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, 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.

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, 2026 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, 2025 and the related notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2026. 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 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.

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 Planet Fitness-branded cardio, circuit- and strength- training 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, 2025, we had approximately 20.7 million members and 2,795 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain. Of our 2,795 clubs, 2,514 are franchised and 281 are corporate-owned.

Current wording

As of March 31, 2026, we had approximately 21.5 million members and 2,909 clubs in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico, Australia and Spain. Of our 2,909 clubs, 2,617 are franchised and 292 are corporate-owned.

Previous wording

As of September 30, 2025, we had contractual commitments to open more than 800 new clubs.

Current wording

As of March 31, 2026, we had contractual commitments to open approximately 750 new clubs.

Previous 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.

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 national advertising funds (“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

Segment Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for the impact of certain non-cash and other items that the Operating Decision Maker (“CODM”) does not consider in her evaluation of ongoing performance of the segment’s core operations. For additional information, see Note 14 to the condensed consolidated financial statements.

Current wording

Segment Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for the impact of certain non-cash and other items that the Company’s chief operating decision maker (“CODM”) does not consider in her evaluation of ongoing performance of the segment’s core operations. For additional information, see Note 13 to the condensed consolidated financial statements.

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, beginning in the 13th 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, beginning with the 13th 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 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 September 30, 2025 and 2024, respectively, and $4.0 billion and $3.6 billion for the nine months ended September 30, 2025 and 2024, 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 $1.4 billion and $1.3 billion during the three months ended March 31, 2026 and 2025, respectively.

Previous wording

(1) Represents severance related expenses recorded in connection with a reduction in force.

Current wording

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

Previous wording

(2) Represents certain expenses recorded in connection with the departure of the former Chief Executive Officer, including costs associated with the search for, and equity-based compensation associated with certain equity awards granted to, the Company’s new Chief Executive Officer and retention payments for certain key employees through the Chief Executive Officer transition.

Current wording

(2) Represents certain expenses recorded in connection with executive leadership transitions. During the three months ended March 31, 2026, amounts represent costs associated with the departure of the Chief Financial Officer and the search for a new Chief Financial Officer. During the three months ended March 31, 2025, amounts represent stock-based compensation associated with certain equity awards granted to the Company’s Chief Executive Officer and retention payments for certain key employees through the Chief Executive Officer transition.

Previous wording

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

Current wording

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

Previous wording

(1) Represents severance related expenses recorded in connection with a reduction in force.

Current wording

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

Previous wording

(2) Represents certain expenses recorded in connection with the departure of the former Chief Executive Officer, including costs associated with the search for, and equity-based compensation associated with certain equity awards granted to, the Company’s new Chief Executive Officer and retention payments for certain key employees through the Chief Executive Officer transition.

Current wording

(2) Represents certain expenses recorded in connection with executive leadership transitions. During the three months ended March 31, 2026, amounts represent costs associated with the departure of the Chief Financial Officer and the search for a new Chief Financial Officer. During the three months ended March 31, 2025, amounts represent stock-based compensation associated with certain equity awards granted to the Company’s Chief Executive Officer and retention payments for certain key employees through the Chief Executive Officer transition.

Previous wording

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

Current wording

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

Previous wording

(10)Includes $3.1 million and $9.3 million for the three and nine months ended September 30, 2024, respectively, of amortization for intangible assets recorded in connection with the 2012 Acquisition, other than favorable leases. During the fourth quarter of 2024, the intangible assets recorded in connection with the 2012 Acquisition became fully amortized. Also includes $9.2 million and $9.7 million for the three months ended September 30, 2025 and 2024, respectively, and $27.5 million and $29.0 million for the nine months ended September 30, 2025 and 2024, respectively, of amortization for intangible assets created in connection with historical acquisitions of franchisee-owned clubs. The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with GAAP, in each period.

Current wording

(7)Represents the amount of actual non-cash amortization expense recorded, in accordance with GAAP, associated with intangible assets created in connection with historical acquisitions of franchisee-owned clubs.

Previous wording

(11)Represents corporate income taxes at an assumed effective tax rate of 25.9% and 25.8% for the three months ended September 30, 2025 and 2024, respectively, and 25.9% and 25.8% for the nine months ended September 30, 2025 and 2024, respectively, applied to adjusted income before income taxes.

Current wording

(8)Represents corporate income taxes at an assumed effective tax rate of 26.0% and 25.9% for the three months ended March 31, 2026 and 2025, respectively, applied to adjusted income before income taxes.

