Q2 2026 Planet Fitness Inc Earnings Call

Speaker #1: Good morning, and thank you for joining today's Planet Fitness Q2 earnings conference call. After today's prepared remarks by management, there will be an opportunity to ask questions.

Speaker #1: Additional updates are planned for the balance of the year and into 2027, underscoring our commitment to continually enhancing member experience and supporting retention. Finally, 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.

Speaker #1: Good morning, and thank you for joining today's Planet Fitness Q2 earnings conference call. After today's prepared remarks by management, there will be an opportunity to ask questions.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. Please limit yourself to 1 question and 1 follow-up.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. Please limit yourself to one question and one follow-up.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #2: Thank you, Operator, and good morning, everyone. Speaking on today's call, we'll be Planet Fitness Chief Executive Officer, Colleen Keating, and Chief Financial Officer, and President International, Sudanchu Priyadarshi.

Speaker #2: Thank you, operator, and good morning, everyone. Speaking on today's call, we'll be Planet Fitness Chief Executive Officer Colleen Keating and Chief Financial Officer and President International Sudanchu Priyadarshi.

Speaker #1: Now 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.

Speaker #2: Colleen and Sudanchu 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.

Speaker #2: Colleen and Sudanchu 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.

Speaker #2: 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.

Speaker #1: For Q2, our average monthly attrition rate was 3.5%. The midpoint of our historical range of 3 to 4%. While we expect it to remain within that range going forward, there will be some fluctuation in future quarters due to seasonality.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: With that, I'll now turn it over to Colleen.

Speaker #2: With that, I'll now turn it over to Colleen.

Speaker #3: Thank you, Brendan, and thank you, everyone, for joining us for the Planet Fitness Q2 earnings call. We are pleased to welcome Sudanchu Priyadarshi to Planet Fitness, a proven global leader with more than 25 years of experience driving enterprise value creation across consumer-facing businesses.

Speaker #3: Thank you, Brendan, and thank you, everyone, for joining us for the Planet Fitness Q2 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: Tom provided a knowledgeable and steady hand as interim CFO, enabling us to complete a thorough search. He will remain with us in an advisory capacity through early September.

Speaker #3: Given this, Tom is joining us on today's call, and we'll be available to provide additional perspective during the Q&A. Now let me turn to our second quarter performance.

Speaker #3: 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.

Speaker #3: During the quarter, we furthered the important work to reignite sustainable member growth, and we are confident that the actions we outlined on our first quarter call are the right ones to achieve this overarching goal.

Speaker #3: During the quarter, we furthered the important work to reignite sustainable member growth, and we are confident that the actions we outlined on our first quarter call are the right ones to achieve this overarching goal.

Speaker #3: 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.

Speaker #3: 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% from last year.

Speaker #3: System-wide, same club sales increased by 1.7%, and adjusted EBITDA increased 3.5% over Q2 2025, and 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.

Speaker #3: System-wide, same club sales increased by 1.7%, and adjusted EBITDA increased 3.5% over Q2 2025. And 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

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: We know proximity and convenience are also factors, and with a Planet Fitness club within an approximate 12-minute drive of 170 million of the U.S.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: I'll also provide an update on global club expansion and franchisee engagement before turning the call over to Sudanchu. Let me start with our marketing updates.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: We will launch interim new creative that takes this a few steps further, featuring a more light-hearted tone aligned to our brand DNA with an intentional emphasis on our unique value proposition and brand differentiation within the HVLP landscape.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: An 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.

Speaker #3: Finally, 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.

Speaker #3: 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.

Speaker #3: Now 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.

Speaker #3: For Q2, our average monthly attrition rate was 3.5%. The midpoint of our historical range of 3 to 4%. While we expect it to remain within that range going forward, there will be some fluctuation in future quarters due to seasonality.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: Also, 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.

The model is currently in an alpha phase and continues to learn from member behavior.

Speaker #3: 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.

The next capability will be a next best action engine to serve up retention offers.

Speaker #3: We also recently implemented a mystery shop program to support consistent brand standards enhanced member satisfaction and operational excellence across our clubs in the U.S.

With them, shortly after joining can encourage a club visit.

Speaker #3: and Canada. The program supplements last year's system-wide NPS rollout to enhance member experience and service delivery in our clubs. Now moving to our pricing architecture.

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.

Speaker #3: 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.

We also recently implemented a Mystery Shop program to support consistent brand standards, enhanced member satisfaction, and operational excellence across our clubs in the US and Canada. The program supplements last year's systemwide NPS rollout to enhance member experience and service delivery in our clubs.

Speaker #3: 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.

Now moving to our pricing architecture, we have launched several regional and local price tests to better understand consumer responses across different markets.

Speaker #3: 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.

As part of our continued focus on reinforcing affordability and driving member acquisition. We will also test a ten dollar, 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.

Speaker #3: 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.

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.

Speaker #3: 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.

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 of multiple dmas and began marketing. The upgraded features this summer,

Speaker #3: 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.

The broader test is designed to help us understand how these offerings influence total joints, join mix upgrades and retention.

Speaker #3: Lastly, turning to development and franchisee engagement. During the second quarter, we opened 23 clubs, 5 of which were international, and included 21 franchise locations and 2 corporate-owned clubs.

Speaker #3: We announced this morning that we 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.

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.

Speaker #3: Ian brings extensive experience in multi-unit real estate development, operations, and asset management. This is an important milestone and a clear signal of the momentum we are building behind disciplined, long-term system growth.

Lastly turning to development and franchisee engagement during the second quarter, we opened 23 clubs 5 of which were International and included 21, franchise locations and 2 corporate owned clubs.

Speaker #3: It reflects the strength of our model, the confidence experienced franchisees and operators see in the Planet Fitness brand, and our opportunity to capitalize on population shifts in the U.S.

We announced this morning that we 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.

Ian brings extensive experience in multi-unit, real estate development, operations, and asset management.

Speaker #3: by continuing to grow our footprint in markets where our accessible, high-value offering can reach more consumers. Turning to international. In July, we completed the sale of our ownership stake in our Australia franchise.

This is an important milestone and a clear signal of the momentum we are building behind disciplined, long-term system growth.

Speaker #3: The strong progress we've seen in Australia demonstrates we can deploy capital in a disciplined, focused manner to accelerate Planet Fitness's international expansion. The sale of our stake to franchise equity partners validates this approach, and we appreciate FEP's ambition to scale the Planet Fitness brand and accelerate growth across Australia.

It reflects the strength of our model, the confidence experienced franchisees and operators see in the Planet Fitness brand and our opportunity to capitalize on population shifts in the US by continuing to grow our footprint in markets where our accessible high value offering can reach more consumers.

Turning to International in July, we completed the sale of our ownership stake, in our Australia franchise.

Speaker #3: We remain steadfastly focused on unit economics and, to that end, continued our active engagement with our franchisees during the quarter, including holding several small group luncheons and dinners to hear directly from them.

The strong progress we've seen in Australia demonstrates, we can deploy capital in a disciplined focused manner. To accelerate Planet fitness's International expansion.

Speaker #3: We look forward to furthering this engagement at our franchisee conference in September. Before I turn it over to Sudanshu, I want to again thank Tom for stepping in as our interim CFO and for graciously extending his time with us to support a smooth transition.

The sale of our stake to franchise Equity Partners validates this approach. And we appreciate FEPS ambition to scale the Planet Fitness brand and accelerate growth across Australia.

Speaker #3: His experience, leadership, and partnership have been invaluable. We're grateful for his contributions and wish him the very best as he returns to the everyday of Saturday club.

We remain steadfastly focused on unit economics and to that end continued, our active engagement with our franchises. During the quarter, including holding several small group, luncheons, and dinners to hear directly from them.

We look forward to furthering this engagement at our franchisee conference in September.

Speaker #3: Now I'll turn it over to Sudanshu.

Speaker #1: Thanks, Colleen, and good morning, everyone. It's a privilege to be with you today for my first earnings call at CFO of Planet Fitness. Before I walk through our second quarter results, I want to take a moment to share why I was drawn to this role.

Before I turn it over to Sudono, I want to again thank Tom for stepping in as our interim CFO and for graciously extending his time with us to support a smooth transition. His experience, leadership, and partnership have been invaluable. We're grateful for his contributions and wish him the very best as he returns to the "Everyday Is Saturday" club.

Speaker #1: Over the course of my career, I have had the opportunity to work across a number of great consumer businesses. What drew me to Planet Fitness was its size and reach, over 5 billion in total system-wide sales, nearly 3,000 clubs, and 21.5 million members, as well as a combination of factors I don't often see in one company.

Now, I'll turn it over to cydonia.

Thanks for calling, and good morning, everyone.

