Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Document Document And Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Xponential Fitness, Inc. | ||
Entity Central Index Key | 0001802156 | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | XPOF | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 225.2 | ||
Entity File Number | 001-40638 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4395129 | ||
Entity Address, Address Line One | 17877 Von Karman Ave. | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Irvine | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92614 | ||
City Area Code | 949 | ||
Local Phone Number | 346-3000 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Current Fiscal Year End Date | --12-31 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Costa Mesa, California | ||
Auditor Firm ID | 34 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s definitive proxy statement relating to its 2023 annual meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. | ||
Class A | |||
Document Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 32,199,751 | ||
Class B | |||
Document Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 17,070,566 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash, cash equivalents and restricted cash | $ 37,370 | $ 21,320 |
Accounts receivable, net (Note 10) | 25,555 | 11,702 |
Inventories | 10,864 | 6,928 |
Prepaid expenses and other current assets | 6,294 | 5,271 |
Deferred costs, current portion | 4,131 | 3,712 |
Notes receivable from franchisees, net (Note 10) | 1,520 | 2,293 |
Total current assets | 85,734 | 51,226 |
Property and equipment, net | 18,524 | 12,773 |
Right-of-use assets | 30,079 | 0 |
Goodwill | 165,697 | 169,073 |
Intangible assets, net | 137,175 | 136,863 |
Deferred costs, net of current portion | 43,620 | 42,015 |
Notes receivable from franchisees, net of current portion (Note 10) | 1,067 | 3,041 |
Other assets | 795 | 553 |
Total assets | 482,691 | 415,544 |
Current Liabilities: | ||
Accounts payable | 16,185 | 14,905 |
Accrued expenses | 12,295 | 21,045 |
Deferred revenue, current portion | 31,996 | 22,747 |
Notes payable | 0 | 983 |
Current portion of long-term debt | 3,035 | 2,960 |
Other current liabilities | 9,265 | 3,253 |
Total current liabilities | 72,776 | 65,893 |
Deferred revenue, net of current portion | 109,465 | 95,691 |
Contingent consideration from acquisitions (Note 17) | 28,182 | 54,881 |
Long-term debt, net of current portion, discount and issuance costs | 133,039 | 127,983 |
Lease liability | 30,583 | 0 |
Other liabilities | 8,633 | 4,675 |
Total liabilities | 382,678 | 349,123 |
Commitments and contingencies (Note 17) | ||
Stockholders' equity (deficit): | ||
Additional paid-in capital | 505,186 | 0 |
Receivable from shareholder (Note 10) | (16,369) | (10,600) |
Accumulated deficit | (641,903) | (643,833) |
Treasury stock, at cost, 75 shares outstanding as of December 31, 2022, no shares outstanding as of December 31, 2021 | (1,697) | 0 |
Total stockholders' deficit attributable to Xponential Fitness, Inc. | (154,778) | (654,429) |
Noncontrolling interests | (53,284) | 443,960 |
Total stockholders' deficit | (208,062) | (210,469) |
Total liabilities, redeemable convertible preferred stock and stockholders' deficit | 482,691 | 415,544 |
Redeemable Convertible Preferred Stock | ||
Current Liabilities: | ||
Redeemable convertible preferred stock, $0.0001 par value, 400 shares authorized, 200 shares issued and outstanding as of December 31, 2022 and 2021 | 308,075 | 276,890 |
Undesignated Preferred Stock | ||
Stockholders' equity (deficit): | ||
Undesignated preferred stock, $0.0001 par value, 4,600 shares authorized, none issued and outstanding as of December 31, 2022 and 2021 | 0 | 0 |
Class A Common Stock | ||
Stockholders' equity (deficit): | ||
Common stock | 3 | 2 |
Class B Common Stock | ||
Stockholders' equity (deficit): | ||
Common stock | $ 2 | $ 2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Treasury stock, shares | 75,000 | |
Undesignated Preferred Stock | ||
Preferred stock, Par value | $ 0.0001 | $ 0.0001 |
Preferred stock, Share authorized | 4,600,000 | 4,600,000 |
Preferred stock, Share issued | 0 | 0 |
Preferred stock, share outstanding | 0 | 0 |
Redeemable Convertible Preferred Stock | ||
Redeemable preferred stock, Par value | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, Share authorized | 400,000 | 400,000 |
Redeemable preferred stock, Share issued | 200,000 | 200,000 |
Redeemable preferred stock, Share outstanding | 200,000 | 200,000 |
Class A Common Stock | ||
Common stock, Par value | $ 0.0001 | $ 0.0001 |
Common stock, Share authorized | 500,000,000 | 500,000,000 |
Common stock, Share issued | 27,571,000 | 23,898,000 |
Common stock, Share outstanding | 27,571,000 | 23,898,000 |
Class B Common Stock | ||
Common stock, Par value | $ 0.0001 | $ 0.0001 |
Common stock, Share authorized | 500,000,000 | 500,000,000 |
Common stock, Share issued | 21,647,000 | 22,969,000 |
Common stock, Share outstanding | 21,572,000 | 22,969,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, net: | |||
Total revenue, net | $ 244,954 | $ 155,079 | $ 106,592 |
Operating costs and expenses: | |||
Selling, general and administrative expenses (Note 10) | 129,108 | 94,798 | 60,917 |
Depreciation and amortization | 15,315 | 10,172 | 7,651 |
Marketing fund expense | 17,290 | 13,044 | 7,101 |
Acquisition and transaction expenses (income) | 2,438 | 26,618 | (10,990) |
Total operating costs and expenses | 229,818 | 185,898 | 98,798 |
Operating income (loss) | 15,136 | (30,819) | 7,794 |
Other (income) expense: | |||
Interest income | (1,805) | (1,164) | (345) |
Interest expense (Note 10) | 13,017 | 24,709 | 21,410 |
Other expense | 523 | 0 | |
Gain on debt extinguishment | 0 | (3,707) | 0 |
Total other expense | 11,735 | 19,838 | 21,065 |
Income (loss) before income taxes | 3,401 | (50,657) | (13,271) |
Income taxes | 526 | 783 | 369 |
Net income (loss) | 2,875 | (51,440) | (13,640) |
Less: Net income (loss) attributable to noncontrolling interests | 945 | (32,611) | |
Net income (loss) attributable to Xponential Fitness, Inc. | $ 1,930 | $ (18,829) | (13,640) |
Net loss per share of Class A common stock: | |||
Basic | $ (0.87) | $ (2.85) | |
Diluted | $ (0.87) | $ (2.85) | |
Weighted average shares of Class A common stock outstanding: | |||
Basic | 25,295 | 22,403 | |
Diluted | 25,295 | 22,403 | |
Franchise revenue | |||
Revenue, net: | |||
Total revenue, net | $ 115,286 | $ 74,459 | 48,056 |
Equipment revenue | |||
Revenue, net: | |||
Total revenue, net | 43,461 | 22,583 | 20,642 |
Merchandise revenue | |||
Revenue, net: | |||
Total revenue, net | 27,073 | 20,140 | 16,648 |
Franchise marketing fund revenue | |||
Revenue, net: | |||
Total revenue, net | 20,384 | 13,623 | 7,448 |
Other service revenue | |||
Revenue, net: | |||
Total revenue, net | 38,750 | 24,274 | 13,798 |
Product revenue | |||
Operating costs and expenses: | |||
Costs of revenue | 47,220 | 28,550 | 25,727 |
Franchise and service revenue | |||
Operating costs and expenses: | |||
Costs of revenue | $ 18,447 | $ 12,716 | $ 8,392 |
Consolidated Statements of Chan
Consolidated Statements of Changes to Stockholders'/Member's Equity (Deficit) - USD ($) $ in Thousands | Total | Prior to Reorganization Transactions and IPO | Reorganization Transactions and IPO | Post Reorganization Transactions and IPO | Post Reorganization Transactions and IPO but Prior to Amendment of LLC Agreement | Subsequent to Amendment of LLC Agreement | Post NCI Rebalancing | IPO Reorganization Transactions and IPO | Underwriters Reorganization Transactions and IPO | Class A Common Stock IPO | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class A Common Stock Reorganization Transactions and IPO | Common Stock Class A Common Stock Post Reorganization Transactions and IPO | Common Stock Class A Common Stock Subsequent to Amendment of LLC Agreement | Common Stock Class A Common Stock IPO Reorganization Transactions and IPO | Common Stock Class A Common Stock Underwriters Reorganization Transactions and IPO | Common Stock Class B Common Stock | Common Stock Class B Common Stock Reorganization Transactions and IPO | Common Stock Class B Common Stock Post Reorganization Transactions and IPO | Common Stock Class B Common Stock Subsequent to Amendment of LLC Agreement | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Reorganization Transactions and IPO | Additional Paid-In Capital Post Reorganization Transactions and IPO | Additional Paid-In Capital Post Reorganization Transactions and IPO but Prior to Amendment of LLC Agreement | Additional Paid-In Capital Subsequent to Amendment of LLC Agreement | Additional Paid-In Capital IPO Reorganization Transactions and IPO | Additional Paid-In Capital Underwriters Reorganization Transactions and IPO | Member's Contribution | Member's Contribution Prior to Reorganization Transactions and IPO | Member's Contribution Reorganization Transactions and IPO | Receivable from Member/Shareholder | Receivable from Member/Shareholder Prior to Reorganization Transactions and IPO | Receivable from Member/Shareholder Reorganization Transactions and IPO | Receivable from Member/Shareholder Post Reorganization Transactions and IPO | Receivable from Member/Shareholder Subsequent to Amendment of LLC Agreement | Accumulated Deficit | Accumulated Deficit Prior to Reorganization Transactions and IPO | Accumulated Deficit Reorganization Transactions and IPO | Accumulated Deficit Post Reorganization Transactions and IPO | Accumulated Deficit Post Reorganization Transactions and IPO but Prior to Amendment of LLC Agreement | Accumulated Deficit Subsequent to Amendment of LLC Agreement | Noncontrolling Interests | Noncontrolling Interests Post Reorganization Transactions and IPO but Prior to Amendment of LLC Agreement | Noncontrolling Interests Subsequent to Amendment of LLC Agreement | Redeemable Noncontrolling Interests Reorganization Transactions and IPO | Redeemable Noncontrolling Interests Post Reorganization Transactions and IPO | Redeemable Noncontrolling Interests Post Reorganization Transactions and IPO but Prior to Amendment of LLC Agreement |
Beginning balance at Dec. 31, 2019 | $ 26,678 | $ 152,265 | $ (31,735) | $ (93,852) | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 1,751 | 1,751 | |||||||||||||||||||||||||||||||||||||||||||||||
Member contributions | 32,884 | 32,884 | |||||||||||||||||||||||||||||||||||||||||||||||
Parent contribution of Rumble assets | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to Member | (73,203) | (73,203) | |||||||||||||||||||||||||||||||||||||||||||||||
Payment received from Member, net | 30,279 | 30,279 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | (13,640) | (13,640) | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | 4,749 | $ 113,697 | (1,456) | (107,492) | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | $ 708 | $ 2,089 | $ 818 | $ 2,089 | $ 283 | $ 708 | $ 535 | $ 5,731 | |||||||||||||||||||||||||||||||||||||||||
Parent contribution of Rumble assets | 20,483 | 20,483 | 20,483 | ||||||||||||||||||||||||||||||||||||||||||||||
Distributions to Member | (10,600) | (10,600) | |||||||||||||||||||||||||||||||||||||||||||||||
Payment received from Member, net | 1,456 | $ 1,456 | |||||||||||||||||||||||||||||||||||||||||||||||
Balance prior to Reorganization Transactions and IPO | 3,454 | $ 124,288 | $ (120,834) | ||||||||||||||||||||||||||||||||||||||||||||||
Effect of Reorganization Transactions | $ (337,259) | $ 1 | $ 2 | $ (124,288) | $ (10,600) | $ (202,374) | |||||||||||||||||||||||||||||||||||||||||||
Effect of Reorganization Transactions, Shares | 12,994,000 | 23,543,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Effect of Reorganization Transactions | $ 282,513 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock | $ 104,388 | $ 10,116 | $ 1 | $ 104,387 | $ 10,116 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock, Shares | 10,000,000 | 904,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of shares from LCAT shareholders | (150,985) | $ (104,387) | $ (46,598) | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Class B shares | $ (9,000) | $ (9,000) | |||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Class B shares, Shares | (750,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance post the Reorganization Transactions and IPO | $ (379,286) | $ 2 | $ 2 | $ 1,116 | $ (10,600) | $ (369,806) | $ 282,513 | ||||||||||||||||||||||||||||||||||||||||||
Balance post the Reorganization Transactions and IPO, shares | 23,898,000 | 22,793,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Class B shares | 176,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment of preferred stock to redemption value | (78,494) | (1,116) | $ (77,378) | ||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock dividends | (5,742) | (307) | (5,435) | ||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | (18,829) | $ (13,342) | (17,155) | (3,375) | $ (13,342) | $ (17,155) | (1,674) | (1,701) | |||||||||||||||||||||||||||||||||||||||||
Net loss | (17,568) | ||||||||||||||||||||||||||||||||||||||||||||||||
Fair value adjustment for redeemable noncontrolling interest | (174,450) | $ (2,065) | $ (172,385) | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value adjustment for redeemable noncontrolling interest | 174,450 | ||||||||||||||||||||||||||||||||||||||||||||||||
Removing the redeemable feature of the noncontrolling interest | $ 445,126 | $ 445,126 | $ (445,126) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance subsequent to the amendment of the LLC agreement | $ (123,676) | $ 2 | $ 2 | $ 1,140 | $ (10,600) | $ (559,346) | $ 445,126 | ||||||||||||||||||||||||||||||||||||||||||
Balance subsequent to the amendment of the LLC agreement, shares | 23,898,000 | 22,793,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | (210,469) | $ (210,469) | $ 2 | $ 2 | (10,600) | (643,833) | $ 443,960 | ||||||||||||||||||||||||||||||||||||||||||
Ending balance, Shares at Dec. 31, 2021 | 23,898,000 | 22,969,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 25,118 | $ 12,925 | 12,193 | ||||||||||||||||||||||||||||||||||||||||||||||
Parent contribution of Rumble assets | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock, Shares | 607,000 | 2,696,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Class B shares | 1,981,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment of preferred stock to redemption value | (31,185) | (31,185) | |||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock dividends | (13,000) | (13,000) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 1,930 | 2,875 | 1,930 | 945 | |||||||||||||||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 3,303,000 | (3,303,000) | |||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Stock, Amount Converted | 510,382 | (510,382) | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 370,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (1,908) | $ 1 | (1,909) | ||||||||||||||||||||||||||||||||||||||||||||||
Loan To Shareholder And Accumulated Interest | (5,769) | (5,769) | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock, shares | 75 | ||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | (2,794) | $ (1,697) | (1,097) | ||||||||||||||||||||||||||||||||||||||||||||||
Settlement of Contingent Consideration | 29,070 | 29,070 | |||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2022 | $ (208,062) | $ (208,062) | $ 3 | $ 2 | $ (1,697) | $ 505,186 | $ (16,369) | $ (641,903) | $ (53,284) | ||||||||||||||||||||||||||||||||||||||||
Ending balance, Shares at Dec. 31, 2022 | 27,571 | 21,647 | 75 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 2,875 | $ (51,440) | $ (13,640) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 15,315 | 10,172 | 7,651 |
Amortization and write off of debt issuance cost | 126 | 5,749 | 3,096 |
Amortization and write-off of discount on long-term debt | 613 | 2,704 | 0 |
Change in contingent consideration from acquisitions | 2,440 | 25,640 | (10,990) |
Amortization of right-of-use assets | 2,655 | 0 | 0 |
Bad debt expense (recovery) | (712) | 410 | 2,766 |
Equity-based compensation | 29,044 | 9,699 | 1,751 |
Non-cash interest | (1,069) | 583 | 1,321 |
Gain on debt extinguishment | 0 | (3,707) | 0 |
Loss (gain) from disposal of assets | (78) | 483 | 68 |
Impairment of studio assets | 0 | 781 | 0 |
Impairment of brand assets | 3,656 | 0 | 0 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | (12,720) | (6,608) | 2,977 |
Inventories | (3,936) | (768) | (1,392) |
Prepaid expenses and other current assets | (1,023) | (4,220) | (2,904) |
Operating lease liabilities | (2,496) | 0 | 0 |
Deferred costs | (2,024) | (7,122) | (1,204) |
Notes receivable, net | 33 | 137 | 210 |
Accounts payable | 469 | (3,013) | 1,709 |
Accrued expenses | (5,008) | 3,596 | 1,914 |
Related party payable | 0 | (1) | (28) |
Other current liabilities | 2,226 | 1,449 | (955) |
Deferred revenue | 18,223 | 30,011 | 7,005 |
Other assets | (240) | 1 | (196) |
Other liabilities | 3,301 | (85) | 113 |
Net cash provided by (used in) operating activities | 51,670 | 14,451 | (728) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (8,955) | (3,638) | (1,880) |
Purchase of studios | 0 | (450) | (1,150) |
Proceeds from sale of assets | 65 | 433 | 58 |
Purchase of intangible assets | (7,177) | (1,220) | (1,010) |
Notes receivable issued | (1,782) | (2,258) | (619) |
Notes receivable payment received | 3,236 | 820 | 0 |
Acquisition of businesses | 0 | (44,322) | 0 |
Net cash used in investing activities | (14,613) | (50,635) | (4,601) |
Cash flows from financing activities: | |||
Borrowings from line of credit | 0 | 0 | 10,000 |
Payments on line of credit | 0 | 0 | (18,000) |
Borrowings from long-term debt | 7,425 | 255,980 | 188,665 |
Payments on long-term debt | (2,978) | (310,600) | (149,219) |
Debt issuance costs | (55) | (996) | (5,158) |
Proceeds from the issuance of Class A common stock, net of underwriting costs | 0 | 122,016 | 0 |
Payments of costs related to IPO | 0 | (3,082) | 0 |
Payments to purchase 750,000 LLC units/Class B Shares | 0 | (9,000) | 0 |
Proceeds from issuance of redeemable convertible preferred stock, net of offering costs | 0 | 198,396 | 0 |
Payment to purchase all of the shares of LCAT from LCAT shareholders | 0 | (144,485) | 0 |
Payment of H&W Cash Merger Consideration | 0 | (11,720) | 0 |
Payments to acquire the Preferred Units and LLC Units | 0 | (20,493) | 0 |
Exchange of LLC units for Class B shares | 0 | 2 | 0 |
Payment of preferred stock dividend and deemed dividend | (16,250) | (8,992) | 0 |
Payment of contingent consideration | (2,190) | (12,154) | (3,250) |
Payments on loans from related party (Note 10) | 0 | (85) | (111) |
Member contributions | 0 | 562 | 27,286 |
Payments for taxes related to net share settlement of restricted share units | (1,909) | 0 | 0 |
Distributions to Member | 0 | (10,600) | (73,203) |
Loan to shareholder (Note 10) | (5,050) | 0 | 0 |
Receipts from Member, net (Note 10) | 0 | 1,456 | 30,279 |
Net cash provided by (used in) financing activities | (21,007) | 46,205 | 7,289 |
Increase in cash, cash equivalents and restricted cash | 16,050 | 10,021 | 1,960 |
Cash, cash equivalents and restricted cash, beginning of year | 21,320 | 11,299 | 9,339 |
Cash, cash equivalents and restricted cash, end of year | 37,370 | 21,320 | 11,299 |
Supplemental cash flow information: | |||
Interest paid | 11,631 | 16,136 | 17,035 |
Income taxes paid | 2,785 | 1,403 | 228 |
Noncash investing and financing activity: | |||
Capital expenditures accrued | 1,407 | 595 | 196 |
Contingent consideration converted to Member contribution (Note 10) | 0 | 0 | 5,598 |
Contingent consideration converted to equity (Note 10) | 29,070 | 0 | 0 |
Debt issuance costs added to debt principal | 0 | 0 | 975 |
Parent contribution of Rumble assets | 0 | 20,483 | 0 |
Original contingent consideration related to Rumble | 0 | 23,100 | 0 |
Rumble note receivable from shareholder | 0 | 10,600 | 0 |
Collateralization of note from shareholder with treasury shares (Note 10) | 1,697 | 0 | 0 |
Adjustment of preferred stock to redemption value | 31,185 | 78,494 | 0 |
Adjustment of redeemable noncontrolling interest | 0 | 174,450 | 0 |
Deferred offering costs reclassified into equity | 0 | 4,429 | 0 |
Accrued deemed dividend | 0 | 3,250 | 0 |
Intangible asset acquired in exchange for deferred revenue | $ 4,800 | $ 0 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 shares | |
Number of LLC units/Class B Shares purchased | 750,000 |
Nature of Business and Operatio
Nature of Business and Operations | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Operations | Note 1 – Nature of Business and Operations Xponential Fitness, Inc. (the "Company" or “XPO Inc.”), was formed as a Delaware corporation on January 14, 2020. On July 23, 2021, the Company completed an initial public offering (“IPO”) of 10,000 shares of Class A common stock and entered into a series of transactions to implement an internal reorganization. Pursuant to a reorganization into a holding company structure, the Company is a holding company with its principal asset being an ownership interest in Xponential Fitness LLC (“XPO LLC”) through its ownership interest in Xponential Intermediate Holdings, LLC (“XPO Holdings”). Information for any period prior to July 23, 2021 relates to XPO LLC. XPO LLC was formed on August 11, 2017 as a Delaware limited liability company for the sole purpose of franchising fitness brands in several verticals within the boutique fitness industry. XPO LLC is a wholly owned subsidiary of XPO Holdings, which was formed on February 24, 2020, and prior to the IPO, ultimately, H&W Franchise Holdings, LLC (the “Parent”). Prior to the formation of XPO Holdings, the Company was a wholly owned subsidiary of H&W Franchise Intermediate Holdings, LLC (the “Member”). As of December 31, 2022 , the Company’s portfolio of ten brands consists of: “Club Pilates,” a Pilates facility franchisor; “CycleBar,” a premier indoor cycling franchise; “StretchLab,” a fitness concept offering one-on-one assisted stretching services; “Row House,” a rowing concept that provides an effective and efficient workout centered around the sport of rowing; “YogaSix,” a yoga concept that concentrates on connecting to one’s body in a way that is energizing; “AKT,” a dance-based cardio workout concept that combines toning, interval and circuit training; “Pure Barre,” a total body workout concept that uses the ballet barre to perform small isometric movements; “Stride,” a running concept that offers treadmill-based high-intensity interval training and strength-training; “Rumble,” a boxing concept that offers boxing-inspired group fitness classes, which was acquired on March 24, 2021; and “BFT,” a high-intensity interval training concept that combines functional, high-energy strength, cardio, and conditioning-based classes, designed to achieve the unique health goals of its members, which was acquired on October 13, 2021. The Company, through its brands, licenses its proprietary systems to franchisees who in turn operate studios to promote training and instruction programs to their club members within each vertical. In addition to franchised studios, the Company operated 55 , 25 and 40 company-owned transition studios as of December 31, 2022, 2021 and 2020, respectively. In connection with the IPO, XPO Inc. entered into a series of transactions to implement an internal reorganization (the “Reorganization Transactions”). The pre-IPO members of XPO Holdings (the “Pre-IPO LLC Members”) who retained their equity ownership in the form of limited liability company units (the “LLC Units”), immediately following the consummation of the Reorganization Transactions are referred to as “Continuing Pre-IPO LLC Members.” Because XPO Inc. manages and operates the business and controls the strategic decisions and day-to-day operations of XPO LLC through its ownership of XPO Holdings and because it also has a substantial financial interest in XPO LLC through its ownership of XPO Holdings, it consolidates the financial results of XPO LLC and XPO Holdings, and a portion of its net income (loss) is allocated to the noncontrolling interest to reflect the entitlement of the Continuing Pre-IPO LLC Members to a portion of XPO Holdings’ net income or loss. Immediately following the closing of the IPO, XPO LLC is the predecessor of the Company for financial reporting purposes. As the sole managing member of XPO LLC, the Company operates and controls all of the business and affairs of XPO LLC. The Reorganization Transactions are accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of the Company recognize the assets and liabilities received in the Reorganization Transactions at their historical carrying amounts, as reflected in the historical consolidated financial statements of XPO LLC. The Company consolidates XPO LLC on its consolidated financial statements and records a noncontrolling interest related to the Class B units held by the Class B stockholders on its consolidated balance sheet and statement of operations. Basis of presentation – The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). On October 13, 2021 and March 24, 2021, the Company acquired the rights to franchise the BFT and Rumble concepts, respectively, and has included the results of operations of BFT and Rumble in its consolidated statements of operations from the acquisition dates forward. See Note 3 for additional information. Principles of consolidation – The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Use of estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements. Actual results could differ from these estimates under different assumptions or conditions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Segment and geographic information – Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, the Company has determined that it operates in one reportable and operating segment. During the years ended December 31, 2022, 2021 and 2020, the Company generated $ 12,823 , $ 2,741 and $ 1,213 of revenue outside of the United States, respectively. As of December 31, 2022 and 2021 , the Company did not have material assets located outside of the United States. Cash, cash equivalents and restricted cash – The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company has marketing fund restricted cash, which can only be used for activities that promote the Company’s brands. In July 2022, the Company issued a $ 750 standby letter of credit to a third-party financing company, who provides loans to the Company's qualified franchisees. The standby letter of credit is contingent upon the failure of franchisees to perform according to the terms of underlying contracts with the third party. The Company deposited cash in a restricted account as collateral for the standby letter of credit. In addition, the Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 17 for further discussion of such obligations guaranteed. Restricted cash was $ 5,381 and $ 1,427 at December 31, 2022 and 2021 , respectively Concentration of credit risk —Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash, accounts receivable and notes receivable. The Company maintains its cash with high-credit quality financial institutions. At December 31, 2022 and 2021, the Company had cash, cash equivalents and restricted cash that total $ 33,961 and $ 12,852 , respectively, on deposit with high-credit quality financial institutions that exceed federally insured limits. T he Company has not experienced any loss as a result of these or previous similar deposits. In addition, the Company closely monitors the extension of credit to its franchisees while maintaining allowances for potential credit losses. Accounts receivable and allowance for doubtful accounts – Accounts receivable primarily consist of amounts due from franchisees and vendors. These receivables primarily relate to royalties, advertising contributions, equipment and product sales, training, vendor commissions and other miscellaneous charges. Receivables are unsecured; however, the franchise agreements provide the Company the right to withdraw funds from the franchisee’s bank account or to terminate the franchise for nonpayment. On a periodic basis, the Company evaluates its accounts receivable balance and establishes an allowance for doubtful accounts based on a number of factors, including evidence of the franchisee’s ability to comply with credit terms, economic conditions and historical receivables. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At December 31, 2022 and 2021 , the allowance for doubtful accounts was $ 865 and $ 2,193 , respectively. Inventories – Inventories are comprised of finished goods including equipment and branded merchandise primarily held for sale to franchisees. Cost is determined using the first-in-first-out method. Management analyzes obsolete, slow-moving and excess merchandise to determine adjustments that may be required to reduce the carrying value of such inventory to the lower of cost or net realizable value. Write-down of obsolete or slow-moving and excess inventory charges are included in costs of product revenue in the consolidated statements of operations. Deferred offering costs – Deferred offering costs, primarily consisted of legal, accounting and other fees relating to the Company’s initial public offering. Upon consummation of the IPO in July 2021, total deferred offering costs of $ 7,511 were reclassified to additional paid-in capital within stockholders' equity and recorded against the proceeds of the IPO. Property and equipment, net – Property and equipment are carried at cost less accumulated depreciation. Depreciation is recognized on a straight-line method, based on the following estimated useful lives: Furniture and equipment 5 years Computers and software 3 - 5 years Vehicles 5 years Leasehold improvements Lesser of useful life or lease term Software consists primarily of costs associated with web development projects. The Company capitalizes eligible costs to acquire, develop, or modify digital platforms that are incurred subsequent to the preliminary project stage. Depreciation of these assets begins upon the initial usage of the digital platforms. The cost and accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss is included in the results of operations during the period of sale or disposal. Costs for repairs and maintenance are expensed as incurred. Repairs and maintenance costs for the years ended December 31, 2022, 2021 and 2020 were insignificant. Goodwill and indefinite-lived intangible assets – Indefinite-lived intangible assets consist of goodwill and certain trademarks. Goodwill – The Company tests for impairment of goodwill annually or sooner whenever events or circumstances indicate that goodwill might be impaired. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company’s reporting units are the brand names under which it sells franchises. The annual impairment test is performed as of the first day of the Company’s fourth quarter. The annual impairment test begins with a qualitative assessment, where qualitative factors and their impact on critical inputs are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines that a reporting unit has an indication of impairment based on the qualitative assessment, it is required to perform a quantitative assessment. The Company generally determines the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying value exceeds the estimate of fair value, a write-down is recorded. The Company calculates impairment as the excess of the carrying value of goodwill over the estimated fair value. During the third quarter of 2022, the Company determined that the AKT reporting unit had an indication of impairment based on a qualitative assessment and performed a quantitative assessment. For further discussion, see Note 7. As a result, the Company recognized an impairment loss to write-off the goodwill associated with the AKT reporting unit. There were no further impairments recognized over the remainder of 2022. There were no impairments recorded for the years ended December 31, 2021 and 2020. Trademarks – The Company tests for impairment of trademarks with an indefinite life annually or sooner whenever events or circumstances indicate that trademarks might be impaired. The Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the trademarks is less than the carrying amount. In the absence of sufficient qualitative factors, trademark impairment is determined utilizing a two-step analysis. The two-step analysis involves comparing the fair value to the carrying value of the trademarks. The Company determines the estimated fair value using a relief from royalty approach. If the carrying amount exceeds the fair value, the Company impairs the trademarks to their fair value. There were no impairme nts recorded for the years ended December 31, 2022, 2021 and 2020 . Definite-lived intangible assets – Definite-lived intangible assets, consisting of franchise agreements, reacquired franchise rights, customer relationships, non-compete agreements, certain trademarks and web design and domain, are amortized using the straight-line method over the estimated remaining economic lives. Deferred video production costs are amortized on an accelerated basis. Amortization expense related to intangible assets is included in depreciation and amortization expense. The recoverability of the carrying values of all intangible assets with finite lives is evaluated when events or changes in circumstances indicate an asset’s value may be impaired. Impairment testing is based on a review of forecasted undiscounted operating cash flows. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value, which is determined based on discounted future cash flows, through a charge to the consolidated statements of operations. Definite-lived intangible asset impairments of $ 280 , $ 118 and $ 0 were recorded for the years ended December 31, 2022, 2021 and 2020, respectively. Definite-lived intangible asset impairments during the year ended December 31, 2022, related to trademark and franchise agreements of the AKT reporting unit for which the carrying value was deemed not recoverable. Definite-lived intangible asset impairments during the year ended December 31, 2021, related to company-owned transition studio assets for which the carrying value was deemed not recoverable . Revenue recognition – The Company’s contracts with customers consist of franchise agreements with franchisees. The Company also enters into agreements to sell merchandise and equipment, training, on-demand video services and membership to company-owned transition studios. The Company’s revenues primarily consist of franchise license revenues, other franchise related revenues including equipment and merchandise sales and training revenue. In addition, the Company earns on-demand revenue, service revenue and other revenue. Each of the Company’s primary sources of revenue and their respective revenue policies are discussed further below. Franchise revenue – The Company enters into franchise agreements for each franchised studio. The Company’s performance obligation under the franchise license is granting certain rights to access the Company’s intellectual property; all other services the Company provides under the franchise agreement are highly interrelated, not distinct within the contract, and therefore accounted for as a single performance obligation, which is satisfied over the term of each franchise agreement. Those services include initial development, operational training, preopening support and access to the Company’s technology throughout the franchise term. Fees generated related to the franchise license include development fees, royalty fees, marketing fees, technology fees and transfer fees, which are discussed further below. Variable fees are not estimated at contract inception, and are recognized as revenue when invoiced, which occurs monthly. The Company has concluded that its agreements do not contain any financing components. Franchise development fee revenue – The Company’s franchise agreements typically operate under ten-year terms with the option to renew for up to two additional five-year successor terms. The Company determined the renewal options are neither qualitatively nor quantitatively material and do not represent a material right. Initial franchise fees are non-refundable and are typically collected upon signing of the franchise agreement. Initial franchise fees are recorded as deferred revenue when received and are recognized on a straight-line basis over the franchise life, which the Company has determined to be ten years , as the Company fulfills its promise to grant the franchisee the rights to access and benefit from the Company’s intellectual property and to support and maintain the intellectual property. The Company may enter into an area development agreement with certain franchisees. Area development agreements are for a territory in which a developer has agreed to develop and operate a certain number of franchise locations over a stipulated period of time. The related territory is unavailable to any other party and is no longer marketed to future franchisees by the Company. Depending on the number of studios purchased under franchise agreements or area development agreements, the initial franchise fee ranges from $ 60 (single studio) to $ 350 (te n studios) and is paid to the Company when a franchisee signs the area development agreement. Area development fees are initially recorded as deferred revenue. The development fees are allocated to the number of studios purchased under the development agreement. The revenue is recognized on a straight-line basis over the franchise life for each studio under the development agreement. Development fees and franchise fees are generally recognized as revenue upon the termination of the development agreement with the franchisee. The Company may enter into master franchise agreements with master franchisees, under which the master franchisee sells licenses to franchisees in one or more countries outside of North America. The master franchise agreements generally provide a ten-year period under which the master franchisee may sell licenses. The master franchise agreement term ends on the earlier of the expiration or termination of the last franchise agreement sold by the master franchisee. Initial master franchise fees are recorded as deferred revenue when received and are recognized on a straight-line basis over 20 years . Franchise royalty fee revenue – Royalty revenue represents royalties earned from each of the franchised studios in accordance with the franchise disclosure document and the franchise agreement for use of the brands’ names, processes and procedures. The royalty rate in the franchise agreement is typically 7 % of the gross sales of each location operated by each franchisee. Royalties are billed on a monthly basis. The royalties are entirely related to the Company’s performance obligation under the franchise agreement and are billed and recognized as franchisee sales occur. Technology fees – The Company may provide access to third-party or other proprietary technology solutions to the franchisees for a fee. The technology solution may include various software licenses for statistical tracking, scheduling, allowing club members to record their personal workout statistics, music and technology support. The Company bills and recognizes the technology fee as earned each month as the technology solution service is performed. Transfer fees – Transfer fees are paid to the Company when one franchisee transfers a franchise agreement to a different franchisee. Transfer fees are recognized as revenue on a straight-line basis over the term of the new or assumed franchise agreement, unless the original franchise agreement for an existing studio is terminated, in which case the transfer fee is recognized immediately. Training revenue – The Company provides coach training services either through direct training of the coaches who are hired by franchisees or by providing the materials and curriculum directly to the franchisees who utilize the materials to train their hired coaches. Direct training fees are recognized over time as training is provided. Training fees for materials and curriculum are recognized at the point in time of delivery of the materials. The Company also offers coach training and final coach certification through online classes. Fees received by the Company for online class training are recognized as revenue over time for the 12-month period that the Company is obligated to provide access to the online training content. Franchise marketing fund revenue – Franchisees are required to pay marketing fees o f 2 % of t heir gross sales. The marketing fees are collected by the Company on a monthly basis and are to be used for the advertising, marketing, market research, product development, public relations programs and materials deemed appropriate to benefit brands. The Company’s promise to provide the marketing services funded through the marketing fund is considered a component of the Company’s performance obligation to grant the franchise license. The Company bills and recognizes marketing fund fees as revenue each month as gross sales occur. Equipment and merchandise revenue – The following revenues are generated as a result of transactions with or related to the Company’s franchisees. Equipment revenue – The Company sells authorized equipment to franchisees to be used in the franchised studios. Certain franchisees may prepay for equipment, and in that circumstance, the revenue is deferred until delivery. Equipment revenue is recognized when control of the equipment is transferred to the franchisee, which is at the point in time when delivery and installation of the equipment at the studio is complete. Merchandise revenue – The Company sells branded and non-branded merchandise to franchisees for retail sales to customers at studios. For branded merchandise sales, the performance obligation is satisfied at the point in time of shipment of the ordered branded merchandise to the franchisee. For such branded merchandise sales, the Company is the principal in the transaction as it controls the merchandise prior to it being delivered to the franchisee. The Company records branded merchandise revenue and related costs upon shipment on a gross basis. Customers have the right to return and/or receive credit for defective merchandise. Returns and credit for defective merchandise were insignificant for the years ended December 31, 2022, 2021 and 2020. For certain non-branded merchandise sales, the Company earns a commission to facilitate the transaction between the franchisee and the supplier. For such non-branded merchandise sales, the Company is the agent in the transaction, facilitating the transaction between the franchisee and the supplier, as the Company does not obtain control of the non-branded merchandise during the order fulfillment process. The Company records non-branded merchandise commissions revenue at the time of shipment. Other revenue – Service revenue – Historically, the revenue from company-owned transition studios has been very limited as the Company typically only owns a small number of studios and only for a short period of time pending the resale of the license to a franchisee. For company-owned transition studios, the Company’s distinct performance obligation is to provide fitness classes to the customer. The company-owned studios sell memberships by individual class and by class packages. Revenue from the sale of classes and class packages for a specified number of classes are recognized over time as the customer attends and utilizes the classes. Revenues from the sale of class packages for an unlimited number of classes are recognized over time on a straight-line basis over the duration of the contract period. On-demand revenue – The Company grants a subscriber access to an online hosted platform, which contains a library of web-based classes that is continually updated, through monthly or annual subscription packages. Revenue is recognized over time on a straight-line basis over the subscription period. Other revenue – The Company earns commission income from certain of its franchisees’ use of certain preferred vendors. In these arrangements, the Company is the agent as it is not primarily responsible for fulfilling the orders. Commissions are earned and recognized at the point in time the vendor ships the product to franchisees. In addition, the Company grants vendors access to franchisees' members to provide certain services to the members for a fee. Revenue is recognized over time on a straight-line basis over the access period. Sales taxes, value added taxes and other taxes that are collected in connection with revenue transactions are withheld and remitted to the respective taxing authorities. As such, these taxes are excluded from revenue. The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. Therefore, shipping and handling fees that are billed to franchisees are recognized in revenue and the associated shipping and handling costs are recognized in cost of product sold as soon as control of the goods transfers to the franchisee. Credit Losses – The Company’s accounts and notes receivable are recorded at net realizable value, which includes an appropriate allowance for estimated credit losses. The estimate of credit losses is based upon historical bad debts, current receivable balances, age of receivable balances, the customer’s financial condition and current economic trends, all of which are subject to change. Actual uncollected amounts have historically been consistent with the Company’s expectations. The Company’s payment terms on its receivables from franchisees are generally 30 days . The following table provides a reconciliation of the activity related to the Company’s accounts receivable, other receivables and notes receivable allowance for credit losses: Accounts receivable Other receivables Notes receivable Total Balance at January 1, 2020 $ 225 $ 429 $ 1,975 $ 2,629 Bad debt expense recognized during the year 2,685 — 81 2,766 Write-off of uncollectible amounts ( 505 ) — ( 147 ) ( 652 ) Balance at December 31, 2020 2,405 429 1,909 4,743 Bad debt expense recognized during the year 102 — 308 410 Write-off of uncollectible amounts ( 314 ) — ( 78 ) ( 392 ) Balance at December 31, 2021 2,193 429 2,139 4,761 Bad debt expense (recovery) recognized during the year ( 705 ) ( 429 ) 422 ( 712 ) Write-off of uncollectible amounts ( 623 ) — ( 1,842 ) ( 2,465 ) Balance at December 31, 2022 $ 865 $ — $ 719 $ 1,584 Shipping and handling fees – Shipping and handling fees billed to customers are recorded in merchandise and equipment revenues. The costs associated with shipping goods to customers are included in costs of product revenue in the consolidated statements of operations. Costs of franchise and service revenue – Costs of franchise and service revenue consists of commissions related to the signing of franchise agreements, travel and personnel expenses related to the on-site training provided to the franchisees, and expenses related to the purchase of the technology packages and the related monthly fees. Costs of franchise and service revenue excludes depreciation and amortization. Costs of product revenue – Costs of product revenue consists of cost of equipment and merchandise and related freight charges. Costs of product revenue excludes depreciation and amortization. Advertising costs – Advertising costs are expensed as incurred. Advertising costs are included in selling, general and administrative expenses. For the years ended December 31, 2022, 2021 and 2020, the Company had approximately $ 7,685 , $ 6,890 and $ 5,409 , respectively, of advertising costs, including amounts spent in excess of marketing fund revenue. Selling, general and administrative expenses – The Company’s selling, general and administrative (“SG&A”) expenses primarily consist of salaries and wages, sales and marketing expenses, professional and legal fees, occupancy expenses, management fees, travel expenses and conference expenses. Marketing fund expenses – Marketing fund expenses are recognized as incurred, and any marketing fund expenditures in excess of marketing fund revenue are reclassified as SG&A expenses in the consolidated statements of operations. Acquisition and transaction expenses (income) – Acquisition and transaction expenses (income) include costs directly related to the acquisition of businesses, which include expenditures for advisory, legal, valuation, accounting and similar services, in addition to amounts recorded for changes in contingent consideration (see Note 16). Accrued expenses – Accrued expenses consisted of the following: December 31, 2022 2021 Accrued compensation $ 4,611 $ 4,248 Contingent consideration from acquisitions, current portion 2,203 3,678 Sales tax accruals 3,186 6,003 Legal accruals 464 2,932 Accrued deemed dividend — 3,250 Other accruals 1,831 934 Total accrued expenses $ 12,295 $ 21,045 Comprehensive income – The Company does not have any components of other comprehensive income recorded within the consolidated financial statements and therefore does not separately present a consolidated statement of comprehensive income in the consolidated financial statements. Fair value measurements – Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , applies to all financial assets and financial liabilities that are measured and reported on a fair value basis and requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 establishes a valuation hierarchy for disclosures of the inputs to valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates and yield curves), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 – Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data. The Company’s financial instruments include cash, restricted cash, accounts receivable, notes receivable, accounts payable, accrued expenses and notes payable. The carrying amounts of these financial instruments approximates fair value due to their short maturities, proximity of issuance to the balance sheet date or variable interest rate. Redeemable convertible preferred stock – The redeemable convertible preferred stock (the “Convertible Preferred”) becomes redeemable at the option of the holder as of a specific date unless an event that is not probable of occurring happens before that date. Therefore, the Company determined that it is probable that the Convertible Preferred will become redeemable based on the passage of time. The Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. Noncontrolling interests – Noncontrolling interests represent the economic interests of XPO LLC held by Class B common stockholders. Income or loss is attributed to the noncontrolling interests based on the weighted average LLC interests outstanding during the period. The noncontrolling interests' ownership percentage can fluctuate over time as the Class B common stockholders elect to exchange their shares of Class B common stock for Class A common stock. In December 2021, the Company and the Continuing Pre-IPO LLC Members amended the LLC agreement where the redemption option in cash was removed, except to the extent the cash proceeds to be used to make the redemption in cash are immediately available and were directly raised from a secondary offering of Company's equity securities. The redeemable noncontrolling interest was adjusted to its fair value as of such date and recorded in equity as noncontrolling interest. Earnings (loss) per share – Basic earnings (loss) per share is calculated by dividing the earnings (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding. Shares of Class B common stock do not share in the earnings of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented. Diluted earnings per share adjusts the basic earnings per share calculation for the potential dilutive impact of common shares such as equity awards using the treasury-stock method. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Shares of Class B common stock are considered potentially dilutive shares of Class A common stock; however, related amounts have been excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods. Prior to the IPO, XPO LLC had one class of membership interest which was held by the Member. Earnings per share data is not provided in the consolidated financial statements for periods prior to the IPO as XPO LLC was a single-member limited liability company with only one unit. For the year ended December 31, 2021 , basic net loss per share has been calculated by dividing net loss attributable to Class A common stockholders for the period subsequent to the Reorganization Transactions, by the weighted average number of shares of Class A common stock outstanding for the same period. Shares of Class A common stock are weighted for the portion of the period in which the shares were outstanding. Income taxes – The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities (“DTAs” and “DTLs”) for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. The Company recognizes DTAs to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize DTAs in the future in excess of the net recorded amount, an adjustment to the DTA valuation allowance would be made, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC Topic 740 on the basis of a two-step process in which the Company (1) determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company does not have any u ncertain tax positions. The Company recognizes potential interest and penalties, if any, related to income tax matters in income tax expense. The Company incurred $ 1 , $ 0 and $ 0 in interest and penalties for the years ended December 31, 2022, 2021 and 2020 , respectively. Recently adopted accounting pronouncements – Accounting for leases – On January 1, 2022, the Company adopted ASU No. 2016-02, “Leases (Topic 842)” utilizing the effective date method for the initial application. Unde |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Note 3 – Acquisitions and Dispositions The Company completed the following acquisitions which contain Level 3 fair value measurements related to the recognition of goodwill and intangibles. Studios During the year ended December 31, 2021, the Company entered into agreements with franchisees under which the Company repurchased six studios to operate as company-owned transition studios. The aggregate purchase price for the acquisitions was $ 450 , less $ 60 of net deferred revenue and deferred costs resulting in total purchase consideration of $ 390 for the year ended December 31, 2021 . The following summarizes the aggregate fair values of the assets acquired and liabilities assumed: Property and equipment $ 196 Reacquired franchise rights 194 Total purchase price $ 390 The fair value of reacquired franchise rights was based on the excess earnings method and are considered to have an approximate five to eight-year life. Inputs used in the methodologies primarily included sales forecasts, projected future cash flows and discount rate commensurate with the risk involved. The acquisitions were not material to the results of operations of the Company. During the year ended December 31, 2021 , the Company refranchised 53 company-owned transition studios for aggregate proceeds of $ 433 and recorded a loss on disposal of the related assets of $ 483 . During the year ended December 31, 2022 , the Company refranchised 21 company-owned transition studios and received no proceeds and recorded no gain or loss on disposal of the studio assets. The Company is actively seeking to refranchise the remaining company-owned transition studios, although it expects to hold a small number of strategic transition studios for a limited time while facilitating the transfer of these studios to new or existing franchisees. When the Company believes that a studio will be refranchised for a price less than its carrying value, but does not believe the studio has met the criteria to be classified as held for sale, the Company reviews the studio for impairment. The Company evaluates the recoverability of the studio assets by comparing estimated sales proceeds plus holding period cash flows, if any, to the carrying value of the studio. For studio assets that are not deemed to be recoverable, the Company recognizes impairment for any excess of carrying value over the fair value of the studios, which is based on the expected net sales proceeds. During years ended December 31, 2022, 2021 and 2020 , included within SG&A expenses, the Company recorded $ 0 , $ 781 and $ 0 of impairment charges, respectively, which is a Level 3 measurement. BodyFit Trademark In the quarter ended June 30, 2022, the Company entered into a Trademark Acquisition Agreement with Vitalize, LLC dba Bodybuilding.com (the "Seller") whereby the Company acquired all rights, titles, and interests in and to the BodyFit trademark in the United States. The acquisition was recorded as an asset acquisition. The aggregate purchase consideration for the acquisition was $ 10,300 . The purchase price consisted of $ 5,500 of cash consideration and $ 4,800 of noncash consideration, which was recorded as a contract liability. The noncash consideration relates to signing of a brand fee agreement (as defined in Note 4) where the Seller has access to the Company's franchisees to sell its products to franchisees over the term of the agreement. The fair value of the trademark was determined using the relief from royalty method and is considered to have a 10-year life. The fair value of the contract liability was determined using the total fair value of the asset acquired reduced by the amount of cash consideration provided, which is a Level 3 measurement. The Trademark Acquisition Agreement is subject to termination due to a third-party right of first refusal. The likelihood of exercise of the right of first refusal was considered remote as of December 31, 2022. BFT On October 13, 2021 , the Company entered into an Asset Purchase Agreement (“APA”) with GRPX Live Pty Ltd., an Australian corporation, and its affiliates (the “Seller”) whereby the Company acquired certain assets relating to the concept and brand known as BFT. Assets acquired include franchise rights, brand, intellectual property and the rights to manage and license the franchise business (the “Franchise System”). The Company also assumed certain contingent liabilities associated with the purchased assets and provided certain indemnifications to the Seller. This acquisition is expected to enhance the Company’s franchise offerings and provide a platform for future growth, which the Company believes is complementary to its portfolio of franchises. Consideration for the transaction included cash of $ 60,000 AUD ($ 44,322 USD based on the currency exchange rate as of the purchase date). In addition, the Company agreed to pay contingent consideration to the Seller consisting of quarterly cash payments based on the sales of the Franchise System and equipment packages in the U.S. and Canada, as well as a percentage of royalties collected by the Company, provided that aggregate minimum payments of $ 5,000 AUD (approximately $ 3,694 USD based on the currency exchange rate as of the purchase date) are required to be paid to the Seller for the two-year period ending December 31, 2023 and the aggregate amount of such payments for the two-year period ending December 31, 2023 is subject to a maximum of $ 14,000 AUD (approximately $ 10,342 USD based on the currency exchange rate as of the purchase date). Based on the purchase price allocation, the Company determined that the fair value of the estimated contingent consideration liability as of the acquisition date is $ 9,388 and is recorded in accrued expenses and contingent consideration from acquisitions in the consolidated balance sheets. See Note 17 for additional information. In addition, the Company entered into a Master Franchise Agreement (“MFA”) with an affiliate of the Seller (the “Master Franchisee”), pursuant to which the Company granted the Master Franchisee the master franchise rights for the BFT TM brands in Australia, New Zealand and Singapore. In exchange, the Company will receive certain fees and royalties, including a percentage of the revenue generated by the Master Franchisee under the MFA. The MFA contains an option for the Company to repurchase the master franchise rights granted under the MFA in either 2023 or 2024 at a purchase price based on the Master Franchisee’s EBITDA. If the Company (or a designee of the Company) does not exercise the option pursuant to the terms of the MFA, then the Company might be required to pay a cancellation fee to the Master Franchisee which might be material to the Company. If the Master Franchisee rejects an offer to repurchase the franchise rights, then the cancellation fee is not required to be paid. At the acquisition date, there were certain claims and lawsuits against the Seller for which the Company has agreed to indemnify the Seller. The claims and lawsuits relate to alleged patent and trademark infringements. Plaintiff alleges that plaintiff has suffered, and is likely to continue to suffer, loss and damage due to breach of the patents by the Seller and is seeking damages or in the alternative an account of profits. The Seller has filed a cross-claim alleging that the defendant’s two Australian patents are, and always have been, invalid and that they should be revoked. The Court held a trial in December 2020, and on February 14, 2022, the Court issued a decision holding that the Plaintiff’s claims of infringement were invalid and that even if they were valid, the Seller did not infringe upon these patents and trademarks. In addition, the Plaintiff has brought related claims for patent infringement against the Seller in the United States District Court for Delaware, and these actions are currently pending. See Note 17 for additional information. As a part of the purchase accounting, the Company did not record any liability for the potential cancelation fee (which was evaluated in accordance with ASC 805, Business Combinations) and potential legal indemnification liability (which was evaluated in accordance with ASC 450, Contingencies). The transaction was accounted for as a business combination using the acquisition method of accounting, which requires the assets acquired and the liabilities assumed to be recorded at their respective fair value as of the date of the transaction. The excess of the purchase price over the estimated fair value of the net assets and liabilities was allocated to goodwill. The Company determined the estimated fair values after review and consideration of relevant information as of the acquisition date, including discounted cash flows, quoted market prices and estimates made by management. The allocation of the purchase price presented below was based on management's estimate of the fair values of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. These valuation techniques incorporate the use of expected future revenues, cash flows and growth rates as well as estimated discount rates commensurate with the risk involved. Trademark was valued using the relief from royalty method and is considered to have a 10-year life. Franchise agreements were valued using the excess earnings method and are considered to have an approximate 8.5 -year life. Internal use software was valued using the cost method and is considered to have a three-year life. The goodwill of $ 21,210 arising from the acquisition consists largely of the synergies expected from combining the operations of the Company and BFT. The acquisition was not material to the results of operations of the Company. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Goodwill $ 21,210 Franchise agreements 24,100 Trademark 8,100 Internal use software 300 Total purchase price $ 53,710 Goodwill and intangible assets recognized from this acquisition are expected to be tax deductible. Rumble On March 24, 2021, the Parent entered into a contribution agreement with Rumble Holdings LLC; Rumble Parent LLC and Rumble Fitness LLC (the “Selling Parties”) to acquire the franchise rights, brand, intellectual property and the rights to manage and license the “Rumble” franchise business. The Parent issued shares of the Parent’s Class A units equivalent to 1,300 shares of Class A common stock, which were used to fund the acquisition. Additional units equivalent to 2,024 shares of Class A common stock were issued to the Selling Parties, which units will vest if share prices ranging from $ 50.62 to $ 75.56 are met, or if the Company or the Parent has a change of control. In connection with the contribution agreement, the Parent agreed to provide up to $ 20,000 in debt financing to the Selling Parties. See Note 8 for additional information. The Parent contributed all assets acquired from the Selling Parties to XPO LLC. The fair value of all the Parent’s Class A units issued to the Selling Parties was determined to be $ 20,483 and is a Level 3 measurement. The Company estimated the value of the Parent’s shares using Level 3 input factors including the fair value of the acquired entity, negotiated values with the sellers of the acquired entity, recent equity recapitalizations of the Parent, comparable industry transactions, adjusted EBITDA multiples ranging from 15 to 18 and the estimated fair value of the Company’s reporting units. The Selling Parties are engaged in the business of operating fitness studios under the “Rumble” name which offer their customers boxing-inspired group fitness classes under the “Rumble” trade name, in addition to offering at home on-demand and live workouts on Rumble TV. The Company will also offer its customers related ancillary products and services related to this concept. The transaction terms include purchasing exclusive rights to establish and operate franchises under the “Rumble” trade name and use certain related assets for the purpose of establishing a franchise system. This acquisition is expected to enhance the Company’s franchise offerings and provide a platform for future growth, which the Company believes is complementary to its portfolio of franchises. The transaction was accounted for as a business combination using the acquisition method of accounting, which requires the assets acquired to be recorded at their respective fair value as of the date of the transaction. The Company determined the estimated fair values after review and consideration of relevant information as of the acquisition date, including discounted cash flows, quoted market prices and estimates made by management. The fair values assigned to tangible and intangible assets acquired are based on management's estimates and assumptions. The following table summarizes the fair values of the assets acquired and liabilities assumed: Goodwill $ 8,183 Franchise agreements 10,900 Trademark 1,400 Total purchase price $ 20,483 The consideration resulted in goodwill of $ 8,183 , which consists largely of the synergies and economies of scale expected from combining the assets of Rumble with the Company’s franchise servicing operations. The fair values, which are Level 3 measurements, of the recognizable intangible assets are comprised of trademarks and franchise agreements. The fair value of trademarks was estimated by the relief from royalty method and are considered to have a ten-year life. The fair value of the franchise agreements was based on the excess earnings method and are considered to have a ten-year life. Inputs used in the methodologies primarily included sales forecasts, projected future cash flows, royalty rate and discount rate commensurate with the risk involved. The acquisition was not material to the results of operations of the Company. In connection with the Reorganization Transactions, the Parent merged with and into XPO Holdings. As a result, the shares issued to Rumble Holdings LLC, are treated as a liability on the Company's balance sheet instead of equity and are therefore subject to a quarterly fair value remeasurement on a mark-to-market basis as a derivative liability. The contingent consideration liability recorded at the IPO date was $ 23,100 . See Note 17 for additional information. Goodwill and intangible assets recognized from this acquisition are not expected to be tax deductible. During the years ended December 31, 2022, 2021 and 2020 , the Company incurred $ 0 , $ 978 and $ 0 , respectively, of transaction costs directly related to the acquisitions, which is included in acquisition and transaction expenses in the consolidated statements of operations. |
Contract Liabilities and Costs
Contract Liabilities and Costs from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities and Costs from Contracts with Customers | Note 4 – Contract Liabilities and Costs from Contracts with Customers Contract liabilities – Contract liabilities consist of deferred revenue resulting from franchise fees, development fees and master franchise fees paid by franchisees, which are recognized over time on a straight-line basis over the franchise agreement term. The Company also receives upfront payments from vendors under agreements that give the vendors access to franchisees’ members to provide certain services to the members (“brand fees”). Revenue from the upfront payments is recognized on a straight-line basis over the agreement term and is reported in other service revenue. Also included in the deferred revenue balance are non-refundable prepayments for merchandise and equipment, as well as revenues for training, service revenue and on-demand fees for which the associated products or services have not yet been provided to the customer. The Company classifies these contract liabilities as either current deferred revenue or non-current deferred revenue in the consolidated balance sheets based on the anticipated timing of delivery. The following table reflects the change in franchise development and brand fee contract liabilities for the years ended December 31, 2022, 2021 and 2020 . Other deferred revenue amounts of $ 18,576 and $ 11,805 f or the years ended December 31, 2022 and 2021 , respectively, are excluded from the table as the original expected duration of the contracts is one year or less . Franchise Brand fees Total Balance at January 1, 2020 $ 72,359 $ — $ 72,359 Revenue recognized that was included in deferred ( 7,921 ) — ( 7,921 ) Deferred revenue recorded as settlement in ( 1,329 ) — ( 1,329 ) Increase, excluding amounts recognized as revenue 13,262 5,385 18,647 Balance at December 31, 2020 76,371 5,385 81,756 Revenue recognized that was included in deferred ( 11,320 ) ( 1,897 ) ( 13,217 ) Deferred revenue recorded as settlement in ( 667 ) — ( 667 ) Increase, excluding amounts recognized as revenue 36,269 2,492 38,761 Balance at December 31, 2021 100,653 5,980 106,633 Revenue recognized that was included in deferred ( 20,631 ) ( 3,445 ) ( 24,076 ) Deferred revenue recorded as settlement in ( 395 ) — ( 395 ) Increase, excluding amounts recognized as revenue 36,617 4,106 40,723 Balance at December 31, 2022 $ 116,244 $ 6,641 $ 122,885 The following table illustrates estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2022. The expected future recognition period for deferred franchise development fees related to unopened studios is based on management’s best estimate of the beginning of the franchise license term for those studios. The Company elected to not disclose short term contracts, sales and usage-based royalties, marketing fees and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in revenue in Franchise Brand fees Total 2023 $ 9,178 $ 4,250 $ 13,428 2024 9,558 1,564 11,122 2025 10,693 414 11,107 2026 11,894 413 12,307 2027 11,803 — 11,803 Thereafter 63,118 — 63,118 $ 116,244 $ 6,641 $ 122,885 The following table reflects the components of deferred revenue: December 31, 2022 2021 Franchise and area development fees $ 116,244 $ 100,653 Brand fees 6,641 5,980 Equipment and other 18,576 11,805 Total deferred revenue 141,461 118,438 Non-current portion of deferred revenue 109,465 95,691 Current portion of deferred revenue $ 31,996 $ 22,747 Contract costs – Contract costs consist of deferred commissions resulting from franchise and area development sales by third-party and affiliate brokers and sales personnel. The total commission is deferred at the point of a franchise sale. The commissions are evenly split among the number of studios purchased under the development agreement and begin to be amortized when a subsequent franchise agreement is executed. The commissions are recognized on a straight-line basis over the initial ten-year franchise agreement term to align with the recognition of the franchise agreement or area development fees. The Company classifies these deferred contract costs as either current deferred costs or non-current deferred costs in the consolidated balance sheets. The associated expense is classified within costs of franchise and service revenue in the consolidated statements of operations. At December 31, 2022 and 2021 , there were approximately $ 3,589 and $ 3,071 of current deferred costs and approximately $ 43,445 and $ 41,941 in non-current deferred costs, respectively. The Company recognized approximately $ 11,049 , $ 6,006 and $ 4,234 in franchise sales commission expense for the years ended December 31, 2022, 2021 and 2020 , respectively. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Notes Receivable | Note 5 – Notes Receivable The Company previously provided unsecured advances or extended financing related to the purchase of the Company’s equipment or franchise fees to various franchisees. These arrangements have terms of up to 18 months with interest typically based on LIBOR plus 700 basis points with an initial interest free period. The Company also provided loans to various franchisees through its relationship with Intensive Capital Inc. (“ICI”) (see Note 10 for additional information). The Company accrues the interest as an addition to the principal balance as the interest is earned. Activity related to these arrangements is presented within operating activities in the consolidated statements of cash flows. The Company has also provided loans for the establishment of new or transferred franchise studios to various franchisees. These loans have terms of up to ten years and bear interest at a stated fixed rate ranging from 0 % to 15 %, or variable rates based on LIBOR plus a specified margin . The Company accrues interest as an addition to the principal balance as the interest is earned. Activity related to these loans is presented within investing activities in the consolidated statements of cash flows. At December 31, 2022 and 2021 , the principal balance of the notes receivable was approximately $ 3,306 and $ 7,473 , respectively. The Company evaluates loans for collectability upon issuance of the loan and records interest only if the loan is deemed collectable. To the extent a loan becomes past due, the Company ceases the recording of interest in the period that a reserve on the loan is established. On a periodic basis, the Company evaluates its notes receivable balance and establishes an allowance for doubtful accounts, based on a number of factors, including evidence of the franchisee’s ability to comply with the terms of the notes, economic conditions and historical collections. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At December 31, 2022 and 2021 , the Company has reserved approximately $ 719 and $ 2,139 as uncollectible notes receivable, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment Property and equipment consisted of the following: December 31, 2022 2021 Furniture and equipment $ 4,182 $ 3,393 Computers and software 14,075 8,686 Vehicles 171 12 Leasehold improvements 7,533 6,481 Construction in progress 3,115 982 Less: accumulated depreciation ( 10,552 ) ( 6,781 ) Total property and equipment $ 18,524 $ 12,773 Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $ 3,931 , $ 3,002 and $ 2,587 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 7 – Goodwill and Intangible Assets Goodwill represents the excess of cost over the fair value of identifiable net assets acquired related to the original purchase of the various franchise businesses and acquisition of company-owned transition studios. Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist. Goodwill at December 31, 2022 decreased to $ 165,697 from $ 169,073 at December 31, 2021. The $ 3,376 decrease was due to an impairment charge of $ 3,376 recognized in the third quarter of 2022 included within selling, general and administrative expenses. This amount represents the accumulated total of impairments recognized to date related to goodwill. There were no other impairments recognized prior to January 1, 2022. During the year ended December 31, 2021 , there was an increase of $ 29,393 in previously reported goodwill due to the acquisitions of Rumble and BFT as discussed in Note 3. During the third quarter of 2022, the Company determined it was necessary to re-evaluate goodwill of the AKT reporting unit for impairment due to impacts arising from litigation resulting in decline in forecasted and actual cash flows. Therefore, the Company performed a quantitative assessment of the fair value of the reporting unit using an income approach with assumptions that are considered Level 3 inputs and concluded that the carrying value of the AKT reporting unit exceeded its fair value, resulting in a goodwill impairment of $ 3,376 . The fair value of the reporting unit was determined by discounting estimated future cash flows, which were calculated based on revenue and expense long-term growth assumptions ranging from 2.0 % to 5.0 %, at a weighted average cost of capital (discount rate) of 16.0 %. In addition, the Company determined that the trademark and franchise agreements intangible assets related to the AKT reporting unit were also impaired and recognized an impairment loss of $ 280 in the third quarter of 2022. There were no further impairment charges recognized on the Company's intangible assets for the remainder of 2022. Intangible assets consisted of the following: December 31, 2022 December 31, 2021 Amortization Gross Accumulated Net Gross Accumulated Net Trademarks 10 $ 21,110 $ ( 2,606 ) $ 18,504 $ 10,920 $ ( 794 ) $ 10,126 Franchise agreements 7.5 – 10 69,100 ( 25,143 ) 43,957 69,500 ( 17,166 ) 52,334 Non-compete agreement 5 — — — 1,400 ( 1,282 ) 118 Web design and domain 3 – 10 430 ( 196 ) 234 430 ( 86 ) 344 Deferred video production costs 3 4,046 ( 2,173 ) 1,873 2,370 ( 1,036 ) 1,334 Total definite-lived intangible assets 94,686 ( 30,118 ) 64,568 84,620 ( 20,364 ) 64,256 Indefinite-lived intangible assets: Trademarks N/A 72,607 — 72,607 72,607 — 72,607 Total intangible assets $ 167,293 $ ( 30,118 ) $ 137,175 $ 157,227 $ ( 20,364 ) $ 136,863 Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $ 11,384 , $ 7,170 and $ 5,064 , respectively. The anticipated future amortization expense of intangible assets is as follows: Year ending December 31, 2023 $ 11,420 2024 10,903 2025 10,392 2026 7,481 2027 6,279 Thereafter 18,093 Total $ 64,568 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 – Debt On February 28, 2020, the Company obtained a five-year $ 185,000 term loan from a lender, along with a consortium of other lenders (the “2020 Facility”). The 2020 Facility also included a $ 10,000 revolving credit facility. The 2020 Facility was collateralized by substantially all of the Company’s assets, including assets of the Company’s subsidiaries. The 2020 Facility had an interest rate based on a reference rate or LIBOR, plus an applicable margin. The proceeds of the term loan were used to repay borrowings, interest and fees outstanding under the prior facility. Principal payments of $ 925 were due quarterly beginning on June 30, 2020, and excess payments were required if the Company’s cash flows exceeded certain thresholds. On March 24, 2021, the 2020 Facility was amended to provide for additional term loans in an amount up to $ 10,600 , which amount was borrowed and the proceeds distributed to the Parent to fund a note payable under a $ 20,000 debt financing obligation in connection with the acquisition of Rumble (see Note 3 for additional information). Quarterly principal payments of $ 53 on the additional term loans began on June 30, 2021 . On April 19, 2021, the Company entered into a Financing Agreement with Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto (the “Credit Agreement”), which consists of a $ 212,000 senior secured term loan facility (the “Term Loan Facility”, and the loans thereunder, each a “Term Loan” and, together, the “Term Loans”). The Company’s obligations under the Credit Agreement are guaranteed by XPO Holdings and certain of the Company’s material subsidiaries and are secured by substantially all of the assets of XPO Holdings and certain of the Company’s material subsidiaries. Under the Credit Agreement, the Company is required to make: (i) monthly payments of interest on the Term Loans and (ii) quarterly principal payments equal to 0.25 % of the original principal amount of the Term Loans. Borrowings under the Term Loan Facility bear interest at a per annum rate of, at the Company’s option, either (a) the specified LIBOR rate plus a margin of 6.50 % or (b) the Reference Rate (as defined in the Credit Agreement) plus a margin of 5.50 % ( 10.59 % at December 31, 2022). The Credit Agreement also contains mandatory prepayments of the Term Loans with: (i) 50 % of XPO Holdings’ and its subsidiaries’ Excess Cash Flow (as defined in