Previous wording

(12)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 25.9% and 25.8% for the three months ended September 30, 2025 and 2024, respectively, and 25.9% and 25.8% for the nine months ended September 30, 2025 and 2024, respectively, applied to adjusted income before income taxes.

Current wording

(4)Represents corporate income taxes at an assumed effective tax rate of 26.0% and 25.9% for the three months ended March 31, 2026 and 2025, respectively, applied to adjusted income before income taxes.

Previous wording

Total revenue was $330.3 million for the three months ended September 30, 2025, compared to $292.2 million for three months ended September 30, 2024, an increase of $38.1 million, or 13.0%.

Current wording

Total revenue was $337.2 million for the three months ended March 31, 2026, compared to $276.7 million for three months ended March 31, 2025, an increase of $60.6 million, or 21.9%.

Previous wording

Franchise segment revenue was $113.7 million for the three months ended September 30, 2025, compared to $102.4 million for three months ended September 30, 2024, an increase of $11.3 million, or 11.0%.

Current wording

Franchise segment revenue was $134.5 million for the three months ended March 31, 2026, compared to $115.2 million for three months ended March 31, 2025, an increase of $19.3 million, or 16.7%.

Previous wording

Franchise revenue was $92.2 million for the three months ended September 30, 2025, compared to $82.9 million for the three months ended September 30, 2024, an increase of $9.4 million, or 11.3%. Included in franchise revenue are the following:

Current wording

Franchise revenue was $102.2 million for the three months ended March 31, 2026, compared to $93.2 million for the three months ended March 31, 2025, an increase of $9.0 million, or 9.7%. Included in franchise revenue are the following:

Previous wording

Of the $21.5 million increase in royalty revenue, $13.0 million was attributable to a franchise same club sales increase of 7.2%, $4.9 million was attributable to new clubs opened since January 1, 2024 before moving into the same club sales base and $3.6 million was from higher royalties on annual fees. The $5.9 million increase in franchise and other fees were primarily attributable to higher join fees and PF Perks revenue and the $2.0 million increase in placement revenue was primarily driven by higher replacement equipment placements.

Current wording

Of the $6.0 million increase in royalty revenue, $2.8 million was attributable to a franchise same club sales increase of 3.5%, $2.2 million was attributable to new clubs opened since January 1, 2025 before they move into the same club sales base and $1.0 million was from higher royalties on annual fees. The $1.4 million increase in franchise and other fees was primarily attributable to higher ADA fees and “PF Perks” revenue. The $1.8 million increase in placement revenue was primarily driven by higher replacement equipment placements.

Previous wording

Equipment segment revenue was $78.8 million for the three months ended September 30, 2025, compared to $61.7 million for the three months ended September 30, 2024, an increase of $17.1 million, or 27.8%. This increase was primarily attributable to $12.3 million of higher revenue from equipment sales to existing franchisee-owned clubs and $4.8 million of higher revenue from equipment sales to new franchisee-owned clubs. In the three months ended September 30, 2025, we had equipment sales to 27 new franchisee-owned clubs compared to 15 in the same period last year.

Current wording

Equipment segment revenue was $62.1 million for the three months ended March 31, 2026, compared to $27.8 million for the three months ended March 31, 2025, an increase of $34.3 million, or 123.4%. This increase was primarily attributable to $32.0 million of higher revenue from equipment sales to existing franchisee-owned clubs and $2.3 million of higher revenue from equipment sales to new franchisee-owned clubs. In the three months ended March 31, 2026, we had equipment sales to 14 new franchisee-owned clubs compared to 10 in the same period last year.

Previous wording

Cost of revenue, which primarily relates to our equipment segment, was $58.2 million for the three months ended September 30, 2025, compared to $45.7 million for the three months ended September 30, 2024, an increase of $12.5 million, or 27.3%. This increase was primarily attributable to higher equipment sales to existing and new franchisee-owned clubs, as described above.

Current wording

Cost of revenue, which primarily relates to our equipment segment, was $45.3 million for the three months ended March 31, 2026, compared to $22.5 million for the three months ended March 31, 2025, an increase of $22.9 million, or 101.6%. This increase was primarily attributable to higher replacement equipment sales to franchisee-owned clubs and higher equipment sales to new franchisee-owned clubs, as described above.

Previous wording

Club operations expense, which relates to our corporate-owned clubs segment, was $79.8 million for the three months ended September 30, 2025, compared to $71.6 million for the three months ended September 30, 2024, an increase of $8.2 million, or 11.4%. This increase was primarily attributable to $3.4 million from clubs included in our same club sales base as a result of higher payroll, marketing and rent and occupancy related expenses, $1.3 million from new clubs opened since July 1, 2024 before moving into the same club sales base, and $3.4 million from the ten clubs open and operating in Spain, of which nine clubs have been opened since July 1, 2024.

