Planet Fitness, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024 and the related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year ended December 31, 2023 and the related notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024. Unless the context requires otherwise, references in this report to the “Company,” “we,” “us” and “our” refer to Planet Fitness, Inc. and its consolidated subsidiaries.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2025 and the related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year ended December 31, 2024 and the related notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2025. Unless the context requires otherwise, references in this report to the “Company,” “we,” “us” and “our” refer to Planet Fitness, Inc. and its consolidated subsidiaries.

Previous wording

We are one of the largest and fastest-growing franchisors and operators of fitness clubs in the world by number of members and locations, with a highly recognized national brand. Our mission is to enhance people’s lives and democratize fitness by providing a high-quality fitness experience in a welcoming, non-intimidating environment, which we call the Judgement Free Zone, where anyone—and we mean anyone—can feel they belong. Our bright, clean clubs are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and weight-training equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups through our PE@PF program. We offer this differentiated fitness experience as low as $15 per month to new members for our standard Classic Card membership. This attractive value proposition is designed to appeal to a broad population, including occasional gym users over age 14 who are not gym members, particularly those who find the traditional fitness club setting intimidating and expensive. We and our franchisees fiercely protect Planet Fitness’ community atmosphere—a place where you do not need to be fit before joining and where progress toward achieving your fitness goals (big or small) is supported and applauded by our staff and fellow members.

Current wording

We are one of the largest and fastest-growing franchisors and operators of fitness centers in the world by number of members and locations, with a highly recognized national brand. Our mission is to enhance people’s lives by providing a high-quality fitness experience in a welcoming, non-intimidating environment, which we call the Judgement Free Zone. Our bright, clean clubs are typically 20,000 square feet, with a large selection of high-quality, purple and yellow Planet Fitness-branded cardio, circuit- and strength equipment and friendly staff trainers who offer unlimited free fitness instruction to all our members in small groups. We offer this differentiated fitness experience starting at only $15 per month to new members for our standard Classic Card membership. This attractive value proposition is designed to appeal to a broad population, inclusive of all fitness levels from beginners to athletes. We and our franchisees fiercely protect Planet Fitness’ community atmosphere—a place where you do not need to be fit before joining and where progress toward achieving your fitness goals (big or small) is supported and applauded by our staff and fellow members.

Previous wording

As of September 30, 2024, we had approximately 19.6 million members and 2,637 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain. Of our 2,637 clubs, 2,369 are franchised and 268 are corporate-owned.

Current wording

As of March 31, 2025, we had approximately 20.6 million members and 2,741 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain. Of our 2,741 clubs, 2,461 are franchised and 280 are corporate-owned.

Previous wording

As of September 30, 2024, we had contractual commitments to open approximately 1,000 new clubs.

Current wording

As of March 31, 2025, we had contractual commitments to open approximately 900 new clubs.

Previous wording

We operate and manage our business in three business segments: Franchise, Corporate-owned clubs (historically referred to as Corporate-owned stores) and Equipment. Our Franchise segment includes operations related to our franchising business in the U.S., Puerto Rico, Canada, Panama, Mexico and Australia, as well as revenues and expenses of the NAF. Our Corporate-owned clubs segment includes operations with respect to all corporate-owned clubs throughout the U.S., Canada and Spain. The Equipment segment includes the sale of equipment to franchisee-owned clubs in the U.S., Canada and Mexico. We evaluate the performance of our segments and allocate resources to them based on revenue and earnings before interest, taxes, depreciation and amortization, referred to as Segment EBITDA. Revenue and Segment EBITDA for all operating segments include only transactions with unaffiliated customers and do not include intersegment transactions. The following tables summarize the financial information for our segments:

Current wording

We operate and manage our business in three business segments: Franchise, Corporate-owned clubs and Equipment. Our Franchise segment includes operations related to our franchising business in the United States, Puerto Rico, Canada, Panama, Mexico and Australia, as well as revenues and expenses of the NAFs. Our Corporate-owned clubs segment includes operations with respect to all corporate-owned clubs throughout the U.S., Canada, and Spain. The Equipment segment includes the sale of equipment to franchisee-owned clubs in the U.S., Canada and Mexico.

