general and administrative expenses increased primarily due to an increase in legal expenses.
- The Company cited continued studio growth domestically and internationally, enhanced digital capabilities, and elevated franchisee studio support as long-term priorities.
Concerns
- North America same store sales decreased 6.8%, compared to growth of 2.4%.
- North America quarterly run-rate average unit volume was $659,000, compared to $686,000.
- Merchandise revenue was $0.5 million, down 90% year-over-year, amid the outsourced retail-model transition and related challenges.
- Net cash used in operating activities was $25.7 million while the Company reported approximately $25.0 million of cash, cash equivalents and restricted cash and $522.4 million in total long-term debt.
- The Company revised its full-year 2026 outlook for net new studio openings, North America system-wide sales, revenue, and adjusted EBITDA.
What to watch
- North America same store sales and North America quarterly run-rate average unit volume.
- The pace of net new studio openings relative to approximately 150 for full year 2026.
- Equipment installations and franchise license sales.
- Execution of the outsourced retail model and merchandise revenue.
- Legal expenses, marketing fund spending, and net cash used in operating activities.
- Delivery against full-year 2026 revenue of $250.0 million to $260.0 million and adjusted EBITDA of $91.0 million to $97.0 million.
Balance sheet and cash flow
- As of June 30, 2026, the Company had approximately $25.0 million of cash, cash equivalents and restricted cash.
- As of June 30, 2026, the Company had $522.4 million in total long-term debt.
- Net cash used in operating activities was $25.7 million for the quarter ended June 30, 2026.
Analysis
Xponential reported a weaker second quarter ended June 30, 2026. Revenue of $66.0 million decreased 13%, while North America system-wide sales of $437.3 million were flat. North America same store sales decreased 6.8%, compared to growth of 2.4%, and North America quarterly run-rate average unit volume was $659,000, compared to $686,000. The Company opened 67 gross new studios and sold 53 franchise licenses in Q2 2026.
Revenue pressure was broad across reported revenue categories. Franchise revenue of $44.0 million was down 3% year-over-year, reflecting lower same store sales and brand divestitures completed in 2025. Equipment revenue of $7.1 million declined 26% year-over-year due to fewer global equipment installations, fewer studio openings, and lower franchise license sales. Merchandise revenue of $0.5 million declined 90% year-over-year as the Company transitioned from an in-house wholesale model to an outsourced retail model and encountered transition challenges.
Profitability also deteriorated. Selling, general and administrative expenses were $32.0 million, up 33% year-over-year, primarily due to legal expenses, while marketing fund expenses were $11.4 million, up 29% year-over-year because spending was front-loaded into the second quarter. The Company reported a net loss of $4.8 million, or a loss of $0.10 per basic share, compared to net income of $1.3 million. Adjusted net income was $0.8 million, compared to $14.5 million, and adjusted EBITDA was $21.9 million, down 22% from $28.1 million.
Liquidity and cash generation warrant attention. The Company had approximately $25.0 million of cash, cash equivalents and restricted cash and $522.4 million in total long-term debt as of June 30, 2026. Net cash used in operating activities was $25.7 million for the quarter ended June 30, 2026. No capital-return activity was reported in the provided release.
The Company revised its full-year 2026 outlook. It now expects net new studio openings of approximately 150, North America system-wide sales of $1.70 billion to $1.75 billion, revenue of $250.0 million to $260.0 million, and adjusted EBITDA of $91.0 million to $97.0 million. The guide places emphasis on stabilization in same store sales, unit volumes, equipment installations, franchise-license sales, and execution of the outsourced retail model, alongside management’s stated priorities of studio growth, digital capabilities, and franchisee support.
Management, verbatim
While our second quarter results were below expectations, we continued to make progress against the priorities we believe are most important to strengthening Xponential for the long term, including continued studio growth, both domestically and internationally, enhanced digital capabilities, and elevated franchisee studio support.
Mike Nuzzo, Chief Executive Officer of Xponential Fitness
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income or loss
- Diluted GAAP EPS
- Diluted non-GAAP EPS
- Free cash flow
- Capital returns, including share repurchases and dividends
- Prior-quarter comparisons for reported metrics
- Prior-year dollar amounts for total revenue and revenue categories
- Formal previous-outlook document for vs_prior_guidance comparison
- Quantitative reconciliation of full-year 2026 adjusted EBITDA to the most directly comparable GAAP financial measure
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.