the Credit Agreement), subject to certain exceptions; (ii) 100 % of the net proceeds of certain asset sales and insurance/condemnation events, subject to reinvestment rights and certain other exceptions; (iii) 100 % of the net proceeds of certain extraordinary receipts, subject to reinvestment rights and certain other exceptions; (iv) 100 % of the net proceeds of any incurrence of debt, excluding certain permitted debt issuances; and (v) up to $ 60,000 of net proceeds in connection with an initial public offering of at least $ 200,000 , subject to certain exceptions. Unless agreed in advance, a ll voluntary prepayments and certain mandatory prepayments of the Term Loan made (i) on or prior to the first anniversary of the closing date are subject to a 2.0 % premium on the principal amount of such prepayment and (ii) after the first anniversary of the closing date and on or prior to the second anniversary of the closing date are subject to a 0.50 % premium on the principal amount of such prepayment. Otherwise, the Term Loans may be paid without premium or penalty, other than customary breakage costs with respect to LIBOR Rate Term Loans. The Credit Agreement contains customary affirmative and negative covenants, including, among other things: (i) to maintain certain total leverage ratios, liquidity levels and EBITDA levels; (ii) to use the proceeds of borrowings only for certain specified purposes; (iii) to refrain from entering into certain agreements outside of the ordinary course of business, including with respect to consolidation or mergers; (iv) restricting further indebtedness or liens; (v) restricting certain transactions with affiliates; (vi) restricting investments; (vii) restricting prepayments of subordinated indebtedness; (viii) restricting certain payments, including certain payments to affiliates or equity holders and distributions to equity holders; and (ix) restricting the issuance of equity. As of December 31, 2022, the Company was in compliance with these covenants. The Credit Agreement also contains customary events of default, which could result in acceleration of amounts due under the Credit Agreement. Such events of default include, subject to the grace periods specified therein, failure to pay principal or interest when due, failure to satisfy or comply with covenants, a change of control, the imposition of certain judgments and the invalidation of liens the Company has granted. The Company received net proceeds of $ 207,760 after deducting original issue discount equal to 2.0 % of the gross amount of the borrowings under the Credit Agreement. The proceeds of the Term Loan were used to repay principal, interest and fees outstanding under the 2020 Facility aggregating $ 195,633 (including a prepayment penalty of approximately $ 1,929 , which is included in interest expense for the year ended December 2021) and for working capital and other corporate purposes. Principal payments of the Term Loan of $ 530 are due quarterly. In July 2021, the Company repaid $ 115,000 of the principal balance of the Term Loans from proceeds of the IPO and Convertible Preferred. In connection with the repayment, the Company incurred a prepayment penalty of $ 413 and wrote off a pro rata portion of debt issuance costs and debt discount aggregating $ 2,454 , which is included in interest expense for the year ended December 31, 2021. On October 8, 2021, the Company entered into an amendment (the "Amendment") to the Credit Agreement. The Amendment provides for, among other things, additional term loans in an aggregate principal amount of $ 38,000 (the “2021 Incremental Term Loan”), the proceeds of which were used to fund the BFT acquisition and the payment of fees, costs and expenses related to the Amendment. The Amendment also (i) increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the 2021 Incremental Term Loan) commencing on December 31, 2021 and (ii) amended the amount of the prepayment premium applicable in the event the 2021 Incremental Term Loan is prepaid within two years of the effective date of the Amendment. On September 30, 2022, the Company entered into a third amendment (the “Third Amendment”) to the Credit Agreement. The Third Amendment provides for, among other things, additional term loans in an aggregate principal amount of $ 7,500 (the “2022 Incremental Term Loan”), the proceeds of which were used for the acquisition of BodyFit trademark and general corporate purposes, including funding working capital and the payment of fees, costs and expenses related to the Third Amendment. The Third Amendment also (i) increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the 2022 Incremental Term Loan) commencing on December 31, 2022 to $ 759 and (ii) amended the amount of the prepayment premium applicable in the event the 2022 Incremental Term Loan is prepaid within two years of the effective date of the Third Amendment. In April 2020, the Company received a loan in the amount of $ 3,665 , pursuant to the Paycheck Protection Program (the “PPP”) administered by the U.S. Small Business Administration. The PPP is part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which provides for forgiveness of up to the full principal amount and accrued interest of qualifying loans guaranteed under the PPP. The loan was scheduled to mature April 17, 2022 , bore interest at 1 % per annum and required no payments during the first 16 months from the date of the loan . In June 2021, the Company was notified that the PPP loan was forgiven. The Company recorded the forgiveness, including accrued interest, as a gain on debt extinguishment in the consolidated statement of operations for $ 3,707 for the year ended December 31, 2021. The Company incurred debt issuance costs of $ 55 , $ 996 and $ 5,158 for the years ended December 31, 2022, 2021 and 2020 , respectively. Debt issuance cost amortization amounted to approximately $ 126 , $ 5,749 and $ 3,096 for the years ended December 31, 2022, 2021 and 2020, respectively. Unamortized debt issuance costs as of December 31, 2022 and 2021 , were $ 270 and $ 341 , respectively, and are presented as a reduction to long-term debt in the consolidated balance sheets. Principal payments on outstanding balances of long-term debt as of December 31, 2022 were as follows: Year ending December 31, Amount 2023 $ 3,035 2024 3,035 2025 131,652 Total $ 137,722 The carrying value of the Company’s long-term debt approximated fair value as of December 31, 2022 and 2021 , due to the variable interest rate, which is a Level 2 input, or proximity of debt issuance date to the balance sheet date. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 9 – 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 exercise of lease renewal options is at the Company's sole discretion. When deemed reasonably certain of exercise, the renewal options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, the Company uses the rate implicit in the lease contract in determining the present value of lease payments. If the implicit rate is not provided, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company lease terms may include options to extend or terminate the lease. Currently, it is not reasonably certain that the Company will exercise those options and therefore, the Company utilized the initial, noncancelable, lease term to calculate the lease assets and corresponding liabilities for all leases. The Company has certain insignificant short-term leases with an initial term of twelve months or less that are not recorded in the consolidated balance sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company applied the practical expedient as an accounting policy for classes of underlying assets that have fixed payments for non-lease components, to not separate non-lease components from lease components and instead to account for them together as a single lease component, which increases the amount of lease assets and corresponding liabilities. For periods prior to January 1, 2022, the Company recognized rent expense related to leases on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of lease incentives was recorded as deferred rent in the Company’s consolidated balance sheets. Supplemental balance sheet information related to leases is summarized as follows: Operating leases Balance Sheet Location December 31, 2022 ROU assets, net Right-of-use assets $ 30,079 Lease liabilities, short-term Other current liabilities $ 3,786 Lease liabilities, long-term Lease liability $ 30,583 Components of lease expense are summarized as follows: December 31, 2022 Related-party lease Third-party leases Total Operating lease costs $ 239 $ 4,666 $ 4,905 Variable lease costs — 856 856 Short-term lease costs — 108 108 Total $ 239 $ 5,630 $ 5,869 Rent expense was $ 5,651 and $ 3,133 for the years ended December 31, 2021 and 2020, respectively. Supplemental cash flow information related to operating leases is summarized as follows: December 31, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 4,717 Lease liabilities arising from new ROU assets $ 20,966 Other information related to leases for the year ended December 31, 2022 is summarized as follows: Weighted average remaining lease term (years) 7.5 Weighted average discount rate 8.8 % Maturities of lease liabilities for the year ended December 31, 2022 are summarized as follows: Amount 2023 $ 6,621 2024 6,596 2025 6,625 2026 6,432 2027 5,564 Thereafter 15,211 Total future lease payments 47,049 Less: imputed interest 12,680 Total $ 34,369 As of December 31, 2021, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows (see Note 10): Related-party lease Third-party leases Total 2022 $ 321 $ 3,392 $ 3,713 2023 331 3,397 3,728 2024 225 3,410 3,635 2025 — 3,245 3,245 2026 — 3,088 3,088 Thereafter — 13,511 13,511 Total $ 877 $ 30,043 $ 30,920 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions The Company has numerous transactions with the pre-IPO Member and pre-IPO Parent and its affiliates. The significant related party transactions consist of borrowings from and payments to the Member and other related parties under common control of the Parent. The Parent entered into a management services agreement with H&W Investco Management LLC (“H&W Investco”), which is beneficially owned by a member of the Company’s board of directors. During the years ended December 31, 2022, 2021 and 2020 , the Company recorded approximately $ 0 , $ 462 and $ 795 , respectively, of management fees included within selling, general and administrative expenses for services received from H&W Investco, including reimbursement for reasonable out-of-pocket expenses. The management services agreement was terminated following the IPO in July 2021. As of December 31, 2019, the Company recorded a reduction to Member’s equity of $ 31,735 , representing the net amount of funds advanced to the Member, as the Company determined that the Member had no plan to repay these amounts in the foreseeable future. The receivable from the Parent was repaid in February 2020. During 2020, the Company provided net funds to a subsidiary of the Parent aggregating $ 1,456 and recorded a corresponding reduction to member’s equity for this same amount. During the year ended December 31, 2021, the Parent repaid the balance of the receivable. The aggregate receivable from the Parent at December 31, 2021 was $ 0 . In February 2020, the Member contributed $ 49,443 to the Company in satisfaction of the $ 32,157 ($ 31,735 at December 31, 2019) receivable with the remainder recorded as a contribution. The proceeds were used to make a $ 30,000 principal payment on the Company’s then outstanding term loan, with the remainder available for unrestricted use by the Company. Also, in February 2020, the Company returned $ 19,443 of the contribution to the Member, which was recorded as a distribution. Also, in 2020, $ 53,760 of the proceeds from the borrowings under the 2020 Facility were forwarded to the Parent and recorded as a distribution. In August 2020, the Member contributed $ 10,000 to the Company, which was recorded as a contribution, the proceeds of which were used to repay the line of credit. In March 2021, the Company recorded a distribution to the Parent of $ 10,600 , which the Parent used to fund a note payable under a debt financing obligation in connection with the acquisition of Rumble. The Company earned interest at the rate of 11 % per annum on the receivable from the Parent. In connection with the Reorganization Transactions, the Parent merged with and into the Member. XPO Inc. recorded $ 10,600 receivable from shareholder, as the Rumble seller is a shareholder of XPO Inc., for the debt financing provided to the Rumble seller. In July 2022, the Company entered into a settlement agreement with the Rumble sellers to resolve disputes related to the acquisition and related agreements. Under the terms of the settlement, the Company will prospectively reduce the interest rate on the debt financing provided to the Rumble sellers from 11 % per annum to 7.5 % per annum if payment is in cash or 10 % per annum if payment is in payment in kind and extend the maturity date of the debt financing. In 2022, the Rumble sellers borrowed an additional $ 5,050 under the debt financing agreement which was recorded as receivable from shareholder within equity. In 2022 , the Company recorded $ 719 of interest in kind, which was recorded as an increase to receivable from shareholder within equity. In addition, the Company agreed to fund additional loans to the Rumble sellers under the existing debt financing agreement in an aggregate amount of $ 5,900 at various dates through July 2023. The Company’s Chief Executive Officer is the sole owner of ICI, which previously provided unsecured loans to the Company, which loaned the funds to franchisees to purchase a franchise territory or to setup a studio. The Company recorded notes payable to ICI and notes receivable from the franchisees resulting from these transactions. The notes from ICI to the Company accrued interest at the time the loan was made, which is recorded as interest expense. The notes receivable begin to accrue interest 45 days after the issuance to the franchisee. At December 31, 2022 and 2021 , the Company had recorded $ 92 and $ 96 of notes receivable. The notes payable were repaid in 2021. The Company recognized $ 11 , $ 11 and $ 13 of interest income and $ 0 , $ 5 and $ 19 of interest expense for the years ended December 31, 2022, 2021 and 2020, respectively. In September 2019, the Company entered into a five-year building lease agreement, expiring August 31, 2024 , with Von Karman Production LLC, which is owned by the Company’s Chief Executive Officer. Pursuant to the lease, the Company was obligated to pay monthly rent of $ 25 for the initial twelve months of the lease term with subsequent 3 % annual rent increa ses. During the years ended December 31, 2022, 2021 and 2020 , the Company recorded expense related to this lease of $ 239 , $ 319 and $ 319 , respectively. In September 2022, the Company's Chief Executive Officer sold the building to an unaffiliated third party. The Company entered into a building lease agreement with the new owner. In December 2022, the Company entered into an agreement with the former owner of Row House, pursuant to which contingent consideration relating to the 2017 acquisition of Row House was settled in exchange for issuance of 105 Restricted Stock Units ("RSUs") which vest on the fourth anniversary of the grant date. As a result of the agreement, the Company recorded a reduction to the contingent consideration liability of $ 1,220 with an offsetting increase in additional paid-in capital and reclassified the former owner's outstanding note receivable of $ 1,834 to additional paid-in capital. In addition, pursuant to the agreement, the Company issued a four-year multi-tranche term loan with an option to borrow up to $ 20 per month in the aggregate principal amount of $ 960 bearing interest of 8.5 % per annum, which was recorded as a liability and offsetting reduction in additional paid-in capital. The outstanding receivable from shareholder and the multi-tranche term loan are collateralized by 75 shares of Class B common stock held by the former owner, which were reclassified to treasury stock, and by the 105 RSUs. The Company earns revenues and has accounts receivable from franchisees who are also officers of the Company. Revenues from these affiliates, primarily related to franchise revenue, marketing fund revenue, package and memberships revenue and merchandise revenue, were $ 577 , $ 507 and $ 327 for the years ended December 31, 2022, 2021 and 2020, respectively. Included in accounts receivable as of December 31, 2022 and 2021 , is $ 4 an d $ 27 , respectively, for such sales. The Company has notes receivable from franchisees, who are also shareholders of the Company. At December 31, 2022 and 2021 , notes receivable from franchisees includes $ 0 and $ 294 and notes receivable from franchisees, net of current portion includes $ 0 and $ 1,744 , respectively. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Note 11 – Redeemable Convertible Preferred Stock On July 23, 2021, the Company issued and sold in a private placement 200,000 newly issued shares of Series A-1 Convertible Preferred Stock, par value $ 0.0001 per share (the “Convertible Preferred”), for aggregate cash proceeds of $ 200,000 , before deduction for offering costs. Holders of Convertible Preferred shares are entitled to quarterly coupon payments at the rate of 6.50 % of the fixed liquidation preference per share, initially $ 1,000 per share. In the event the quarterly preferential coupon is not paid in cash, the fixed liquidation preference automatically increases at the PIK rate of 7.50 %. The Convertible Preferred has an initial conversion price equal to $ 14.40 per share and is mandatorily convertible under certain circumstances and redeemable at the option of the holder beginning on the date that is eight years from the IPO or upon change of control. At issuance, the Company assessed the Convertible Preferred for any embedded derivatives. The Company determined that the Convertible Preferred represented an equity host under ASC Topic 815, Derivatives and Hedging . The Company’s analysis was based on a consideration of all stated and implied substantive terms and features of the hybrid financial instrument and weighing those terms and features on the basis of the relevant facts and circumstances. Certain embedded features in the Convertible Preferred require bifurcation. However, the fair value of such embedded features were immaterial upon issuance and as of December 31, 2022. The Convertible Preferred ranks senior to the Company’s common stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution and winding up. It is entitled to receive any dividends or distributions paid in respect of the common stock on an as-converted basis and has no stated maturity and will remain outstanding indefinitely unless converted into common stock or repurchased by the Company. Series A preferred stock will vote on an as-converted basis with the Class A and Class B common stock and will have certain rights to appoint additional directors, including up to a majority of the Company’s board of directors, under certain limited circumstances relating to an event of default or the Company’s failure to repay amounts due to the Convertible Preferred holders upon a redemption. Shares of Series A-1 preferred stock are non-voting; however, any shares of Series A-1 preferred stock issued to the Preferred Investors will convert on a one-to-one basis to shares of Series A preferred stock when permitted under relevant antitrust restrictions. At any time after July 23, 2029, upon a sale of the Company, or at any time after the occurrence and continuance of an event of default, holders of the Convertible Preferred have the right to require the Company to redeem all, but not less than all, of the Preferred shares then outstanding at a redemption price in cash equal to the greater of (i) the fair market value per share of Preferred Stock (based on the average volume-weighted average price per share of Class A common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the redemption notice, and (ii) the fixed liquidation preference, plus accrued and unpaid dividends. The Convertible Preferred is recorded as mezzanine equity (temporary equity) on the consolidated balance sheets because it is not mandatorily redeemable but does contain a redemption feature at the option of the Preferred holders that is considered not solely within the Company’s control. At December 31, 2022 and 2021 , the Company recognized the preferred maximum redemption value of $ 308,075 and $ 276,890 , respectively, which is the maximum redemption value on the earliest redemption date based on fair market value per share of Convertible Preferred (based on the average volume-weighted average price per share of Class A common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the redemption notice and 200,000 outstanding shares of Convertible Preferred). The recording of the preferred maximum redemption value was treated as deemed dividend, which was not included in the calculation of loss per share, and resulted in a net decrease of $ 31,185 to additional paid-in capital and $ 78,494 to additional paid-in capital and accumulated deficit as of December 31, 2022 and 2021 , respectively (see Note 18). |
Member's_Stockholder's Equity (
Member's/Stockholder's Equity (Deficit) | 12 Months Ended |
Dec. 31, 2022 | |
Members' Equity [Abstract] | |
Member's/Stockholder's Equity (Deficit) | Note 12 – Member’s/Stockholder's Equity (Deficit) Member’s contributions – As described in Note 3 and presented in the consolidated statements of changes to stockholders'/member’s equity (deficit), during the year ended December 31, 2021, the Parent contributed assets related to the Rumble acquisition. The fair value of assets contributed was $ 20,483 . As described in Note 10, in February 2020, the Member contributed $ 49,443 to the Company, of which $ 32,157 was in satisfaction of the receivable from the Member and the remainder was a member’s contribution. Of this $ 49,443 , $ 30,000 was used to paydown the principal on then outstanding term loans with the remainder available for unrestricted use by the Company. Also, in February 2020, the Company returned $ 19,443 of the contribution to the Member, which was recorded as a distribution. Also, in 2020, $ 53,760 of the proceeds from the borrowings under the 2020 Facility were paid to the Parent and recorded as a distribution. Common stock – As described in Note 1, in connection with the IPO in July 2021, the Company issued 10,000 shares of Class A common stock, at a price of $ 12.00 per share. Immediately after the IPO, 22,994 shares of Class A common stock were outstanding, including 12,994 shares issued to historical owners of the Parent. Also on July 23, 2021, in connection with the completion of the Reorganization Transactions, 23,543 shares of Class B common stock were issued to the Continuing Pre-IPO LLC Members. In August 2021, the Company sold 904 shares of Class A common stock to the underwriters pursuant to the underwriter’s option to purchase additional shares. After underwriter discounts and commissions, the Company received net proceeds of approximately $ 10,116 on August 24, 2021, which were used (i) $ 9,000 to purchase 750 LLC Units from the Company’s Chief Executive Officer and (ii) $ 1,116 for working capital. On April 6, 2022, the Company entered into an underwriting agreement with certain existing stockholders, affiliates of H&W Investco (the “Selling Stockholders”) and certain underwriters named therein, pursuant to which the Selling Stockholders sold 4,500 shares of Class A common stock at a price of $ 20.00 per share. All of the shares sold in this offering were offered by the Selling Stockholders. In addition, the Selling Stockholders granted the underwriters a 30-day option to purchase up to an additional 675 shares of the Company's Class A common stock, which was exercised on April 7, 2022. The shares sold in the offering consisted of (i) 2,479 existing shares of Class A common stock and (ii) 2,696 newly-issued shares of Class A common stock issued in connection with the exchange of LLC units held by the Selling Stockholders. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Selling Stockholders. Simultaneously, 2,696 Class B shares were surrendered by the Selling Stockholders and canceled. Additionally, during the year ended December 31, 2022 , pursuant to the Amended LLC agreement, certain Continuing Pre-IPO LLC Members exchanged their LLC units for 607 shares of Class A common stock on a one-for-one basis. Noncontrolling interests – Following the IPO, XPO Inc. is the sole managing member of XPO LLC and, as a result, consolidates the financial results of XPO LLC. The Company reported noncontrolling interests representing the economic interests in XPO LLC held by the Continuing Pre-IPO LLC Members. Under the Amended LLC agreement, the Continuing Pre-IPO LLC Members are able to exchange their LLC Units for shares of Class A common stock on a one-for-one basis (simultaneously cancelling an equal number of shares of Class B common stock of the exchanging member), or at the option of the Company for cash. Prior to the second amendment of the LLC agreement. the Company's decision of whether to exchange LLC Units for Class A common stock or cash was made at the discretion of the Continuing Pre-IPO LLC Members through their control of the Company's board of directors. Accordingly, the redeemable noncontrolling interest was reported as temporary equity at the greater of the redemption value of the units or the carrying value as of the balance sheet date, with a corresponding adjustment to additional paid-in capital. In December 2021, the Company and the Continuing Pre-IPO LLC Members amended the LLC agreement where the redemption option in cash was removed, except to the extent the cash proceeds to be used to make the redemption in cash are immediately available and were directly raised from a secondary offering of the Company's equity securities. The redeemable noncontrolling interest was adjusted to its fair value as of such date and recorded in equity as noncontrolling interest. Future redemptions or exchanges of LLC Units by the Continuing Pre-IPO LLC Members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. During 2022, the Company experienced a change in noncontrolling interests ownership due to the conversion of Class B to Class A shares and as such, has rebalanced the related noncontrolling interests balance. The Company calculated the rebalancing based on the net assets of XPO LLC, after considering the preferred shareholders' claim on the net assets of XPO LLC. The Company used the liquidation value of the preferred shares for such rebalancing. The following table summarizes the ownership of XPO LLC as of December 31, 2022: Owner Units Owned Ownership percentage XPO Inc. 27,571 56.0 % Noncontrolling interests 21,647 44.0 % Total 49,218 100.0 % |
Equity Compensation
