Xponential Fitness, Inc.

Asset-light multi-brand fitness franchisor generating positive FCF but burdened by losses and serious governance/legal overhangs.

Strengths

• Positive free cash flow ($24.7M) and positive operating margin (6.3%)
• Reported ROE 14.4% (70th pct) on an asset-light franchise model

Risks

• Net loss (-12.3% margin), negative ROA (-11%), and negative book equity from the Up-C structure
• Material weakness in internal controls, multiple state franchise-law investigations, leadership turnover and substantial debt

Notable findings

• No interest coverageInterest coverage 0.40 (cannot cover interest)
• Negative equityNegative book equity (debt/equity -1.86)
• Net lossNet loss (net margin -12.3%)
• Weak liquidityCurrent ratio 0.82 (<1)
• Exec changeRecent 8-K item 5.02 8-K ↗
• Material weakness• Material weakness identified in our internal control over financial reporting could, if not remediated, result in material misstatements in our financial statements and cause us to fail to meet our
• Chronic dilutionShare count +15%/yr over 4y (dilution)
• Revenue declineRevenue -26.8% YoY