Previous wording

(1) “Corporate and other” primarily includes corporate overhead costs, such as payroll and related benefit costs and professional services that are not directly attributable to any individual segment.

Current wording

(1) Corporate and other Adjusted EBITDA includes adjusted corporate overhead costs, such as payroll and related benefit costs and professional services that are not directly attributable to any individual segment and thus are unallocated.

Previous wording

(2) Total Segment EBITDA is equal to EBITDA, which is a metric that is not presented in accordance with GAAP. Refer to “—Non-GAAP Financial Measures” for a definition of EBITDA and a reconciliation to net income, the most directly comparable GAAP measure.

Current wording

(2) Segment Adjusted EBITDA plus the Adjusted EBITDA of corporate and other is equal to Adjusted EBITDA. Adjusted EBITDA is a metric that is not presented in accordance with GAAP. Refer to “—Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure.

Previous wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing include total monthly dues and annual fees billed to members (which we refer to as system-wide sales), the number of new club openings, same club sales (historically referred to as same store sales) for both corporate-owned and franchisee-owned clubs, EBITDA, Adjusted EBITDA, Segment EBITDA, Adjusted net income and Adjusted net income per share, diluted. See “—Non-GAAP financial measures” below for our definition of EBITDA, Adjusted EBITDA, Adjusted net income, and Adjusted net income per share, diluted and why we present EBITDA, Adjusted EBITDA, Adjusted net income, and Adjusted net income per share, diluted, and for a reconciliation of our EBITDA, Adjusted EBITDA, and Adjusted net income to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, and a reconciliation of Adjusted net income per share, diluted to net income per share, diluted, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Current wording

In assessing the performance of our business, we consider a variety of performance and financial measures. The key measures for determining how our business is performing include total monthly dues and annual fees from members (which we refer to as system-wide sales), the number of new club openings, same club sales for both corporate-owned and franchisee-owned clubs, Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted net income, and Adjusted net income per share, diluted. See “—Non-GAAP Financial Measures” below for more information.

Previous wording

The number of new club openings reflects clubs opened during a particular reporting period for both corporate-owned and franchisee-owned clubs. Opening new clubs is an important part of our growth strategy and we expect the majority of our future new clubs will be franchisee-owned. Before we obtain the certificate of occupancy or report any revenue for new corporate-owned clubs, we incur pre-opening costs, such as rent expense, labor expense, marketing expense and other operating expenses. Our clubs open with an initial start-up period of higher than normal marketing and operating expenses, particularly as a percentage of monthly revenue. New clubs may not be profitable and their revenue may not follow historical patterns. The following table shows the growth in our corporate-owned and franchisee-owned club base:

Current wording

The number of new club openings reflects clubs opened during a particular reporting period for both corporate-owned and franchisee-owned clubs. Opening new clubs is an important part of our growth strategy and we expect the majority of our future new clubs will be franchisee-owned. Before we obtain the certificate of occupancy or report any revenue for new corporate-owned clubs, we incur pre-opening costs, such as rent expense, labor expense and other operating expenses. Our clubs open with an initial start-up period requirement of higher than normal marketing spend and operating expenses may also be higher, particularly as a percentage of monthly revenue. New clubs may not be profitable and their revenue may not follow historical patterns. The following table shows the growth in our corporate-owned and franchisee-owned club base:

Previous wording

(1) The term “debranded” refers to a franchisee-owned club whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded clubs from continuing to operate as fitness clubs. The term “consolidated” refers to the combination of a franchisee’s club with another club located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining club.

Current wording

(1) The term “debranded” refers to a franchisee-owned club whose right to use the Planet Fitness brand and marks has been terminated in accordance with the franchise agreement. We retain the right to prevent debranded clubs from continuing to operate as fitness centers. The term “consolidated” refers to the combination of a franchisee’s club with another club located in close proximity with our prior approval. This often coincides with an enlargement, re-equipment and/or refurbishment of the remaining club.

