Planet Fitness, Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, good morning, everyone.

Speaking on today's call will be Planet Fitness Chief Executive Officer, Colleen Keating, and Chief Financial Officer and President International, Sudhanshu Priyadarshi. Colleen and Sudhanshu will be available for questions during the Q&A session following the prepared remarks. Today's call is being webcast live and recorded for replay. Before I turn the call over to Colleen, I'd like to remind everyone that the language on forward-looking statements included in our earnings release also applies to our comments made during the call. Our release can be found on our investor website, along with any reconciliation of non-GAAP financial measures mentioned on the call with their corresponding GAAP measures. With that, I'll now turn it over to Colleen.

Thank you, Brendon, thank you everyone for joining us for the Planet Fitness second quarter earnings call. We are pleased to welcome Sudhanshu Priyadarshi to Planet Fitness, a proven global leader with more than 25 years of experience driving enterprise value creation across consumer-facing businesses. His deep CFO expertise, vast international operating experience, and disciplined approach to strategy, execution, margin expansion, and capital allocation align closely with our strategic growth priorities. I look forward to partnering with him to deliver meaningful value for our members, franchisees, and shareholders. I also want to thank and recognize Tom Fitzgerald for pausing his retirement to shepherd our finance organization through our period of leadership transition. Tom provided a knowledgeable and steady hand as interim CFO, enabling us to complete a thorough search, and he will remain with us in an advisory capacity through early September.

Given this, Tom is joining us on today's call and will be available to provide additional perspective during the Q&A. Now let me turn to our second quarter performance. During the quarter, we furthered the important work to reignite sustainable member growth. We are confident that the actions we outlined on our first quarter call are the right ones to achieve this overarching goal. While we are encouraged by our initial progress, several of our key initiatives, particularly with marketing, will take time to fully implement and gain traction. We finished the quarter with 21.5 million members, up 3.6% to last year. System-wide same club sales increased by 1.7%. Adjusted EBITDA increased 3.5% over Q2 2025. We opened 23 new clubs.

The fitness industry is supported by strong long-term tailwinds as more people recognize the critical role movement plays in physical and mental well-being, disease prevention, and living longer, healthier lives. Against that backdrop, our focus remains clear: broaden our reach to the approximately 70% of the U.S. population not currently paying for a fitness membership, strengthen the relevance of our brand messaging with our core audience, and reinforce why Planet Fitness is uniquely positioned to bring people into the category. We appeal to fitness beginners, more casual gym-goers, or those progressing on their fitness journey who appreciate our strong value proposition and judgment-free environment. One of the reasons why people don't join a gym is intimidation, and Planet Fitness is ideally and uniquely positioned for this population.

We know proximity and convenience are also factors. With a Planet Fitness club within an approximate 12-minute drive of 170 million of the U.S. population, our reach and accessibility are unmatched. As we shared on our Q1 earnings call, we are concentrating our efforts this year on two priorities that are central to reigniting net member growth, driving acquisition, and reinforcing affordability. I'll discuss our progress to date in key areas supporting these priorities, including our marketing evolution, net member growth trends, pricing architecture, and in-club member experience enhancements. I'll also provide an update on global club expansion and franchisee engagement before turning the call over to Sudhanshu. Let me start with our marketing updates.

As we continue to evolve our marketing strategy, our goal is to both target and speak more effectively to the roughly 70% of the U.S. population that doesn't have a gym membership while reinforcing what makes Planet Fitness differentiated, our welcoming, non-intimidating environment. We are approaching this work in phases with our newly engaged creative agency. To date, we made intentional refinements to our existing creative, so it feels a bit more approachable and supportive, depicting more variety of fitness levels, dialing down sweat levels, and brightening the imagery. We will launch interim new creative that takes this a few steps further, featuring a more lighthearted tone aligned to our brand DNA with an intentional emphasis on our unique value proposition and brand differentiation within the HVLP landscape. You will see this new interim creative in market this quarter.

