Boutique fitness studio franchisor Xponential Fitness (NYSE: XPOF) beat Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 13.4% year on year to $65.97 million. On the other hand, the company’s full-year revenue guidance of $255 million at the midpoint came in 3.4% below analysts’ estimates. Its non-GAAP profit of $0.02 per share was 84.9% below analysts’ consensus estimates.
Is now the time to buy Xponential Fitness? Find out by accessing our full research report, it’s free.
Xponential Fitness (XPOF) Q2 CY2026 Highlights:
- Revenue: $65.97 million vs analyst estimates of $64.39 million (13.4% year-on-year decline, 2.5% beat)
- Adjusted EPS: $0.02 vs analyst expectations of $0.13 (84.9% miss)
- Adjusted EBITDA: $21.94 million vs analyst estimates of $26.29 million (33.3% margin, 16.6% miss)
- EBITDA guidance for the full year is $94 million at the midpoint, below analyst estimates of $103.5 million
- Operating Margin: 14.4%, down from 19.5% in the same quarter last year
- Free Cash Flow Margin: 0.1%, down from 1.3% in the same quarter last year
- Market Capitalization: $281.4 million
Company Overview
Owner of Club Pilates, Stretch Lab, BFT and Pure Barre, Xponential Fitness (NYSE: XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into 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 19.5% 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.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Xponential Fitness’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 6% annually. Note that COVID hurt Xponential Fitness’s business in 2020 and part of 2021, and it bounced back in a big way thereafter. 
We can dig further into the company’s revenue dynamics by analyzing its three most important segments: Franchise, Equipment, and Merchandise, which are 66.7%, 10.8%, and 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 8.7% and 40,825%. On the other hand, its Equipment revenue (workout equipment sold to franchisees) averaged 37.9% declines. 
This quarter, Xponential Fitness’s revenue fell by 13.4% year on year to $65.97 million but beat Wall Street’s estimates by 2.5%.
Looking ahead, sell-side analysts expect revenue to decline by 5.8% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not catalyze better top-line performance yet.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Xponential Fitness’s operating margin has been trending up over the last 12 months, but it still averaged negative 2.7% 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 14.4%, down 5 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
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 6.7% annually over the last four years. The next few quarters will be critical for assessing its long-term profitability.
In Q2, Xponential Fitness reported adjusted EPS of $0.02, down from $0.26 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Xponential Fitness’s full-year EPS will flip from negative $0.59 to positive $0.65.
Key Takeaways from Xponential Fitness’s Q2 Results
It was encouraging to see Xponential Fitness beat analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 12.5% to $5.57 immediately after reporting.
Xponential Fitness may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