Previous wording

•our ability and our franchisees’ ability to operate clubs effectively and efficiently to meet consumer expectations;

Current wording

•our and our franchisees’ ability to operate clubs effectively and efficiently to meet consumer expectations;

Previous wording

We present same club sales as compared to the same period in the prior year for all clubs that have been open and for which monthly membership dues have been billed for longer than 12 months, beginning with the 13 th month and thereafter, as applicable. Same club sales of our international clubs are calculated on a constant currency basis, meaning that we translate the current year’s same club sales of our international clubs at the same exchange rates used in the prior year. Since opening new clubs is a significant component of our revenue growth, same club sales is only one measure of how we evaluate our performance.

Current wording

We present same club sales as compared to the same period in the prior year for all clubs that have been open and for which monthly membership dues have been billed for longer than 12 months, beginning with the 13th month and thereafter, as applicable. Same club sales of our international clubs are calculated on a constant currency basis, meaning that we translate the current year’s same club sales of our international clubs at the same exchange rates used in the prior year. Since opening new clubs is a significant component of our revenue growth, same club sales is only one measure of how we evaluate our performance.

Previous wording

Clubs acquired from or sold to franchisees are removed from the franchisee-owned or corporate-owned same club sales base, as applicable, upon the ownership change and for the 12 months following the date of the ownership change. These clubs are included in the corporate-owned or franchisee-owned same club sales base, as applicable, following the 12 th month after the acquisition or sale. These clubs remain in the system-wide same club sales base in all periods. The following table shows our same club sales:

Current wording

Clubs acquired from or sold to franchisees are removed from the franchisee-owned or corporate-owned same club sales base, as applicable, upon the ownership change and for the 12 months following the date of the ownership change. These clubs are included in the corporate-owned or franchisee-owned same club sales base, as applicable, following the twelfth month after the acquisition or sale. These clubs remain in the system-wide same club sales base in all periods. The following table shows our same club sales:

Previous wording

We review the total amount of dues we collect from our members on a monthly basis, which allows us to assess changes in the performance of our corporate-owned and franchisee-owned clubs from period to period, any competitive pressures, local or regional membership traffic patterns and general market conditions that might impact our club performance. System-wide sales is an operating measure that includes monthly membership dues and annual fee billings by franchisees that are not revenue realized by the Company in accordance with GAAP, as well as monthly membership dues and annual fee billings by our corporate-owned clubs. While we do not record sales by franchisees as revenue, and such sales are not included in our condensed consolidated financial statements, we believe that this operating measure aids in understanding how we derive royalty revenue and is important in evaluating our performance. We bill monthly dues on or around the 17 th of every month and bill annual fees once per year to each member based upon when the member signed their membership agreement. System-wide sales were $1.2 billion and $1.1 billion during the three months ended September 30, 2024 and 2023, respectively, and $3.6 billion and $3.3 billion for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

We review the total amount of dues we bill to our members on a monthly basis, which allows us to assess changes in the performance of our corporate-owned and franchisee-owned clubs from period to period, any competitive pressures, local or regional membership traffic patterns and general market conditions that might impact our club performance. System-wide sales is an operating measure that includes monthly membership dues and annual fee billings by franchisees that are not revenue realized by the Company in accordance with GAAP, as well as monthly membership dues and annual fee billings by the Company’s corporate-owned clubs. While the Company does not record sales by franchisees as revenue, and such sales are not included in the Company’s consolidated financial statements, the Company believes that this operating measure aids in understanding how the Company derives its royalty revenue and is important in evaluating its performance. We typically bill monthly dues on or around the 17 th of every month and bill annual fees once per year to each member based upon when the member signed their membership agreement. System-wide sales were $1.3 billion and $1.2 billion during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

We refer to EBITDA and Adjusted EBITDA as we use these measures to evaluate our operating performance and we believe these measures are useful to investors in evaluating our performance. EBITDA and Adjusted EBITDA as presented in this Quarterly Report on Form 10-Q are supplemental measures of our performance that are neither required by, nor presented in accordance with GAAP. EBITDA and Adjusted EBITDA should not be considered as substitutes for GAAP metrics such as net income or any other performance measures derived in accordance with GAAP.

