Soho House & Co Inc. Q1 2025 Earnings: Membership Momentum and Strategic Gains Fuel Growth

Soho House & Co Inc. (NYSE: SHCO) delivered a solid first-quarter 2025 performance, with results highlighting its dual focus on membership growth and operational discipline. The company reported net profit of $8.2 million and revenue of $282.9 million, outperforming consensus estimates and signaling progress toward stabilizing its financial trajectory. Below is an in-depth analysis of the drivers, challenges, and strategic priorities shaping the luxury members-only hospitality brand’s future.

Financial Highlights: A Beat on Earnings, But Challenges Remain

The quarter’s EPS of $0.04 marked a significant improvement over the consensus estimate of -$0.12, though it still trails the $0.00 EPS reported in Q3 2024. Revenue grew to $282.9 million, driven by membership revenue (up 14% year-over-year to $112.9 million) and Soho Home’s retail sales, which contributed $57.5 million in “Other Revenues.”

However, in-house revenue (e.g., food, beverage, and accommodation) rose only 1.9%, reflecting lingering macroeconomic pressures and the impact of the Los Angeles wildfires. A $3 million insurance claim for fire-related losses remains unresolved, adding uncertainty to Q1’s results.

Strategic Initiatives: Membership Growth as the Engine of Value

Soho House’s membership-centric strategy is its most compelling growth lever:

1. Member Expansion and Retention:
2. Total members increased to 269,636, up 3.1% year-over-year, with Soho House members surging 7.1% to 212,001.

3. The waitlist hit 102,000, a 15% year-over-year jump, underscoring strong demand. New rules replacing one-time fees with House Introduction Credits incentivize recurring In-House spending, boosting deferred revenue.

4. Geographic Expansion:

5. Soho House Portland added 1,000+ members in its first months, leveraging local White City House members.
6. The planned Soho Farmhouse Ibiza and first South American house in Sao Paulo (expected to open in 2025) will tap high-growth markets.

1. Enhanced Member Experience:
2. Personalization: New app features boosted event bookings by 6%.
3. Amenities: Renovations at London’s White City House and upcoming gyms in New York and Los Angeles improve retention.

Operational Excellence: Margin Improvements and Cost Control

Soho House’s focus on profitability is yielding results:

• Adjusted EBITDA rose to $47.0 million, a 137% year-over-year increase, driven by $22.9 million in pandemic-related insurance proceeds and margin expansion to 17% (from 8% in Q1 2024).
• Food & Beverage margins improved, and RevPAR grew 4% year-over-year due to strategic pricing.
• Pre-opening expenses fell 65% to $2.0 million, reflecting disciplined capital allocation.

The company also introduced a new HR system in the UK, aiming to reduce labor costs and streamline operations globally.

Challenges and Risks

Despite the progress, risks persist:

1. One-Time Gains Dependency: The pandemic insurance proceeds and wildfire claim resolution are non-recurring, raising questions about organic growth.
2. Membership Fragmentation: Other Members (Soho Friends/Works) declined 9.3% to 57,635, signaling potential weaknesses in non-core segments.
3. Strategic Transaction Uncertainty: A $9.00 per share acquisition offer remains under review, with no guarantees of success.

Future Outlook: Growth vs. Structural Hurdles

CEO Andrew Carnie emphasized confidence in Soho House’s long-term strategy, citing:

• 2025 Guidance: Raised Adjusted EBITDA guidance to $157–$165 million (up from $155–$165 million).
• Cash Position: $155 million in liquidity supports new openings and risk mitigation.
• Member-Driven Resilience: Active app users rose 5.3% to 215,283, indicating strong digital engagement.

However, the company must address geographic concentration risks (45% of Houses in the UK/US) and declines in discretionary spending on non-essential amenities.

Conclusion: A Story of Progress, but Not Without Hurdles

Soho House & Co’s Q1 2025 results reflect meaningful strides in membership growth and operational efficiency, with Adjusted EBITDA nearly tripling year-over-year. The shift to a subscription-based revenue model (via membership fees and deferred credits) positions the company to capitalize on recurring income streams.

However, the reliance on one-time insurance gains and the unresolved acquisition offer introduce volatility. Investors should weigh the 17% EBITDA margin expansion and strategic expansion pipeline against execution risks in high-cost markets.

Final Take: For long-term investors seeking exposure to the luxury members-only space, Soho House’s membership flywheel and premium brand equity remain compelling. Yet, short-term volatility and macroeconomic headwinds demand caution. The stock’s performance hinges on whether organic margin improvements can outpace reliance on non-recurring gains—a challenge, but one the company appears poised to address.

Data as of Q1 2025. All figures in USD.