Business Context and Reporting Period
Company: Xponential Fitness, Inc. (XPOF)
Filing Type: Form 8-K (Current Report)
Date of Report: December 8, 2025
Event: Entry into a new Credit Agreement, refinancing of existing debt, and repurchase of all outstanding Preferred Stock.
Key Financial Metrics and Capital Structure
- New Debt Facility:
- Term Loans: $525 million principal amount.
- Revolving Commitments: $25 million principal amount.
- Interest Rate: Term SOFR or Base Rate plus a leverage-based margin.
- Maturity: Five years from the Closing Date (December 8, 2030).
- Debt Repayment (Refinancing):
- Outstanding loans repaid under the Existing Credit Agreement: Approximately $369.2 million.
- Exit fee paid: Approximately $7.2 million.
- Make-whole premium paid: Approximately $10.4 million.
- Preferred Stock Repurchase:
- Total cash paid: Approximately $127.0 million.
- Accrued and unpaid dividends paid: Approximately $1.4 million.
- Shares repurchased: 114,660 shares of Series A and Series A-1 Convertible Preferred Stock.
- Post-transaction status: No Preferred Stock remains outstanding.
- Use of Proceeds: Funded the refinancing, repurchase of Preferred Stock, and transaction expenses. Revolving loans are designated for working capital and general corporate purposes.
Material Changes Versus Prior Period
The filing details a significant restructuring of the company's capital structure compared to the prior period:
- Debt Increase: Total new debt principal ($550 million) exceeds the repaid debt principal ($369.2 million), resulting in a net increase in leverage to fund the equity repurchase and transaction costs.
- Equity Elimination: Complete elimination of the 6.50% Series A and Series A-1 Convertible Preferred Stock, removing associated dividend obligations.
- Covenant Changes: Transition from the Existing Credit Agreement (dated April 19, 2021) to a new agreement with a Total Net Leverage Ratio financial covenant effective for the test period ending March 31, 2026.
Guidance, Outlook, and Risks
- Repayment Schedule: Mandatory quarterly principal payments on Term Loans commence March 31, 2026.
- First 4 quarters: 0.25% of aggregate principal outstanding on Closing Date.
- Next 4 quarters: 0.75% of aggregate principal outstanding on Closing Date.
- Thereafter: 1.25% of aggregate principal outstanding on Closing Date.
- Covenants: The new agreement includes customary affirmative and negative covenants restricting the incurrence of additional debt, granting liens, making investments, restricted payments, and asset dispositions.
- Security: Obligations are secured by a first priority lien on substantially all assets of the Borrower and Guarantors.
- Management Commentary: The filing does not contain forward-looking guidance on revenue or earnings, focusing solely on the execution of the financing and repurchase transactions.
Investor Verification Checklist
- Verify the exact calculation of the "Total Net Leverage Ratio" threshold in Section 7.12 of the Credit Agreement (Exhibit 10.1) to assess covenant headroom.
- Confirm the total transaction expenses paid, as the filing states proceeds were used for expenses but does not quantify the specific amount.
- Review the impact of the increased debt load on future interest coverage ratios given the new leverage-based margin.
- Assess the strategic rationale for the $128.4 million total outflow for Preferred Stock repurchase versus retaining cash for operations.
- Monitor the first mandatory principal payment due March 31, 2026, to ensure liquidity sufficiency.