Current wording

We refer to Adjusted EBITDA, Adjusted net income and Adjusted net income per share, diluted as we use these measures to evaluate our operating performance and we believe these measures are useful to investors in evaluating our performance. Adjusted EBITDA, Adjusted net income and Adjusted net income per share, diluted, as presented in this Quarterly Report on Form 10-Q, are supplemental measures of our performance that are neither required by, nor presented in accordance with GAAP and should not be considered as substitutes for GAAP metrics such as net income or any other performance measures derived in accordance with GAAP. Also, in the future we may incur expenses or charges such as those added back to calculate Adjusted EBITDA, Adjusted net income and Adjusted net income per share, diluted. Our presentation of Adjusted EBITDA, Adjusted net income and Adjusted net income per share, diluted should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Previous wording

We define EBITDA as net income before interest, taxes, depreciation and amortization. We believe that EBITDA, which eliminates the impact of certain expenses that we do not believe reflect our underlying business performance, provides useful information to investors to assess the performance of our segments as well as the business as a whole. Our Board of Directors also uses EBITDA as a key metric to assess the performance of management. We define Adjusted EBITDA as EBITDA, adjusted for the impact of certain additional non-cash and other items that we do not consider in our evaluation of ongoing performance of the Company’s core operations. We believe that Adjusted EBITDA is an appropriate measure of operating performance in addition to EBITDA because it eliminates the impact of other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors.

Current wording

We define Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, as adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing performance of the Company’s core operations. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of certain expenses and other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors. Our Board of Directors also uses Adjusted EBITDA as a key metric to assess the performance of management. Our CODM also uses Segment Adjusted EBITDA, which is Adjusted EBITDA specific to each of our three reportable segments, to assess the financial performance of and allocate resources to our segments in accordance with ASC 280, Segment Reporting. Corporate overhead costs not directly attributable to any individual segment are not allocated to the three segments and are included in Corporate and Other Adjusted EBITDA within Adjusted EBITDA.

Previous wording

Adjusted net income assumes that all net income is attributable to Planet Fitness, Inc., which assumes the full exchange of all outstanding Holdings Units for shares of Class A common stock of Planet Fitness, Inc., adjusted for certain non-cash and other items that we do not believe directly reflect our core operations. Adjusted net income per share, diluted, is calculated by dividing Adjusted net income by the total weighted-average shares of Class A common stock outstanding plus any dilutive awards granted under the 2015 Omnibus Incentive Plan as calculated in accordance with GAAP and assuming the full exchange of all outstanding Holdings Units and corresponding Class B common stock as of the beginning of each period presented. Adjusted net income and Adjusted net income per share, diluted, are supplemental measures of operating performance that do not represent, and should not be considered, alternatives to net income and earnings per share, as calculated in accordance with GAAP. We believe Adjusted net income and Adjusted net income per share, diluted, supplement GAAP measures and enable us to more effectively evaluate our performance period-over-period. A reconciliation of net income, the most directly comparable GAAP measure, to Adjusted net income, and the computation of Adjusted net income per share, diluted, is set forth below.

Current wording

Adjusted net income assumes that all net income is attributable to Planet Fitness, Inc., which assumes the full exchange of all outstanding Holdings Units for shares of Class A common stock of Planet Fitness, Inc., adjusted for certain non-cash and other items that we do not believe directly reflect our core operations. Adjusted net income per share, diluted, is calculated by dividing Adjusted net income by the total weighted-average shares of Class A common stock outstanding plus any dilutive options and restricted stock units as calculated in accordance with GAAP and assuming the full exchange of all outstanding Holdings Units and corresponding Class B common stock as of the beginning of each period presented. We believe Adjusted net income and Adjusted net income per share, diluted, supplement GAAP measures and enable us to more effectively evaluate our performance period-over-period.

Previous wording

(5) Represents severance related expenses recorded in connection with a reduction in force during the nine months ended September 30, 2024 and the elimination of the President and Chief Operating Officer position during the nine months ended September 30, 2023.

Current wording

(1) Represents severance related expenses recorded in connection with a reduction in force during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

(10) Represents a loss (gain) related to the adjustment of our tax benefit arrangements primarily due to changes in our deferred state tax rate.

Current wording

(4) Represents gains related to the adjustment of our tax benefit arrangements primarily due to changes in our deferred state tax rate.