Equity Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Compensation | Note 13 – Equity Compensation Profit interest units – Under the Pre-IPO Plan, the Parent granted time-based and performance-based profit interest units to certain key employees of the Company and its subsidiaries. Subsequent to the IPO, the profit interest units converted to Class B shares. The performance-based grants were awarded with vesting conditions based on performance targets connected to the value received from change of control of the Parent and were subject to certain forfeiture provisions prior to vesting. In June 2021, the Parent amended previously issued profit interest units with performance-based vesting conditions that were based on performance targets connected to the value received from change of control of the Parent. The vesting condition, as amended, was based on the average trading price of XPO Inc. common stock exceeding the IPO threshold price, as defined in the agreement. The amendment of these units was treated as a modification with the compensation cost of the amended units of $ 18,127 recognized over the new estimated service period through November 2022. In March 2022, the units vested when the average trading price condition was met. During the years ended December 31, 2022 and 2021 , the Company recognized $ 12,003 and $ 6,069 of expenses, respectively. The fair value of the time-based grants was recognized as compensation expense over the vesting period (generally four years ), with an increase to Member’s contribution / Additional Paid-in Capital in Member’s / Stockholders' equity. The fair value of the time-based grants was calculated using a Black-Scholes option-pricing model with the following assumptions: Years Ended December 31, 2021 2020 Risk free interest rate 0.05 % – 0.16 % 0.15 % Weighted average volatility 47.3 % 39.6 % Dividend yield — % — % Expected terms (in years) (1) 0.86 1.31 (1) The Company has limited historical information regarding the expected term. Accordingly, the Company determined the expected life of the units using the simplified method. During the years ended December 31, 2022, 2021 and 2020 , the Company recognized $ 190 , $ 906 and $ 1,751 of compensation expenses, respectively, which was included within selling, general and administration expenses. At December 31, 2022 , the Company had $ 21 of unrecognized compensation expense. The unrecognized compensation expense is expected to be recognized over a weighted average period of approximately 1.08 years for the time-based grants. The following table summarizes activity for profit interest units: Performance-based profit interests Time-based profit interests Number of units Number of units Outstanding at January 1, 2020 1,879 829 Issued 53 53 Vested — ( 405 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2020 1,932 477 Issued 3 3 Vested — ( 406 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2021 1,935 74 Issued — — Vested ( 1,921 ) ( 61 ) Forfeited, expired, or canceled ( 14 ) — Outstanding at December 31, 2022 — 13 Expected to vest — 13 Phantom stock – Club Pilates and CycleBar issued 14 and 0.2 phantom stock units, respectively, to certain employees that settle, or were expected to settle, with cash payments. The phantom stock units were awarded with vesting conditions that include a service period and/or performance targets and a change of control and were subject to certain forfeiture provisions prior to vesting. There was no expense recorded for the years ended December 31, 2021 and 2020 related to the phantom stock units as vesting was not considered probable. During the years ended December 31, 2021 and 2020, 14 phantom stock units issued by Club Pilates and 0.2 phantom stock units issued by CycleBar were cancelled, respectively. Liability Classified Restricted stock units – In November 2021, the Company granted restricted stock unit (“RSU”) awards with performance conditions of meeting certain EBITDA targets through the year ending December 31, 2024. The awards were granted with fixed dollar valuation and the number of shares granted depends on the trading price at the closing date of the period in which the EBITDA target is met. As such, these awards are classified as a liability. As of December 31, 2022, management believes that the EBITDA targets will be achieved and is accordingly recognizing expense ratably over the vesting period. Management performs a regular assessment to determine the likelihood of meeting the targets and adjusts the expense recognized if necessary. During the years ended December 31, 2022 and 2021 , the Company recognized $ 3,926 and $ 352 of expense, respectively. At December 31, 2022 , the Company had $ 3,597 of unrecognized expense relating to these grants. Equity Classified Restricted stock – In June 2021, the Company adopted the 2021 Omnibus Incentive Plan (the “2021 Plan” ) under which the Company may grant options, restricted stock units and other equity-based awards. The number of shares available for issuance under the 2021 Plan shall not exceed in the aggregate the sum of (i) 5,746 shares of Class A common stock, (ii) the number of shares of Class A common stock issuable pursuant to awards previously granted under the First Amended and Restated Profits Interest Plan of H&W Franchise Holdings LLC ( “ Pre-IPO Plan ”) (taking into account any conversion of such outstanding Awards) and (iii) an additional number of shares of Class A common stock that shall become available on the first day of each fiscal year of the Company in an amount equal to the lesser of (A) 511 , (B) 2 % of the outstanding shares of Class A common stock on the last day of the immediately prior fiscal year or (C) such number of shares of Class A common stock as determined by the board of directors in its discretion. As of December 31, 2022 , there were 3,648 shares available for future grants under the Plan, less the variable number of shares relating to RSU awards granted with performance conditions classified as a liability. As an accounting policy election, the Company recognizes forfeitures as they occur. The following table summarizes activity for RSUs for the years ended December 31, 2022 and 2021: Shares Weighted Average Outstanding at January 1, 2021 — $ — Issued 1,123 13.76 Vested — — Forfeited, expired, or canceled — — Outstanding at December 31, 2021 1,123 13.76 Issued 1,642 19.82 Vested ( 487 ) 13.61 Forfeited, expired, or canceled ( 176 ) 18.00 Outstanding at December 31, 2022 2,102 $ 18.25 Restricted stock units are valued at the Company’s closing stock price on the date of grant, and generally vest over a one - to four-year period. Compensation expense for restricted stock units is recognized on a straight-line basis. Included in the RSUs described above, the Company granted 171 performance-based RSUs at a weighted average grant-date closing price of $ 18.25 per share. The performance-based RSUs are recognized as expense on a straight-line basis over the vesting period of three to four years. Management performs a regular assessment to determine the likelihood of meeting the related metrics and adjusts the expense recognized if necessary. As of December 31, 2022 , the performance metrics related to 18 performance-based RSUs fell below the minimum threshold and as a result, the Company cancelled these previously granted performance-based RSUs and reversed previously recorded expense. As of December 31, 2022, the achievement of remaining performance metrics is considered probable. Total compensation expense recognized for restricted stock units was $ 12,925 and $ 2,372 for the year ended December 31, 2022 and 2021, respectively. Due to the Company's full valuation allowance on its net deferred tax assets, there is no income tax benefit on the unvested RSUs. During the year ended December 31, 2022, the Company recognized an income tax benefit of $ 445 on vested RSUs. At December 31, 2022 , the Company had $ 29,490 of total unamortized compensation expense related to non-vested restricted stock units. That cost is expected to be recognized over a weighted-average period of 3.32 years. |
Income Taxes and Tax Receivable
Income Taxes and Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Income Taxes and Tax Credits [Abstract] | |
Income Taxes and Tax Receivable Agreement | Note 14 – Income Taxes and Tax Receivable Agreement The Company is the managing member of XPO Holdings and, as a result, consolidates the financial results of XPO Holdings in the consolidated financial statements. XPO Holdings is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following a corporate reorganization effected in connection with the IPO. As an entity classified as a partnership for tax purposes, XPO Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by XPO Holdings is passed through to and included in the taxable income or loss of its members, including the Company. The Company is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated from XPO Holdings, based on its 56.0 % economic interest in XPO Holdings. Prior to 2021, the Company was a pass-through entity for income tax purposes. As such, the information below is not applicable for periods prior to 2021. Income (loss) before income taxes is as follows: Years ended December 31, 2022 2021 U.S. income (loss) before income taxes $ 3,421 $ ( 50,599 ) Foreign loss before income taxes ( 20 ) ( 58 ) Income (loss) before income taxes $ 3,401 $ ( 50,657 ) Income tax expense (benefit) for the years ended December 31, 2022 and 2021 consists of the following: Years ended December 31, 2022 2021 Current tax expense (benefit): Federal $ ( 142 ) $ 322 State 450 274 Foreign 262 187 Total current tax expense (benefit) 570 783 Deferred tax expense (benefit): Federal ( 31 ) — State ( 8 ) — Foreign ( 5 ) — Total deferred tax expense (benefit) ( 44 ) — Income tax expense (benefit) $ 526 $ 783 A reconciliation between the Company's effective tax rate and the applicable U.S. federal statutory income tax rate for the years ended December 31, 2022 and 2021: Years ended December 31, 2022 2021 Tax computed at federal statutory rate 21.0 % 21.0 % State tax, net of federal tax benefit 3.0 % ( 0.1 ) % Non-controlling interests ( 31.1 ) % ( 2.1 ) % Income (loss) from pass-through entities — % ( 5.3 ) % Permanent items — % ( 1.5 ) % TRA liability ( 3.6 ) % — % Executive compensation 3.8 % — % Contingent consideration 45.4 % ( 10.4 ) % Preferred stock dividend — % ( 1.5 ) % State rate differential 22.5 % — % Other 5.7 % ( 0.0 ) % Valuation allowance ( 51.2 ) % ( 1.6 ) % Effective tax rate 15.5 % ( 1.6 ) % D eferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. The components that comprise the Company's net deferred tax assets consist of the following as of December 31, 2022 and 2021: Years ended December 31, 2022 2021 Deferred tax assets: Investment in partnership $ 40,827 $ 28,164 Net operating losses 26,361 28,844 Tax receivable agreement 332 59 Interest expense 3,265 3,055 Deferred revenue 1,383 1,111 Other 279 379 Total deferred tax assets 72,447 61,612 Valuation allowance for deferred tax assets ( 72,403 ) ( 61,592 ) Total deferred tax assets, net of valuation allowance 44 20 Deferred tax liabilities: Property and equipment and intangible assets — ( 3 ) Other — ( 17 ) Total deferred tax liabilities — ( 20 ) Net deferred tax assets (liabilities) $ 44 $ — Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. On the basis of this evaluation, as of December 31, 2022 and 2021 , a valuation allowance of $ 72,403 and $ 61,592 has been applied against the Company's net deferred tax assets that are not more likely than not to be realized. The amount of the DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for growth. The Company recorded a valuation allowance to equity at the IPO date against its deferred tax assets related to its investment in XPO Holdings of approximately $ 60,197 . As of December 31, 2022, the Company had federal and state net operating loss carryforwards of $ 100,976 and $ 91,397 , respectively. As of December 31, 2021, the Company had federal and state net operating loss carryforwards of $ 109,182 and $ 109,560 , respectively. Of the total federal net operating losses, approximately $ 94,640 were generated after January 1, 2018, and therefore do not expire. Federal net operating losses generated after January 1, 2018 are subject to a taxable income limitation of 80 % in accordance with the Tax Cuts and Jobs Act of 2017. The remaining federal and state net operating loss carryforwards will begin to expire in 2035 and 2032 , respectively, unless previously utilized by the Company. As of December 31, 2022, the Company has foreign tax credits of $ 247 that begin to expire in 2030 . Utilization of the net operating losses and credit carryforwards may be subject to annual limitations due to ownership changes that have occurred or that could occur in the future, as required by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "Code"), as well as similar state and foreign provisions. These ownership changes may limit the amount of net operating losses and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of outstanding stock of a company by certain stockholders. The Company is subject to taxation and files income tax returns in the United States federal jurisdiction, many state and foreign jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. The Company’s tax returns remain open for examination in the U.S for years 2019 through 2022. T he Company's foreign subsidiaries are generally subject to examination three years following the year in which the tax obligation originated. The years subject to audit may be extended if the entity substantially understates corporate income tax. The Company does not expect a significant change in unrecognized tax benefits during the next 12 months. Tax Receivable Agreement – In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) pursuant to which the Company is generally required to pay to the other parties thereto in the aggregate 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes as a result of (i) certain favorable tax attributes acquired from the Blocker Companies in the Mergers (including net operating losses and the Blocker Companies’ allocable share of existing tax basis), (ii) increases in the Company's allocable share of existing tax basis and tax basis adjustments that resulted or may result from (x) the IPO Contribution and the Class A-5 Unit Redemption, (y) future taxable redemptions and exchanges of LLC Units by Continuing Pre-IPO LLC Members and (z) certain payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”). The Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in XPO Holdings or the Company. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes an assumption related to the fair market value of assets. The payment obligations under the TRA are obligations of XPO Inc. and not of XPO Holdings. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. The TRA provides that if (i) there is a material breach of any material obligations under the TRA; or (ii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any LLC Units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination. The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, the TRA will not terminate but the Company’s or the Company’s successor’s obligations with respect to tax benefits would be based on certain assumptions, including that the Company or the Company’s successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the TRA. As of December 31, 2022, the Company has concluded, based on applicable accounting standards, that it was more likely than not that its deferred tax assets subject to the TRA would not be realized; therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such deferred tax assets. Except for $ 1,163 and $ 801 of the current and non-current portions of the TRA, respectively, $ 57,842 of the TRA liability was not recorded as of December 31, 2022 . If utilization of the deferred tax asset subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA which will be recognized as expense within its consolidated statements of operations. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 15 – Earnings (Loss) Per Share For the year ended December 31, 2022 and the period from July 23, 2021 through December 31, 2021, the period following the Reorganization Transactions and IPO, basic earnings (loss) per share has been calculated by dividing net income (loss) attributable to Class A common stockholders by the weighted average number of shares of Class A common stock outstanding for the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to XPO Inc. by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to July 23, 2021, therefore no earnings per share information has been presented for any period prior to the date. Because a portion of XPO Holdings is owned by parties other than the Company, those parties participate in earnings and losses at the XPO Holdings level. Additionally, given the organizational structure of XPO Inc, a parallel capital structure exists at XPO Holdings such that the shares of XPO Holdings are redeemable on a one-to-one basis with the XPO Inc. shares. In order to maintain the one-to-one ratio, the preferred stock issued at the XPO Inc. level also exist at the XPO Holdings level. The Company applies the two class method to allocate undistributed earnings or losses of XPO Holdings, and in doing so, determines the portion of XPO Holdings’ income or loss that is attributable to the Company and accordingly reflected in income or loss available to common stockholders in the Company’s calculation of basic earnings (loss) per share. Due to the attribution of only a portion of the preferred stock dividends issued by XPO Holdings to the Company in first determining basic earnings (loss) per share at the subsidiary level, the amounts presented as net income (loss) attributable to noncontrolling interests and net income (loss) attributable to XPO Inc. presented below will not agree to the amounts presented on the consolidated statement of operations. Diluted earnings per share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted average number of shares of Class A common stock outstanding to give effect to potentially dilutive securities. The potential dilutive impact of redeemable Convertible Preferred shares and Class B common stock is evaluated using the as-if-converted method. Weighted average shares of Class B common stock were 22,146 and 23,084 for the years ended December 31, 2022 and 2021, respectively. The potentially dilutive impact of restricted stock units is calculated using the treasury stock method. Because the Company reported net losses for the periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of diluted net loss per share. The following table presents the calculation of basic earnings (loss) per share and diluted earnings per share of Class A common stock: Year Ended Year Ended Numerator: Net income (loss) $ 2,875 $ ( 51,440 ) Less: net loss attributable to noncontrolling interests 19,284 78,417 Less: dividends on preferred shares ( 13,000 ) ( 5,742 ) Less: deemed dividend ( 31,185 ) ( 84,994 ) Net loss attributable to XPO Inc. - basic and diluted $ ( 22,026 ) $ ( 63,759 ) Denominator: Weighted average shares of Class A common stock outstanding - basic and diluted 25,295 22,403 Net loss per share attributable to Class A common stock - basic $ ( 0.87 ) $ ( 2.85 ) Net loss per share attributable to Class A common stock - diluted $ ( 0.87 ) $ ( 2.85 ) Anti-dilutive shares excluded from diluted loss per share of Class A common stock: Rumble Class A common stock - 1,300 Restricted stock units 2,102 1,123 Convertible preferred stock 13,889 13,889 Conversion of Class B common stock to Class A common stock 21,572 22,969 Treasury share options 75 - Rumble contingent shares 2,024 2,024 Profits interests, time vesting 14 74 Profit interest units, performance vesting - 1,935 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Note 16 – Employee Benefit Plan The Company maintains the Xponential Fitness, Inc. 401(k) Profit Sharing Plan and Trust (the “401(k) Plan”). Employees who have completed one month of service and have attained age 18 are eligible to participate in elective deferrals under the 401(k) Plan. Employees are eligible to participate for purposes of matching contributions upon completion of one year of service. On an annual basis, the Company will determine the formula for the discretionary matching contribution. In addition, the Company may make a discretionary nonelective contribution to the 401(k) Plan. During the years ended December 31, 2022, 2021 and 2020 , the Company recorded expense for matching contributions to the 401(k) Plan of $ 481 , $ 483 and $ 338 , respectively. |
Contingencies and Litigation
Contingencies and Litigation | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Note 17 – Contingencies and Litigation Litigation – In August 2020, Get Kaisered Inc., Kaiser Fitness LLC and Anna Kaiser (collectively, the “Plaintiffs”) filed a complaint against the Company and the Member alleging, among other claims, breaches by the Company of an asset purchase agreement and a consulting agreement. The complaint seeks relief including monetary damages and injunctive relief. On February 8, 2022, the Company entered into a settlement agreement with the Plaintiffs, pursuant to which the parties agreed to resolve all disputes and dismiss all actions. In addition, the Company agreed to pay Plaintiffs an amount in cash as part of the settlement. The Company has included in accrued expenses in the consolidated balance sheet as of December 31, 2021 an amount which approximates the settlement amount when combined with pre-existing obligations. The settlement amount was paid in full in March 2022. In connection with the October 2021 acquisition of BFT, the Company agreed to indemnify the Seller for certain claims and lawsuits against the Seller that existed at the acquisition date. The claims and lawsuits relate to alleged patent and trademark infringements. Plaintiff alleges that plaintiff has suffered, and is likely to continue to suffer, loss and damage due to breach of the patents by the Seller and is seeking damages or in the alternative an account of profits. The Seller has filed a cross-claim alleging that the defendant’s two Australian patents are, and always have been, invalid and that they should be revoked. The Court held a trial in December 2020, and on February 14, 2022, the Court issued a decision holding that the Plaintiff’s claims of infringement were invalid and that even if they were valid, the Seller did not infringe upon these patents and trademarks. In addition, the Plaintiff has brought related claims for patent infringement against the Seller in the United States District Court for Delaware, and these actions are currently pending. The Company is subject to normal and routine litigation brought by former or current employees, customers, franchisees, vendors, landlords or others. The Company intends to defend itself in any such matters. The Company believes that the ultimate determination of liability in connection with legal claims pending against it, if any, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position; however, it is possible that the Company’s business, results of operations, liquidity or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period. The Company accrued for estimated legal liabilities and has entered into certain settlement agreements to resolve legal disputes and recorded $ 464 and $ 2,931 , which is included in accrued expenses in the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Contingent consideration from acquisitions – In connection with the 2017 acquisition of CycleBar from a then affiliate of the Member, the Company recorded contingent consideration of $ 4,390 for the estimated fair value of the contingent payment. Payment of additional consideration is contingent on CycleBar reaching two milestones based on a number of operating franchise studios and average monthly revenues by September 2022. The first milestone payout was $ 5,000 and the second milestone was $ 10,000 . The contingent consideration is measured at estimated fair value using a probability weighted discounted cash flow analysis. These inputs include the probability of achievement, the projected payment date and the discount rate of 8.5 % used to present value the projected cash flows. In March 2020, the Parent entered into an agreement with the former owners of CycleBar, which (i) reduced the second milestone amount to $ 2,500 , (ii) imposed interest at 10 % per annum on the first and second milestones beginning March 5, 2020 and April 2, 2020, respectively, and (iii) increased the interest rate to 14 % on the first milestone if not paid prior to January 1, 2021. As a result, in March 2020, the Company recorded a reduction to the contingent consideration liability of $ 5,598 with an offsetting increase in Member’s equity. The Company recorded approximately $ 744 and $ 706 of additional contingent consideration as interest expense for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, the Company paid the contingent consideration in full. In connection with the 2017 acquisition of Row House, the Company agreed to pay to the sellers 20 % of operational or change of control distributions, subject to distribution thresholds, until the date on which a change in control or liquidation of Row House occurs. The Company determines the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach, which is a Level 3 measurement. Inputs used in the methodology primarily included sales forecasts, projected future cash flows and discount rate commensurate with the risk involved. During the years ended December 31, 2022 and 2021 , the Company recorded $ 380 and $ 540 of additional contingent consideration, which was recorded as acquisition and transaction expenses, respectively. During the year ended December 31, 2020, the Company recorded a reduction of $ 6,065 to contingent consideration, of which $ 215 and ($ 6,280 ) was recorded as interest expense and acquisition and transaction expenses (income), respectively. In December 2022, the Company entered into an agreement with the former owner of Row House (see Note 10), which settled the contingent consideration. As a result of the agreement, the Company recorded a reduction to the contingent consideration liability of $1,220 with an offsetting increase in additional paid-in capital. As of December 31, 2022 and 2021 , contingent consideration totaled $ 0 and $ 840 , respectively. In connection with the 2017 acquisition of StretchLab, the Company agreed to pay to the seller 20 % of operational or change of control distributions, until the date on which a change of control or a liquidation of StretchLab occurs. The Company determined the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach, which is a Level 3 measurement. Inputs used in the methodology primarily included sales forecasts, projected future cash flows and discount rate commensurate with the risk involved. In September 2019, the Company entered into a settlement agreement with the StretchLab sellers to resolve disputes related to the acquisition and related agreements and to settle all amounts due under the contingent consideration. Under the terms of the