Planet Fitness, Inc. Q3 FY2025 earnings call

• In Q3, Planet Fitness ended with approximately 20.7 million members and 6.9% system-wide same club sales growth, having added 35 new clubs to reach 2,795 globally. - The 2025 High School Summer Pass saw record participation with over 3.7 million teens completing over 19 million free workouts, a 30% increase from the prior year. - Continued the "we are all strong on this planet" marketing campaign, with Black Card penetration at 66.1%, a 300 basis point increase from the same quarter last year. - 95% of franchisees developing or renovating clubs chose new format optimized clubs, and by the end of 2025, nearly 80% of clubs system-wide will have an optimized format. - Franchisees shifted 1% of marketing funding from local to national ad fund to drive member growth. - Received Fortune's 2025 100 Fastest-Growing Companies list and was #22 in Franchise Times Top 400 as the top-rated fitness concept.

In the third quarter, franchise segment revenue increased 11%, corporate-owned club segment revenue rose 7.6%, and equipment segment revenue grew 27.8%. Cost of revenue for equipment sales was $58.2 million, a 27.3% increase from the prior year. Corporate club operation expense was $79.8 million, up 11.4%. SG&A for the quarter was $30.5 million, with adjusted SG&A at 9.1% of total revenue. National advertising fund expense was $21.4 million, a 8.7% increase. Net income was $59.2 million, adjusted net income was $67 million, and adjusted EBITDA was $140.8 million, an increase of 14.4%.

• Confident in opening 160-170 new clubs in 2025, including franchise and corporate locations, and completing 130-140 equipment placements in new franchise clubs. - Raised 2025 outlook: same club sales growth expected to be approximately 6.5% (up from 6%), revenue growth ~11% (up from 10%), adjusted EBITDA growth ~12% (up from 10%), adjusted net income to increase in the 13%-14% range (up from 8%-9%), and adjusted net income per diluted share to grow in the 16%-17% range (up from 11%-12%). - Plan to raise Black Card price to $29.99 after the peak join season in 2026.

• Elevated attrition rates were noted, with Jay Stasz indicating it was driven by the click-to-cancel tail. - Macroeconomic factors could potentially impact membership trends and overall results.

Q: John Heinbockel asked about the marketing split and the 5,000 store target.

A: Colleen Keating discussed using the national ad fund for digital marketing, AI, and CRM, and opportunities in less dense markets with smaller club prototypes.

Q: Sharon Zackfia inquired about churn.

A: Jay Stasz stated that the elevated churn was due to the click-to-cancel tail.

Q: Jonathan Komp questioned the guidance raise and Black Card pricing.

A: Jay Stasz talked about Q3 results, equipment trends, SG&A, and the testing behind the Black Card price increase.

Q: Others asked about various topics including Analyst Day, global expansion, brand partnerships, AI in retention, Black Card services, Q4 comps, High School Summer Pass conversion, franchisee returns, and demographic shifts. Responses varied from Colleen Keating and Jay Stasz discussing details on each respective topic.