It's a privilege to be with you today, for my first earnings call at CFO of Planet Fitness.

Our second quarter results.

I want to take a moment to share why I was drawn to this role.

Over the course of my career. I have had the opportunity to work across a number of great consumer businesses.

Speaker #1: A brand with real emotional resonance in the judgment-free zone; a highly franchised and capital-efficient operating model; and a long runway for growth in the U.S.

What drew me to Planet Fitness was its size and reach.

Over 5 billion, in total systemwide sales.

Nearly 3,000 clubs and 21.5 million members.

Speaker #1: and internationally. I have spent my career focused on turning strategy into discipline execution, driving margin expansion, capital efficiency, and shareholder value. And I see tremendous opportunity to do exactly that here working alongside Colleen and this leadership team while also helping lead our international expansion.

As well as a combination of factors I don't often see in one company.

A brand with real emotional, resonance in the judgement free zone.

A highly franchised and capital-efficient operating model.

And a long runway for growth in the US and internationally.

I have spent my career focused on turning a strategy into discipline execution.

Speaker #1: I also want to take a moment to thank Tom. Tom stepped back in at a critical moment for this company and did an excellent job stabilizing the finance organization, all while helping set me up for a smooth start.

Driving margin expansion.

Capital efficiency and shareholder value.

And I see tremendous opportunity to do exactly that here, working alongside Colleen and this leadership team while also, helping lead our International expansion.

Speaker #1: Tom, thank you for your partnership. And I'm glad you will remain available to us as an advisor while we complete this transition. Now to our second quarter results.

I also want to take a moment to thank Tom.

Tom stepped back in at a critical moment for this company.

Speaker #1: All of my comments regarding our second quarter performance will be comparing Q2 2026 to Q2 of last year unless otherwise noted. We opened 23 new clubs in Q2 this year, consistent with the number of openings in the year-ago period.

And did an excellent job, stabilizing the finance organization.

all while helping set me up for a smooth start.

Tom.

Thank you for your partnership.

And I'm glad you will remain available to us as an adviser while we complete this transition.

Now, to our second quarter results.

Speaker #1: We delivered system-wide same-club sales growth of 1.7% in the second quarter, with franchisee and corporate same-club sales both up 1.7%. Our Q2 comp increase was entirely driven by rate growth.

All of my comments regarding our second quarter performance will be comparing Q2 2026 to Q2 of last year unless otherwise noted.

We opened 23 new clubs in Q2 this year.

Consistent with the number of openings in the year ago. Period.

Speaker #1: Black card penetration was approximately 68% at the end of the quarter, an increase of 210 basis points from the prior year. For the second quarter, total revenue was $365 million, compared to $341 million and increase of 7%.

We delivered systemwide same-store sales growth of 1.7% in the second quarter, with both franchising and corporate same-store sales up 1.7%.

Our Q2 comp increase was entirely driven by rate growth.

Speaker #1: The increase was driven by revenue growth across all three segments. A 13% increase in franchisee segment revenue was primarily due to an increase in national ad fund.

Black Card penetration was approximately 68% at the end of the quarter.

An increase of 210 basis, points from the prior year.

Speaker #1: Or NAF. Higher royalty revenue from increased same-club sales as well as new clubs and franchisee and other fees. The increase in NAF revenue was primarily due to a 1 percentage point increase in NAF contributions from 2% to 3% for 2026.

For the second quarter, total revenue was 365 million compared to 341 million and increase of 7%.

The increase was driven by Revenue growth across all 3 segments.

A 13% increase in franchises, segment Revenue was primarily due to an increase in National ad fund.

Or Nas.

Speaker #1: For the second quarter, the average royalty rate was 6.7%, which is flat compared to prior year. The 4% increase in revenue in the corporate-on-club segment was driven by the sales from new clubs as well as increased same-club sales.

Higher royalty revenue from increased same Club sales as well as new clubs and franchisees and other fees.

The increase in Naf Revenue was primarily due to a 1 percentage Point. Increase in math contributions from 2% to 3% for 2026.

Speaker #1: As a reminder, we opened 19 new corporate clubs since the end of Q2 last year, 11 of which occurred in the fourth quarter of 2025.

For the second quarter, the average royalty rate was 6.7%.

Which is flat compared to Prior year.

Speaker #1: Equipment segment revenue increased 4%. The increase was driven by higher revenue from new franchisee-owned club placement sales and higher revenue from replacement equipment sales.

The 4% increase in revenue in the corporate-owned club segment was driven by sales from new clubs, as well as increased same-club sales.

As a reminder, we have opened 19 new corporate clubs since the end of Q2 last year.

Speaker #1: We completed 21 new club placements this quarter, compared to 19 last year. For the quarter replacement equipment accounted for 85% of total equipment revenue, compared to 87%.

11 of which occurred in the fourth quarter of 2025.

Equipment, segment Revenue increased 4%.

Speaker #1: Our cost of revenue which primarily relates to the cost of equipment sales to franchisee-owned clubs amounted to $64 million, compared to $59 million. Club operations expense, which relates to our corporate-owned club segment, increased 6% to $82 million, compared to $77 million.

The increase was driven by higher revenue from new franchisee and club placement sales, as well as higher revenue from replacement equipment sales.

We completed 21, new club, placements is quarter compared to 19 last year.

counted for 85% of total equipment revenue, compared to 87%.

Speaker #1: This increase was primarily due to operating expense from 19 new clubs opened since the end of Q2 last year, partially offset by the sale of 8 clubs in California.

Our cost of Revenue, which primarily relates to the cost of equipment sales to franchising on clubs.

Amounted to 64 million compared to 59 million.

Speaker #1: SG&A decreased 3% to $34 million, compared to $36 million, while adjusted SG&A was $33 million, a decrease of 2%. National advertising fund expense was $33 million, compared to $23 million, primarily due to the 1.6 this year in marketing from the local fund to the national fund.

Club operations. Expense, which relates to our corporate owned Club. Segments, increased 6% to 82 million compared to 77 million.

This increase was primarily.

Due to operating expenses from 19 new clubs opened since the end of Q2 last year, partially offset by the sale of 8 clubs in California.

Speaker #1: Net income was $67 million, adjusted net income was $68 million, and adjusted net income per dietary share was $88. Our adjusted net income per share is based on an adjusted weighted diluted average share count of 77.5 million shares compared with 80.1 million in the first quarter of 2026.

Sgna decreased 3% to 34 million compared to 36 million while adjusted sgna was 33 million a decrease of 2%.

National advertising fund. Expense was 33 million compared to 23 million primarily due to the 1.6 this year in marketing, from the local fund, to the National Fund.

Speaker #1: The decrease in our share count reflects the open market repurchases made during the second quarter, which I will cover in detail shortly. Adjusted EBITDA was $153 million, an increase of 3.5% year over year, and adjusted EBITDA margin was $41.8%, compared to $148 million, with adjusted EBITDA margin of $43.3%.

Net income was $67 million. Adjusted net income was $68 million, and adjusted net income per diluted share was $0.88.

Our adjusted net income per share is based on an adjusted weighted diluted, average share, count of 77.5. Million shares compared with 80.1 million, in the first quarter of 2026.

The decrease, in our share count, reflects the open market repurchases, made during the second quarter which I will cover in detail shortly.

Speaker #1: By segment, franchisee adjusted EBITDA was $92 million, and adjusted EBITDA margin decreased from $72.3% to $67.6%. With the change in margin, primarily due to the increase in the NAF contribution rate.

Adjusted EBITDA was $153 million, an increase of 3.5% year-over-year, and adjusted EBITDA margin was 41.8%, compared to $148 million with an adjusted EBITDA margin of 43.3%.

Speaker #1: Excluding NAF, franchisee adjusted EBITDA margins were consistent year over year. Corporate club adjusted EBITDA was $57 million, and adjusted EBITDA margin decreased from $40.7% to 40%.

by segment franchisee at justed ibida, was 92 million and adjusted ibida margin decreased from 72.3% to 67.6%

With the change in margin, similarly, due to the increase in the nas contribution rate.

Speaker #1: Equipment adjusted EBITDA was $24 million, and adjusted EBITDA margin decreased from $32.1% to $28.4%. The change in equipment adjusted EBITDA margins was due to the timing of replacement equipment discounts.

Excluding NAS franchisee adjusted EBITDA, margins were consistent year-over-year.

And adjusted ibida margin decreased from 40.7% to 40%.

Speaker #1: For the first half of 2026, equipment adjusted EBITDA margins were $29.6% in line with our expectations. Now turning to the balance sheet. In Q2 2026, utilizing cash on hand and a 75 million drawdown on one of our variable funding notes, we repurchased approximately $4 million shares at an average price of $50.44 for a total of $200 million.

