F45 Training Holdings Inc.

Third-quarter total revenue increased 8% to $29.3 million from $27.2 million a year ago. Adjusted EBITDA was $6.1 million versus $10.1 million in the prior-year quarter, and gross profit was roughly flat at $19.9 million. Gross margin was 67.9%, down from 73.4%, mainly because of a higher mix of lower-margin equipment sales. Franchise gross profit was roughly flat at $17 million, while equipment and merchandise gross profit declined 3% to $2.8 million; equipment gross margin was 26.1% versus 33.6% last year. Net loss was $16.2 million. For the quarter, total system-wide sales increased 31% to a record $131 million, and same-store sales increased 15%. Management maintained full-year guidance for net franchises sold of 350 to 450, initial studio openings of 350 to 450, revenue of $120 million to $130 million, and adjusted EBITDA of $25 million to $30 million.

Ben Coates framed the quarter as evidence that the business is stabilizing after major restructuring, saying results came in above expectations on revenue and adjusted EBITDA. He emphasized that membership trends remain strong, total membership reached new highs, and engagement is holding up despite macro uncertainty. His tone was cautiously constructive: he repeatedly pointed to cost reductions, franchise resilience, and master franchise agreements as ways to support more consistent growth and profitability.

Chris Payne focused on the financial reset and balance-sheet management. He said Q3 gross profit was $19.9 million with gross margin at 67.9%, SG&A was $53.8 million versus $110 million a year ago, and normalized SG&A was about $19.5 million, in line with the target range; management expects quarterly normalized SG&A to fall to $15 million to $20 million. He also said cash and cash equivalents were about $17 million at quarter-end, the revolver was fully drawn at about $88 million, and the company expects the cost-cutting initiatives to deliver $7 million to $10 million of quarterly savings versus earlier quarters. He reiterated that the company still expects about $10 million of free cash flow per quarter starting in Q4 and said liquidity can be improved through discounting world packs and by pursuing master franchise upfront fees.

Analysts pressed management on why system-wide sales are outpacing visits in the U.S.; Chris said the subscription model means sales and visits do not perfectly align, and he added that visitation at constant studios is holding steady at about 2.5x to 3x per week. Questions also focused on liquidity and inventory monetization; management said world pack discounting is a lever to bring cash in, and noted potential upfront fees from master franchises as another source of liquidity. On franchise development, management said it prefers master franchise agreements in complex regions and wants to expand multi-unit and institutional franchisees, while also discussing credit-facility efforts that it expects to accelerate in Q1 2023.