PLNT

• Leadership Updates: New CFO and President International Sudhanshu Priyadarshi joined the company, with former interim CFO Tom Fitzgerald remaining in an advisory capacity through early September 2026. Management cites the company's strong brand resonance, capital-efficient franchise model, and large long-term growth runway both domestically and internationally as key attractions for new leadership.

• Core Strategic Priorities: The company's top overarching goal is to reignite sustainable net member growth, focused on two key pillars: driving member acquisition and reinforcing affordability. The core target market remains the 70% of the U.S. population that does not currently pay for a fitness membership, who Planet Fitness targets with its unique value proposition and non-intimidating, judgment-free environment.

• Marketing Initiatives: The company is evolving its marketing strategy in phases with a new creative agency, refining existing creative to be more approachable, feature a wider range of fitness levels, and use brighter imagery. Interim new creative with a lighthearted tone, aligned to the brand's core identity and focused on value proposition and differentiation, will launch in Q3 2026. A full new marketing campaign for the key Q1 2027 acquisition period will be tested through the end of 2026 before a full launch in late December 2026. A dynamic creative optimization engine to tailor messaging to target audiences across channels will roll out starting September 2026.

• Member Growth & Retention: The company ended Q2 2026 with 21.5 million total members, up 3.6% YoY and flat sequentially from Q1 2026. The average monthly attrition rate was 3.5%, in the middle of the company's historical 3-4% range. New retention initiatives include a predictive AI churn model in the CRM platform (currently in alpha testing) that will add a next-best-action retention offer engine, a new 100-day new member engagement program launching with franchisees in September 2026, and a new national mystery shop program to enforce consistent brand standards across all clubs. Black card penetration reached 68% at the end of Q2, up 210 basis points YoY.

• Pricing Tests: Multiple regional and local pricing tests are currently in flight across different pricing architectures. The company will launch a national limited-time $10 classic card promotion in Q3 2026, to test regional impacts of the price point for future promotional use; this is not a test of a permanent rollback of the classic card from its current $15 price.

• Member Experience Enhancements: A fully redesigned Planet Fitness mobile app with personalized features, enhanced activity tracking, improved progress metrics, and more accurate crowd meter data will launch in September 2026, with additional updates planned through 2027. The company expanded a test of new Black Card spa recovery modalities to 100 clubs, with early interest from franchisees leading to early ordering access for red light saunas and red light booths, to measure impacts on joins, upgrades, and retention. The company's annual High School Summer Pass program, which introduces younger consumers to the brand, has already recorded over 12 million workouts in 2026, tracking close to 2025's strong participation levels.

• Club Expansion & International Updates: 23 new clubs opened in Q2 2026 (21 franchise-owned, 2 corporate-owned), matching the year-ago pace. The company completed the sale of its ownership stake in the Australia franchise to equity partners, as part of its disciplined capital recycling strategy for international expansion. A new seasoned hospitality franchisee joined the system with a new growth territory on Florida's west coast, signaling continued franchisee confidence in the brand.

• The company raised 2026 adjusted net income per diluted share guidance to 6% growth, up from the prior outlook of 4% growth. The upward revision is driven by a lower projected adjusted diluted weighted average shares outstanding of ~77 million, down from 79 million prior, following $200 million in share repurchases completed in Q2 2026.
• 2026 adjusted net income guidance was slightly revised to a 3% decline, from a prior 2% decline, partially offsetting the per-share increase, due to higher projected annual interest expense of $115 billion, up $4 million from prior guidance following a $75 million drawdown on a variable funding note for share repurchases. The company plans to repay this drawdown by the end of 2026.
• All other 2026 guidance remains unchanged: system-wide same-club sales growth is projected at ~1%, total revenue growth is projected at ~7%, and adjusted EBITDA growth is projected at ~6%. Management still expects sequential moderation in quarterly same-club sales growth through the second half of 2026, but does not project negative same-club sales in Q3 or Q4 2026.
• System-wide new club openings are still projected to be 180 to 190 for full year 2026, with 150 to 160 new equipment placements. Openings and placements are still expected to be weighted to the fourth quarter, consistent with prior guidance. Replacement equipment sales are still expected to make up approximately 70% of full year 2026 equipment segment revenue.

Total company Q2 2026 revenue was $365 million, a 7% increase year-over-year (YoY), from $341 million in Q2 2025.