Equipment. Adjusted iida was 24 million and adjusted ibida margin decreased from 32.1% to 28.4%.

The change in equipment adjusted iida margins was due to the timing of replacement equipment discounts.

For the first half of 2026.

Equipment, adjusted ibida. Margins worth 29.6% in line with our expectations.

Now, turning to the balance sheet.

Speaker #1: This brought our year-to-date repurchases to $250 million, leaving $250 million remaining under the $500 million repurchase program authorized by the board late last year.

Speaker #1: As of June 30, 2026, we had total cash, cash equivalents, and marketable securities of $544 million, compared to $607 million on December 31, 2025, which included $73 million and $66 million of restricted cash, respectively, in each period.

In Q2 2026, utilizing cash on hand and a $75 million drawdown on one of our variable funding notes, we repurchased approximately 4 million shares at an average price of $50.44, for a total of $200 million.

This brought our year to date repurchases to 250 million. Leaving, 250 million remaining under the 500 million repurchase program authorized by the board late last year.

As of June 30th 2026.

We had total cash.

Cash equivalents.

Speaker #1: We planned to utilize a portion of our available cash to repay the $75 million VFN by year-end. Moving on to our 2026 outlook. Based on our second quarter share repurchase activity, we are raising our view for adjusted net income per dietary share which is now projected to grow approximately 6%, up from our prior outlook of approximately 4%.

And marketable securities of 544 million compared to 67 million on December 31st 2025, which included?

$73 million and $66 million of restricted cash, respectively, in each period.

75 million vfn by year end.

Moving on to our 2026 outlook.

Speaker #1: This is based on adjusted diluted weighted average shares outstanding of approximately 77 million down from our prior expectations of approximately 79 million. The benefit of lower share count is being partially offset by higher interest expense following the drawdown of our 75 million VFN.

Based on our second quarter's repurchase activity, we are raising our view for adjusted net income per diluted share, which is now projected to grow approximately 6%, up from our prior outlook of approximately 4%.

Speaker #1: Interest expense for the year is now expected to be approximately $115 million, up 4 million from our prior guidance, which is requiring us to adjust our adjusted net income guidance slightly to down 3% versus down 2%.

This is based on adjusted diluted weighted average shares outstanding of approximately 77 million, down from our prior expectations of approximately 79 million.

The benefit of a lower share count is being partially offset by higher interest expense following the drawdown of our $75 million VFN.

Speaker #1: The rest of our outlook remains unchanged. We still expect system-wide same club sales growth to be approximately 1%, revenue to grow approximately 7%, and adjusted EBITDA to grow approximately 6%.

Interest expense for the year is not expected to be approximately 115 million up 4 million from our prior guidance, which is requiring us to adjust our adjusted. Net income guidance slightly to down. 3% versus down to 2%.

Speaker #1: As we discussed on our Q1 call, we anticipate quarterly same club sales growth to moderate sequentially as we move through the year. This is still the expectation, however, our forecast does not assume that same club sales are negative in either the third or fourth quarters.

The rest of our Outlook remains unchanged.

We still expect systemwide same Club, sales growth to be approximately 1%.

Revenue to grow approximately 7%.

And adjusted EBITDA to grow approximately 6%.

Speaker #1: Moving to unit growth, we still expect to open between $180 and $190 new club system-wide with $150 to $160 equipment placements and anticipate that the cadence of the remaining opening and placement to be weighted to the fourth quarter.

as we discussed on our q1 call, we anticipate quarterly, same Club sales growth to moderate sequentially as we move through the year,

This is still the expectation. However, our forecast does not assume that same club sales are negative in either the third or fourth quarters.

Moving to unit growth.

Speaker #1: We expect that replacement equipment sales will make up approximately 70% of total equipment segment revenue for the full year. We expect second half replacement equipment revenue to be slightly lower than the first half, with a higher mix in quarter three.

We still expect to open between 180 and 190 new club system wide width, 150 to 160 equipment, placements, and anticipate that the Cadence of the remaining openings and placements to be weighted to the fourth quarter.

Speaker #1: We also expect full year equipment margin rate of approximately 30%. Lastly, we continue to expect capital expenditures to be up 10 to 15% and depreciation and amortization to be up approximately 10%.

We expect that replacement equipment. Sales will make up approximately 70% of total equipment, segment revenue for the full year.

We expect second-half replacement equipment revenue to be slightly lower than the first half, with a higher mix in Q3.

Speaker #1: In closing, having now had the chance to get closer to the business over the past 40 days, I am even more convinced of what drew me to Planet Fitness in the first place.

we also expect full year equipment margin rate of approximately 30%

Speaker #1: This is a highly franchised capital-efficient model built around a brand that continues to resonate broadly with consumers. And it has tremendous growth prospects domestically and more so internationally, where the temp is even greater given the lower fitness participation rates outside of the US.

Lastly, we continue to expect Capital expenditures to be up 10 to 15% and depreciation and emotion to be up approximately 10%.

In closing, having now had the chance to get closer to the business over the past 40 days.

Speaker #1: As we look to the back half of the year and beyond, we remain focused on discipline execution of the strategic priorities call in outlined aimed at driving sustainable growth and generating increased value for our members' franchisees and shareholders.

I am even more convinced of what drew me to Planet Fitness in the first place. This is a highly franchised Capital efficient model built around a brand that continues to resonate broadly with consumers.

And it has tremendous growth prospects domestically and more. So internationally.

Where the time is even greater given the lower Fitness participation rates outside of the US.

Speaker #1: I will now turn the call back to the operator to open it up for Q&A.

As we look to the back half of the year and beyond,

Speaker #2: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #2: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

We remain focused on discipline, execution of the Strategic priorities calling outlined aimed at driving sustainable growth and generating increased value for our members, franchises and shareholders.

I will not turn the call back to the operator to open it up for Q&A.

Speaker #2: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Arpine Kocharian with UBS.

Speaker #2: Your line is open. Please go ahead.

Speaker #3: Hi. Thank you so much for taking my question and, Sudhanshu, welcome to the call. Look forward to working with you. You talked about having completed the welcome.

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you please pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Speaker #3: You talked about having completed different pricing tests. Would you be able to share at all some of those initial findings and learnings, and what that could mean for your broader pricing structure?

Speaker #3: Specifically, how you're thinking about maybe introducing a third tier of pricing. Does that even make sense at this point? And also, is it fair to assume that any update to that lower-end pricing or maybe classic card pricing or whatever it could be wouldn't come without a kind of a review of black card pricing at this point?

Hi, thank you so much for taking my question and suddenly welcome to the call look forward to working with you. Um, you talked about having completed, uh, welcome, you talked about having completed different pricing tests, would you be able to share at all some of those initial findings? Um, and learnings, and what that could mean for your broader pricing structure?

Speaker #4: Arpine, good morning. Thanks for the question. As I indicated, we've got a number of price tests, both regionally and locally, to really understand consumer response.

Speaker #4: Across a number of different pricing architectures and different markets. Many of the tests are still in flight, and we are still reading the results.

Specifically how you're thinking about, maybe introducing a third tier of pricing? Does that even make sense at this point? And also is it fair to assume that any update to that lower end pricing? Or maybe classic card pricing, or whatever it could be, wouldn't come without a kind of a review of Black Card pricing. At this point.

Speaker #4: As you know, due to the subscription nature, of our business and our seasonality, we tend to run tests for a fairly long period of time.

Speaker #4: We'll evaluate those tests on really reinforcing affordability driving member acquisition and sustained member growth. And to your question, we've tested tiers. We've tested different price points.

Speaker #4: And in different regions as well.

Speaker #3: Great. And you know part of the reason for part of latter part of my question is Sharon is actually coming in pretty steady, right, even when we think about sort of what it was in the prior quarter.

Speaker #3: It seems like Sharon is pretty steady. Does that make you sort of rethink the black card pricing strategy a little bit, or would you say that it's going to be viewed holistically more aligned with what you're doing with the rest of the pricing structure?

Uh, ARP. Good morning. Thanks for the question. Uh, as I as I indicated, we've got a number of price tests, both regionally and locally, uh, to really understand consumer response across a number of different pricing architectures, and different markets, many of the tests are still in flight, and we are still reading the results. As, you know, due to the subscription nature, uh, of our business and our seasonality. We, we tend to run tests for, um, you know, fairly long period of time. Uh, we'll evaluate those tests on really reinforcing affordability, uh, driving member acquisition and sustained member growth. Uh, and to, you know, to your question, uh, We've tested tears, we've tested, uh, you know,

You have a different price points and um in different regions as well.

Speaker #4: Yeah. Again, we're leaning hard into sustainable net member growth. So as we evaluate any pricing decisions in our architecture, whether they're tiers, regional nuance, or something with black card, we're going to evaluate the price elasticity in conjunction with join mix as well as total sustainable net member growth and impact on churn.

