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Planet Fitness, Inc. (PLNT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered strong top-line growth: revenue rose 19.4% to $340.5M, Adjusted EBITDA increased to $130.8M, and diluted EPS was $0.56; system-wide same club sales grew 5.5% .
  • Largest contribution came from Equipment segment (+49.2% y/y to $105.1M) driven by re-equip demand and added strength equipment; Franchise and Corporate segments also grew, 11.0% and 8.5% respectively .
  • 2025 outlook targets ~10% revenue and Adjusted EBITDA growth, 160–170 new clubs, and 5–6% same club sales growth; net interest expense ~$86M and CapEx +25% reflect investment in leadership, brand, and format optimization .
  • Strategic catalysts: first Classic Card price increase in 25+ years (from $10 to $15), shift to greater strength equipment mix, and leadership realignment to accelerate openings—management emphasized sustainable, steady club growth and eventual return to ~200 annual openings in a few years .

What Went Well and What Went Wrong

What Went Well

  • Equipment segment strength: revenue +49.2% y/y to $105.1M, with higher-margin mix and strong re-equip demand; segment Adjusted EBITDA +78.3% to $29.9M .
  • Membership and Black Card momentum: net membership growth of ~1M in 2024 to ~19.7M; Black Card penetration ~64% (+~200 bps y/y), with members visiting ~6.5x per month vs just over 6x in 2023 .
  • Management execution and franchisee alignment: rollout of new economic model and raised Classic Card price; “We received an enthusiastic response with nearly all of our franchisees signing our new growth model franchise agreement.” (CEO) .

What Went Wrong

  • Adjusted EBITDA margin compression in Q4 to 38.4% (from 40.1% y/y), reflecting heavier marketing investment and a greater mix of lower-margin Equipment segment .
  • Ongoing SG&A and leadership investments temper 2025 margin leverage; management flagged ’25 as a foundation year with EBITDA growth roughly matching revenue growth .
  • Real estate remains tight for domestic expansion despite some tailwinds (retail vacancies ~4% per CoStar), requiring deeper real estate team engagement to support franchisee site selection .

Financial Results

Quarterly Comparison (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$300.9 $292.2 $340.5
Diluted EPS ($USD)$0.56 $0.50 $0.56
Adjusted Net Income ($USD Millions)$62.2 $54.7 $59.7
Adjusted EPS ($USD)$0.71 $0.64 $0.70
Adjusted EBITDA ($USD Millions)$127.5 $123.1 $130.8
Adjusted EBITDA Margin (%)N/AN/A38.4
System-wide Same Club Sales Growth (%)4.2 4.3 5.5

Q4 2024 vs Prior Year (Q4 2023)

MetricQ4 2023Q4 2024YoY Change
Revenue ($USD Millions)$285.1 $340.5 +19.4%
Diluted EPS ($USD)$0.41 $0.56 +$0.15
Net Income Attributable ($USD Millions)$35.3 $47.1 +$11.8
Adjusted Net Income ($USD Millions)$53.1 $59.7 +$6.6
Adjusted EPS ($USD)$0.60 $0.70 +$0.10
Adjusted EBITDA ($USD Millions)$114.3 $130.8 +$16.5

Segment Revenue Breakdown (Q4 2024 vs Q4 2023)

SegmentQ4 2023 ($USD Millions)Q4 2024 ($USD Millions)YoY Change
Franchise$98.2 $109.0 +11.0%
Corporate-owned Clubs$116.4 $126.3 +8.5%
Equipment$70.4 $105.1 +49.2%

Segment Adjusted EBITDA (Q4 2024 vs Q4 2023)

SegmentQ4 2023 ($USD Millions)Q4 2024 ($USD Millions)YoY Change
Franchise$68.1 $74.7 +9.8%
Corporate-owned Clubs$45.6 $46.4 +1.8%
Equipment$16.8 $29.9 +78.3%

KPIs and Operating Metrics (oldest → newest)

