Xponential Fitness 2025 Q2 Earnings Remarkable Turnaround as Net Income Surges 109.4%

Xponential Fitness (XPOF) reported its fiscal 2025 Q2 earnings on Aug 08th, 2025. The company narrowed its losses to $0.01 per share in 2025 Q2, marking a significant improvement from a $0.30 loss in 2024 Q2. The company recorded a net income of $1.35 million in 2025 Q2, a 109.4% positive swing from a net loss of $14.34 million in the same period last year. The company revised its full-year guidance, reflecting proactive investments and strategic divestitures aimed at strengthening 2026 performance.

Revenue
Xponential Fitness reported total revenue of $76.21 million in Q2 2025, representing a 0.9% decline from $76.90 million in the prior year period. The decline was primarily attributed to a shift in business mix and ongoing economic pressures. Franchise revenue remained the largest segment at $45.35 million, driven by stable unit-level performance and ongoing brand strength. Equipment revenue, at $9.51 million, saw moderate demand, while merchandise revenue totaled $5.61 million. The franchise marketing fund contributed $9.46 million, and other service revenue amounted to $6.27 million. Despite the slight revenue contraction, the company maintained a diverse revenue stream, indicating resilience across its business units.

Earnings/Net Income
Xponential Fitness achieved a remarkable turnaround in profitability in Q2 2025, reporting a net income of $1.35 million. This marked a 109.4% swing from a net loss of $14.34 million in Q2 2024. The improvement was largely driven by cost optimization initiatives and the successful completion of strategic divestitures, including the sale of CycleBar and Rumble. The company also benefited from a 96.7% reduction in per-share losses, narrowing from $0.30 to $0.01. These results underscore the company’s progress in addressing operational inefficiencies and aligning its cost structure with current market conditions. The net income growth demonstrates a strong operational turnaround.

Price Action
The stock price of Xponential Fitness experienced a sharp decline in the most recent trading session, with a 17.65% drop in a single day. Over the past week, the stock has fallen by 31.17%, and it has lost 28.82% in value month-to-date. These steep declines reflect investor concerns about the company’s long-term growth trajectory and the broader market's cautious stance on fitness sector exposure.

Post-Earnings Price Action Review
Historically, the strategy of buying Xponential Fitness shares on the date of its quarterly earnings release and holding for 30 days has proven ineffective. Backtested data from the past three years revealed an average return of -14.96%, with no significant performance differences observed between earnings beats and misses. This consistent underperformance suggests that investors may not have placed much faith in the company’s quarterly results as a catalyst for sustained stock appreciation, indicating that earnings announcements alone may not be sufficient to drive positive investor sentiment in the near term.

CEO Commentary
Former CEO Mark King emphasized meaningful progress on key initiatives, including expanding the field operations team and executing a new retail partnership. He acknowledged the revised guidance, which reflects the impact of these strategic moves and proactive investments intended to strengthen 2026 performance. The tone conveyed a cautious yet forward-looking approach, emphasizing strategic repositioning and operational improvements to drive long-term growth. This strategic outlook aligns with the company’s broader focus on operational efficiency and market adaptability.

Guidance
Xponential Fitness updated its full-year 2025 guidance, forecasting net new studio openings of 170–190, North America system-wide sales of $1.78B–$1.8B, and total revenue of $300M–$310M. The company also projects Adjusted EBITDA of $106M–$111M. Key assumptions include a mid-to-high-single-digit tax rate, a share count of 34.8M, and $1.9M in quarterly preferred dividends. The guidance reflects the company’s strategic focus on unit expansion and cost optimization while navigating a challenging economic environment.

Additional News
Within the past three weeks of Aug 8, 2025, Xponential Fitness did not announce any material M&A activities, C-level changes, or dividend-related news. However, the company’s recent strategic divestitures, including the sale of CycleBar and Rumble, indicate a broader focus on portfolio optimization and core business strengthening. The company’s revised guidance and ongoing cost-cutting initiatives underscore its commitment to long-term value creation and operational efficiency. These strategic moves position the company to focus on high-growth opportunities while managing capital discipline.