Great. And, you know, part of the reason for part of letter, part of my question is churn is actually coming in pretty steady, right? Even when we think about sort of what what it was in the prior quarter, it seems like churn is

Pretty steady. Does that make you sort of rethink the Black Card pricing strategy a little bit, or would you say that it's going to be viewed holistically, more aligned with what you're doing with the rest of the pricing structure?

And we're leaning. Uh, we're leaning hard into sustainable, net member growth

Speaker #3: Thank you very much.

Speaker #4: Sure.

Speaker #2: Your next question comes from the line of Randy Konik with Jefferies. Your line is open. Please go ahead.

Speaker #1: Great. Thanks. Just curious, on churn, again, as mentioned, that's stable. And the last question there, is there any kind of difference you're seeing between churn statistics of black card versus the classic card at the moment?

So, as we evaluate any pricing decisions in our architecture, whether they're tier tiers Regional Nuance or, uh, or something with black cards. Uh, we're going to evaluate the price elasticity in conjunction with, uh, join mix as well as total sustainable, net member growth, uh, and impact on churn.

Thank you very much.

Speaker #1: Just curious on what you're seeing there.

Speaker #4: Yeah. Good morning, Randy. And thanks for the question. With regard to churn specifically, you're right, but it's within the range that we've typically said an average monthly churn rate between 3 and 4 percent.

Your next question comes from the line of Randy koenic with Jeffrey's, your line is open. Please go ahead.

Speaker #4: And it was solidly in the middle there. We haven't seen a significant difference between classic and black card member churn. As we've talked about before, we do see some variance across generational cohorts.

Great, thanks. Just curious on churn. Um, again, you just mentioned that it's stable in the last question there. Is there any kind of difference you’re seeing between churn statistics of Black Card versus the Classic Card at the moment? Just curious what you’re seeing there.

Speaker #4: But not a marked difference between classic and black card.

Speaker #1: Got it. And I guess just following up here on the $10 classic card test, can you just expand upon that a little bit more in terms of the scope?

Speaker #1: How long it will be in place if you offer $10 limited time offer, what does that mean? And then when you kind of think about that and you put that forth, you said you had some engagement with franchisees with dinners and stuff like that before the September meeting.

Good morning, Randy. And thanks for the question, um, with regard with regard to Insurance, specifically you're right. But, you know, it's it's within the range that we've we've typically said, an average monthly churn rate between 3 and 4% and it was solidly in the middle. There we haven't seen a significant difference between, uh, between classic and black card member churn. Um, as we've talked about before, uh, we do see some, some variance across generational cohorts, um, but not not a marked difference between classic and black cards.

Speaker #1: Any initial impressions from these meetings you've held thus far with franchisees on communicating to them or different pricing architectures, different pricing objectives, and what their feedback is and what they've been asking for or what they're kind of focused on right now?

Speaker #4: Sure. So specific to the $10 classic card promo, it is a promo window, I guess, for competitive reasons. We won't indicate the exact dates we're going to run it or exactly how long it will run.

Got it. And and I guess just following up here on the, the 10 classic card, uh, test can you just expand upon that a little bit more in terms of the scope? Uh, you know, how long it will be in place if if you offer a ten dollar, uh, limited time offer? What does that mean? Um, and then, you know, when you kind of think about that, and you put that forth, you said, you had some engagement with franchisees with dinners and stuff like that. Before the September meeting what any initial Impressions from these uh, meetings, you've helped

Speaker #4: But it will be a limited time promotion. And we do intend to run it during this quarter. We have communicated with our franchisees about our intent to test that as a promo, again, a limited time promo, nationally.

Thus far with franchises on, you know, communicating to them or, you know, different pricing architectures, different pricing objectives and what their feedback is and what, what they've been asking for or what they're, they're kind of focused on right now.

Speaker #4: And one of the reasons it's important to test it nationally is to read the regional nuances and really understand kind of price elasticity and demand indicators around price point in different markets around the country.

Speaker #4: And from a franchisee sentiment standpoint, we've been very communicative with them. Around our strategic pivots and, again, around this promo, as in any franchise organization, we'll have some franchisees that would be completely on board and others that might be a little bit more reticent, but certainly they understand the outputs that we're seeking to evaluate by running this test nationally.

Communicated with our franchises about our intent to uh, to test that as a promo. Again, a limited time promo nationally and 1 of the reasons. It's important to test. It nationally is to read the regional nuances and really understand kind of price elasticity and demand indicators around price point in uh in different markets, around the country.

Speaker #1: Got it. Thank you.

Speaker #4: Sure.

Speaker #2: Your next question comes from the line of Simon Siegel with Guggenheim Securities. Your line is open. Please go ahead.

Speaker #1: Thanks, everyone. Good morning, Stanley. Welcome. Looking forward to working with you. Colleen, maybe just to follow up on that. So if someone buys the $10 classic test, do they get it temporarily, or does that become their go-forward rate?

And from a, from a franchisee sentiment standpoint. Um, you know, we we've been very communicative with them, uh, around our strategic pivots and uh, again around this, uh, this promo as in any franchise organization, you know, we'll have some franchises that, uh, would be completely on board and others that, um, you know, might be a little bit more reticent, but certainly they, they understand, uh, the outputs that were seeking to evaluate by running this test nationally.

Got it. Thank you.

Sure.

Speaker #1: It just feels like that's a pretty compelling offer now. And so I'm curious how you plan to use that to strategically trigger new ads and also how you ensure it doesn't drive any negative response from anyone who joined at 15 or maybe would have joined at 15 in the future.

Your next question comes from the line of Simon seagull with Guggenheim SEC. Securities, your line is open. Please go ahead.

Speaker #1: And then just curious how you're thinking about the potential impacts to franchisee unit economics? Do you have offsets to the lower revenue? Do you think it drives incremental members in that offset?

Speaker #1: Just curious how you're thinking about that full picture. Thanks.

Speaker #4: Morning, Simeon. And thanks for the question. So from a standpoint of pricing, it's a limited time offer. But it's not a limited time. It's not intended to be a limited time rate.

Thanks everyone. Good morning. It's Andrew, welcome. Look forward to working with you. Um, calling, maybe just to follow up on that. So if someone buys the ten dollar classic test of the, get it temporarily, or does that become their go forward rate? It just feels like that's a pretty compelling offer now. And so, I'm curious how you plan to use that to strategically, trigger new ads and also how you ensure it doesn't drive any negative

Speaker #4: So when someone joins at a classic card price point, as we've done historically, they that's a legacy protected rate. So as long as they remain a member of Planet Fitness, they continue to enjoy the rate at which they joined.

Response from anyone who joined in 150, would have joined a 15 in the future and then just curious how you're thinking about the potential impacts to franchisee unit economics to do, you have offsets to the lower Revenue? Do you think it drives incremental members in that offset? Just curious how you're thinking about that full picture? Thanks.

Man, um, and thanks for the question.

Uh, so

Speaker #4: And that will be or is intended to be the case with this limited $10 promo. From a standpoint of unit economics, we do know that the lift of the classic card price from 10 to $15 across the system holistically has been accretive to the AUVs of our franchisees' clubs.

Speaker #4: There are some franchisees in certain markets who have encouraged us to test the $10 promo pricing. We did it in a very concentrated regional test earlier this summer or late spring.

Speaker #4: And really, again, want to read and better understand the regional nuances and regional price elasticity by running the test nationally. And I think, as I indicated, we're not running the test because we're contemplating a rollback of 15 to 10.

Uh, pricing. It's, it's a limited time offer, uh, but it's not a limited time, it's not intended to be a limited time rate. So, uh, when someone joins at a classic card price point, uh, as we've done historically, um, they in, that's a legacy protected rate. So, as long as they remain a member of Planet Fitness, they continue to enjoy enjoy the rate, uh, at which they joined and that will, that will be your intended to be the case. With this, uh, this limited ten dollar uh, promo from the standpoint of unit economics. Uh, you know, we do know that the list of the classic card price from 10 to 15 dollars across the system, holistically has been accretive to the auvs of our franchises clubs. Um, there there are some franchises in in certain markets who have encouraged us to uh to test the ten dollar promo pricing. We did it in a very uh, a very concentrated

Regional test. Um,

Speaker #1: Perfect. Thanks, best of luck.

Speaker #4: Thank you.

Speaker #2: Your next question comes from the line of Jonathan Komp with Baird. Your line is open. Please go ahead.

You know, earlier this summer uh, our late spring and uh really again want to want to read and better understand the regional nuances and Regional price elasticity by running the test nationally.

Speaker #5: Yeah. Hi. Good morning. Thank you. Colleen, I want to follow up on the marketing pivot that you highlighted. Would you characterize this more as a shift back to the historical Planet Playbook?

