Planet Fitness, Inc.

Good morning, and thank you for joining today's Planet Fitness Q1 earnings conference call. After prepared remarks by management, there will be an opportunity to ask questions. Please limit yourself to one question and one follow-up. If you have additional questions, please rejoin the queue. I would now like to hand the call over to Brendan Frey for opening remarks. Please go ahead.

Thank you, Operator, and good morning, everyone. Speaking on today's call will be Planet Fitness Chief Executive Officer Colleen Keating and Interim Chief Financial Officer Tom Fitzgerald. Colleen and Tom 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 apply 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, Brendan, and thank you, everyone, for joining us for the Planet Fitness first quarter earnings call. I'm pleased to have Tom Fitzgerald joining me on today's call, and I'd like to thank Tom for pausing his retirement to step in as interim CFO. Tom is an accomplished finance leader with a deep understanding of our business and franchise model. I look forward to working with him again to position Planet Fitness to drive growth and shareholder value as we conduct a thoughtful and disciplined search to identify our next permanent CFO. To start today's call, I'll walk through the key drivers of our first quarter performance and review the actions we're taking to refine our go-to-market strategies and reinvigorate member growth. Tom will follow with a review of the financials and outline our updated 2026 guidance. During the first quarter, we grew net new members by more than 700,000, achieved system-wide same club sales growth of 3.5%, increased adjusted EBITDA 19.5% over Q1 2025, and opened 15 new clubs. While our top and bottom line results exceeded expectations, we are not satisfied with our member growth performance. The fitness industry continues to enjoy a number of long-term tailwinds as more people recognize the critical role movement plays in enhancing both physical and mental wellbeing, preventing disease, and enabling longer, healthier lives. As a result, Demand for accessible and affordable fitness continues to grow. We saw this momentum in 2025, delivering 6.4% club growth and adding approximately 1.1 million net new members, a 10% increase in net new membership ads over 2024. A recent Health and Fitness Association study cited that fitness memberships for 2025 we're up 5.4% over 24, reflecting that the industry experienced solid growth last year as well. While this favorable backdrop remains in place, during our key Q1 signup period, we faced some internal and external headwinds that impacted our join momentum year to date. As a result, we are taking targeted actions to reinvigorate member growth. we believe that a combination of four factors most directly affected our performance. First, our marketing largely resonated with a more fitness-minded consumer, yet had less resonance with the fitness beginner or more casual gym-goer, traditionally our sweet spot, given our differentiated, non-intimidating environment. Second, we saw some competitive impacts in certain markets, particularly South Central and Southeast US. Third, unfavorable weather conditions affected a number of regions during the quarter. And fourth, macroeconomic pressures and uncertainty weighed on consumers. Our overall performance reflects the strength and resiliency of our model. However, the addition of more than 700,000 net new members during the quarter did not meet our expectations. While this was driven by multiple factors, Refining our marketing messaging and targeting is directly within our control. We are making immediate and near-term adjustments to broaden our reach and ensure our messaging is both visible and resonates with the fitness beginner and more casual gym goer. Before I further address that, let me provide some context on how the year has unfolded. Member join trends were solid in the first two weeks of January, partially offset by temporarily elevated churn. Severe cold and winter weather in late January and February disrupted joins, especially as several of the storms fell on Mondays, our busiest join day of the week. We anticipated that our March campaign, Black Card First Month Free, which was very successful during the same time last year, would improve our join momentum over the remainder of Q1 and into Q2. Yet, as we moved through March and into early April, our joint trends remained below our plan. Guided by consumer research and member behavior, over the past two years, we've evolved our equipment mix to deliver a more balanced combination of strength and cardio equipment, along with additional open floor space. This ensures members can work out their way. At the end of the first quarter, More than 80% of our entire system featured some version of a format optimized layout or equipment offering. As we've shared previously, our data shows this was the right decision as we enhance the member experience and support long-term engagement. And we shared some of this feedback at our investor day last fall. This evolution was a notable shift within our clubs. To broaden our reach and reinforce that people of all fitness levels can achieve their goals at Planet Fitness, in Q4 of 2024, we began to showcase more advanced aspirational gym goers and strength equipment in our marketing, which resonated with a more fitness-minded