Planet Fitness Inc ((PLNT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Planet Fitness Inc. recently held its Q4 2024 earnings call, revealing a generally positive sentiment with strong revenue and membership growth. The company highlighted strategic price increases and successful international expansion as key drivers of this growth. However, challenges remain in meeting higher club opening targets and maintaining adjusted EBITDA margins, indicating areas for improvement as the company lays a foundation for sustainable growth.
Impressive Revenue and Growth Metrics
Planet Fitness reported a remarkable 19.4% revenue growth and a 14.4% increase in adjusted EBITDA during Q4 2024. System-wide same club sales grew by 5.5%, and the company expanded its global presence by adding 86 new clubs in the quarter, bringing the total club count to over 2,700.
Membership Growth and Expansion
The company achieved significant membership growth, adding 1 million new members in 2024 to reach approximately 19.7 million members. Notably, the penetration of the Black Card membership increased to about 64%, with Gen Z identified as the fastest-growing demographic.
Successful Price Increase Strategy
For the first time in 25 years, Planet Fitness increased the classic card membership price from $10 to $15. This strategic move contributed to revenue growth, with the company experiencing low member churn and a favorable response to the price adjustment.
International Expansion
Planet Fitness successfully entered the Spanish market in 2024, ending the year with five clubs. This marks a significant step in their international expansion strategy, demonstrating the company’s ability to grow beyond domestic borders.
Decreased Adjusted EBITDA Margin
Despite the revenue growth, the adjusted EBITDA margin decreased to 38.4% in Q4 2024 from 40.1% in Q4 2023. This decline was primarily due to increased marketing investments and higher equipment sales, which typically yield lower margins.
Challenges in Meeting Club Opening Targets
Planet Fitness aims to open 200 new clubs annually, but it will take a few years to reach this target. The company expects to open between 160 and 170 new clubs in 2025, indicating a slower pace than initially anticipated.
Forward-Looking Guidance
Looking ahead, Planet Fitness provided robust guidance for 2025, projecting a 10% increase in revenue and adjusted EBITDA growth of 10%. The company anticipates opening between 160 and 170 new clubs and expects system-wide same club sales growth between 5% and 6%. Additionally, adjusted net income is projected to grow by 8% to 9%. The company remains committed to sustainable long-term growth by focusing on strategic imperatives such as redefining their brand, enhancing member experience, refining product offerings, and optimizing club formats.
In summary, the earnings call from Planet Fitness Inc. reflected a positive outlook with strong growth metrics and strategic initiatives driving revenue and membership increases. While challenges in club openings and margin maintenance persist, the company’s forward-looking guidance suggests a continued focus on sustainable growth and strategic expansion.