A Good Day to be Xponential

Fitness Industry

Xponential just announced its Q4 financial results, and they beat out analyst expectations, with system-wide sales passing $1B for the first time.  The stock popped up 14%, and is currently trading around an all time high, up 140% from its IPO price in the Summer of 2021.

I guessed a few weeks back that Xponential was going to have some record financial results for 2 reasons:

  1. The CEO Anthony Geisler gave upbeat guidance in January about the company’s prospects and performance.
  2. The original investor and BOD chairman Mark Grabowski sold almost his entire stake and the CEO also sold a lot of shares in February - it’s hard to do that and not get sued unless the near-term future is rosy.
Congrats to Xponential on the continued growth!

What caught my eye from a Tribe perspective were some of the comments made by Sarah Luna, President at Xponential:

  • “The success of our omnichannel fitness experience, which is helping drive more customers into our studios, is apparent in our growing visits,”
  • “In 2022, 17% of XPASS North America members had never interacted with Xponential brands prior to purchasing an XPASS membership. In addition, 64% of XPASS North American members were inactive before purchasing an XPASS membership.”
  • “We are also connecting with our members virtually through XPLUS, our fitness on demand digital offering. 2022 marked the first full year of XPLUS and at the end of the year we had over 117,000 subscribers importantly of these subscribers many also hold in-studio memberships. XPLUS drives retention and engagement by providing subscribers the ability to work out anytime, anywhere.”
  • “With 72% of fitness club owners, according to ClubIntel, offering on-demand and live-stream workouts, we understand the need to continue to invest in our XPLUS platform. We are constantly developing new content for XPLUS platform and are offering on Lululemon Studio.”
  • “2022 was an exciting year for Xponential’s omni channel fitness offering and 2023 is proving to be just as energizing.”
  • “We will be developing a new app and gamification platform that will drive even greater awareness in 2023.”

It’s great to see proof that digital offerings can drive brand awareness and in-studio memberships, as well as being revenue opportunities in their own right.

One interesting partnership that Sarah mentioned in the earnings calls is with Aktiv, which involves building out Xponential ‘pods’ into other gym and fitness spaces.  These pods have equipment and on-demand video content from each of the Xponential brands (pilates, boxing, etc), competing with Les Mills and FitnessOnDemand in-studio offerings.

On gamification, Xponential has been quietly adding metrics and leaderboards into its at-home offering for a while, and at the Connected Health & Fitness Summit 2023 last month in Los Angeles, Xponential mentioned that they are working on a connected boxing solution for Rumble.

Studies have for years shown that gamification can significantly increase member levels of effort in workouts, such as this one in 2017, but over the next few years we expect to see more gamification enter both the in-studio and at-home experiences for consumer fitness.

If you’re a gym or studio owner thinking about your digital or omnichannel strategy, at Tribe we’d love to show you how our software platform could help you get going quickly and at low cost with a much more compelling experience for your members.  Hit us up today!

Justin Marston

Thinker, writer, innovator, runner, Star Wars fan

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