Xponential Fitness Reports Weak Q4 & FY25 Results, Issues Bleak 2026 Outlook, Settles $40M in Legal Claims
Summary
Xponential Fitness reported significant declines in Q4 and full-year 2025 financial performance, including negative same-store sales and adjusted EBITDA, and provided a weak 2026 outlook with projected revenue and profit decreases, alongside finalizing nearly $40 million in legal and regulatory settlements.
Key Events
-
Weak Q4 and Full Year 2025 Financial Results
For Q4 2025, North America same store sales decreased by 4% (compared to 7% growth in Q4 2024), and Adjusted EBITDA declined 26% to $22.9 million. For the full year 2025, Adjusted EBITDA decreased 4% to $111.8 million, and the company swung to an adjusted net loss of $18.4 million from an adjusted net income of $1.8 million in 2024.
-
Deteriorating 2026 Outlook
The company initiated a full year 2026 outlook projecting a 16% decrease in revenue (midpoint) to $260.0-$270.0 million, a 6% decrease in Adjusted EBITDA (midpoint) to $100.0-$110.0 million, and a 20% decrease in net new studio openings (midpoint) to 150-170. North America system-wide sales are projected to increase by only 1% at the midpoint.
-
Significant Legal and Regulatory Settlements
Xponential Fitness finalized a $17.0 million settlement with the FTC (payable over 12 months) and a $22.75 million settlement with over 500 current and former franchisees (payable over 35 months). These combined payments of $39.75 million aim to substantially reduce regulatory and legal uncertainty.
Analysis
Xponential Fitness faces substantial headwinds as evidenced by its latest financial results and forward guidance. The significant deceleration in same-store sales, coupled with a sharp decline in adjusted EBITDA and a swing to a considerable adjusted net loss, indicates deteriorating operational performance. The 2026 outlook further compounds these concerns, projecting continued revenue and profit contraction, and a slowdown in studio expansion. While the $39.75 million in legal and regulatory settlements resolve significant uncertainties, the material financial cost represents a substantial burden for the company. Investors should closely monitor the company's ability to reverse these negative trends and manage its debt load amidst a challenging operating environment.
At the time of this filing, XPOF was trading at $6.50 on NYSE in the Trade & Services sector, with a market capitalization of approximately $392.5M. The 52-week trading range was $5.38 to $13.99. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.