Current wording

Club operations expense, which relates to our Corporate-owned clubs segment, was $88.2 million for the three months ended March 31, 2026, compared to $81.7 million for the three months ended March 31, 2025, an increase of $6.5 million, or 8.0%. This increase was primarily attributable to $5.1 million from new clubs opened since January 1, 2025 before they move into the same club sales base and $4.6 million from clubs included in our same club sales base as a result of higher marketing primarily due to the 1% rate increase in NAF contributions for fiscal year 2026, partially offset by $3.2 million of club operations expense attributable to the clubs located in California that the Company sold to a franchisee in August 2025.

Previous wording

National advertising fund expense was $66.2 million for the nine months ended September 30, 2025, compared to $59.6 million for the nine months ended September 30, 2024, an increase of $6.5 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.

Current wording

National advertising fund expense was $32.2 million for the three months ended March 31, 2026, compared to $21.9 million for the three months ended March 31, 2025, an increase of $10.3 million, or 46.8%. This increase was primarily a result of higher advertising and marketing expenditures due to higher national advertising revenue as described above.

Previous wording

Depreciation and amortization expense was $39.1 million for the three months ended September 30, 2025, compared to $41.0 million for the three months ended September 30, 2024, a decrease of $1.9 million, or 4.7%. This decrease was primarily attributable to a decrease in amortization expense as a result of certain intangible assets becoming fully amortized during the fourth quarter of 2024, partially offset by an increase in depreciation expense primarily from new clubs opened since July 1, 2024.

Current wording

Depreciation and amortization expense was $40.3 million for the three months ended March 31, 2026, compared to $38.3 million for the three months ended March 31, 2025, an increase of $2.0 million, or 5.1%. This increase was primarily attributable to an increase in depreciation expense primarily from new clubs opened since January 1, 2025 partially offset by a decrease in amortization expense as a result of certain intangible assets becoming fully amortized during the prior year.

Previous wording

Interest expense was $78.7 million for the nine months ended September 30, 2025, compared to $72.6 million for the nine months ended September 30, 2024, an increase of $6.2 million, or 8.5%. This increase was primarily attributable to a higher principal balance and blended interest rate on our indebtedness related to the issuance of the Company’s fixed rate senior secured notes in June 2024, partially offset from the write-off in the prior year period of deferred financing costs associated with the prepayment of the Company’s fixed rate senior secured notes issued August 2018.

Current wording

Interest expense was $33.0 million for the three months ended March 31, 2026, compared to $26.2 million for the three months ended March 31, 2025, an increase of $6.8 million, or 25.8%. This increase was primarily from a higher principal balance and blended interest rate on our indebtedness related to the issuance of the 2025 Notes in December 2025.

Previous wording

Income tax expense was $28.0 million for the three months ended September 30, 2025, compared to $16.5 million for the three months ended September 30, 2024, an increase of $11.5 million, or 69.3%. This increase is primarily attributable to our higher income before taxes in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, as well as a higher effective tax rate.

Current wording

Income tax expense was $19.3 million for the three months ended March 31, 2026, compared to $16.2 million for the three months ended March 31, 2025, an increase of $3.1 million, or 19.1%. This increase is primarily attributable to our higher income before taxes in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Previous wording

The Company’s effective tax rate was 31.9% for the three months ended September 30, 2025, compared to 27.7% in the prior year period. The increase in the effective income tax rate was primarily due to the remeasurement of deferred tax assets, the sale of our corporate-owned clubs, and an increase in the valuation allowance.

Current wording

The Company’s effective tax rate was 26.8% for the three months ended March 31, 2026, compared to 27.4% in the prior year period. The decrease in the effective income tax rate was primarily attributable to a lower net impact of the Spanish valuation allowance in the current year period compared to the prior year period.

Previous wording

Franchise Segment Adjusted EBITDA was $253.7 million for the nine months ended September 30, 2025, compared to $226.4 million for the nine months ended September 30, 2024, an increase of $27.4 million, or 12.1%. This increase was primarily attributable to higher franchise and NAF revenue of $27.6 million and $6.7 million, respectively, as described above, and higher other income, net of $1.3 million, partially offset by $6.5 million of higher NAF expense and $1.5 million of higher selling, general and administrative expense.

