Xponential Fitness, Inc. Leases Disclosure
Note 8 – Leases
The Company leases office space, company-owned transition studios, warehouse, training centers and a video recording studio. Certain real estate leases include one or more options to renew. The Company has in the past guaranteed lease agreements for certain franchisees. See Note 16 of Notes to Consolidated Financial Statements for additional information.
Right-of-use (“ROU”) assets from operating leases are subject to the impairment guidance in ASC Topic 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present. ASC Topic 360 requires three steps to identify, recognize and measure impairment. If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount. If the undiscounted cash flows used in the recoverability test are less than the carrying amount, the Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3). When determining the fair value of the ROU asset, the Company estimates what market participants would pay to lease the assets assuming the highest and best use in the assets' current forms. During the year ended December 31, 2025, 2024, and 2023, the Company recognized ROU asset impairment charges of $6,812, $7,012, and $92, respectively, related to studio exits in conjunction with its restructuring plan discussed in Note 17. The impairment charges were recorded within impairment of goodwill and other assets in the consolidated statements of operations.
Supplemental balance sheet information related to leases is summarized as follows:
Operating leases |
|
Balance Sheet Location |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
ROU assets, net |
|
Right-of-use assets |
|
$ |
13,736 |
|
|
$ |
24,036 |
|
Lease liabilities, short-term |
|
|
|
$ |
4,701 |
|
|
$ |
5,276 |
|
Lease liabilities, long-term |
|
Lease liability |
|
$ |
14,243 |
|
|
$ |
23,858 |
|
The following tables present the components of lease expense:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease costs |
|
$ |
6,987 |
|
|
$ |
10,905 |
|
|
$ |
21,260 |
|
Variable lease costs |
|
|
976 |
|
|
|
882 |
|
|
|
1,699 |
|
Total |
|
$ |
7,963 |
|
|
$ |
11,787 |
|
|
$ |
22,959 |
|
The following table presents the supplemental cash flow information related to operating leases:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Cash paid for amounts included in the measurement of operating lease liabilities |
|
$ |
5,963 |
|
|
$ |
6,454 |
|
|
$ |
14,641 |
|
Lease liabilities arising from new ROU assets |
|
$ |
2,975 |
|
|
$ |
116 |
|
|
$ |
70,455 |
|
The following table presents other information related to leases:
|
|
Years ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Weighted average remaining lease term (years) |
|
|
4.6 |
|
|
|
4.7 |
|
|
|
6.7 |
|
Weighted average discount rate |
|
|
9.0 |
% |
|
|
8.8 |
% |
|
|
8.5 |
% |
Maturities of lease liabilities as of December 31, 2025 are summarized as follows:
|
|
Amount |
|
|
|
2026 |
|
$ |
6,183 |
|
|
2027 |
|
|
5,077 |
|
|
2028 |
|
|
3,380 |
|
|
2029 |
|
|
2,736 |
|
|
2030 |
|
|
2,444 |
|
|
Thereafter |
|
|
3,504 |
|
|
Total future lease payments |
|
|
23,324 |
|
|
Less: imputed interest |
|
|
4,380 |
|
|
Total |
|
$ |
18,944 |
|
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 4, 2024 | |
| 2022 | Mar 6, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.