settlement agreement, the Company made payments to the sellers aggregating $ 6,500 , which was recorded at the settlement date using a discount rate of 8.345 %. The Company made an initial payment of $ 1,000 in September 2019, and the first quarterly payment of $ 688 in December 2019. Quarterly payments of $ 688 continued through September 2021, when the final payment was made. In connection with the 2018 acquisition of YogaSix, the Company is obligated to make additional payments for purchase consideration if certain events occur. Payment of additional consideration is contingent on YogaSix reaching a milestone of opening a number of franchise studios before the fourth anniversary of the purchase date. The contingent consideration is measured at estimated fair value using a probability weighted discounted cash flow analysis. The inputs include the probability of achievement, the projected payment date and the discount rate of 8.5 % used to present value the projected cash flows. The Company recorded $ 50 and $ 13 of additional contingent consideration as interest expense for the years ended December 31, 2021 and 2020, respectively. During the year ended December 2021, the Company paid the contingent consideration in full. In connection with the 2018 acquisition of Stride, the Company initially recorded contingent consideration of $ 1,869 for the estimated fair value of the contingent payments. Payment of additional consideration was contingent on Stride reaching two milestones for opening franchise studios before the first anniversary of the purchase date. The contingent consideration is measured at estimated fair value using a probability weighted discounted cash flow analysis. These inputs include the probability of achievement, the projected payment date and the discount rate of 8.5 % used to present value the projected cash flows. The contingent consideration agreement was modified in 2019 and 2020. Payments of additional consideration, as amended, were contingent on Stride reaching milestones for opening two franchise studios and membership enrollments for such studios at various dates through 2021. During the years ended December 31, 2021 and 2020, the Company recorded $ 0 and ($ 250 ), respectively, as acquisition and transaction expenses (income). During the year ended December 31, 2021, the Company paid the contingent consideration in full. In connection with the Reorganization Transactions, the Parent merged with and into the Member. The Company recorded contingent consideration equal to the fair value of the shares issued in connection with the Rumble acquisition of $ 23,100 and $ 10,600 receivable from shareholder for debt financing provided to the Rumble seller. The shares issued to the Rumble seller are treated as a liability on the Company's balance sheet as they are subject to vesting conditions. The fair value of the contingent consideration is measured at estimated fair value using a Monte Carlo simulation analysis. During the years ended December 31, 2022 and 2021 , the Company recorded an increase of $ 7,340 and $ 25,100 to contingent consideration, which was recorded as acquisition and transaction expenses (income), respectively. During the year ended December 31, 2022, the contingency related to 1,300 shares of Class A common stock expired and the $ 27,850 contingent consideration related to those shares was reclassified to additional paid-in capital. At December 31, 2022 and 2021 , contingent consideration totals $ 27,690 and $ 48,200 , recorded as contingent consideration from acquisitions in the consolidated balance sheets, respectively. In connection with the October 2021 acquisition of BFT, the Company agreed to pay contingent consideration to the Seller consisting of quarterly cash payments based on the sales of the Franchise System and equipment packages in the U.S. and Canada, as well as a percentage of royalties collected by the Company, provided that aggregate minimum payments of $ 5,000 AUD (approximately $ 3,694 USD based on the currency exchange rate as of the purchase date) are required to be paid to the Seller for the two-year period ending December 31, 2023 and the aggregate amount of such payments for the two-year period ending December 31, 2023 is subject to a maximum of $ 14,000 AUD (approximately $ 10,342 USD based on the currency exchange rate as of the purchase date). At the acquisition date, the Company determined that the fair value of the estimated contingent consideration liability was $ 9,388 . During the years ended December 31, 2022 and 2021 , the Company recorded ($ 4,634 ) and $ 130 of contingent consideration, which was recorded as interest expense of $ 646 and $ 130 , and acquisition and transaction expenses (income) of ($ 5,280 ) and $ 0 , respectively. In addition, during the year ended December 31, 2022 , the Company paid $ 2,190 of contingent consideration. At December 31, 2022 and 2021 , contingent consideration was $ 2,203 and $ 3,678 recorded as accrued expenses, respectively, and $ 492 and $ 5,841 recorded as contingent consideration from acquisitions, respectively, in the consolidated balance sheets. Letter of credit – In July 2022, the Company issued a $ 750 standby letter of credit to a third-party financing company, who provides loans to the Company's qualified franchisees. The standby letter of credit is contingent upon the failure of franchisees to perform according to the terms of underlying contracts with the third party. The Company deposited cash in a restricted account as collateral for the standby letter of credit. The Company has determined the fair value of these guarantees at inception is not material, and as of December 31, 2022, no accrual has been recorded for the Company’s potential obligation under its guaranty arrangement. The Company has guaranteed lease agreements for certain franchisees. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $ 1,357 and $ 927 as of December 31, 2022 and 2021, respectively, and would only require payment upon default by the primary obligor. The Company has determined the fair value of these guarantees at inception is not material, and as of December 31, 2022 and 2021 , no accrual has been recorded for the Company’s potential obligation under its guaranty arrangement. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 – Subsequent Events In January 2023, the Rumble sellers borrowed an additional $ 3,100 under the debt financing agreement which was recorded as receivable from shareholder within equity (see Note 10). In January 2023, the Company entered into a fourth amendment (the "Fourth Amendment") to the Credit Agreement. The Fourth Amendment provides for, among other things, additional term loans in an aggregate principal amount of $ 130,000 (the "2023 Incremental Term Loan"), the proceeds of which were used to fund the Repurchase Transactions (defined below) and the payment of fees, costs and expenses related to the Amendment and the Repurchase Transactions. The Amendment also (i) increases the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the 2023 Incremental Term Loan) to $ 1,065 commencing on June 30, 2023 and (ii) amends the amount of the prepayment premium applicable in the event the 2023 Incremental Term Loan is prepaid. On January 9, 2023, the Company entered into a preferred stock repurchase agreement (the "Repurchase Agreement") with certain holders of the Convertible Preferred, pursuant to which the Company agreed to repurchase 85 shares of Convertible Preferred. On January 13, 2023, the repurchase was completed for an aggregate payment of $ 130,967 . In February 2023, the Company entered into an underwriting agreement with certain existing stockholders, affiliates of H&W Investco and our Chief Executive Officer (collectively the "Selling Stockholders") and certain underwriters named therein, pursuant to which the Selling Stockholders sold 5,000 shares of Class A common stock at a price of $ 24.50 per share. All of the shares sold in this offering were offered by the Selling Stockholders. In addition, the Selling Stockholders granted the underwriters a 30-day option to purchase up to an additional 750 shares of the Company's Class A common stock, which was exercised on February 15, 2023. The shares sold in the offering consisted of (i) 2,276 existing shares of Class A common stock and (ii) 3,474 newly-issued shares of Class A common stock issued in connection with the exchange of LLC units held by the Selling Stockholders. Simultaneously, 3,474 Class B shares were surrendered by the Selling Stockholders and canceled. The Company did not receive any proceeds from the sale of shares of Class A common stock offered by the Selling Stockholders. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation – The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). On October 13, 2021 and March 24, 2021, the Company acquired the rights to franchise the BFT and Rumble concepts, respectively, and has included the results of operations of BFT and Rumble in its consolidated statements of operations from the acquisition dates forward. See Note 3 for additional information. |
Principles of consolidation | Principles of consolidation – The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements. Actual results could differ from these estimates under different assumptions or conditions. |
Segment and geographic information | Segment and geographic information – Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, the Company has determined that it operates in one reportable and operating segment. During the years ended December 31, 2022, 2021 and 2020, the Company generated $ 12,823 , $ 2,741 and $ 1,213 of revenue outside of the United States, respectively. As of December 31, 2022 and 2021 , the Company did not have material assets located outside of the United States. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash – The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company has marketing fund restricted cash, which can only be used for activities that promote the Company’s brands. In July 2022, the Company issued a $ 750 standby letter of credit to a third-party financing company, who provides loans to the Company's qualified franchisees. The standby letter of credit is contingent upon the failure of franchisees to perform according to the terms of underlying contracts with the third party. The Company deposited cash in a restricted account as collateral for the standby letter of credit. In addition, the Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 17 for further discussion of such obligations guaranteed. Restricted cash was $ 5,381 and $ 1,427 at December 31, 2022 and 2021 , respectively |
Concentration of credit risk | Concentration of credit risk —Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash, accounts receivable and notes receivable. The Company maintains its cash with high-credit quality financial institutions. At December 31, 2022 and 2021, the Company had cash, cash equivalents and restricted cash that total $ 33,961 and $ 12,852 , respectively, on deposit with high-credit quality financial institutions that exceed federally insured limits. T he Company has not experienced any loss as a result of these or previous similar deposits. In addition, the Company closely monitors the extension of credit to its franchisees while maintaining allowances for potential credit losses. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts – Accounts receivable primarily consist of amounts due from franchisees and vendors. These receivables primarily relate to royalties, advertising contributions, equipment and product sales, training, vendor commissions and other miscellaneous charges. Receivables are unsecured; however, the franchise agreements provide the Company the right to withdraw funds from the franchisee’s bank account or to terminate the franchise for nonpayment. On a periodic basis, the Company evaluates its accounts receivable balance and establishes an allowance for doubtful accounts based on a number of factors, including evidence of the franchisee’s ability to comply with credit terms, economic conditions and historical receivables. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At December 31, 2022 and 2021 , the allowance for doubtful accounts was $ 865 and $ 2,193 , respectively. |
Inventories | Inventories – Inventories are comprised of finished goods including equipment and branded merchandise primarily held for sale to franchisees. Cost is determined using the first-in-first-out method. Management analyzes obsolete, slow-moving and excess merchandise to determine adjustments that may be required to reduce the carrying value of such inventory to the lower of cost or net realizable value. Write-down of obsolete or slow-moving and excess inventory charges are included in costs of product revenue in the consolidated statements of operations. |
Deferred offering costs | Deferred offering costs – Deferred offering costs, primarily consisted of legal, accounting and other fees relating to the Company’s initial public offering. Upon consummation of the IPO in July 2021, total deferred offering costs of $ 7,511 were reclassified to additional paid-in capital within stockholders' equity and recorded against the proceeds of the IPO. |
Property and equipment, net | Property and equipment, net – Property and equipment are carried at cost less accumulated depreciation. Depreciation is recognized on a straight-line method, based on the following estimated useful lives: Furniture and equipment 5 years Computers and software 3 - 5 years Vehicles 5 years Leasehold improvements Lesser of useful life or lease term Software consists primarily of costs associated with web development projects. The Company capitalizes eligible costs to acquire, develop, or modify digital platforms that are incurred subsequent to the preliminary project stage. Depreciation of these assets begins upon the initial usage of the digital platforms. The cost and accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss is included in the results of operations during the period of sale or disposal. Costs for repairs and maintenance are expensed as incurred. Repairs and maintenance costs for the years ended December 31, 2022, 2021 and 2020 were insignificant. |
Goodwill and indefinite-lived intangible assets | Goodwill and indefinite-lived intangible assets – Indefinite-lived intangible assets consist of goodwill and certain trademarks. Goodwill – The Company tests for impairment of goodwill annually or sooner whenever events or circumstances indicate that goodwill might be impaired. Goodwill has been assigned to reporting units for purposes of impairment testing. The Company’s reporting units are the brand names under which it sells franchises. The annual impairment test is performed as of the first day of the Company’s fourth quarter. The annual impairment test begins with a qualitative assessment, where qualitative factors and their impact on critical inputs are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines that a reporting unit has an indication of impairment based on the qualitative assessment, it is required to perform a quantitative assessment. The Company generally determines the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying value exceeds the estimate of fair value, a write-down is recorded. The Company calculates impairment as the excess of the carrying value of goodwill over the estimated fair value. During the third quarter of 2022, the Company determined that the AKT reporting unit had an indication of impairment based on a qualitative assessment and performed a quantitative assessment. For further discussion, see Note 7. As a result, the Company recognized an impairment loss to write-off the goodwill associated with the AKT reporting unit. There were no further impairments recognized over the remainder of 2022. There were no impairments recorded for the years ended December 31, 2021 and 2020. Trademarks – The Company tests for impairment of trademarks with an indefinite life annually or sooner whenever events or circumstances indicate that trademarks might be impaired. The Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the trademarks is less than the carrying amount. In the absence of sufficient qualitative factors, trademark impairment is determined utilizing a two-step analysis. The two-step analysis involves comparing the fair value to the carrying value of the trademarks. The Company determines the estimated fair value using a relief from royalty approach. If the carrying amount exceeds the fair value, the Company impairs the trademarks to their fair value. There were no impairme nts recorded for the years ended December 31, 2022, 2021 and 2020 . |
Definite-lived intangible assets | Definite-lived intangible assets – Definite-lived intangible assets, consisting of franchise agreements, reacquired franchise rights, customer relationships, non-compete agreements, certain trademarks and web design and domain, are amortized using the straight-line method over the estimated remaining economic lives. Deferred video production costs are amortized on an accelerated basis. Amortization expense related to intangible assets is included in depreciation and amortization expense. The recoverability of the carrying values of all intangible assets with finite lives is evaluated when events or changes in circumstances indicate an asset’s value may be impaired. Impairment testing is based on a review of forecasted undiscounted operating cash flows. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value, which is determined based on discounted future cash flows, through a charge to the consolidated statements of operations. Definite-lived intangible asset impairments of $ 280 , $ 118 and $ 0 were recorded for the years ended December 31, 2022, 2021 and 2020, respectively. Definite-lived intangible asset impairments during the year ended December 31, 2022, related to trademark and franchise agreements of the AKT reporting unit for which the carrying value was deemed not recoverable. Definite-lived intangible asset impairments during the year ended December 31, 2021, related to company-owned transition studio assets for which the carrying value was deemed not recoverable . |
Revenue recognition | Revenue recognition – The Company’s contracts with customers consist of franchise agreements with franchisees. The Company also enters into agreements to sell merchandise and equipment, training, on-demand video services and membership to company-owned transition studios. The Company’s revenues primarily consist of franchise license revenues, other franchise related revenues including equipment and merchandise sales and training revenue. In addition, the Company earns on-demand revenue, service revenue and other revenue. Each of the Company’s primary sources of revenue and their respective revenue policies are discussed further below. Franchise revenue – The Company enters into franchise agreements for each franchised studio. The Company’s performance obligation under the franchise license is granting certain rights to access the Company’s intellectual property; all other services the Company provides under the franchise agreement are highly interrelated, not distinct within the contract, and therefore accounted for as a single performance obligation, which is satisfied over the term of each franchise agreement. Those services include initial development, operational training, preopening support and access to the Company’s technology throughout the franchise term. Fees generated related to the franchise license include development fees, royalty fees, marketing fees, technology fees and transfer fees, which are discussed further below. Variable fees are not estimated at contract inception, and are recognized as revenue when invoiced, which occurs monthly. The Company has concluded that its agreements do not contain any financing components. Franchise development fee revenue – The Company’s franchise agreements typically operate under ten-year terms with the option to renew for up to two additional five-year successor terms. The Company determined the renewal options are neither qualitatively nor quantitatively material and do not represent a material right. Initial franchise fees are non-refundable and are typically collected upon signing of the franchise agreement. Initial franchise fees are recorded as deferred revenue when received and are recognized on a straight-line basis over the franchise life, which the Company has determined to be ten years , as the Company fulfills its promise to grant the franchisee the rights to access and benefit from the Company’s intellectual property and to support and maintain the intellectual property. The Company may enter into an area development agreement with certain franchisees. Area development agreements are for a territory in which a developer has agreed to develop and operate a certain number of franchise locations over a stipulated period of time. The related territory is unavailable to any other party and is no longer marketed to future franchisees by the Company. Depending on the number of studios purchased under franchise agreements or area development agreements, the initial franchise fee ranges from $ 60 (single studio) to $ 350 (te n studios) and is paid to the Company when a franchisee signs the area development agreement. Area development fees are initially recorded as deferred revenue. The development fees are allocated to the number of studios purchased under the development agreement. The revenue is recognized on a straight-line basis over the franchise life for each studio under the development agreement. Development fees and franchise fees are generally recognized as revenue upon the termination of the development agreement with the franchisee. The Company may enter into master franchise agreements with master franchisees, under which the master franchisee sells licenses to franchisees in one or more countries outside of North America. The master franchise agreements generally provide a ten-year period under which the master franchisee may sell licenses. The master franchise agreement term ends on the earlier of the expiration or termination of the last franchise agreement sold by the master franchisee. Initial master franchise fees are recorded as deferred revenue when received and are recognized on a straight-line basis over 20 years . Franchise royalty fee revenue – Royalty revenue represents royalties earned from each of the franchised studios in accordance with the franchise disclosure document and the franchise agreement for use of the brands’ names, processes and procedures. The royalty rate in the franchise agreement is typically 7 % of the gross sales of each location operated by each franchisee. Royalties are billed on a monthly basis. The royalties are entirely related to the Company’s performance obligation under the franchise agreement and are billed and recognized as franchisee sales occur. Technology fees – The Company may provide access to third-party or other proprietary technology solutions to the franchisees for a fee. The technology solution may include various software licenses for statistical tracking, scheduling, allowing club members to record their personal workout statistics, music and technology support. The Company bills and recognizes the technology fee as earned each month as the technology solution service is performed. Transfer fees – Transfer fees are paid to the Company when one franchisee transfers a franchise agreement to a different franchisee. Transfer fees are recognized as revenue on a straight-line basis over the term of the new or assumed franchise agreement, unless the original franchise agreement for an existing studio is terminated, in which case the transfer fee is recognized immediately. Training revenue – The Company provides coach training services either through direct training of the coaches who are hired by franchisees or by providing the materials and curriculum directly to the franchisees who utilize the materials to train their hired coaches. Direct training fees are recognized over time as training is provided. Training fees for materials and curriculum are recognized at the point in time of delivery of the materials. The Company also offers coach training and final coach certification through online classes. Fees received by the Company for online class training are recognized as revenue over time for the 12-month period that the Company is obligated to provide access to the online training content. Franchise marketing fund revenue – Franchisees are required to pay marketing fees o f 2 % of t heir gross sales. The marketing fees are collected by the Company on a monthly basis and are to be used for the advertising, marketing, market research, product development, public relations programs and materials deemed appropriate to benefit brands. The Company’s promise to provide the marketing services funded through the marketing fund is considered a component of the Company’s performance obligation to grant the franchise license. The Company bills and recognizes marketing fund fees as revenue each month as gross sales occur. Equipment and merchandise revenue – The following revenues are generated as a result of transactions with or related to the Company’s franchisees. Equipment revenue – The Company sells authorized equipment to franchisees to be used in the franchised studios. Certain franchisees may prepay for equipment, and in that circumstance, the revenue is deferred until delivery. Equipment revenue is recognized when control of the equipment is transferred to the franchisee, which is at the point in time when delivery and installation of the equipment at the studio is complete. Merchandise revenue – The Company sells branded and non-branded merchandise to franchisees for retail sales to customers at studios. For branded merchandise sales, the performance obligation is satisfied at the point in time of shipment of the ordered branded merchandise to the franchisee. For such branded merchandise sales, the Company is the principal in the transaction as it controls the merchandise prior to it being delivered to the franchisee. The Company records branded merchandise revenue and related costs upon shipment on a gross basis. Customers have the right to return and/or receive credit for defective merchandise. Returns and credit for defective merchandise were insignificant for the years ended December 31, 2022, 2021 and 2020. For certain non-branded merchandise sales, the Company earns a commission to facilitate the transaction between the franchisee and the supplier. For such non-branded merchandise sales, the Company is the agent in the transaction, facilitating the transaction between the franchisee and the supplier, as the Company does not obtain control of the non-branded merchandise during the order fulfillment process. The Company records non-branded merchandise commissions revenue at the time of shipment. Other revenue – Service revenue – Historically, the revenue from company-owned transition studios has been very limited as the Company typically only owns a small number of studios and only for a short period of time pending the resale of the license to a franchisee. For company-owned transition studios, the Company’s distinct performance obligation is to provide fitness classes to the customer. The company-owned studios sell memberships by individual class and by class packages. Revenue from the sale of classes and class packages for a specified number of classes are recognized over time as the customer attends and utilizes the classes. Revenues from the sale of class packages for an unlimited number of classes are recognized over time on a straight-line basis over the duration of the contract period. On-demand revenue – The Company grants a subscriber access to an online hosted platform, which contains a library of web-based classes that is continually updated, through monthly or annual subscription packages. Revenue is recognized over time on a straight-line basis over the subscription period. Other revenue – The Company earns commission income from certain of its franchisees’ use of certain preferred vendors. In these arrangements, the Company is the agent as it is not primarily responsible for fulfilling the orders. Commissions are earned and recognized at the point in time the vendor ships the product to franchisees. In addition, the Company grants vendors access to franchisees' members to provide certain services to the members for a fee. Revenue is recognized over time on a straight-line basis over the access period. Sales taxes, value added taxes and other taxes that are collected in connection with revenue transactions are withheld and remitted to the respective taxing authorities. As such, these taxes are excluded from revenue. The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. Therefore, shipping and handling fees that are billed to franchisees are recognized in revenue and the associated shipping and handling costs are recognized in cost of product sold as soon as control of the goods transfers to the franchisee. Credit Losses – The Company’s accounts and notes receivable are recorded at net realizable value, which includes an appropriate allowance for estimated credit losses. The estimate of credit losses is based upon historical bad debts, current receivable balances, age of receivable balances, the customer’s financial condition and current economic trends, all of which are subject to change. Actual uncollected amounts have historically been consistent with the Company’s expectations. The Company’s payment terms on its receivables from franchisees are generally 30 days . The following table provides a reconciliation of the activity related to the Company’s accounts receivable, other receivables and notes receivable allowance for credit losses: Accounts receivable Other receivables Notes receivable Total Balance at January 1, 2020 $ 225 $ 429 $ 1,975 $ 2,629 Bad debt expense recognized during the year 2,685 — 81 2,766 Write-off of uncollectible amounts ( 505 ) — ( 147 ) ( 652 ) Balance at December 31, 2020 2,405 429 1,909 4,743 Bad debt expense recognized during the year 102 — 308 410 Write-off of uncollectible amounts ( 314 ) — ( 78 ) ( 392 ) Balance at December 31, 2021 2,193 429 2,139 4,761 Bad debt expense (recovery) recognized during the year ( 705 ) ( 429 ) 422 ( 712 ) Write-off of uncollectible amounts ( 623 ) — ( 1,842 ) ( 2,465 ) Balance at December 31, 2022 $ 865 $ — $ 719 $ 1,584 |