Current wording

Franchise Segment Adjusted EBITDA was $94.7 million in the three months ended March 31, 2026, compared to $84.9 million in the three months ended March 31, 2025, an increase of $9.9 million, or 11.6%. This increase was primarily attributable to higher franchise and NAF revenue of $9.0 million and $10.3 million, respectively, and $2.2 million of higher other gain, net, partially offset by $10.3 million of higher NAF expense and $1.2 million of higher selling, general and administrative expense.

Previous wording

Equipment Segment Adjusted EBITDA was $57.6 million for the nine months ended September 30, 2025, compared to $41.9 million for the nine months ended September 30, 2024, an increase of $15.7 million, or 37.6%. This increase was primarily attributable to higher equipment sales to existing and new franchisee-owned clubs, as described above.

Current wording

Equipment Segment Adjusted EBITDA was $19.5 million in the three months ended March 31, 2026, compared to $7.4 million in the three months ended March 31, 2025, an increase of $12.0 million, or 161.6%. This increase was primarily driven by higher equipment sales to existing and new franchisee-owned clubs, as described above.

Previous wording

As of September 30, 2025, we had $329.0 million of cash and cash equivalents, $114.4 million of short-term marketable securities, $78.2 million of long-term marketable securities and $56.4 million of restricted cash.

Current wording

As of March 31, 2026, we had $375.3 million of cash and cash equivalents, $98.5 million of short-term marketable securities, $97.0 million of long-term marketable securities and $81.2 million of restricted cash.

Previous wording

We require cash principally to fund day-to-day operations, to finance capital investments, to service our outstanding debt and tax benefit arrangements and to address our working capital needs. Based on our current level of operations, we believe that with our available cash balance, the cash generated from our operations, and amounts available under our 2022 variable funding notes will be adequate to meet our anticipated debt service requirements and obligations under our tax benefit arrangements, capital expenditures and working capital needs for at least the next 12 months. Our ability to continue to fund these items could be adversely affected by the occurrence of any of the events described under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2024. There can be no assurance that our business will generate sufficient cash flows from operations or otherwise to enable us to service our indebtedness, including our Securitized Senior Notes, or to make anticipated capital expenditures. Our future operating performance and our ability to service, extend or refinance our indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Current wording

We require cash principally to fund day-to-day operations, to finance capital investments, to service our outstanding debt and tax benefit arrangements and to address our working capital needs. Based on our current level of operations, we believe that with our available cash balance, the cash generated from our operations, and amounts available under our Variable Funding Notes (as defined below) will be adequate to meet the above needs for at least the next 12 months. Our ability to continue to fund these items could be adversely affected by the occurrence of any of the events described under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2025. There can be no assurance that our business will generate sufficient cash flows from operations or otherwise to enable us to service our indebtedness, including our securitized senior notes, or to make anticipated capital expenditures. Our future operating performance and our ability to service, extend or refinance our indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Previous wording

Net cash provided by operating activities of $294.7 million for the nine months ended September 30, 2024 was primarily attributable to $126.7 million of net income and $172.1 million of adjustments to reconcile net income to net cash provided by operating activities, primarily consisting of depreciation and amortization, deferred tax expense, equity-based compensation expense, amortization of deferred financing costs, loss on extinguishment of debt and other adjustments, partially offset by a $4.0 million working capital cash outflow. The working capital cash outflow was primarily attributable to a decrease in the tax benefit arrangement liability as a result of payments made during the period and an increase in accounts receivable. The working capital cash outflow was partially offset by an increase in deferred revenue primarily from increased annual fee revenue, an increase in lease liabilities net of right-of-use assets primarily from new corporate-owned clubs in 2024, an increase in equipment deposits, and an increase in accounts payable and accrued expenses.

Current wording

Net cash provided by operating activities of $147.5 million for the three months ended March 31, 2026 was primarily attributable to $51.8 million of net income and $56.6 million of adjustments to reconcile net income to net cash provided by operating activities, primarily consisting of depreciation and amortization, deferred tax expense, equity-based compensation expense, amortization of deferred financing costs and other adjustments and a $39.2 million working capital cash inflow. The working capital cash inflow was primarily attributable to a decrease in accounts receivable primarily from collections in 2026, an increase in deferred revenue primarily from increased annual billing and NAF revenue, an increase in income taxes payable, and a decrease in inventory primarily from the delivery of equipment orders. The working capital cash inflow was partially offset by an increase in restricted assets for the NAF and a decrease in accounts payable and accrued expenses primarily related to equipment orders from prior year end.