At the same time, we will begin testing creative for an entirely new marketing campaign for our critical Q1 acquisition period, giving us time to read results and make adjustments before the campaign goes live in late December. We are continuing to advance our media optimization efforts. As we refine our creative and optimize our media mix, our goal is to better reach our target audience across social platforms and multiple media channels. To support that work, our dynamic creative optimization engine remains on track for a rolling launch beginning in September. This will allow us to better tailor creative and our messaging over time as we reach prospective members with greater relevance. Also in September, we will launch a redesigned Planet Fitness app with updates to make the member experience more personalized, engaging, and easier to navigate.

This will include a dynamic home screen tailored to in-club workout, enhanced activity tracking, including weight, reps, and sets, a redesigned fitness profile with progress metrics, and improved Crowd Meter accuracy. Additional updates are planned for the balance of the year and into 2027, underscoring our commitment to continually enhancing member experience and supporting retention. On the marketing front, we kicked off our High School Summer Pass program in June, which continues to be an important way for us to introduce younger consumers to our brand and reinforce our commitment to making fitness accessible. We're continuing to build momentum with High School Summer Pass, with more than 12 million workouts completed to date. This program remains especially valuable as it builds awareness and brand affinity with the next generation of potential members, including Gen Alpha, as they become old enough to join.

Let me turn to our second quarter net member growth. As I noted earlier, we ended with 21.5 million members, up 3.6% to last year and flat to Q1. For Q2, our average monthly attrition rate was 3.5%, the midpoint of our historical range of 3%-4%. While we expect it to remain within that range going forward, there will be some fluctuation in future quarters due to seasonality. In an effort to improve this metric, we are deepening our member retention efforts with our predictive AI churn model integrated in our CRM platform, which is designed to identify early churn indicators. The model is currently in an alpha phase and continues to learn from member behavior. The next capability will be a next-best-action engine to serve up retention offers.

Related to our retention efforts, we will kick off components of our first 100-day program with franchisees at our September conference. This will strengthen engagement both inside and outside our clubs during the critical early period of a member's journey. As most members join online, an opportunity to engage with them shortly after joining can encourage a club visit. During the visit, our teams can proactively engage, understand a member's goals, and connect them with the most relevant areas of the club to provide support and meet their needs. We also recently implemented a mystery shop program to support consistent brand standards, enhance member satisfaction, and operational excellence across our clubs in the U.S. and Canada. The program supplements last year's system-wide NPS rollout to enhance member experience and service delivery in our clubs. Moving to our pricing architecture.

We have launched several regional and local price tests to better understand consumer responses across different markets. As part of our continued focus on reinforcing affordability and driving member acquisition, we will also test a $10 Classic Card promotion nationally later this quarter. Offering the Classic Card at $10 for a limited time promotion nationally will help us better understand regional impacts. We are not running this test to inform a rollback of the Classic Card price. We want to understand its impact for use in limited promo windows, as well as read the impacts by region. Turning to member experience. We know from industry data and member feedback that recovery is an important part of fitness. To this end, we expanded our test of new Black Card Spa modalities to 100 clubs across multiple DMAs and began marketing the upgraded features this summer.

The broader test is designed to help us understand how these offerings influence total joins, join mix, upgrades, and retention. Additionally, based on strong member preference and franchisee enthusiasm, we offered the opportunity to our franchisees to order the Red Light Sauna and the LED Red Light Booth early. We're excited for the test results for the other modalities as we endeavor to make recovery more accessible, just as we democratized fitness access more than 30 years ago. Lastly, turning to development and franchisee engagement. During the second quarter, we opened 23 clubs, five of which were international, and included 21 franchise locations and two corporate-owned clubs. We announced this morning that we've welcomed a new franchisee to Planet Fitness. Seasoned hospitality developer, Ian McClure, CEO of Gulf Coast Hotel Management, acquired growth territory on the west coast of Florida.