consumer. This was a shift from the lighthearted approachable tone that had previously been a hallmark of our brand messaging. We were encouraged by our net member growth in 2025. and made the decision to extend the campaign into 2026. However, looking at data from Q4 of last year and Q1 of this year, we saw that our messaging and targeting was successful in driving increased penetration with the fitness-minded consumer, yet we may have pivoted too far. To this end, we've identified two areas where we're sharpening and intensifying our focus this year, driving member acquisition and reinforcing affordability. Let me start with member growth. We believe we have an opportunity to dial up the brand's no gym intimidation ethos in our creative and messaging to appeal broadly to fitness beginners or more casual gym goers, a differentiator that sets us apart from the rest of the industry and is a critical advantage relative to other HVLP peers. To support this, We're testing new marketing initiatives aimed at reigniting net member growth with our target audience at the forefront. We also ran an RFP process in Q1 and recently selected a new creative agency. While we are already refining existing work for Q2 and Q3, we anticipate a new campaign to be in market before year end to set us up for Q1, 2027. Additionally, as we shared at our investor day, We're investing in more advanced data-driven marketing tools that allow us to be more agile in our messaging. This includes testing different machine learning models as we modernize our CRM engine, as well as building a dynamic content optimization engine for both development of creative assets and dynamic ad serving. These tools will enable us to deliver personalized advertising in real time through the right channels, driving acquisition and retention. While we have seen and are actively addressing increased competition from other HVLP brands in certain markets, they generally target a narrower span of fitness levels and age cohorts. In this environment, it is critical that we clearly and consistently message consumers that while our offering has evolved to meet consumer needs, What truly sets Planet Fitness apart is our non intimidating, judgment free environment. And this is where we can fully leverage our unmatched marketing fund by letting prospective members who are new to fitness know where the place for them to begin their fitness journey and remain as they progress on that journey. While we know most consumers today are more fitness aware, our sweet spot is the more than 70% of the population that are not a gym member today. and who value the welcoming environment at Planet Fitness. We have a clear plan to expand our leadership position, strengthening the Planet Fitness brand, deepening member engagement, shifting elements of our execution to ensure we continue to maintain and extend our leadership in the HVLP space, and driving membership and unit growth. Now let me turn to our affordability and the everyday value that we offer. Against a macroeconomic backdrop of increasing financial pressure on consumers, we are reinforcing Planet Fitness's longstanding commitment to affordability. Economic data indicates an increasingly uneven economic recovery, with higher income households remaining resilient, while lower income consumers experience mounting pressure. We want Planet Fitness to be accessible to all consumers who want to improve their health. Our pricing architecture and consumer value proposition is one of our most powerful strategic levers and historically has been a source of disruption and growth for our brand as the leader in the HVLP space. While we conducted extensive testing over the past couple of years to support a potential black card price increase, the consumer and economic backdrop have shifted. Based on our experience, price increases create a near-term headwind to member joins. As a result, given our decision to prioritize member growth, we have decided to pause the national rollout of our black card price increase. At the same time, we are a test and learn organization, and our objective is to evolve pricing thoughtfully and in line with our brand promise of democratizing access to fitness while delivering exceptional value. Our test and learn approach ensures any pricing change is deliberate, data-driven, and true to who we are as a brand, reinforcing our HVLP positioning while sustaining our role as the category leader. Given our softer start to the year and the adjustments to our strategies, we are updating certain elements of our full-year guidance. Two key factors driving the revisions are the net member growth shortfall in Q1, which has an outsized impact on the year, and our decision to pause and increase to black card pricing. Tom will walk through the specifics shortly. These changes also impact the three-year algorithm we shared at Investor Day last November, and as a result, we've made the decision to withdraw that outlook. I want to reaffirm our confidence in our strategy and the many key initiatives that underpinned it, which we outlined at Investor Day. We are continuing with these investments, and they are progressing well and on track. While we are taking action to address current market conditions, we are doing so while leaning into the same initiatives we outlined in November to drive sustainable, long-term member growth. Now I'll turn it over to Tom.