Previous wording

(11) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our condensed consolidated statements of operations.

Current wording

(5) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations.

Previous wording

(5) Represents severance related expenses recorded in connection with a reduction in force during the nine months ended September 30, 2024 and the elimination of the President and Chief Operating Officer position during the nine months ended September 30, 2023.

Current wording

(1) Represents severance related expenses recorded in connection with a reduction in force during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

(10) Represents a loss (gain) related to the adjustment of our tax benefit arrangements primarily due to changes in our deferred state tax rate.

Current wording

(4) Represents gains related to the adjustment of our tax benefit arrangements primarily due to changes in our deferred state tax rate.

Previous wording

(11) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our condensed consolidated statements of operations.

Current wording

(5) Represents the Company’s pro-rata portion of the basis difference related to intangible asset amortization expense in its equity method investees, which is included within losses from equity-method investments, net of tax on our consolidated statements of operations.

Previous wording

(14)Represents the amount of non-cash amortization expense recorded in each period, in accordance with GAAP, which includes $3.1 million for both the three months ended September 30, 2024 and 2023 and $9.3 million for both the nine months ended September 30, 2024 and 2023 of amortization of intangible assets recorded in connection with the 2012 Acquisition, other than favorable leases. This adjustment also includes $9.7 million and $9.9 million for the three months ended September 30, 2024 and 2023, respectively, and $29.0 million and $29.2 million for the nine months ended September 30, 2024 and 2023, respectively, of amortization of intangible assets created in connection with historical acquisitions of franchisee-owned clubs.

Current wording

(7)Includes $3.1 million of amortization of intangible assets recorded in connection with the 2012 Acquisition, other than favorable leases, for the three months ended March 31, 2024, and $9.2 million and $9.7 million of amortization of intangible assets created in connection with historical acquisitions of franchisee-owned clubs for the three months ended March 31, 2025 and 2024, respectively. The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with GAAP, in each period.

Previous wording

(15)Represents corporate income taxes at an assumed effective tax rate of 25.8% for both the three and nine months ended September 30, 2024 and 25.9% for both the three and nine months ended September 30, 2023 applied to adjusted income before income taxes.

Current wording

(8)Represents corporate income taxes at an assumed effective tax rate of 25.9% and 25.8% for the three months ended March 31, 2025 and 2024, respectively, applied to adjusted income before income taxes.

Previous wording

(16)Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc.

Current wording

(9)Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc.

Previous wording

(4)Represents corporate income taxes at an assumed effective tax rate of 25.8% for both the three and nine months ended September 30, 2024 and 25.9% for both the three and nine months ended September 30, 2023 applied to adjusted income before income taxes.

Current wording

(4)Represents corporate income taxes at an assumed effective tax rate of 25.9% and 25.8% for the three months ended March 31, 2025 and 2024, respectively, applied to adjusted income before income taxes.

Previous wording

Total revenue was $292.2 million for the three months ended September 30, 2024, compared to $277.6 million for three months ended September 30, 2023, an increase of $14.7 million, or 5.3%.

Current wording

Total revenue was $276.7 million for the three months ended March 31, 2025, compared to $248.0 million for three months ended March 31, 2024, an increase of $28.6 million, or 11.5%.

Previous wording

Franchise segment revenue was $102.4 million for the three months ended September 30, 2024, compared to $98.2 million for three months ended September 30, 2023, an increase of $4.3 million, or 4.3%.

Current wording

Franchise segment revenue was $115.2 million for the three months ended March 31, 2025, compared to $104.0 million for three months ended March 31, 2024, an increase of $11.2 million, or 10.7%.

Previous wording

Franchise revenue was $82.9 million for the three months ended September 30, 2024, compared to $80.6 million for the three months ended September 30, 2023, an increase of $2.3 million, or 2.8%. Included in franchise revenue is royalty revenue of $69.9 million, franchise and other fees of $7.9 million, and placement revenue of $4.5 million for the three months ended September 30, 2024, respectively, compared to royalty revenue of $64.0 million, franchise and other fees of $9.4 million, and placement revenue of $5.9 million for the three months ended September 30, 2023, respectively. Of the $6.0 million increase in royalty revenue, $3.2 million was attributable to a franchise same club sales increase of 4.5%, $1.6 million was attributable to new clubs opened since July 1, 2023 and $1.2 million was from higher royalties on annual fees. Partially offsetting the increase in franchise revenue was a $1.5 million decrease in franchise and other fees, a $1.4 million decrease in placement revenue primarily driven by lower equipment placements, and a $0.9 million decrease in revenue associated with the sale of HVAC units to franchisees.