Previous wording

Net cash provided by operating activities of $309.4 million for the nine months ended September 30, 2025 was primarily attributable to $159.6 million of net income and $177.8 million of adjustments to reconcile net income to net cash provided by operating activities, primarily consisting of depreciation and amortization, deferred tax expense, equity-based compensation expense, amortization of deferred financing costs, gain on sale of corporate-owned clubs and other adjustments and a $28.0 million working capital cash outflow. The working capital cash outflow was primarily attributable to a decrease in the tax benefit arrangement liability as a result of payments made during the period, a decrease in income taxes payable and a decrease in accounts payable and accrued expenses. The working capital cash outflow was partially offset by an increase in lease liabilities net of right-of-use assets primarily from new corporate-owned clubs in 2025, an increase in equipment deposits, a decrease in accounts receivable primarily from collections in 2025 and an increase in deferred revenue primarily from increased annual fee billing and NAF revenue.

Current wording

Net cash provided by operating activities of $133.9 million for the three months ended March 31, 2025 was primarily attributable to $42.1 million of net income and $51.4 million of adjustments to reconcile net income to net cash provided by operating activities, primarily consisting of depreciation and amortization, deferred tax expense, equity-based compensation expense, gain on insurance proceeds, amortization of deferred financing costs and other adjustments and a $40.4 million working capital cash inflow. The working capital cash inflow was primarily attributable to a decrease in accounts receivable primarily from collections in 2025, an increase in deferred revenue primarily from increased annual billing and NAF revenue, an increase in lease liabilities primarily from new corporate-owned clubs in 2025, an increase in income taxes payable and a decrease in inventory primarily from the delivery of equipment orders. The working capital cash inflow was partially offset by an increase in restricted assets for the NAF and a decrease in accounts payable and accrued expenses primarily related to equipment orders.

Previous wording

For the nine months ended September 30, 2025, net cash used in investing activities was $106.0 million compared to $148.3 million in the nine months ended September 30, 2024, a decrease of $42.3 million. This decrease was primarily attributable to maturities of marketable securities, net of purchases of $23.8 million, proceeds from the sale of corporate-owned clubs of $21.6 million, and insurance proceeds of $2.1 million, partially offset by the issuance of a note receivable to a related party of $2.6 million, higher cash used for acquisitions and other investments of $1.5 million and higher capital expenditures of $0.6 million. Capital expenditures for the nine months ended September 30, 2025 and 2024 were as follows:

Current wording

For the three months ended March 31, 2026, net cash used in investing activities was $47.2 million compared to $28.1 million in the three months ended March 31, 2025, an increase of $19.1 million. This increase is primarily attributable to the issuance of promissory notes to certain franchisees of $20.6 million and higher capital expenditures of $2.4 million, partially offset by purchases of marketable securities, net of maturities of $4.5 million. Capital expenditures for the three months ended March 31, 2026 and 2025 were as follows:

Previous wording

For the nine months ended September 30, 2025, net cash used in financing activities was $169.6 million compared to $101.5 million in the nine months ended September 30, 2024, an increase of $68.0 million. This increase was primarily attributable to a $201.8 million decrease in net cash provided by long-term debt in the prior year, consisting of $800.0 million of borrowings, $586.2 million of principal payments and $12.1 million of deferred financing costs incurred, and a $15.7 million decrease in cash provided by the proceeds from the issuance of Class A common stock, which was primarily a result of the exercise of stock options in the prior year period, partially offset by a $150.2 million decrease in cash used for share repurchases in the current year.

Current wording

For the three months ended March 31, 2026, net cash used in financing activities was $55.6 million compared to $55.4 million in the three months ended March 31, 2025, an increase of $0.2 million.

Previous wording

In February 2022, the Master Issuer issued the Series 2022-1 Class A-1 Notes, which allow for the drawing of up to $75 million of 2022 variable funding notes, including a letter of credit facility. The 2022 variable funding notes are undrawn as of September 30, 2025.

Current wording

In February 2022 and December 2025, the Master Issuer issued the Series 2022-1 Class A-1 Notes (the “2022 Variable Funding Notes”) and the Series 2025-1 Class A-1 Notes (the “2025 Variable Funding Notes” and together with the 2022 Variable Funding Notes, the “Variable Funding Notes”), respectively, each of which allow for the drawing of up to $75 million of Variable Funding Notes, including letters of credit facilities. The Variable Funding Notes are undrawn as of March 31, 2026.

Previous wording

There were no material changes to the terms of any debt obligations in the nine months ended September 30, 2025. The Company was in compliance with its debt covenants as of September 30, 2025. See Note 6 to the Condensed Consolidated Financial Statements contained in Item 1 herein for further information related to our long-term debt obligations.

Current wording

There were no material changes to the terms of any debt obligations in the three months ended March 31, 2026. The Company was in compliance with its debt covenants as of March 31, 2026.