Xponential Fitness, Inc. (NYSE: XPOF)

Xponential Fitness, Inc. is a leading global franchisor of boutique health and wellness brands. The company operates a diversified platform of five brands covering Pilates, barre, stretching, yoga and functional training. Through its franchisees and master franchisees it provides workout experiences in studio locations across North America and internationally. As of December 31 2025 the company had 2,529 studios operating across its five brands in the United States and a total of 2,606 studios in the North America Region. Internationally there were 491 studios open in countries such as Australia, Japan, Singapore, Spain, United Kingdom, and Mexico.

Xponential Fitness generates revenue primarily from franchise related fees. An upfront non refundable franchise fee is paid when a license is granted. Once a studio opens the company receives recurring royalty fees based on gross sales, technology fees, merchandise sales, and marketing fund contributions. Approximately 78% of revenue in 2025 was considered recurring with royalty fees expected to grow as a share of total revenue over time. The company also earns revenue from digital platform subscriptions offered to members, and from the sale of branded merchandise and equipment through its outsourced retail merchandising partner. Additional income streams include fees for instructor and management training, fees from the sale of point of sale displays, and from other retail items to franchisees.

The company operates through the following segments.

• Club Pilates: This segment provides Reformer based Pilates workouts, including introductory, cardio, strength training, stretching, and suspension classes, supported by a 500 hour teacher training program for instructors.

• Pure Barre: This segment offers low impact full body workouts that use the ballet barre to perform isometric movements with class formats such as introductory, strength and power, balance and flexibility, classic barre, and interval training.

• StretchLab: This segment delivers one on one and group assisted stretching sessions, using stretch benches, and provides a comprehensive training program for Flexologist instructors.

• YogaSix: This segment supplies modern yoga instruction across six class formats including introductory, slow flow, stretching, hot yoga, cardio, and strength training backed by a 200 hour accredited teacher training program for Registered Yoga Trainers.

• BFT: This segment delivers community based, 50 minute, functional, high energy, strength, cardio, and conditioning classes with fourteen signature class formats and a specialized training program for BFT coaches.

Xponential Fitness holds a leading position in the boutique fitness industry as one of the largest franchisors of boutique health and wellness brands in the United States. The company benefits from a diversified portfolio that spans multiple verticals reducing reliance on any single brand and creating cross selling opportunities for franchisees. Its asset light franchise model and the Xponential Playbook provide franchisees with standardized operational support, site selection assistance, training, and digital tools that help drive studio level economics and profitability. The scale of the platform enables favorable vendor relationships, shared corporate services, and a network effect that makes the brand more attractive to prospective franchisees and consumers alike. As of December 31 2025 franchisees were contractually committed to open an additional 832 studios in the North America Region with approximately 30% of those licenses currently inactive due to development schedule delays. These factors contribute to predictable recurring revenue streams and support the company's ability to scale while maintaining low ongoing capital requirements.

The company serves individual consumers who seek boutique fitness experiences in a studio setting as well as through digital platforms. Its members span a wide range of ages, fitness levels, and demographics and are attracted to accessible pricing and a strong sense of community fostered by the studios. Franchisees are also customers of Xponential Fitness receiving ongoing support services, training, and access to the corporate platform that helps them operate and grow their studio businesses. Together these groups create a recurring base of demand that drives studio openings, membership growth, and overall system revenue.