Current wording

Franchise revenue was $93.2 million for the three months ended March 31, 2025, compared to $84.2 million for the three months ended March 31, 2024, an increase of $9.0 million, or 10.7%. Included in franchise revenue is royalty revenue of $78.3 million, franchise and other fees of $12.5 million, and placement revenue of $2.3 million for the three months ended March 31, 2025, compared to royalty revenue of $72.3 million, franchise and other fees of $9.5 million, and placement revenue of $1.8 million for the three months ended March 31, 2024. Of the $6.0 million increase in royalty revenue, $3.6 million was attributable to a franchise same club sales increase of 6.2%, $1.3 million was attributable to new clubs opened since January 1, 2024 before they move into the same club sales base and $1.0 million was from higher royalties on annual fees. The $2.9 million increase in franchise and other fees was primarily attributable to higher join fees and PF Perks revenue. The $0.5 million increase in placement revenue was primarily driven by higher replacement equipment placements.

Previous wording

National advertising fund revenue was $19.5 million for the three months ended September 30, 2024, compared to $17.6 million for the three months ended September 30, 2023, an increase of $2.0 million, or 11.2%. This increase was primarily attributable to $1.1 million from higher same club sales and new clubs opened since July 1, 2023 and $0.7 million from the collection of national advertising fund revenue on annual fees.

Current wording

National advertising fund revenue was $21.9 million for the three months ended March 31, 2025, compared to $19.8 million for the three months ended March 31, 2024, an increase of $2.2 million, or 10.9%. This increase was attributable to $2.2 million from higher same club sales and new clubs opened since January 1, 2024.

Previous wording

Revenue from our corporate-owned clubs segment was $128.1 million for the three months ended September 30, 2024, compared to $113.2 million for the three months ended September 30, 2023, an increase of $14.9 million, or 13.1%. This increase was primarily attributable to $9.6 million from corporate-owned clubs included in the same club sales base, of which $4.6 million was attributable to a same club sales increase of 3.4%, $1.1 million was attributable to higher annual fee revenue and $3.9 million was attributable to other fees. Additionally, $5.3 million was from new clubs opened since July 1, 2023.

Current wording

Corporate-owned clubs segment revenue was $133.7 million for the three months ended March 31, 2025, compared to $122.4 million for the three months ended March 31, 2024, an increase of $11.3 million, or 9.2%. This increase was primarily attributable to $6.7 million from the corporate-owned clubs in the same club sales base, of which $4.8 million was attributable to a same club sales increase of 5.1%, $1.5 million was attributable to annual fee revenue and $0.4 million was attributable to other fees. Additionally, $4.6 million was from new clubs opened since January 1, 2024 before they move into the same club sales base.

Previous wording

Equipment segment revenue was $151.0 million for the nine months ended September 30, 2024, compared to $163.7 million for the nine months ended September 30, 2023, a decrease of $12.7 million, or 7.7%. This decrease was primarily attributable to $10.6 million of lower revenue from equipment sales to new franchisee-owned clubs and $2.1 million of lower revenue from equipment sales to existing franchisee-owned clubs. In the nine months ended September 30, 2024, we had equipment sales to 47 new franchisee-owned clubs compared to 64 in the same period last year.

Current wording

Equipment segment revenue was $27.8 million for the three months ended March 31, 2025, compared to $21.6 million for the three months ended March 31, 2024, an increase of $6.2 million, or 28.7%. This increase was primarily attributable to $8.9 million of higher revenue from equipment sales to existing franchisee-owned clubs, partially offset by $2.7 million of lower revenue from equipment sales to new franchisee-owned clubs. In the three months ended March 31, 2025, we had equipment sales to 10 new franchisee-owned clubs compared to 14 in the same period last year.

