Planet Fitness, Inc.

Thank you for standing by for the Planet Fitness First Quarter 2025 call. Call lines have been placed on mute to prevent any bad call lines. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, followed by the number one on your touchdown phone. To reveal your question, please press star one again. It is my pleasure to introduce your host, Ms. Susie Caravella, again.

Thank you, operator, and good morning, everyone. Speaking on today's call will be Planet Fitness Chief Executive Officer Colleen Keating and Chief Financial Officer Jay Stas. They 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. Now, I will turn the call over to Colleen.

Thank you, Stacey, and thank you everyone for joining us for the Planet Fitness first quarter earnings call. We were pleased to end the first quarter with 20.6 million members, an increase of approximately 900,000 from the end of 2024. We grew system-wide same club sales by 6.1% and opened 19 new clubs globally, bringing our total club count to 2741. Given the strength and durability of our model, we delivered this healthy growth against a backdrop of increasing volatility in the macroeconomic environment. As a leader in the high-value, low-price fitness category, we've successfully grown our model for over 30 years while navigating a variety of different market conditions throughout our history. Before I go deeper into our first quarter performance, I'd like to highlight why we're confident that we're well positioned to execute our strategy and deliver on our 2025 expectations. At the same time, we are mindful of the broader macroeconomic conditions, including consumer sentiment and tariff uncertainty. During the great financial crisis between 2007 and 2010, we achieved strong same club sales growth We grew our membership and opened new clubs. Prior to 2020, we had 53 straight quarters of positive same club sales growth. More recently, we weathered a global pandemic without one club permanently closing due to financial reasons, even though our clubs were shut down and did not collect member dues for an average of six months. We are a resilient brand. and continue to strengthen our leadership position by offering consumers a place to get a high-quality workout at an incredible value in our judgment-free environment. Now let's review the progress we've made on our four strategic imperatives during the first quarter. As a reminder, these four strategic imperatives are redefining our brand promise and communicating it through our marketing, enhancing member experience refining our product and optimizing our format and accelerating new club growth let me start with redefining our brand we were pleased with our first quarter net member growth which was in line with our expectations we kicked off the year with our new creative a campaign that communicates that we are all strong on this planet It focuses on our shift to a more balanced complement of equipment in our clubs, our welcoming, judgment-free atmosphere, and the supportive community that we offer all our members. Based on research we conducted during the quarter, the campaign improved brand perception across all fitness levels and enhanced the perceived value of a Planet Fitness membership. We also saw an increase in purchase intent from former members as we highlighted the capital HV aspects of our offering and we had a strong 30 plus percent rejoin rate during the quarter. Looking ahead, we will augment our ability to test, learn, and make data-driven decisions as we evolve our brand. We have a pipeline of testing projects currently underway that range from pricing to changes in the physical layout of our clubs. During the first quarter, we used several different promotional strategies that tested successfully in 2024. In addition to our typical 10-day offers, we ran two classic card two-day flash sales and a first month free black card offer. both of which contributed to our membership growth during the period. We continue to see strong black card penetration with 65% of our membership at that tier as of the end of the quarter, a nearly 300 basis point increase from Q1 of last year. Consumers continue to recognize the value of the black card, with the gap between the classic and black card memberships only $10. We will hold on a decision on a system-wide black card price change until after we anniversary the classic card price increase, which you will recall went into effect on June 28th of last year. As for member activity, our members were more engaged during the first quarter of this year and visited a club an average of 6.7 times per month, the highest quarter utilization in five years. This is an encouraging data point as we think about retention in general and in the context of our Click to Cancel rollout. Gen Z continues to lead our membership growth and has been the fastest growing demographic group of our membership since 2021. To further this momentum, we're excited to announce that we will be running the High School Summer Pass program again this year. This has been incredibly successful at building brand loyalty and is a cost-effective program that has yielded a mid-single digit conversion rate to paying members over the past few years. Now to member experience and product refinement. We hold a highly differentiated position in the high-value, low-price sector of the fitness industry. We bring a top-quality, judgment-free fitness experience to life, and foster meaningful relationships with our members who span a broad spectrum of age, socioeconomic, and fitness levels. Our clubs have many stories from members who have had life-changing experiences because of their memberships. We truly do make fitness accessible to almost everyone, having clubs within a 12-minute drive of 170 million people in the United States. We're proactively tailoring our offering to respond to evolving customer needs. Based on insights from consumer research and member behavior, we expanded our footprint of strength equipment and opened up spaces within our clubs for members to do more functional training. We believe that this move will enhance member experience, providing them with the ideal equipment mix and environment to achieve their workouts their way. As part of the research that we conducted during the quarter, we asked consumers if they thought they could get strong at Planet Fitness. The majority of respondents who had seen our ads noted that they believe that we have the equipment for building strength and that we are a gym they can grow with. This feedback further supports our decision to expand strength equipment in our clubs. At the end of the first quarter, Nearly 1,800 clubs had the more balanced mix of equipment, with the remainder of the clubs expected to have it by the end of the year. And finally, to our efforts to accelerate new club growth. During the first quarter, I continued to visit more clubs, now 125 globally, including a trip to Australia where I celebrated the opening of a new club with our Australia team and many of our members. Similar to my trips to Mexico and Spain, my biggest takeaway is that our format and brand offering resonates with fitness-minded consumers across geographies and generations. In fact, our clubs in Spain continue to have strong ramps, and we recently opened our eighth club in the country. As evidence of their healthy performance, we believe we will be in a position to re-franchise the clubs and future development rights in the medium term. We remain steadfastly focused on unit economics. We made two foundational changes in 2024, giving our franchisees the opportunity to improve club IRRs, the new growth model, and the classic card price increase for new members. Franchisee sentiment was positive coming into 2025, and was bolstered by strong first quarter net member growth and revenue growth that had the added rate benefit from the classic card price increase. As I stated earlier, we are a resilient brand and have historically emerged from prior periods of market uncertainty in an even stronger position. That said, I would be remiss if I didn't touch on tariffs. Our teams are in discussion with our vendors and working through what potential tariff impacts mean to our business and franchisee unit economics. We are taking a thoughtful approach focused on the things we can control to continue to execute on our strategic imperatives. We are in communication with our franchisees and at current tariff levels do not see a material impact to our 2025 targets. As such, we are reiterating our growth targets for this year. I am pleased with the progress we've made thus far in 2025, and I am excited about the opportunities that lie ahead for Planet Fitness. I look forward to sharing more of our progress with you. Now, I will turn it over to Jay.