And I think as I indicated, we're not running the test because we're contemplating or, you know, a roll back of uh of 15 to 10.

Perfect. Thanks. Best luck.

You.

Speaker #5: And are you contemplating within the tests ways to drive incremental value to members that you could find new ways to monetize? I know there's a lot of discussion about testing different price points.

Your next question comes from the line of Jonathan comp with beard. Your line is open. Please go ahead.

Speaker #5: But what about alternative offerings or new ways to add value that you might be able to capture more dues or price from members over time?

Yeah. Hi, good morning. Thank you, Colleen. I want to follow up on the marketing pivot that you highlighted. Would you characterize this more as a shift back to...

Speaker #4: Sure. Good morning. Nice to hear from you. And thanks for the questions. So to your first question about kind of the marketing playbook, and I alluded to it in my remarks a bit, what you'll see in the campaign, the new campaign that we're developing, is certainly a lighter approach.

You know, the historical Planet Playbook. Um, and, and are you contemplating within the tests ways to drive incremental value to members that you could find new ways to monetize? I know there's a lot of discussion about testing different price points but what about alternative offerings or new ways to, you know, add add value that you might be able to, you know, capture more uh, you know, dues or or price from from Members over time.

Speaker #4: We want to convey approachability and ensure that our messaging resonates with the 70% that is really our target audience, our core consumer. So more casual gym-goer, fitness beginner, what this brand has historically done very successfully is bring people into the category.

Speaker #4: So we want to ensure that we're reaching people with messaging that conveys that approachability judgment-free and welcoming no-gym intimidation environment that makes Planet Fitness unique and special.

Speaker #4: As it relates to continuing to enhance the value propositions for our members, we've done a lot over the last period, couple of periods, few periods to enhance the value proposition for our members.

Speaker #4: We're seeing it resonate in the increases in our net promoter scores, our net promoter scores are up 9 percentage points year on year as of the end of Q2.

Speaker #4: And our feedback about the format optimization and the investments that we've made in equipment on the club floor are telling us that our member feedback is telling us that they're seeing enhanced value in their relationship with Planet Fitness.

Speaker #4: And as you know, more than two-thirds of our members today are black card members. And we're making significant enhancements to our recovery offering in the black card spa, having tested it in 13 testing new modalities in 13 clubs.

Has historically done. Very successfully is bring people into the category. Uh so we want to ensure that that we're reaching people with messaging uh, that conveys that approachability uh, judgment-free and you know, welcoming know, Jim intimidation environment that makes Planet Fitness unique uh, and special as it relates to uh, continuing to enhance the value proposition for our members. We've done a lot over the last. You know, the last period couple periods few periods, uh, to enhance the value proposition for our members. Uh, we're seeing it resonate in the increases in our net promoter scores, our net promoter scores are up 9 percentage points year on year as of the end of Q2 and our, our feedback about the format optimization and the Investments that we've made in equipment on the club floor are telling us that remember

Speaker #4: Earlier this year, and now this summer, moving to 100 club tests with the five new black card modalities. So we're very focused on continuing to add value for our members, both at the classic and black card tiers.

Speaker #5: Okay. Thank you. And then just separately, I wanted to ask how we should view capital allocation in light of the pretty significant buyback completed during the quarter.

For feedback is telling us that they're seeing enhanced value in their relationship with Planet Fitness. And as you know, um, more than 2/3 of our members today are Black Card members, and we're making significant, uh, enhancements to our recovery offering in the Black Card. Spa, spa having uh, tested it in 13 test testing, new modalities, and 13 clubs, uh, earlier this year. And now this summer moving to a 100

Speaker #5: And maybe more broadly, was your business has become more capital-intensive over the past several years? Just any broader thoughts on evaluating the current structure or the current ownership rate of your unit base, especially with the new franchise interest you mentioned?

Club test with the 5, new blackard modalities. So we're very focused on continuing to add value for, uh, our members. Both at the classic and black cards here.

Speaker #5: Just any broader thoughts there would be helpful. Thank you.

Speaker #4: Sure.

Speaker #6: So Jonathan, this is with Hanshu. First, capital allocation will remain what we have today. We are a cash flow-generative business. We use a lot of cash to generate value, whether opening clubs.

Speaker #6: You saw how we have recycled capital in Australia. Or buying back share when we see the value. At the same time, we will continue to look at international growth opportunities.

Okay, thank you and then just separately. I wanted to ask how we should view Capital allocation in light of the pretty pretty significant buyback. Uh, completed during the quarter and and and maybe more broadly, it was your business has become more Capital intensive over the past several years. Just any broader thoughts on evaluating you know the current structure or the current uh ownership rate of your unit base, especially with the new franchise interest, you mentioned. Just any broader thought there would be helpful. Thank you.

All right. So Jonathan this is with hanu uh, first

Speaker #6: Same like Australia model, where we see growth, but your question about why we having corporate club, why we have a franchisee, we want to run an asset-light model.

Speaker #6: That's what we have. We have less than 10% is the corporate club. We want to continue to run that model. That model is working for us.

Capital allocation will remain what we have today. You know, we are a cash flow generator business. We use a lot of cash to generate value, whether opening clubs—you saw how we have recycled capital in Australia—or buying back shares when we see the value.

At the same time, we will continue to look at, uh, International growth opportunities seem like Australia model where we we see growth.

Speaker #6: But overall, we feel that we will look at all our options available to us, management team and board, to create shareholder value. That's why we are here for.

Speaker #6: And all of those options, we consider regularly. But I think what we have right now is driving growth, is driving member growth. And we are happy about it.

But your question about, you know, why we having corporate Club? Why we have a franchisee, we want to run an asset like model. Uh, that's what we have. You know, we have less than uh, 10% is, is the corporate club. We want to continue to do to run that model. That model is working for us. Uh,

Speaker #6: Anything, Colleen, you want to add?

Speaker #4: Yeah. I'll just say your John, I know you're aware we sold our California clubs last year to an existing franchisee. Who had infrastructure on the West Coast and could operate them more efficiently than we could because we didn't have a large portfolio on the West Coast.

But overall, uh we feel that uh we will look at all our options available to us management team and board to create shareholder value. That's why we are here for and all of those options we consider regularly. But I think what we have right now is is driving growth, you're driving member growth and we are happy about it.

Speaker #4: Exiting our position in Australia, it was another example. We'll use our balance sheet to help fuel and accelerate growth in a healthy way. At the same time, if we have an opportunity to exit a position and recycle that capital, we will do that as well.

Speaker #4: So to date, we've kept to the-ish 90/10, 90%, 10% franchise versus corporate-owned. We see our corporate portfolio as a great test lab for us as we continue to be a test and learn shop and want to invest in kind of R&D.

Speaker #4: At the same time, we continue to evaluate opportunities for capital recycling and that could include other portfolio transactions. With our currently corporate stores, if the right opportunity presented itself.

Speaker #4: So again, similar to as we did with Australia, California, you know that we've considered our position in Spain as well. And at some juncture, intend that we'll either sell the Spain territory or bring a franchisee into that market as well.

Speaker #5: Okay. Thank you very much.

Speaker #4: Thank you.

Speaker #3: Your next question comes from the line of Rahul Krotthapalli with J.P. Morgan. Your line is open. Please go ahead.

Speaker #7: Good morning, guys. Colleen, does it make sense to test weekly membership plans in the system? Say at a lower $4.99 or a $5.99 wide card or a $6.99, $7.99 black card.

Intend that will will either, you know, sell the Spain territory, uh, or bring a franchisee into that market, uh, as well.

Okay, thank you very much.

Thank you.

Speaker #7: Given mature club capacity still remains, and I know you guys do this in Australia or probably in some other markets. Are you testing these?

Your next question comes from the line of Rahul Kotra Pali with JPMorgan. Your line is open. Please go ahead.

Speaker #7: Or what do you think the impact could be? And I have a follow-up.

Speaker #4: Sure. Hi, Raul. Nice to hear from you. Thanks for the question. You're right. We do have other billing cycles in other geographies. Some of the international geographies.

Speaker #4: More because that market and that's what the consumer expects in those geographies. Here domestically, in the US, the monthly billing is the most typical billing structure.

Good morning, guys. Uh, Colleen, does it make sense to test weekly membership plans in the system? Say at like a lower 499 or a 599 white card, or like a 690 and 799 black card given like, matured Club, capacity, Still Remains and uh I I know you guys do this in Australia or probably in some other markets. Are you testing these or what do you think the impact could be? And I have a follow-up.

Speaker #4: So to clearly answer your question, we have not tested and are not currently contemplating a weekly billing test. In the US.