Previous wording

Club operations expense, which relates to our corporate-owned clubs segment, was $71.6 million for the three months ended September 30, 2024, compared to $63.1 million for the three months ended September 30, 2023, an increase of $8.5 million, or 13.5%. This increase was primarily attributable to $5.7 million from new clubs opened since July 1, 2023 and $2.8 million from corporate-owned clubs included in the same club sales base as a result of higher payroll, operational and rent and occupancy expenses.

Current wording

Club operations expense, which relates to our Corporate-owned clubs segment, was $81.7 million for the three months ended March 31, 2025, compared to $74.4 million for the three months ended March 31, 2024, an increase of $7.3 million, or 9.9%. This increase was primarily attributable to $2.3 million from clubs included in our same club sales base as a result of higher rent and occupancy, payroll, and operational expenses and $5.0 million from new clubs opened since January 1, 2024 before they move into the same club sales base, of which $1.7 million was attributable to the opening and operating of seven clubs in Spain.

Previous wording

National advertising fund expense was $19.7 million for the three months ended September 30, 2024, compared to $17.6 million for the three months ended September 30, 2023, an increase of $2.1 million, or 11.9%. This increase was primarily a result of higher advertising and marketing expenditures due to higher national advertising revenue as described above.

Current wording

National advertising fund expense was $21.9 million for the three months ended March 31, 2025, compared to $19.8 million for the three months ended March 31, 2024, an increase of $2.2 million, or 10.9%. This increase was primarily a result of higher advertising and marketing expenditures due to higher national advertising revenue as described above.

Previous wording

Other losses, net was $0.7 million for the nine months ended September 30, 2024, compared to $7.7 million for the nine months ended September 30, 2023, a decrease of $7.0 million, or 90.9%. The decrease was primarily the result of a legal reserve recorded in the prior year period.

Current wording

Other (gains) losses, net was a $1.2 million gain for the three months ended March 31, 2025, compared to a $0.5 million loss for the three months ended March 31, 2024, a decrease of $1.7 million, or 355.6%. The gain in 2025 was primarily the result of a gain on insurance proceeds received in the current period.

Previous wording

Interest expense was $26.6 million for the three months ended September 30, 2024, compared to $21.7 million for the three months ended September 30, 2023, an increase of $4.9 million, or 22.6%. This increase was primarily from higher interest expense related to the issuance of the 2024 Notes in June 2024.

Current wording

Interest expense was $26.2 million for the three months ended March 31, 2025, compared to $21.4 million for the three months ended March 31, 2024, an increase of $4.8 million, or 22.2%. This increase was primarily from a higher principal balance and blended interest rate on our indebtedness related to the issuance of the 2024 Notes in June 2024.

Previous wording

Other income, net was $1.1 million for the nine months ended September 30, 2024, compared to $0.6 million for the nine months ended September 30, 2023, an increase of $0.5 million, or 79.4%. This increase was primarily attributable to a $0.8 million gain on the remeasurement of our tax benefit arrangements due to changes in our deferred state tax rate in the nine months ended September 30, 2024.

Current wording

Other income, net was $0.3 million for the three months ended March 31, 2025, compared to $0.6 million for the three months ended March 31, 2024.

Previous wording

Income tax expense was $16.5 million for the three months ended September 30, 2024, compared to $13.5 million for the three months ended September 30, 2023, an increase of $3.0 million, or 22.6%. This increase is primarily attributable to our higher income before taxes in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Current wording

Income tax expense was $16.2 million for the three months ended March 31, 2025, compared to $14.3 million for the three months ended March 31, 2024, an increase of $1.9 million, or 13.2%. This increase is primarily attributable to our higher income before taxes in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Previous wording

The Company’s effective tax rate was 27.7% for the three months ended September 30, 2024, compared to 24.5% in the prior year period. The increase in the effective income tax rate was primarily due to non-deductible expenses and remeasurement of deferred tax assets.

Current wording

The Company’s effective tax rate was 27.4% for the three months ended March 31, 2025, compared to 28.4% in the prior year period. The decrease in the effective income tax rate was primarily due to remeasurement of deferred tax assets in the three months ended March 31, 2024.