Shipping and handling fees | Shipping and handling fees – Shipping and handling fees billed to customers are recorded in merchandise and equipment revenues. The costs associated with shipping goods to customers are included in costs of product revenue in the consolidated statements of operations. |
Costs of franchise and service revenue | Costs of franchise and service revenue – Costs of franchise and service revenue consists of commissions related to the signing of franchise agreements, travel and personnel expenses related to the on-site training provided to the franchisees, and expenses related to the purchase of the technology packages and the related monthly fees. Costs of franchise and service revenue excludes depreciation and amortization. |
Costs of product revenue | Costs of product revenue – Costs of product revenue consists of cost of equipment and merchandise and related freight charges. Costs of product revenue excludes depreciation and amortization. |
Advertising costs | Advertising costs – Advertising costs are expensed as incurred. Advertising costs are included in selling, general and administrative expenses. For the years ended December 31, 2022, 2021 and 2020, the Company had approximately $ 7,685 , $ 6,890 and $ 5,409 , respectively, of advertising costs, including amounts spent in excess of marketing fund revenue. |
Selling, general and administrative expenses | Selling, general and administrative expenses – The Company’s selling, general and administrative (“SG&A”) expenses primarily consist of salaries and wages, sales and marketing expenses, professional and legal fees, occupancy expenses, management fees, travel expenses and conference expenses. |
Marketing fund expenses | Marketing fund expenses – Marketing fund expenses are recognized as incurred, and any marketing fund expenditures in excess of marketing fund revenue are reclassified as SG&A expenses in the consolidated statements of operations. |
Acquisition and transaction expenses (income) | Acquisition and transaction expenses (income) – Acquisition and transaction expenses (income) include costs directly related to the acquisition of businesses, which include expenditures for advisory, legal, valuation, accounting and similar services, in addition to amounts recorded for changes in contingent consideration (see Note 16). |
Accrued expenses | Accrued expenses – Accrued expenses consisted of the following: December 31, 2022 2021 Accrued compensation $ 4,611 $ 4,248 Contingent consideration from acquisitions, current portion 2,203 3,678 Sales tax accruals 3,186 6,003 Legal accruals 464 2,932 Accrued deemed dividend — 3,250 Other accruals 1,831 934 Total accrued expenses $ 12,295 $ 21,045 |
Comprehensive income | Comprehensive income – The Company does not have any components of other comprehensive income recorded within the consolidated financial statements and therefore does not separately present a consolidated statement of comprehensive income in the consolidated financial statements. |
Fair value measurements | Fair value measurements – Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , applies to all financial assets and financial liabilities that are measured and reported on a fair value basis and requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. ASC 820 establishes a valuation hierarchy for disclosures of the inputs to valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date. Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates and yield curves), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 – Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company’s own data. The Company’s financial instruments include cash, restricted cash, accounts receivable, notes receivable, accounts payable, accrued expenses and notes payable. The carrying amounts of these financial instruments approximates fair value due to their short maturities, proximity of issuance to the balance sheet date or variable interest rate. |
Redeemable convertible preferred stock | Redeemable convertible preferred stock – The redeemable convertible preferred stock (the “Convertible Preferred”) becomes redeemable at the option of the holder as of a specific date unless an event that is not probable of occurring happens before that date. Therefore, the Company determined that it is probable that the Convertible Preferred will become redeemable based on the passage of time. The Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. |
Noncontrolling interests | Noncontrolling interests – Noncontrolling interests represent the economic interests of XPO LLC held by Class B common stockholders. Income or loss is attributed to the noncontrolling interests based on the weighted average LLC interests outstanding during the period. The noncontrolling interests' ownership percentage can fluctuate over time as the Class B common stockholders elect to exchange their shares of Class B common stock for Class A common stock. In December 2021, the Company and the Continuing Pre-IPO LLC Members amended the LLC agreement where the redemption option in cash was removed, except to the extent the cash proceeds to be used to make the redemption in cash are immediately available and were directly raised from a secondary offering of Company's equity securities. The redeemable noncontrolling interest was adjusted to its fair value as of such date and recorded in equity as noncontrolling interest. |
Earnings (loss) per share | Earnings (loss) per share – Basic earnings (loss) per share is calculated by dividing the earnings (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding. Shares of Class B common stock do not share in the earnings of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented. Diluted earnings per share adjusts the basic earnings per share calculation for the potential dilutive impact of common shares such as equity awards using the treasury-stock method. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Shares of Class B common stock are considered potentially dilutive shares of Class A common stock; however, related amounts have been excluded from the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and two-class methods. Prior to the IPO, XPO LLC had one class of membership interest which was held by the Member. Earnings per share data is not provided in the consolidated financial statements for periods prior to the IPO as XPO LLC was a single-member limited liability company with only one unit. For the year ended December 31, 2021 , basic net loss per share has been calculated by dividing net loss attributable to Class A common stockholders for the period subsequent to the Reorganization Transactions, by the weighted average number of shares of Class A common stock outstanding for the same period. Shares of Class A common stock are weighted for the portion of the period in which the shares were outstanding. |
Income taxes | Income taxes – The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities (“DTAs” and “DTLs”) for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. The Company recognizes DTAs to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize DTAs in the future in excess of the net recorded amount, an adjustment to the DTA valuation allowance would be made, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC Topic 740 on the basis of a two-step process in which the Company (1) determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company does not have any u ncertain tax positions. The Company recognizes potential interest and penalties, if any, related to income tax matters in income tax expense. The Company incurred $ 1 , $ 0 and $ 0 in interest and penalties for the years ended December 31, 2022, 2021 and 2020 , respectively. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements – Accounting for leases – On January 1, 2022, the Company adopted ASU No. 2016-02, “Leases (Topic 842)” utilizing the effective date method for the initial application. Under Topic 842, the Company elected the package of practical expedients to not reassess (1) the classification of existing leases, (2) whether any expired or existing contracts are or contain leases and (3) initial direct costs for any existing leases. The Company did not elect the practical expedient pertaining to land easements, as it is not applicable to its leases. Additionally, the Company did not elect to use the practical expedient that permits a reassessment of lease terms for existing leases using hindsight. The Company's lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for common area maintenance. The Company applied the practical expedient as an accounting policy for classes of underlying assets that have fixed payments for non-lease components, to not separate non-lease components from lease components and instead to account for them together as a single lease component, which increases the amount of lease assets and corresponding liabilities. The Company has certain insignificant short-term leases with an initial term of twelve months or less that are not recorded in the consolidated balance sheets. As a result of the adoption of Topic 842, the consolidated financial statements for 2022 are presented under the new standard, while the comparative periods presented are not adjusted and continue to be reported in accordance with the Company's historical accounting policy. This standard requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, for all leases with a term greater than 12 months. The adoption of the new lease standard had a significant impact on the Company's consolidated balance sheets due to the recognition of $ 17,597 of right-of-use assets for operating leases and a corresponding lease obligation of $ 21,826 on January 1, 2022. The adoption of Topic 842 did not have a material impact on the Company's lease classification or on its statements of operations and liquidity. See Note 9, for information regarding the Company's adoption of Topic 842 and the Company's undiscounted future lease payments and the timing of those payments. Accounting for leases prior to January 1, 2022 under ASC 840 –The Company recognizes rent expense related to leased space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, as a result of lease incentives is recorded as deferred rent in the Company’s consolidated balance sheets. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements – The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company the JOBS Act permits the Company an extended transition period for complying with new or revised accounting standards affecting public companies. The Company has elected to use this extended transition period. Credit Losses – In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326).” The standard introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses and will apply to trade and notes receivables. The new guidance will be effective for the Company’s annual and interim periods beginning after December 15, 2022. The Company will adopt the new accounting standard on January 1, 2023. The adoption of this accounting standard will not have a material impact on the Company's consolidated financial statements. Reference Rate Reform – In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the expected transition away from reference rates that are expected to be discontinued, such as LIBOR. ASU 2020-04 was effective upon issuance. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.” ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU 2022-06 was effective upon issuance. The application of this accounting standard will not have a material impact on the Company's consolidated financial statements. Business Combinations – In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." ASU 2021-08 primarily addresses the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The amendment improves comparability by specifying for all acquired revenue contracts regardless of their timing of payment (1) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and (2) how to measure those contract assets and contract liabilities. This results in better comparability for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years with early adoption permitted. The adoption of this accounting standard, effective January 1, 2023, will not have an impact on the Company's consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment Estimated Useful Lives | Depreciation is recognized on a straight-line method, based on the following estimated useful lives: Furniture and equipment 5 years Computers and software 3 - 5 years Vehicles 5 years Leasehold improvements Lesser of useful life or lease term |
Reconciliation of Activity Related to Accounts Receivable, Other Receivables and Notes Receivable Allowance for Credit Losses | The following table provides a reconciliation of the activity related to the Company’s accounts receivable, other receivables and notes receivable allowance for credit losses: Accounts receivable Other receivables Notes receivable Total Balance at January 1, 2020 $ 225 $ 429 $ 1,975 $ 2,629 Bad debt expense recognized during the year 2,685 — 81 2,766 Write-off of uncollectible amounts ( 505 ) — ( 147 ) ( 652 ) Balance at December 31, 2020 2,405 429 1,909 4,743 Bad debt expense recognized during the year 102 — 308 410 Write-off of uncollectible amounts ( 314 ) — ( 78 ) ( 392 ) Balance at December 31, 2021 2,193 429 2,139 4,761 Bad debt expense (recovery) recognized during the year ( 705 ) ( 429 ) 422 ( 712 ) Write-off of uncollectible amounts ( 623 ) — ( 1,842 ) ( 2,465 ) Balance at December 31, 2022 $ 865 $ — $ 719 $ 1,584 |
Summary of Accrued Expenses | Accrued expenses consisted of the following: December 31, 2022 2021 Accrued compensation $ 4,611 $ 4,248 Contingent consideration from acquisitions, current portion 2,203 3,678 Sales tax accruals 3,186 6,003 Legal accruals 464 2,932 Accrued deemed dividend — 3,250 Other accruals 1,831 934 Total accrued expenses $ 12,295 $ 21,045 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Studios | |
Business Acquisition [Line Items] | |
Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed | The following summarizes the aggregate fair values of the assets acquired and liabilities assumed: Property and equipment $ 196 Reacquired franchise rights 194 Total purchase price $ 390 |
Rumble | |
Business Acquisition [Line Items] | |
Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed: Goodwill $ 8,183 Franchise agreements 10,900 Trademark 1,400 Total purchase price $ 20,483 |
BFT Acquisition | |
Business Acquisition [Line Items] | |
Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Goodwill $ 21,210 Franchise agreements 24,100 Trademark 8,100 Internal use software 300 Total purchase price $ 53,710 |
Contract Liabilities and Cost_2
Contract Liabilities and Costs from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Franchise Development and Brand Fee Contract Liabilities | The following table reflects the change in franchise development and brand fee contract liabilities for the years ended December 31, 2022, 2021 and 2020 . Franchise Brand fees Total Balance at January 1, 2020 $ 72,359 $ — $ 72,359 Revenue recognized that was included in deferred ( 7,921 ) — ( 7,921 ) Deferred revenue recorded as settlement in ( 1,329 ) — ( 1,329 ) Increase, excluding amounts recognized as revenue 13,262 5,385 18,647 Balance at December 31, 2020 76,371 5,385 81,756 Revenue recognized that was included in deferred ( 11,320 ) ( 1,897 ) ( 13,217 ) Deferred revenue recorded as settlement in ( 667 ) — ( 667 ) Increase, excluding amounts recognized as revenue 36,269 2,492 38,761 Balance at December 31, 2021 100,653 5,980 106,633 Revenue recognized that was included in deferred ( 20,631 ) ( 3,445 ) ( 24,076 ) Deferred revenue recorded as settlement in ( 395 ) — ( 395 ) Increase, excluding amounts recognized as revenue 36,617 4,106 40,723 Balance at December 31, 2022 $ 116,244 $ 6,641 $ 122,885 |
Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligation | The following table illustrates estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2022. The expected future recognition period for deferred franchise development fees related to unopened studios is based on management’s best estimate of the beginning of the franchise license term for those studios. The Company elected to not disclose short term contracts, sales and usage-based royalties, marketing fees and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in revenue in Franchise Brand fees Total 2023 $ 9,178 $ 4,250 $ 13,428 2024 9,558 1,564 11,122 2025 10,693 414 11,107 2026 11,894 413 12,307 2027 11,803 — 11,803 Thereafter 63,118 — 63,118 $ 116,244 $ 6,641 $ 122,885 |
Summary of Components of Deferred Revenue | The following table reflects the components of deferred revenue: December 31, 2022 2021 Franchise and area development fees $ 116,244 $ 100,653 Brand fees 6,641 5,980 Equipment and other 18,576 11,805 Total deferred revenue 141,461 118,438 Non-current portion of deferred revenue 109,465 95,691 Current portion of deferred revenue $ 31,996 $ 22,747 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following: December 31, 2022 2021 Furniture and equipment $ 4,182 $ 3,393 Computers and software 14,075 8,686 Vehicles 171 12 Leasehold improvements 7,533 6,481 Construction in progress 3,115 982 Less: accumulated depreciation ( 10,552 ) ( 6,781 ) Total property and equipment $ 18,524 $ 12,773 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: December 31, 2022 December 31, 2021 Amortization Gross Accumulated Net Gross Accumulated Net Trademarks 10 $ 21,110 $ ( 2,606 ) $ 18,504 $ 10,920 $ ( 794 ) $ 10,126 Franchise agreements 7.5 – 10 69,100 ( 25,143 ) 43,957 69,500 ( 17,166 ) 52,334 Non-compete agreement 5 — — — 1,400 ( 1,282 ) 118 Web design and domain 3 – 10 430 ( 196 ) 234 430 ( 86 ) 344 Deferred video production costs 3 4,046 ( 2,173 ) 1,873 2,370 ( 1,036 ) 1,334 Total definite-lived intangible assets 94,686 ( 30,118 ) 64,568 84,620 ( 20,364 ) 64,256 Indefinite-lived intangible assets: Trademarks N/A 72,607 — 72,607 72,607 — 72,607 Total intangible assets $ 167,293 $ ( 30,118 ) $ 137,175 $ 157,227 $ ( 20,364 ) $ 136,863 |
Schedule of Anticipated Future Amortization Expense of Intangible Assets | The anticipated future amortization expense of intangible assets is as follows: Year ending December 31, 2023 $ 11,420 2024 10,903 2025 10,392 2026 7,481 2027 6,279 Thereafter 18,093 Total $ 64,568 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Payments on Outstanding Balances of Long-term Debt | Principal payments on outstanding balances of long-term debt as of December 31, 2022 were as follows: Year ending December 31, Amount 2023 $ 3,035 2024 3,035 2025 131,652 Total $ 137,722 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases is summarized as follows: Operating leases Balance Sheet Location December 31, 2022 ROU assets, net Right-of-use assets $ 30,079 Lease liabilities, short-term Other current liabilities $ 3,786 Lease liabilities, long-term Lease liability $ 30,583 |
Summary of components of lease expense | Components of lease expense are summarized as follows: December 31, 2022 Related-party lease Third-party leases Total Operating lease costs $ 239 $ 4,666 $ 4,905 Variable lease costs — 856 856 Short-term lease costs — 108 108 Total $ 239 $ 5,630 $ 5,869 |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases is summarized as follows: December 31, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 4,717 Lease liabilities arising from new ROU assets $ 20,966 |
Schedule of other information related to leases | Other information related to leases for the year ended December 31, 2022 is summarized as follows: Weighted average remaining lease term (years) 7.5 Weighted average discount rate 8.8 % |
Schedule of future minimum lease payments | Maturities of lease liabilities for the year ended December 31, 2022 are summarized as follows: Amount 2023 $ 6,621 2024 6,596 2025 6,625 2026 6,432 2027 5,564 Thereafter 15,211 Total future lease payments 47,049 Less: imputed interest 12,680 Total $ 34,369 As of December 31, 2021, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows (see Note 10): Related-party lease Third-party leases Total 2022 $ 321 $ 3,392 $ 3,713 2023 331 3,397 3,728 2024 225 3,410 3,635 2025 — 3,245 3,245 2026 — 3,088 3,088 Thereafter — 13,511 13,511 Total $ 877 $ 30,043 $ 30,920 |
Member's_Stockholder's Equity_2
Member's/Stockholder's Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Members' Equity [Abstract] | |
Summary of Ownership of XPO LLC | The following table summarizes the ownership of XPO LLC as of December 31, 2022: Owner Units Owned Ownership percentage XPO Inc. 27,571 56.0 % Noncontrolling interests 21,647 44.0 % Total 49,218 100.0 % |
Equity Compensation (Tables)
Equity Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Performance-based and Time-based Profit Interests Activity | The following table summarizes activity for profit interest units: Performance-based profit interests Time-based profit interests Number of units Number of units Outstanding at January 1, 2020 1,879 829 Issued 53 53 Vested — ( 405 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2020 1,932 477 Issued 3 3 Vested — ( 406 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2021 1,935 74 Issued — — Vested ( 1,921 ) ( 61 ) Forfeited, expired, or canceled ( 14 ) — Outstanding at December 31, 2022 — 13 Expected to vest — 13 |
Summary of Restricted Stock Units Activity | The following table summarizes activity for RSUs for the years ended December 31, 2022 and 2021: Shares Weighted Average Outstanding at January 1, 2021 — $ — Issued 1,123 13.76 Vested — — Forfeited, expired, or canceled — — Outstanding at December 31, 2021 1,123 13.76 Issued 1,642 19.82 Vested ( 487 ) 13.61 Forfeited, expired, or canceled ( 176 ) 18.00 Outstanding at December 31, 2022 2,102 $ 18.25 |
Time-based Profit Interest Units | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Assumptions Used to Calculate Fair Value of Time-based Grants | The fair value of the time-based grants was calculated using a Black-Scholes option-pricing model with the following assumptions: Years Ended December 31, 2021 2020 Risk free interest rate 0.05 % – 0.16 % 0.15 % Weighted average volatility 47.3 % 39.6 % Dividend yield — % — % Expected terms (in years) (1) 0.86 1.31 (1) The Company has limited historical information regarding the expected term. Accordingly, the Company determined the expected life of the units using the simplified method. |
Income Taxes and Tax Receivab_2
Income Taxes and Tax Receivable Agreement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Income (loss) Before Income Taxes | Income (loss) before income taxes is as follows: Years ended December 31, 2022 2021 U.S. income (loss) before income taxes $ 3,421 $ ( 50,599 ) Foreign loss before income taxes ( 20 ) ( 58 ) Income (loss) before income taxes $ 3,401 $ ( 50,657 ) |
Summary of Income Tax Expense (Benefit) | Income tax expense (benefit) for the years ended December 31, 2022 and 2021 consists of the following: Years ended December 31, 2022 2021 Current tax expense (benefit): Federal $ ( 142 ) $ 322 State 450 274 Foreign 262 187 Total current tax expense (benefit) 570 783 Deferred tax expense (benefit): Federal ( 31 ) — State ( 8 ) — Foreign ( 5 ) — Total deferred tax expense (benefit) ( 44 ) — Income tax expense (benefit) $ 526 $ 783 |
Summary of Reconciliation Between Company's Effective Tax Rate and Applicable U.S. federal Statutory Income Tax Rate | A reconciliation between the Company's effective tax rate and the applicable U.S. federal statutory income tax rate for the years ended December 31, 2022 and 2021: Years ended December 31, 2022 2021 Tax computed at federal statutory rate 21.0 % 21.0 % State tax, net of federal tax benefit 3.0 % ( 0.1 ) % Non-controlling interests ( 31.1 ) % ( 2.1 ) % Income (loss) from pass-through entities — % ( 5.3 ) % Permanent items — % ( 1.5 ) % TRA liability ( 3.6 ) % — % Executive compensation 3.8 % — % Contingent consideration 45.4 % ( 10.4 ) % Preferred stock dividend — % ( 1.5 ) % State rate differential 22.5 % — % Other 5.7 % ( 0.0 ) % Valuation allowance ( 51.2 ) % ( 1.6 ) % Effective tax rate 15.5 % ( 1.6 ) % D |