Speaker #7: Got it. And then you shared some details on the upcoming app enhancements. Is there an opportunity to provide something on the lines of a nutrition or a dietary recommendations or partnerships with many networks out there to your point on democratizing even wellness beyond recovery?

Uh sure. Hi role. Uh, nice to hear from you. Thanks for the question. Uh, you're right. We do have other billing Cycles in other geographies. Some of the international geographies um more because that's market and that's what the consumer expects in those geographies. Um, you know, here domestically

Uh, in the US, uh, the, you know, the monthly billing is the most is the most typical billing structure. Um, so to, you know, to clearly answer your question, we have not tested and are not currently contemplating a weekly billing test.

In the US.

Speaker #7: Any thoughts there?

Speaker #4: Sure. So you're asking about the ability to use our app to highlight partnerships? Is that am I getting the question clearly?

Speaker #7: Yeah. Partnerships with any nutrition or dietary recommendations for the existing membership base. As an added feature for the wellness.

Got it. Uh, and then you shared some details on the upcoming app enhancements. Is there an opportunity to provide something along the lines of nutrition or a dietary recommendation, or partnership with many networks out there? To your point, on democratizing, like—

Speaker #4: Yeah. So we've done some of that to date. We've had we've had a partnership with Factor Meals which provides prepackaged nutrition balanced nutrition meal plan options.

Even Wellness Beyond recovery. Any thoughts there.

Um, sure. So you're asking about the ability to use our app to highlight partners.

Speaker #4: And we had fairly good utilization with that from that with our members with that perk. We have also had a partnership with Row. And Row provides nutrition and wellness counseling and also GLP-1 access and access to physician support.

Partnerships with an indirect nutrition or dietary recommendations for the existing membership base uh, in like as an added uh, feature for the wellness.

Speaker #4: And that launched in late Q4 of last year. It's been one of our most successful and most utilized perks programs to date. So we're always exploring additional opportunities for perks and partnerships.

Date. We've had um, you know, we got a partnership with Factor meals, uh, which provides uh, you know, pre-packaged nutrition, balanced nutrition, uh meal plan options, uh and had Fairly good utilization with that. From that uh, with our members with that perk, uh, we have also had a partnership with row, um, and row provides nutrition and wellness, uh, counseling and and also glp1.

Speaker #4: Again, for competitive reasons. I probably won't talk about them with specificity except to talk about the ones that we've recently where I just highlighted in the real partnership.

Speaker #4: And the fact that we do see an opportunity to utilize the app to bring to bear opportunities for a more holistic a more holistic access to other wellness partners through the member relationship with Planet Fitness.

Speaker #7: Thank you.

Speaker #3: Your next question comes from the line of Max Rakhlenko with TD Cohen. Your line is open. Please go ahead.

Speaker #7: Great. Thanks a lot. So first, Colleen, can you remind us historically the mix of joints that would come during promotion versus non-promotion periods? There are some concerns that this price test that you're doing on the Classic card could eventually become almost the shadow price decrease.

Access and access to, uh, physician support, and that launched in late Q4 of last year. It's been 1 of our most successful and most utilized perks programs to date. So, um, we're we're always exploring additional opportunities for perks and Partnerships. Uh, again, for competitive reasons, I probably won't talk about them, uh, with specificity except to talk about the ones that we've, you know, we've, we've recently worked, I just highlighted in the real partnership. Um, and the fact that we do see an opportunity to utilize the app to bring to bear uh opportunities for a more holistic uh more more holistic, access to other Wellness Partners um through the member relationship with Planet Fitness,

thank you.

Speaker #7: And then separately, how do you maintain the $15 Classic card members from not putting in rejoining at $10?

Your next question comes from the line of Max Reclkink with TD Cohen. Your line is open. Please go ahead.

Speaker #4: Good morning. It's nice to hear from you. So we've have historically not really deconstructed publicly the promo versus non-promo joins. What I will say is that we will we intend to test this promo really national promo really to read how it performs across different regions and different geographies.

Great. Thanks a lot. So for us, Colleen, can you remind us historically? The mix of joints that would come during the promotion versus non-promotional periods is there are some concerns that this, uh, price that you're doing on the classic card could eventually become almost the shadow price, decrease, and then separately, how do you maintain the 15 Dollar classic Card members from not quitting and rejoining at $10?

Speaker #4: It is again, it's not contemplated to be kind of the new Classic card pricing at all. And then as it relates to kind of trade down, which I think is your question, we ran a localized $10 Classic card promo a couple of months ago, earlier in the summer, late spring.

Um, morning. It's uh, nice to hear from you. So, um, we've have historically, uh, you know, not really deconstructed publicly the uh, the promo versus non-promoted join. What I what I will say is that we will We intend to test this promo. Really National promo really to read um,

Speaker #4: And one of the things that we were reading from that test before we made the decision to test nationally was trade down. And we did not see significant trade down from 15 to 10 at all.

Read how it performs across different regions and different uh geographies. Uh, it is, you know, again it's not contemplated to be kind of the The New Classic card price. I get all um,

Speaker #7: Hey, Max. It's Tom. I'd add one thing too. Back when we were testing moving from 10 to 15, we had numerous test sales back in 2024.

Speaker #7: One of the test sales was at 15 all the time and we were promoted to 10. And across multiple promotions on Classic card, we didn't see really anybody.

Uh, a local, a localized ten dollar, uh, ten dollar, classic card promo, uh, a couple of months ago earlier in the summer late spring, and 1 of the things that we were reading from that test. Before we made the decision to test nationally uh was trade down and we did not see significant trade down from uh, from 15 to 10 at all.

Speaker #7: I mean, you could count them on one hand. How many people bought a $15 membership, came back in when we went to 10 to essentially downgrade it.

Speaker #7: Just they weren't doing it.

Speaker #4: And I think the importance is that very limited time offer so that it doesn't become to use your vernacular shadow pricing.

Speaker #7: Yeah. Got it. That's super helpful. And then in the $150 to $160 franchise placements for this year, what's the expectation for the number of boxes that may open ahead of the ADAs?

Hey hey Max. Uh it's Tom I'd add 1 thing too, back when we were testing moving from 10 to 15, we had numerous tests cells back in 2024, 1 of the test cells was at 15 all the time, and we would promote to 10 and across multiple promotions on class on classic card. We didn't see really anybody. I mean, you could count them on 1 hand. How many people bought a 15 dollar membership came back in when we went to 10 to to essentially downgrade it just they they weren't doing it.

Speaker #7: And then separately, can you just update us on usage of where cure periods are today versus prior periods as we assess any potential risk around opening slowing next year?

And I think the importance is that uh, very limited time, uh, offer. Uh so that it doesn't become to use your vernacular, uh, shadow.

Speaker #7: Yeah. Hey, Max. It's Tom. I'll try that one. So we don't really disclose how many people are ahead of ADAs. I think we've talked historically sort of directionally pre-COVID a number of folks were ahead of their ADAs.

Speaker #7: Given where the system was at the time. But we currently don't really disclose that. But I think broadly speaking, most folks are tracking to their ADAs a couple might be slightly ahead.

That's super helpful and then in the 150 to 160 uh franchise placements for this year. But the expectation for the number of boxes that may open ahead of EA's and then separately, can you just update us on usage of uh where periods are today versus uh prior uh periods? As we assess any potential risk around, uh, opening flowing next year?

Yeah. Hey Max. Uh it's Tom, I'll try that 1 um

Speaker #7: And we also in terms of the cure periods and sort of which I think to your point is really for those who are unaware, the time to get a club open if it's not going to open on time for reasons that are beyond your control like permitting or whatever.

Speaker #7: We don't really disclose that either. But I would say it's not disproportionately higher or lower than it's been in recent years. So maybe as a quick follow-up given that it doesn't seem like you think that there's going to be much of a IP sell in openings next year.

Speaker #7: Is that fair?

Speaker #4: No. We're not guiding we're not guiding next year at this point. We'll we will do that in due course. But we're confident in our in where we guided openings for this year.

So we don't really disclose, how many people are ahead of ADA. I think we've talked historically, sort of directionally preco the number of folks were ahead of their Adas, um, you know, given uh, where the system was at the time but we currently don't really disclose that but I think broadly speaking, you know, most folks are tracking to the radius. A couple might be slightly ahead and we also in terms of the Cure periods and and so which I think to your point is really for those who are unaware the time to to to get a club open, if it's not going to open on time for reasons that are beyond your control like permitting or whatever, um, we don't really disclose that either, but I would say it's not

It's not disproportionately uh, higher or lower than it's been in recent years.

Speaker #4: And of course, came off a very strong opening year last year. So we're feeling good about the unit opening momentum. And I think to the kind of the use of cure periods and your earlier question, at the end of the day, our franchisees want to open clubs.