• Franchisee Segment: Revenue increased 13% YoY, driven by higher National Ad Fund (NAF) revenue from a 1 percentage point increase in NAF contribution rates (from 2% to 3% in 2026), higher royalty revenue from same-club sales growth and new club openings, and increased franchise fees. The average royalty rate held flat YoY at 6.7%. Adjusted EBITDA margin for the segment was 67.6%, with the increase driven by the higher NAF contribution rate; excluding NAF, margins were flat YoY. This segment contributed ~45% of total company revenue based on disclosed growth trends.
• Corporate-Owned Club Segment: Revenue increased 4% YoY, driven by sales from 19 new corporate clubs opened since Q2 2025. Adjusted EBITDA for the segment was $57 million, and adjusted EBITDA margin decreased 70 basis points to 40% YoY. This segment contributed ~38% of total company revenue.
• Equipment Segment: Revenue increased 4% YoY, driven by higher sales from new franchise club placements (21 placements in Q2 2026 vs 19 in Q2 2025) and higher replacement equipment sales. Replacement equipment accounted for 85% of total segment revenue in Q2 2026, down from 87% YoY. Adjusted EBITDA for the segment was $24 million, and adjusted EBITDA margin decreased 370 basis points to 28.4% YoY, due to the timing of replacement equipment discounts. For the first half of 2026, the segment's adjusted EBITDA margin was 29.6%, in line with expectations. This segment contributed ~17% of total company revenue.

• Pricing tests are still ongoing, and results will take time to fully analyze, introducing uncertainty around future pricing architecture decisions and their impact on member growth, margins, and franchisee unit economics.
• Marketing initiatives take time to fully implement and gain traction, so full impacts on member acquisition are not yet visible and are dependent on successful creative testing and optimization.
• The $10 national limited-time classic card promotion carries the potential risk of creating shadow pricing expectations or trade-downs from existing $15 classic card members, though small-scale regional testing has not shown significant trade-down activity to date.
• Unit growth depends on consistent franchisee execution and timely permitting for new clubs, with cure periods for delayed openings currently in line with historical levels but still presenting execution risk.
• The company paused the nationwide rollout of $30 Black Card pricing, leaving uncertainty around the timing and impact of future price increases for that tier.

Q: What are the initial findings from ongoing pricing tests, and does management plan to review black card pricing alongside any changes to lower-tier pricing? / A: Most regional and local pricing tests across different architectures and price points are still in flight, so final results are not yet available. Due to the subscription nature of the business and seasonality, tests are run for extended periods to get reliable data. All pricing decisions, whether for tiers, regional variation, or black card pricing, will be evaluated holistically based on price elasticity, join mix, overall sustainable net member growth, and impact on churn.

Q: The upcoming $10 classic card promotion is a legacy protected rate for new joiners. How does management plan to mitigate negative impacts from existing higher-priced classic members and negative impacts to franchisee unit economics? / A: The test is not intended to roll back the permanent $15 classic card price, and is only for a limited promotional window to test regional price elasticity. Small-scale earlier regional testing did not show significant trade-down activity from $15 to $10. Management notes the prior $10 to $15 price increase was accretive to franchisee AUVs overall, and incremental new members from the promotion are expected to offset any temporary per-member revenue impact. The test will provide data to understand regional demand nuances for future promotional use.

Q: What changes have been made to the creative development and testing process after last year's campaign underperformed expectations? / A: Last year's campaign successfully communicated that Planet Fitness offers high-quality equipment, but over-emphasized intense fitness and muscle definition, alienating the brand's core target of casual/beginner gym-goers. For the new campaign, management will lean into the brand's traditional lighthearted, approachable tone, feature talent that reflects the core 70% target audience, and conduct more extensive consumer testing than in prior years. Interim creative launching this quarter will help inform learnings for the full campaign launching ahead of the Q1 2027 acquisition period.

Q: What is the company's current approach to capital allocation? / A: Planet Fitness will maintain its current capital-efficient, asset-light strategy, with ~90% of clubs franchise-owned and less than 10% corporate-owned. Corporate clubs serve as a test lab for new initiatives. The company will continue to recycle capital by exiting existing positions (such as the recent Australia stake sale and prior California club sale) to fund growth, and will repurchase shares when management sees attractive value for shareholders. The company will continue to evaluate opportunities to exit other small corporate international positions, such as Spain, to recycle capital.