KPIQ2 2024Q3 2024Q4 2024
Membership (Millions)~19.7 ~19.6 ~19.7
Total Clubs2,617 2,637 2,722
Net New Clubs in Quarter18 21 86
System-wide Same Club Sales Growth (%)4.2 4.3 5.5
Black Card Penetration (%)N/AN/A~64
Avg Visits per Member per MonthN/AN/A~6.5 (vs just over 6 in 2023)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
System-wide New Club OpeningsFY2025N/A (first issued)160–170Introduced
New Equipment Placements (Franchise)FY2025N/A (first issued)130–140Introduced
System-wide Same Club Sales Growth (%)FY2025N/A (first issued)5–6%Introduced
Revenue Growth (%)FY2025N/A (first issued)~+10%Introduced
Adjusted EBITDA Growth (%)FY2025N/A (first issued)~+10%Introduced
Adjusted Net Income Growth (%)FY2025N/A (first issued)+8–9%Introduced
Adjusted Diluted EPS Growth (%)FY2025N/A (first issued)+11–12% (based on ~84.5M diluted shares incl. repurchases)Introduced
Net Interest Expense ($USD Millions)FY2025N/A~$86Introduced
Capital ExpendituresFY2025N/A~+25% y/yIntroduced
Depreciation & AmortizationFY2025N/AFlat vs 2024Introduced
Equipment Segment Margin Rate (%)FY2025N/A~28–29%Introduced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Classic Card price increaseImplemented in late June; confidence in value; ASR and refinancing highlighted to enhance shareholder value Price increase tailwind driving comps (70% rate/30% membership mix); churn favorable and cancel rates improved; more Black Card uptake given $10 spread Sustained rate-driven comp uplift to mid-year anniversary; stable churn patterns post change
Strength equipment & format optimizationAdoption of updated equipment mix and re-equip cadence; Equipment margin mix cited Broad adoption of 3 additional strength pieces; strong Q4 re-equip demand; equipment revenue/margin up; floor plan changes to enable functional training Positive member feedback, margin accretive mix, continued rollout in 2025
Unit growth trajectorySteady openings with franchisee economics improvements; 140–150 openings FY2024 guided 2025 target 160–170 openings; aim to return to ~200/year in a few years; Spain expansion on balance sheet then refranchise Gradual ramp; international expansion via balance sheet then refranchising
Marketing & brandBrand and messaging evolution underway; NAF/LAP are % of revenue New promise “grow stronger together” and inclusive creative; heavier Q4 marketing investment impacting EBITDA margin; cadence weighted to Q1 Increased spend and brand refresh to drive top-line; margins near-term pressured
Click-to-cancelN/AShort-term churn elevation (8–12 weeks) then normalization; 100% of corporate clubs already using; exception noted in one state (TN) Manageable policy impact; focus on retention and rejoin rates (~high-30s%)

Management Commentary

  • “We had strong results in 2024 and closed out the year with 19.7 million members, posting revenue growth of more than 10% and growing Adjusted EBITDA by approximately 12%.” (CEO) .
  • “We rolled out a new economic model... and raised the new member Classic Card price for the first time in more than 25 years.” (CEO) .
  • “Adjusted EBITDA was $130.8 million... margin was 38.4%... decreased... primarily because of our marketing investment, along with the increase in reequipped sales that flowed through our equipment segment.” (CFO) .
  • “We expect to open between 160 and 170 new clubs [in 2025]... reequipped sales ~70% of total equipment segment revenue... margin rate ~28% to 29%.” (CFO) .
  • “We believe that 200 new club openings per year is achievable, but it will take a few years before we get there.” (CFO) .

Q&A Highlights

  • Estimates and comps mix: 2025 comps embedded with low-to-mid single-digit lift from rate; comp mix roughly 70% rate, 30% membership; churn trends improved and consistent post Q3/Q4 .
  • Equipment cadence and margins: Q4 plate-loaded spike; 2025 re-equip to be more evenly spread; Equipment margin targeted ~28–29% with profit dollars maintained across mix shift .
  • Development pacing: Aim for consistent YOY increases; corporate-owned international builds (Spain) on balance sheet for proof-of-concept, then refranchise and recycle capital .
  • Marketing spend: NAF/LAP scale with revenue; Q1-heavy cadence; brand refresh underway with inclusive message and strength emphasis .
  • Click-to-cancel: Short-term churn elevation then normalization; high rejoin rates (~37–38%) support retention thesis .

Estimates Context

  • Wall Street consensus EPS and revenue estimates for Q4 2024 were unavailable due to S&P Global API rate limits at the time of retrieval. As a result, explicit “vs. estimates” comparisons cannot be provided. If consensus becomes available, compare revenue ($340.5M) and adjusted EPS ($0.70) to the SPGI consensus means for Q4 2024 to assess beats/misses .
  • Company’s FY2025 guidance (revenue ~+10%, Adjusted EBITDA +10%, openings 160–170) may drive model updates to reflect higher re-equip revenue share, SG&A/leadership investments, and net interest expense ($86M). No speculative adjustments are included here; guidance details are provided above .

Key Takeaways for Investors

  • Revenue strength broad-based, with outsized Equipment contribution reflecting re-equip cycle and strength mix shift; watch sustainability as re-equip share normalizes across 2025 .
  • Near-term margin compression stems from deliberate brand/marketing investments and mix shift; management expects EBITDA growth ~in line with revenue in 2025 before leverage in out-years .
  • Classic Card price increase and rising Black Card penetration underpin rate-driven comps into mid-2025 anniversary; monitor churn and rejoin dynamics as click-to-cancel expands .
  • Development trajectory is steady and strategic; target 160–170 openings in 2025 with longer-term ambition to ~200/year; real estate constraints require active support, but franchisee economics are improving .
  • Balance sheet flexibility supports international proof-of-concept (Spain) and capital recycling via refranchising; CapEx up ~25% in 2025 to fund corporate builds and format optimization .
  • 2025 guidance sets clear expectations for top-line and adjusted earnings; Equipment margin targeted ~28–29% and net interest ~$86M are critical inputs for modeling .
  • Trading lens: narrative is shifting toward brand refresh and strength-focused product, steady unit growth, and franchisee alignment—monitor evidence of demand response in Q1/Q2 and signs of margin leverage as investments annualize .