Boutique fitness studio franchisor Xponential Fitness (NYSE: XPOF) fell short of the market’s revenue expectations in Q1 CY2026, with sales falling 21% year on year to $60.71 million. Its non-GAAP loss of $0.04 per share was significantly below analysts’ consensus estimates.
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Xponential Fitness (XPOF) Q1 CY2026 Highlights:
- Revenue: $60.71 million vs analyst estimates of $64.01 million (21% year-on-year decline, 5.1% miss)
- Adjusted EPS: -$0.04 vs analyst estimates of $0.13 (significant miss)
- Adjusted EBITDA: $20.41 million vs analyst estimates of $25.1 million (33.6% margin, 18.7% miss)
- EBITDA guidance for the full year is $105 million at the midpoint, in line with analyst expectations
- Operating Margin: 21.5%, up from 12.6% in the same quarter last year
- Free Cash Flow was -$22.15 million, down from $5.35 million in the same quarter last year
- Market Capitalization: $277.2 million
Company Overview
Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE: XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Xponential Fitness grew its sales at a 23.5% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Xponential Fitness’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.4% annually. Note that COVID hurt Xponential Fitness’s business in 2020 and part of 2021, and it bounced back in a big way thereafter. 
Xponential Fitness also breaks out the revenue for its three most important segments: Franchise, Equipment, and Merchandise, which are 67.8%, 7.2%, and 1.1% of revenue. Over the last two years, Xponential Fitness’s Franchise (royalty fees) and Merchandise (apparel sold to franchisees) revenues averaged year-on-year growth of 10.4% and 49,007%. On the other hand, its Equipment revenue (workout equipment sold to franchisees) averaged 40.4% declines. 
This quarter, Xponential Fitness missed Wall Street’s estimates and reported a rather uninspiring 21% year-on-year revenue decline, generating $60.71 million of revenue.
Looking ahead, sell-side analysts expect revenue to decline by 9.6% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
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Operating Margin
Xponential Fitness’s operating margin has risen over the last 12 months, but it still averaged negative 4.7% over the last two years. This is due to its large expense base and inefficient cost structure.
This quarter, Xponential Fitness generated an operating margin profit margin of 21.5%, up 8.9 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Although Xponential Fitness’s full-year earnings are still negative, it reduced its losses and improved its EPS by 25.9% annually over the last four years. The next few quarters will be critical for assessing its long-term profitability.
In Q1, Xponential Fitness reported adjusted EPS of negative $0.04, up from negative $0.20 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Xponential Fitness’s full-year EPS of negative $0.35 will flip to positive $0.71.
Key Takeaways from Xponential Fitness’s Q1 Results
We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.9% to $6.39 immediately following the results.
Xponential Fitness didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
