XPOFHIGH SIGNALOPERATIONAL10-K

XPOF executed a major portfolio restructuring by divesting three brands (CycleBar, Rumble, and Lindora) in 2025, reducing from eight to five brands while achieving dramatic operational improvements.

The divestitures represent a strategic pivot toward focusing on the company's core fitness brands, which appears to be yielding immediate operational benefits. Despite the portfolio reduction, XPOF achieved a remarkable turnaround from -$53.6M to +$19.8M in operating income, suggesting the divested brands were dragging down performance and the remaining five brands have stronger unit economics.

Comparing 2026-03-04 vs 2025-03-14View on EDGAR →
FINANCIAL ANALYSIS

XPOF's financial transformation is striking - operating income swung $73.4M positive while operating cash flow more than doubled to $28.3M, demonstrating the divestitures' immediate operational benefits. However, revenue declined 20.7% and total debt surged 49% to $525M, deepening negative stockholders' equity to -$269.1M, indicating the company traded revenue scale for profitability while potentially taking on debt to fund the restructuring. The dramatic inventory reduction of 77.8% and accounts receivable decline of 41.8% reflect the smaller, more focused business model but raise questions about the company's financial stability given the substantial debt load.

FINANCIAL STATEMENT CHANGES
Operating Cash Flow
Cash Flow
+142.5%
$11.7M→$28.3M

Operating cash flow surged 142.5% — exceptional cash generation, highest quality earnings signal.

Operating Income
P&L
+137%
-$53.6M→$19.8M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Inventory
Balance Sheet
-77.8%
$10.0M→$2.2M

Inventory drawn down 77.8% — strong sell-through or deliberate destocking; watch for supply constraints.

Total Debt
Balance Sheet
+49%
$352.4M→$525.0M

Debt increased 49% — substantial leverage increase; assess whether deployed for growth or covering losses.

Net Income
P&L
+42.8%
-$67.7M→-$38.7M

Net income grew 42.8% — bottom-line growth signals improving overall business health.

Accounts Receivable
Balance Sheet
-41.8%
$31.7M→$18.4M

Receivables declined — improved collection efficiency or conservative revenue recognition.

Stockholders Equity
Balance Sheet
-24.2%
-$216.6M→-$269.1M

Equity decreased 24.2% — buybacks or losses reducing book value, monitor solvency ratios.

Capital Expenditure
Cash Flow
-24%
$4.7M→$3.6M

Capex reduced 24% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Revenue
P&L
-20.7%
$14.0M→$11.1M

Revenue softened 20.7% — monitor whether this is cyclical or structural.

Total Liabilities
Balance Sheet
+20.1%
$597.4M→$717.6M

Liabilities increased 20.1% — monitor debt-to-equity ratio and interest coverage.

LANGUAGE CHANGES
NEW — 2026-03-04
PRIOR — 2025-03-14
ADDED
We operate a diversified platform of five brands spanning across verticals including Pilates, barre, stretching, functional training, and yoga.
states, Puerto Rico, and 28 additional countries as of December 31, 2025.
The Company's portfolio of brands includes Club Pilates, the largest Pilates brand in the United States; StretchLab, a concept offering one-on-one and group stretching services; YogaSix, the largest franchised yoga brand in the United States; Pure Barre, a total body workout that uses the ballet barre to perform small isometric movements, and the largest barre brand in the United States; and BFT, a functional training and strength-based program.
Prior to the divestitures of the CycleBar and Rumble brands in July 2025, through our ownership of the CycleBar and Rumble brands, we franchised boutique fitness studios dedicated to indoor cycling and boxing disciplines, respectively.
Additionally, prior to the divestiture of the Lindora brand in September 2025, through our ownership of the Lindora brand, we franchised clinics that provided medically guided wellness and metabolic health solutions to its members.
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REMOVED
We operate a diversified platform of eight brands spanning across verticals including Pilates, indoor cycling, barre, stretching, boxing, functional training, metabolic health and yoga.
states, Puerto Rico, and 30 additional countries as of December 31, 2024.
Key performance metrics in this Business section are presented on an adjusted basis to reflect historical information of Lindora prior to the acquisition by the Company in January 2024 and on an adjusted basis to remove historical information for both Stride and Row House prior to their divestitures by the Company in February 2024 and May 2024, respectively.
International expansion will be a key component of our growth strategy, and we will continue to invest and market our brands in focused attractive international markets.
With extensive industry experience, our management team and brand presidents are the driving force behind our operational excellence.
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