Maybe it's a quick follow-up given that it doesn't seem like you think that there is going to be much of a IP cell and openings next year is that the

Speaker #4: We have a we're heavily weighted to Q4 openings because they want to open clubs in time for the Q1 acquisition period. And at the end of the day, leaning into the flywheel and the strong economics of our focus on sustained member growth are the things that are going to be most accretive to unit economics.

Not, we're not, we're not guiding, uh, we're not guiding next year at this point. We'll uh, you know, we will do that in due course. But uh, we're confident in our in where we guided openings for this year and of course, came off of a very strong opening, uh, opening year last year, so we're feeling good about the unit opening momentum. And, you know, I think to the kind of the use of cure periods. And, uh, your earlier question, at the end of the day, our franchises want to open clubs, we we have a we're heavily weighted.

Speaker #4: And bring people into the system like the new franchisee that we just announced this morning.

Speaker #7: Great. Thanks so much. Good luck. Second half. Thanks, Max.

Speaker #3: Your next question comes from the line of Joseph Altobello with Raymond James. Your line is open. Please go ahead.

Speaker #7: Thanks. Good morning. So I understand the plan is not to roll back Classic to $10. But if the test does prove successful in certain areas, could you have different pricing across regions?

The Q4 openings because, uh, they want to open clubs in time for the, uh, the q1 acquisition period. And, you know, at the end of the day, uh, you know, leaning into the flywheel and the strong economics of our focus on, uh, sustained member growth or the things that are going to be, you know, most accretive to unit economics. And um, you know, and and uh, and bring people in into the system like the new franchisee that we just announced this morning.

Great. Thanks so much. Uh, good luck. Second half.

Thank you. Thanks man.

Speaker #7: For example, on Classic and then follow up on that, is the plan still to go to $30 nationally on Black Card at some point?

Your next question comes from the line of Joseph Altabella with Raymond James. Your line is open. Please go ahead.

Speaker #4: So I'll take that all fully start that. I said a couple of times that one of the things that we want to read from the national Black Card national Classic card promo at 10 is kind of the regional nuance.

Speaker #4: And if different regions have a different performance to the to that $10 to the $10 price point. So again, we're not kind of we're not going to talk forward-looking about what our intentions are from a pricing architecture because we still have a lot of things in test.

Thanks. Good morning. So I I understand the plan is not to roll back, you know classic uh to ten dollars but if the test does proved successful in certain areas could you could you have different pricing across regions for example on classic and then follow up on that is the plan still to go to 30 dollars nationally on on black card at some point.

so I'll I'll

start that.

Speaker #4: And we consider this $10 national promo also a test. So as we read the tests and make decisions, we'll communicate that. But you're right to infer that we're reading regional nuance with this.

Um, you know, I I said a couple of times, the 1 of the things that we want to read from the national black card. Uh, National classic card promo at 10 um is kind of the regional nuanced and if different regions have uh an you know, a different performance. Um,

Speaker #4: And then as far as the Black Card pricing to 30, I'd say we made an appropriate decision given that we're leaning into net member growth, very heavily this year, because it's the thing that's most accretive to the economic flywheel for our franchisees.

Speaker #4: So it was appropriate decision to pause the nationwide rollout of the Black Card price. At the same time, we're putting new modalities, into the Black Card spot, continuing to add value, looking at regional nuance.

When can we consider this ten-dollar national promo? Uh, also a test. Uh, so as we read the tests and make decisions, we'll communicate that, but um, you're right to infer that we're reading regional nuance with this.

Speaker #4: So at some juncture, we obviously we see that there'll be an opportunity to move on Black Card pricing exactly where how much. And will it be static nationwide?

Speaker #4: Those are things that we're continuing to evaluate.

Speaker #7: Got it. Helpful. And just to follow up on that, what sort of changes have you made to the creative development process to ensure that it resonates with your target customer?

Speaker #7: Because it seems like you kind of lost your way a little bit obviously during this past holiday period. Thanks.

Speaker #4: Yeah. What I would say is the last campaign did a lot of what we asked it to do in conveying that you could get strong at Planet Fitness and that we were we had top quality equipment.

Um, and then, as far as a black card pricing to 30, um, you know, I'd say we made we made an appropriate decision. Uh, given that we're leaning into net member growth. Very heavily this year, uh, because it's the thing that's most accretive to the economic flywheel for our our franchises. Uh, so it was an appropriate decision to pause the Nationwide roll out of the black card price. Um, at the same time, uh, you know, we're putting new modalities, uh, into the Blackhearts Spa continuing to add value looking at Regional nuanced. Um, so at, you know, at some juncture, we obviously we see that there'll be an opportunity, uh, to move on Black Card pricing. Um, exactly where, how, how, how much and will it be? Static Nationwide. Um, those are things that we're continuing to evaluate.

Speaker #4: At the same time, we left some of our customers feeling like we weren't talking to them with regard to the things that make us most unique and special, which is our approachability and our judgment-free environment.

Got it helpful and just just to follow up on that. What what sort of changes have you made to the creative development process? You know, to ensure that it resonates with with your Target Customer because it seems like you kind of lost your way a little bit obviously, you know during this past holiday period. Thanks.

Speaker #4: So in the new creative and then in the new in the interim creative and in the new campaign, you will see us dialing up a bit more a light-heartedness, a little bit of humor, more approachability.

Speaker #4: So that we broaden the reach and really ensure that we are marketing to the full 70% that is our deep pool of consumers and unique for Planet Fitness.

Speaker #4: As I mentioned in my remarks, you will see later this quarter some interim new creative that will convey that bit of humor, bit of light-heartedness while at the same time conveying that you can you can get a great workout at Planet Fitness.

Speaker #4: And then for the new the full new campaign that will launch at the end of Q4 and carry us into the critical Q1 join period, member acquisition period, we'll be testing that new campaign and creative throughout the next few months.

Yeah. What I would say is the last campaign did a lot of what we, you know, what we asked it to do, um, in conveying that you could get strong at Planet Fitness and that we were, you know, we had top quality Equipment. Um, at the same time, we left some of our customers feeling, like we weren't talking to them, uh, with regard to the things that make us most unique and special, which is our approachability, and our judgment-free environment. So, in the new creative, um, and then in the new, in the interim creative, and in the new campaign, um, you will see us dialing up a bit more, a light-heartedness, a little bit of humor, uh, more approachability. So that we broaden the reach and really ensure that we are marketing to the full 70%, that is our, you know, our deep pool of consumers and, and unique for a Planet Fitness. Um, as I mentioned in my remarks, you will see later this quarter, uh, some interim new.

Speaker #7: Okay. Thank you.

Speaker #3: Your next question comes from the line of Sharon Zackfia with William Blair. Your line is open. Please go ahead.

Speaker #5: Hey, Colleen. Maybe following up on that last question. Can you talk about any changes in the way you're testing the creative relative to last year?

Creative that will convey that bit of humor, a bit of light-heartedness. While at the same time, conveying that you can, you know, you can get a great workout at at Planet Fitness. Um, and then for the new, the full new campaign that will launch at the end of Q4 and carry us into the critical q1. Join period. Uh, member acquisition period. Uh, we'll be testing, uh, that new that new campaign and creative throughout the, uh, the next few months.

Speaker #5: Because I know you felt good about the test last year and then when the launch happened, it didn't really meet expectations.

Okay, thank you.

Speaker #4: Yeah. So for the creative that we were running last year, in 2025, we tested that fairly extensively before we launched it. And it was driving increase in join volume.

Your next question comes from the line of Sharon Zakia with William Blair. Your line is open. Please go ahead.

Speaker #4: As you know, we had a 10% lift in that member growth in 2025 versus 2024 despite the two headwinds of the nationwide rollout put to cancel and the price increase of 50% on the Classic card pricing.

Uh Hey Colleen, maybe following up on that last question. Can you talk about any changes in the way? You're testing the creative relative the last year because I know you felt good about the test last year. And then, you know, when the launch happened it didn't really meet expectations.

so,

For the creative.

Speaker #4: At the same time, as we saw traction with that campaign, we dialed it up and I say we probably over-torqued. Dialed up the sweat level, dialed up the size of the muscle.

Speaker #4: And brought talent in that was that represented a little bit more of the fit getting fitter versus the 70% that is our target. So the change in the creative this the next creative and the new campaign, you'll see us featuring not only in messaging the approachability, but also in the talent and how we shoot that creative.

Speaker #4: We will continue to test it with consumers extensively and probably even a little bit more than we've tested in the past. And that's one of the reasons why we're going to run interim creative that will start this quarter and that how we read that will also help inform the full new campaign that will launch for Q1.

