Planet Fitness, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Planet Fitness, Inc. operates as a franchisor and operator of fitness centers with approximately 21.5 million members and 2,909 clubs (2,617 franchised, 292 corporate-owned) across the U.S. and international markets. The company operates three segments: Franchise, Corporate-owned clubs, and Equipment.
Key Financial Metrics
| Metric (in thousands) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $337,236 | $276,662 |
| Net Income | $51,796 | $42,079 |
| Net Income Attributable to PF, Inc. | $51,554 | $41,867 |
| Diluted EPS | $0.65 | $0.50 |
| Operating Cash Flow | $147,521 | $133,927 |
| Adjusted EBITDA | $139,868 | $117,005 |
| Cash & Equivalents | $375,273 | $345,652 |
| Total Debt (Net) | $2,479,087 | $2,482,254 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 21.9% year-over-year, driven primarily by a 123.4% surge in Equipment segment revenue ($62.1M vs. $27.8M) due to higher sales to existing and new franchisees.
- Franchise Segment: Revenue grew 16.7% to $134.5M. National Advertising Fund (NAF) revenue jumped 46.8% to $32.2M following a rate increase from 2% to 3% for fiscal year 2026.
- Corporate-Owned Clubs: Revenue increased 5.2% to $140.6M, supported by a 3.5% same-club sales increase, partially offset by the sale of 8 California clubs to a franchisee in August 2025.
- Profitability: Net income rose 23.1% to $51.8M. Operating margin improved to 29.3% from 28.7%.
- Interest Expense: Increased 25.8% to $33.0M due to higher principal balances and blended interest rates following the issuance of 2025 Notes in December 2025.
Guidance, Outlook, and Risks
- Capital Allocation: The company remains aggressive on buybacks. Under the 2025 Share Repurchase Program ($500M authorized), $450.0 million remains available as of March 31, 2026. The company repurchased 1.37 million shares in Q1 2026.
- Growth Strategy: The company has contractual commitments to open approximately 750 new clubs. Same-club sales growth was 3.5% system-wide.
- Liquidity: Management believes cash, operating cash flow, and available credit facilities are sufficient for the next 12 months. The Variable Funding Notes ($75M capacity) remain undrawn.
- Risks: Key risks include franchisee bankruptcies, rising construction costs, cybersecurity threats, and the impact of inflation on franchisee operations. The company also faces potential asset impairments related to goodwill and intangible assets.
Investor Verification Checklist
- Equipment Sales Sustainability: Verify if the 123% spike in equipment revenue is a one-time bulk order or indicative of a sustained replacement cycle.
- NAF Rate Impact: Confirm the long-term impact of the 1% NAF contribution rate increase on franchisee profitability and churn.
- Debt Servicing: Review the impact of the increased interest expense ($33M) on future free cash flow, especially with $2.5B in total debt.
- Share Repurchase Pace: Monitor the execution of the remaining $450M buyback authorization and its effect on share count reduction.
- California Club Sale: Assess the long-term revenue impact of converting 8 corporate-owned California clubs to franchisee ownership.