Xponential Fitness Inc-A (NYSE:XPOF) Surpasses Q3 Earnings Estimates, Shares Jump 13.5%

Xponential Fitness Inc-A (NYSE:XPOF) reported third-quarter financial results that surpassed analyst expectations, driving a significant positive market response despite a year-over-year revenue decline. The boutique fitness franchisor's performance demonstrated resilience in key operational metrics while navigating a transitional period.

Earnings Performance vs. Estimates

The company delivered stronger-than-anticipated results for the quarter ended September 30, 2025, particularly in profitability measures. Xponential posted revenue of $78.8 million, exceeding analyst estimates of $76.8 million despite representing a 2% decrease from the prior year period. The earnings performance proved notably robust, with non-GAAP earnings per share of $0.34 substantially outperforming the $0.125 consensus estimate.

Key quarterly comparisons include:

• Revenue: $78.8 million actual vs. $76.8 million estimated
• Non-GAAP EPS: $0.34 actual vs. $0.125 estimated
• Year-over-year revenue change: -2%
• Adjusted EBITDA: $33.5 million, up 9% from $30.8 million

Market Reaction and Price Movement

Investors responded enthusiastically to the earnings beat, with shares jumping approximately 13.5% in after-market trading following the announcement. This positive momentum contrasts sharply with the stock's recent performance, which had seen declines of roughly 10% over the past two weeks and 17% over the past month. The strong reaction suggests investors were particularly encouraged by the company's ability to exceed profitability expectations during a period of strategic transition.

Operational Highlights and Financial Health

The earnings release revealed several important operational developments under new CEO Mike Nuzzo, who marked his first 90 days leading the company. While total revenue declined slightly, this was primarily driven by lower equipment revenue resulting from reduced installations and decreased merchandise revenue, partially offset by higher franchise revenue and franchise marketing fund revenue.

Notable operational achievements include:

• North America system-wide sales increased 10% to $432.2 million
• Average unit volume improved to $668,000 from $654,000
• Net loss narrowed significantly to $6.7 million from $18.1 million in the prior year period
• Cash position strengthened to $41.5 million from $32.7 million at year-end 2024

2025 Outlook and Analyst Expectations

Xponential reiterated most of its full-year guidance while updating system-wide sales projections. The company maintained its expectations for net new studio openings, revenue, and adjusted EBITDA, projecting revenue between $300 million and $310 million, which aligns closely with analyst estimates of $311.1 million for full-year 2025.

The company's guidance reflects:

• Revenue range of $300.0-$310.0 million (approximately -5% at midpoint)
• Adjusted EBITDA range of $106.0-$111.0 million (approximately -7% at midpoint)
• North America system-wide sales range of $1.730-$1.750 billion (+12% at midpoint)
• Net new studio openings of 170-190 (-37% at midpoint)

Strategic Positioning and Future Prospects

CEO Mike Nuzzo expressed confidence in the company's underlying strengths, noting "significant potential for improvement across our operations" during his initial assessment period. The improved profitability metrics and narrowed losses suggest the company is making progress in operational efficiency despite the challenging revenue environment.

The market's strong positive reaction to these results indicates investor confidence in the company's strategic direction and its ability to maintain profitability while navigating current headwinds. The beat on both top and bottom-line estimates, particularly the substantial earnings per share outperformance, appears to have outweighed concerns about the year-over-year revenue decline.

For more detailed earnings analysis and future estimates, visit Xponential Fitness's earnings page.

Disclaimer: This article presents financial information for informational purposes only and does not constitute investment advice or recommendation regarding any specific security. Investors should conduct their own research and consult with financial advisors before making investment decisions.