Um, you know, we tested that fairly extensively before we launched it, and it was driving, um, increase in in join volume. Uh, as you know, we had a 10% lift in, uh, in that member growth in 2025 versus 2024. Uh, despite the 2 headwind of the Nationwide roller to put to cancel and the, uh, the price, you know, price increase of 50% on the classic card pricing. Um, at the same time as we saw traction with that campaign, uh, we dialed it up and you know, I I say we probably over torqued, dialed up the sweat, level dialed up the size of the muscle and, you know, brought talent in that was a that represented a little bit more of the fit getting fitter versus uh, the 70% that is our Target.

Speaker #5: Okay. Thank you.

Speaker #4: And Sharon.

Speaker #3: Your next question comes from the line of Dan Hsu with BNP Paribas. Your line is open. Please go ahead.

Speaker #6: Hi guys. Thanks for the question. It sounds like summer pass is going well. Maybe could you compare it a little bit to last year?

Also help inform the full new campaign that will launch for q1.

Thank you.

Speaker #6: And I know it's important to attract the next generation of gym goers, but maybe could you talk about how that's balancing between younger consumers who maybe a little bit more gym serious versus more casual older consumers?

Your next question comes from the line of Zen 2 with BNP paraba. Your line is open. Please go ahead.

Speaker #6: And is the marketing shift to maybe less kind of sweat less fit getting fitter impacting the acquisition of younger consumers at all? Thanks.

Speaker #4: Sure. So high school summer pass last year, so obviously we're still in the middle of high school summer pass this year. But high school summer pass last year, we had a significant increase in participation.

Speaker #4: More than 30% increase in participation in 2025 versus 2024. And saw an increase in the conversion percentage at the end of high school summer high school summer pass last year.

Hi guys. Thanks for the question. Um, it sounds like summer pass is going well. Um, maybe could you compare it a little bit to last year? And, um, you know, I know it's important to attract the next generation of Jim goers. But maybe could you talk about how that, you know, balancing between younger consumers, who may be a little bit more um Jim serious versus, you know, more casual older consumers, and is the marketing shift um to maybe less kind of sweat. Uh less fit, getting fitter, impacting the acquisition of younger consumers and all. Thanks,

Speaker #4: How we're tracking this year is pretty close in line to the to what we had what we saw last year. So maintaining that significant increase that we had seen last year.

Speaker #4: We're within a couple of percent of last year's numbers, but again, we're still in the middle of high school summer high school summer pass.

Speaker #4: And we won't measure conversion until after the pass program ends and then we market for conversion in the fall. But as I said, we've had

Sure. Um, so High School summer pass last year. So obviously, we're still in the middle of High School, summer pass this year, but High School summer passed last year. Um, we had a significant increase in participation more than 30% increase in participation, uh, 2025 versus 2024 and saw an increase in the conversion percentage. Uh, at the end of High School summer, High School, summer pass last year, um, how we're tracking this year is pretty close in line to the, uh, to what we had, what we saw last year. So,

Speaker #1: 12 million workouts . Incredible participation and it remember it remains a key program for us to attract young consumers into the category as it relates to the younger consumer .

Speaker #1: Maybe being a bit more fitness minded or fitness aware . We have seen , again , Gen Z as the fastest growing proportion of our membership and also the largest proportion of our joins .

Speaker #1: So we know our brand is resonating with Gen Z , one of the things we're doing with the the DC O engine , the dynamic creative optimization engine that will enable us to tailor our marketing messaging to different target audiences We've also probably seen enhanced the use of influencers across social channels , and we've seen the influencers resonate with the younger consumer .

So um, maintaining that significant increase that we had uh had seen last year. Um, we're within a couple of percent of uh of last year's numbers. But again we're still in the middle of of High School summer, High School, summer pass and we won't measure conversion until um after the past program and and then you know we we mark it for conversion in um in the fall but you know as I said we've had 12 million workouts. Incredible participation and it reme it remains uh a key program for us to attract uh young consumers into the category as it relates to the younger consumer, maybe being a bit more uh Fitness minded or Fitness aware.

Speaker #1: So we'll ensure that the optimization of our media mix and the use of the DC O engine , which is scheduled to launch in September , will enable us to reach the across all of our target consumers

Speaker #2: Okay . Thanks . And then for maybe the second half , same store sales . I think you mentioned some moderation , but staying positive .

Speaker #2: Could you maybe give us a little bit more color on how we should think about the mix of rate versus member growth in the second half ?

Uh, we have seen, again, Gen Z as the fastest growing, uh, proportion of our membership and also the largest proportion of our joins. So we know our brand is resonating with Gen Z. One of the things we're doing with the, uh, the DCO engine—the dynamic creative optimization engine—that will enable us to tailor our marketing messaging to different target audiences. Uh, we've also probably seen, enhanced, the use of influencers across social channels, um, and we've seen the use of influencers resonate with the younger consumer. Uh, so we'll ensure that the optimization of our media mix—

Speaker #1: Yes . Yeah . Or I could start or you want to take that . Yeah . Go ahead .

And the use of the dco engine which is uh scheduled to launch in September. Uh, will enable us to reach the across all of our Target consumers.

Speaker #3: So the rate we said that in Q2 , most of our entirely everything was driven by by rate . And that was our expectation .

Speaker #3: And it's reflected the slowdown in net new joints . But but with more than 100% of the comp is driven by rate . It's reinforces our focus on prioritizing member growth across entire system .

Okay, thanks. And then, um, for maybe the second half, same store, sales, I think you mentioned some moderation, but staying, uh, positive. Could you maybe give us a little bit more color on how you how we should think about the mix of rate versus member growth? Um, in the second half,

Or I could start or you want to, you want to take?

Speaker #3: And we recognize that increasing the membership is what will fuel the planet . Fitness flywheel and that's our focus area . Sustainable long term growth is basically driven by expanding the member base , complemented by rate growth rather than the other way around .

so the rate, uh, we said that in in Q2 most of of entirely everything was driven by by rate, uh,

And that was our expectation and it's affected the Slowdown uh in net new joints.

Speaker #3: And as Colin said , we have continued to sharpen and intensify our focus on driving growth . And member acquisition .

But but it's more than 100% of the comp is driven by rate. It's reinforced with our focus on prioritizing member growth across entire system.

Speaker #1: I'll just say two additional things . Perhaps relative to this question . We are not contemplating or , you know , anticipating in our guidance a negative comp quarter in the in either of the two remaining quarters of the year .

That's our Focus area, sustainable long-term growth uh is is basically driven by expanding the member base uh complemented by rate growth rather than the other way around.

Speaker #1: So , you know , we're not projecting a negative quarter in Q3 or Q4 , but to Sudan point , the comp will be driven entirely by rate .

And as Colleen said, we continue to sharpen and intensify our focus on driving them growth and member acquisition.

Speaker #1: And I'll also say we increased our black card penetration again in Q2 by about 200 basis points over Q2 . Prior year . So we are we're continuing to get price lift , organic price lift or I should say average rate lift because of the continuing increase in black card penetration

Speaker #2: Great . Thank you .

Speaker #1: For that time . Right .

Speaker #4: We have reached the end of the Q&A session . I will now turn the call back to Colleen Keating CEO for closing remarks .

Speaker #1: Thank you . In closing , I'd first like to thank our team members for the progress on our priorities to really reignite sustainable member growth , and also our franchisees for their support of these endeavors .

We increased our Black Card penetration again, uh, in Q2 by about 200 basis points over Q2 prior year, so we are we're continuing to get uh, price lift, organic price lift or a I should say average rate list. Um, because of the continuing increase in Black Card penetration,

Great. Thank you.

Right time, right.

Speaker #1: We're we're proud of our leadership position in the fitness industry and are highly profitable business model with durable cash flows throughout our history , we've demonstrated our ability to adapt to changing market conditions while remaining focused on long term growth .

We have reached the end of the Q&A session. I will now turn the call back to Colleen, Keating, CEO for closing remarks.

Speaker #1: We've differentiated ourselves through an accessible , high value offering that has broadened the appeal of fitness to millions of consumers . That same disciplined approach continues to drive our strategy today , and I am confident it will fuel the growth that this brand can deliver .

Speaker #1: Thank you .

Thank you in closing. I I'd first like to thank our team members for the progress on our priorities to really reignite. Sustainable member growth. And also our franchisees for their support of these Endeavors. We're, we're proud of our leadership position in the fitness industry and our highly profitable business model with durable, cash flows throughout our history, we've demonstrated our ability to adapt to changing market. Conditions, while remaining focused on long-term growth. We've differentiated ourselves through an accessible high value offering that is brought into the appeal of Fitness to millions of consumers, that same disciplined approach, continues to drive our strategy today. And I am confident it will fuel the growth.

That this brand can deliver. Thank you.

This concludes today's call, thank you for attending. You may now disconnect