Xponential Fitness Reports 21% Revenue Decline in Q1 2026

Xponential Fitness, Inc. reported a significant decline in financial performance for the first quarter of 2026, with total revenue decreasing by 21% to $60.7 million compared to $76.9 million in the same period of 2025. The decline was primarily driven by a sharp drop in equipment revenue, which fell 61% to $4.4 million, and merchandise revenue, which plummeted 90% to $0.7 million. Franchise revenue also saw a decrease of 6% to $41.2 million, attributed to lower same-store sales and the impact of brand divestitures. Despite these challenges, the company managed to achieve an operating income of $13.0 million, up from $9.7 million in the prior year, largely due to a reduction in operating costs, which fell by 29% to $47.7 million.

In terms of strategic developments, Xponential Fitness has undergone significant organizational changes, including the divestiture of its Lindora, CycleBar, and Rumble brands in 2025. These divestitures were aimed at refocusing resources on core brands and enhancing operational efficiency. The company also entered into a Retail Supply Agreement with Fit Commerce, effective December 1, 2025, to outsource its retail merchandising, which is expected to streamline operations and improve profitability.

Operationally, Xponential Fitness reported a total of 3,137 studios operating globally as of March 31, 2026, an increase from 2,971 studios a year earlier. The company opened 66 new studios during the quarter, although this was a decrease from 106 openings in the same period of 2025. The number of franchise licenses sold globally reached 5,399, reflecting a commitment to expand its franchise network. However, same-store sales growth was negative at -6%, compared to a positive growth of 6% in the previous year, indicating challenges in maintaining revenue levels at existing locations.

The company’s cash position has also been impacted, with cash and cash equivalents decreasing to $21.5 million from $45.9 million at the end of 2025. Cash used in operating activities was $21.7 million, a stark contrast to the $5.8 million generated in the same quarter of the previous year. This shift was influenced by unfavorable changes in working capital, particularly in accounts payable and accrued expenses. Looking ahead, Xponential Fitness anticipates continued challenges in the market, particularly in light of ongoing restructuring efforts and the need to stabilize its financial position. The company remains focused on executing its strategic initiatives to enhance operational efficiency and drive growth in its core brands.