Summary of Company's Net Deferred Tax Assets | The components that comprise the Company's net deferred tax assets consist of the following as of December 31, 2022 and 2021: Years ended December 31, 2022 2021 Deferred tax assets: Investment in partnership $ 40,827 $ 28,164 Net operating losses 26,361 28,844 Tax receivable agreement 332 59 Interest expense 3,265 3,055 Deferred revenue 1,383 1,111 Other 279 379 Total deferred tax assets 72,447 61,612 Valuation allowance for deferred tax assets ( 72,403 ) ( 61,592 ) Total deferred tax assets, net of valuation allowance 44 20 Deferred tax liabilities: Property and equipment and intangible assets — ( 3 ) Other — ( 17 ) Total deferred tax liabilities — ( 20 ) Net deferred tax assets (liabilities) $ 44 $ — |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings (Loss) Per Share | The following table presents the calculation of basic earnings (loss) per share and diluted earnings per share of Class A common stock: Year Ended Year Ended Numerator: Net income (loss) $ 2,875 $ ( 51,440 ) Less: net loss attributable to noncontrolling interests 19,284 78,417 Less: dividends on preferred shares ( 13,000 ) ( 5,742 ) Less: deemed dividend ( 31,185 ) ( 84,994 ) Net loss attributable to XPO Inc. - basic and diluted $ ( 22,026 ) $ ( 63,759 ) Denominator: Weighted average shares of Class A common stock outstanding - basic and diluted 25,295 22,403 Net loss per share attributable to Class A common stock - basic $ ( 0.87 ) $ ( 2.85 ) Net loss per share attributable to Class A common stock - diluted $ ( 0.87 ) $ ( 2.85 ) Anti-dilutive shares excluded from diluted loss per share of Class A common stock: Rumble Class A common stock - 1,300 Restricted stock units 2,102 1,123 Convertible preferred stock 13,889 13,889 Conversion of Class B common stock to Class A common stock 21,572 22,969 Treasury share options 75 - Rumble contingent shares 2,024 2,024 Profits interests, time vesting 14 74 Profit interest units, performance vesting - 1,935 |
Contingencies and Litigation (T
Contingencies and Litigation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | Maturities of lease liabilities for the year ended December 31, 2022 are summarized as follows: Amount 2023 $ 6,621 2024 6,596 2025 6,625 2026 6,432 2027 5,564 Thereafter 15,211 Total future lease payments 47,049 Less: imputed interest 12,680 Total $ 34,369 As of December 31, 2021, under the previous accounting guidance for leases, approximate annual future commitments under noncancelable operating leases were as follows (see Note 10): Related-party lease Third-party leases Total 2022 $ 321 $ 3,392 $ 3,713 2023 331 3,397 3,728 2024 225 3,410 3,635 2025 — 3,245 3,245 2026 — 3,088 3,088 Thereafter — 13,511 13,511 Total $ 877 $ 30,043 $ 30,920 |
Nature of Business and Operat_2
Nature of Business and Operations - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||
Apr. 06, 2022 shares | Jul. 23, 2021 shares | Dec. 31, 2022 USD ($) Brand Studio shares | Dec. 31, 2021 USD ($) Building | Dec. 31, 2020 USD ($) Studio | |
Payment of fees and expenses | $ | $ 0 | $ 3,082 | $ 0 | ||
Number of brands | Brand | 10 | ||||
Number of company-owned studios | 55 | 25 | 40 | ||
Class A Common Stock | |||||
Number of shares issued | shares | 4,500,000 | 12,994 | |||
Convertible Preferred Stock | |||||
Redemption of Class A-5 unit | $ | $ 308,075 | $ 276,890 | |||
Initial Public Offering | Class A Common Stock | |||||
Number of shares issued | shares | 10,000,000 | 607,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jul. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | |
Accounting Policies [Line Items] | |||||||
Number of reportable segment | Segment | 1 | ||||||
Number of operating segment | Segment | 1 | ||||||
Revenues | $ 12,823,000 | $ 2,741,000 | $ 1,213,000 | ||||
Restricted cash | 5,381,000 | 1,427,000 | |||||
Cash, cash equivalents and restricted cash | 37,370,000 | 21,320,000 | |||||
Allowance for accounts receivable | 865,000 | 2,193,000 | |||||
Impairment charge | $ 3,376,000 | ||||||
Impairment charge, remainder of 2022 | 0 | ||||||
Impairment of brand assets | $ 280,000 | 3,656,000 | 0 | 0 | |||
Impairment of definite-lived intangible asset | $ 280,000 | $ 118,000 | $ 0 | ||||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Costs and Expenses | Costs and Expenses | ||||
Franchisee agreement term | 10 years | ||||||
Franchise agreement term, option to extend | option to renew for up to two additional five-year successor terms. | ||||||
Deferred revenue | $ 141,461,000 | $ 118,438,000 | |||||
Franchise royalty percentage | 7% | ||||||
Franchise marketing fees percentage | 2% | ||||||
Contract with customer, threshold period | 30 days | ||||||
Advertising costs | $ 7,685,000 | 6,890,000 | $ 5,409,000 | ||||
Percentage of benefits expected to realize from tax benefits | 15% | ||||||
Payment obligation basis spread on interest rate | 100% | ||||||
Interest or penalties | $ 1,000 | 0 | 0 | ||||
ROU assets, net | 30,079,000 | 0 | |||||
Total | 34,369,000 | ||||||
AKT reporting unit | |||||||
Accounting Policies [Line Items] | |||||||
Impairment charge | 0 | 0 | |||||
Trademark | |||||||
Accounting Policies [Line Items] | |||||||
Impairment of brand assets | 0 | 0 | $ 0 | ||||
Letter of Credit | |||||||
Accounting Policies [Line Items] | |||||||
Line of credit facility, additional borrowings | $ 750,000 | ||||||
Credit Concentration Risk | |||||||
Accounting Policies [Line Items] | |||||||
Cash, cash equivalents and restricted cash | $ 33,961,000 | $ 12,852,000 | |||||
Master Franchise Agreements | |||||||
Accounting Policies [Line Items] | |||||||
Franchisee agreement term | 10 years | ||||||
Initial Public Offering | |||||||
Accounting Policies [Line Items] | |||||||
Reclassification of deferred offering costs as additional paid-in capital | $ 7,511,000 | ||||||
Accounting Standards Update 2016-02 | |||||||
Accounting Policies [Line Items] | |||||||
ROU assets, net | $ 21,826,000 | ||||||
Total | $ 17,597,000 | ||||||
Maximum | Franchise Development Fees | |||||||
Accounting Policies [Line Items] | |||||||
Deferred revenue | $ 350,000 | ||||||
Minimum | Franchise Development Fees | |||||||
Accounting Policies [Line Items] | |||||||
Deferred revenue | $ 60,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details 1) | Dec. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Master Franchise Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 20 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Training fees [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Computers and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computers and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Lesser of useful life or lease term |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Reconciliation of Activity Related to Accounts Receivable, Other Receivables and Notes Receivable Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | $ 4,761 | $ 4,743 | $ 2,629 |
Bad debt expense recognized during the year | (712) | 410 | 2,766 |
Write-off of uncollectible amounts | (2,465) | (392) | (652) |
Receivable, allowance for credit loss, ending balance | 1,584 | 4,761 | 4,743 |
Accounts Receivable | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 2,193 | 2,405 | 225 |
Bad debt expense recognized during the year | (705) | 102 | 2,685 |
Write-off of uncollectible amounts | (623) | (314) | (505) |
Receivable, allowance for credit loss, ending balance | 865 | 2,193 | 2,405 |
Notes Receivable | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 2,139 | 1,909 | 1,975 |
Bad debt expense recognized during the year | 422 | 308 | 81 |
Write-off of uncollectible amounts | (1,842) | (78) | (147) |
Receivable, allowance for credit loss, ending balance | 719 | 2,139 | 1,909 |
Other Receivables | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 429 | 429 | 429 |
Bad debt expense recognized during the year | $ (429) | ||
Receivable, allowance for credit loss, ending balance | $ 429 | $ 429 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 4,611 | $ 4,248 |
Contingent consideration from acquisitions, current portion | 2,203 | 3,678 |
Sales tax accruals | 3,186 | 6,003 |
Legal accruals | 464 | 2,932 |
Accrued deemed dividend | 3,250 | |
Other accruals | 1,831 | 934 |
Total accrued expenses | $ 12,295 | $ 21,045 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Oct. 13, 2021 USD ($) | Oct. 13, 2021 AUD ($) | Mar. 24, 2021 USD ($) $ / shares shares | Jul. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Studio | Dec. 31, 2021 USD ($) Studio | Dec. 31, 2020 USD ($) | Jul. 23, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||
Aggregate purchase price for the acquisition | $ 0 | $ 44,322,000 | $ 0 | ||||||
Proceeds from sale of assets | 65,000 | 433,000 | 58,000 | ||||||
Loss (gain) from disposal of assets | (78,000) | 483,000 | 68,000 | ||||||
Goodwill | $ 165,697,000 | $ 169,073,000 | |||||||
Asset Purchase Agreement | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of asset purchase agreement | Oct. 13, 2021 | ||||||||
Studios | |||||||||
Business Acquisition [Line Items] | |||||||||
Aggregate purchase price for the acquisition | $ 450,000 | ||||||||
Net deferred revenue and deferred costs | 60,000 | ||||||||
Total purchase consideration | $ 390,000 | ||||||||
Number of studios refranchised | Studio | 21 | 53 | |||||||
Proceeds from sale of assets | $ 0 | $ 433,000 | |||||||
Loss (gain) from disposal of assets | 0 | 483,000 | |||||||
Studios | Level 3 | Selling General and Administrative Expenses | |||||||||
Business Acquisition [Line Items] | |||||||||
Impairment charges | $ 0 | 781,000 | 0 | ||||||
Studios | Franchise Rights | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 5 years | ||||||||
Studios | Franchise Rights | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 8 years | ||||||||
Rumble | |||||||||
Business Acquisition [Line Items] | |||||||||
Amount agreed to provide debt financing to selling parties | $ 20,000,000 | ||||||||
Goodwill | $ 8,183,000 | ||||||||
Transaction costs directly related to the acquisitions | $ 0 | $ 978,000 | $ 0 | ||||||
Fair value of shares issued in acquisition | $ 23,100,000 | ||||||||
Rumble | Class A Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of shares issued to fund the acquisition | shares | 1,300 | ||||||||
Number of shares of issued to selling parties | shares | 2,024 | ||||||||
Fair value of all the Parent’s shares issued | $ 20,483,000 | ||||||||
Rumble | Minimum | Measurement Input, EBITDA Multiple | |||||||||
Business Acquisition [Line Items] | |||||||||
Adjusted EBITDA multiples range | 15 | ||||||||
Rumble | Minimum | Class A Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Share Price | $ / shares | $ 50.62 | ||||||||
Rumble | Maximum | Measurement Input, EBITDA Multiple | |||||||||
Business Acquisition [Line Items] | |||||||||
Adjusted EBITDA multiples range | 18 | ||||||||
Rumble | Maximum | Class A Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Share Price | $ / shares | $ 75.56 | ||||||||
Rumble | Franchise Rights | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 10 years | ||||||||
Rumble | Trade Names | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 10 years | ||||||||
BFT Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Total purchase consideration | $ 44,322,000 | $ 60,000,000 | |||||||
Goodwill | 21,210,000 | ||||||||
BFT Acquisition | Asset Purchase Agreement | |||||||||
Business Acquisition [Line Items] | |||||||||
Aggregate minimum payments for next two years | 3,694,000 | 5,000,000 | |||||||
Aggregate maximum amount payment to seller | 10,342,000 | $ 14,000,000 | |||||||
Business combination estimated fair value of contingent consideration | $ 9,388,000 | ||||||||
BFT Acquisition | Franchise Rights | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 8 years 6 months | 8 years 6 months | |||||||
BFT Acquisition | Trade Names | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life of intangible assets | 10 years | 10 years | |||||||
BodyfitTrademark | |||||||||
Business Acquisition [Line Items] | |||||||||
Aggregate purchase price for the acquisition | $ 10,300,000 | ||||||||
Total purchase consideration | $ 5,500,000 | ||||||||
Noncash consideration | $ 4,800,000 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 13, 2021 | Mar. 24, 2021 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 165,697 | $ 169,073 | ||
Studios | ||||
Business Acquisition [Line Items] | ||||
Property and equipment | 196 | |||
Total purchase price | 390 | |||
Studios | Franchise Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 194 | |||
Rumble | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 8,183 | |||
Total purchase price | 20,483 | |||
Rumble | Franchise Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 10,900 | |||
Rumble | Trademark | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 1,400 | |||
BFT Acquisition | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 21,210 | |||
Total purchase price | 53,710 | |||
BFT Acquisition | Franchise Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 24,100 | |||
BFT Acquisition | Trademark | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 8,100 | |||
BFT Acquisition | Internal Use Software | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 300 |
Contract Liabilities and Cost_3
Contract Liabilities and Costs from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Other deferred revenue | $ 141,461 | $ 118,438 | |
Expected duration of contracts | one year or less | ||
Franchisee agreement term | 10 years | ||
Deferred costs, current portion | $ 4,131 | 3,712 | |
Deferred costs, net of current portion | 43,620 | 42,015 | |
Franchise Agreements | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Deferred costs, current portion | 3,589 | 3,071 | |
Deferred costs, net of current portion | 43,445 | 41,941 | |
Equipment and Other | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Other deferred revenue | 18,576 | 11,805 | |
Franchise revenue | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Sales commission and fees | $ 11,049 | $ 6,006 | $ 4,234 |
Contract Liabilities and Cost_4
Contract Liabilities and Costs from Contracts with Customers - Summary of Changes in Franchise Development and Brand Fee Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | $ 106,633 | $ 81,756 | $ 72,359 |
Revenue recognized that was included in deferred revenue at the beginning of the year | (24,076) | (13,217) | (7,921) |
Deferred revenue recorded as settlement in purchase accounting | (395) | (667) | (1,329) |
Increase, excluding amounts recognized as revenue during the year | 40,723 | 38,761 | 18,647 |
Ending Balance | 122,885 | 106,633 | 81,756 |
Franchise Development Fees | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | 100,653 | 76,371 | 72,359 |
Revenue recognized that was included in deferred revenue at the beginning of the year | (20,631) | (11,320) | (7,921) |
Deferred revenue recorded as settlement in purchase accounting | (395) | (667) | (1,329) |
Increase, excluding amounts recognized as revenue during the year | 36,617 | 36,269 | 13,262 |
Ending Balance | 116,244 | 100,653 | 76,371 |
Brand Fees | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | 5,980 | 5,385 | |
Revenue recognized that was included in deferred revenue at the beginning of the year | (3,445) | (1,897) | |
Increase, excluding amounts recognized as revenue during the year | 4,106 | 2,492 | 5,385 |
Ending Balance | $ 6,641 | $ 5,980 | $ 5,385 |
Contract Liabilities and Cost_5
Contract Liabilities and Costs from Contracts with Customers - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligation (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 122,885 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 13,428 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 11,122 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 11,107 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 12,307 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 11,803 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 63,118 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
Franchise Development Fees | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 116,244 |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 9,178 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 9,558 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 10,693 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 11,894 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 11,803 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 63,118 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | |
Brand Fees | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 6,641 |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 4,250 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 1,564 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 414 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 413 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Contract Liabilities and Cost_6
Contract Liabilities and Costs from Contracts with Customers - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligation (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 122,885 |
Franchise Development Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | 116,244 |
Brand Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 6,641 |
Contract Liabilities and Cost_7
Contract Liabilities and Costs from Contracts with Customers - Summary of Components of Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | $ 141,461 | $ 118,438 |
Deferred revenue, net of current portion | 109,465 | 95,691 |
Deferred revenue, current portion | 31,996 | 22,747 |
Franchise and Area Development Fees | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | 116,244 | 100,653 |
Brand Fees | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | 6,641 | 5,980 |
Equipment and Other | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | $ 18,576 | $ 11,805 |
Notes Receivable - Additional I
Notes Receivable - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loans And Leases Receivable Disclosure [Line Items] | ||
Unsecured advances arrangement term | 18 months | |
Notes receivable, principal balance | $ 3,306 | $ 7,473 |
Reserve for uncollectible notes receivable | $ 719 | $ 2,139 |
Unsecured Advances | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loans receivables variable rate description | LIBOR plus 700 basis points | |
Loans receivable, basis spread on variable rate | 7% | |
Loans For Establishment Of New Or Transferred Franchise Studios | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loans receivables variable rate description | variable rates based on LIBOR plus a specified margin | |
Notes receivable, term | 10 years | |
Loans For Establishment Of New Or Transferred Franchise Studios | Minimum | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Notes receivable interest rate | 0% | |
Loans For Establishment Of New Or Transferred Franchise Studios | Maximum | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Notes receivable interest rate | 15% |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Less: accumulated depreciation | $ (10,552) | $ (6,781) |
Total property and equipment | 18,524 | 12,773 |
Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 4,182 | 3,393 |
Computers and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 14,075 | 8,686 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 171 | 12 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 7,533 | 6,481 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | $ 3,115 | $ 982 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 3,931 | $ 3,002 | $ 2,587 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||||
Amount of goodwill decreased | $ 3,376 | $ 165,697 | $ 169,073 | |
Impairment charge | $ 3,376 | |||
Weighted average cost of capital discount rate | 16% | |||
Impairment of brand assets | $ 280 | 3,656 | 0 | $ 0 |
Amortization expense | $ 11,384 | 7,170 | $ 5,064 | |
Rumble | ||||
Goodwill [Line Items] | ||||
Goodwill increased due to acquisition | $ 29,393 | |||
Minimum | ||||
Goodwill [Line Items] | ||||
Estimated future net cash flows discounted rate | 2% | |||
Maximum | ||||
Goodwill [Line Items] | ||||
Estimated future net cash flows discounted rate | 5% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | $ 94,686 | $ 84,620 |
Accumulated amortization | (30,118) | (20,364) |
Total | 64,568 | 64,256 |
Gross amount | 167,293 | 157,227 |
Net amount | $ 137,175 | 136,863 |
Trademark | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Gross amount | $ 21,110 | 10,920 |
Accumulated amortization | (2,606) | (794) |
Total | 18,504 | 10,126 |
Gross amount | 72,607 | 72,607 |
Net amount | 72,607 | 72,607 |
Franchise Agreements | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | 69,100 | 69,500 |
Accumulated amortization | (25,143) | (17,166) |
Total | $ 43,957 | 52,334 |
Franchise Agreements | Minimum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 7 years 6 months | |
Franchise Agreements | Maximum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Non-compete Agreement | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 5 years | |
Gross amount | $ 0 | 1,400 |
Accumulated amortization | 0 | (1,282) |
Total | 0 | 118 |
Web Design and Domain | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | 430 | 430 |
Accumulated amortization | (196) | (86) |
Total | $ 234 | 344 |
Web Design and Domain | Minimum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 3 years | |
Web Design and Domain | Maximum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Deferred Video Production Costs | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 3 years | |
Gross amount | $ 4,046 | 2,370 |
Accumulated amortization | (2,173) | (1,036) |
Total | $ 1,873 | $ 1,334 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Anticipated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 11,420 | |
2024 | 10,903 | |
2025 | 10,392 | |
2026 | 7,481 | |
2027 | 6,279 | |
Thereafter | 18,093 | |
Total | $ 64,568 | $ 64,256 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Apr. 19, 2021 | Mar. 24, 2021 | Feb. 28, 2020 | Jul. 31, 2021 | Apr. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Oct. 08, 2021 | |
Debt Instrument [Line Items] | |||||||||||
Proceeds from debt, net | $ 207,760,000 | ||||||||||
Percentage of gross amount of borrowings to debt discount | 2% | ||||||||||
Received loan amount | $ 137,722,000 | ||||||||||
Gain on debt extinguishment | 0 | $ 3,707,000 | $ 0 | ||||||||
Debt issuance costs | 55,000 | 996,000 | 5,158,000 | ||||||||
Amortization of debt issuance cost | 126,000 | 5,749,000 | 3,096,000 | ||||||||
Unamortized debt issuance costs | 270,000 | 341,000 | |||||||||
Repayments of debt | $ 2,978,000 | 310,600,000 | $ 149,219,000 | ||||||||
U.S. Small Business Administration, Coronavirus Act, Paycheck Protection Program (“PPP”) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument maturity date | Apr. 17, 2022 | ||||||||||
Received loan amount | $ 3,665,000 | ||||||||||
Notes receivable interest rate | 1% | ||||||||||
Debt instrument, payment terms | no payments during the first 16 months from the date of the loan | ||||||||||
Debt instrument, periodic payment | $ 0 | ||||||||||
Gain on debt extinguishment | 3,707,000 | ||||||||||
2021 Incremental Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 38,000,000 | ||||||||||
Two Thousand Twenty Two Incremental Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal payments due | $ 759,000 | ||||||||||
Debt instrument, face amount | $ 7,500,000 | ||||||||||
Term Loan | 2020 Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings | $ 185,000,000 | ||||||||||
Debt instrument term | 5 years | ||||||||||
Principal payments due | $ 925,000 | ||||||||||
Term Loan | Amended 2020 Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal payments due | $ 53,000 | ||||||||||
Line of credit facility, additional borrowings | $ 10,600,000 | ||||||||||
Debt instrument, frequency of periodic payment | Quarterly | ||||||||||
Debt instrument principal payment beginning period | Jun. 30, 2021 | ||||||||||
Term Loan | Amended 2020 Facility | Rumble Holdings LLC | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt financing obligations | $ 20,000,000 | ||||||||||
Revolving Credit Facility | 2020 Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings | $ 10,000,000 | ||||||||||
Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment penalty | 1,929,000 | ||||||||||
Senior secured term loan facility | $ 212,000,000 | ||||||||||
Percentage of principal payments equal to original principal | 0.25% | ||||||||||
Percentage of subsidiaries excess cash flow subject to certain exceptions | 50% | ||||||||||
Percentage of net proceeds of certain asset sales and insurance/condemnation events | 100% | ||||||||||
Net proceeds of certain extraordinary receipts, subject to reinvestment rights and certain other exceptions | 100% | ||||||||||
Percentage of net proceeds of any incurrence of debt, excluding certain permitted debt issuances | 100% | ||||||||||
Percentage of premium on the principal amount of closing date | 2% | ||||||||||
Percentage of premium on the principal amount of prepayment | 0.50% | ||||||||||
Proceeds from the term loan | $ 195,633,000 | ||||||||||
Principal payments of the term loan | 530,000 | ||||||||||
Repayments of debt | $ 115,000,000 | ||||||||||
Term Loan Facility | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Net proceeds in connection with initial public offering | 60,000,000 | ||||||||||
Term Loan Facility | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Initial public offering subject to certain expectations | $ 200,000,000 | ||||||||||
Term Loan Facility | LIBOR Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings under the term loan facility bear interest at a per annum rate | 6.50% | ||||||||||
Term Loan Facility | Reference Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings under the term loan facility bear interest at a per annum rate | 5.50% | 10.59% | |||||||||
Term Loan Facility | Interest Expense | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment penalty | 413,000 | ||||||||||
Debt issuance costs and debt discount amortized | $ 2,454,000 |
Debt - Schedule of Principal Pa
Debt - Schedule of Principal Payments on Outstanding Balances of Long-term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 3,035 |
2024 | 3,035 |
2025 | 131,652 |
Total | $ 137,722 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
ROU assets, net | $ 30,079 | $ 0 |
Lease liabilities, short-term | $ 3,786 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | |
Lease liabilities, long-term | $ 30,583 | $ 0 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease costs | $ 4,905 |
Variable lease costs | 856 |
Short-term lease costs | 108 |
Total | 5,869 |
Related-party Lease | |
Lessee, Lease, Description [Line Items] | |
Operating lease costs | 239 |
Variable lease costs | 0 |
Short-term lease costs | 0 |
Total | 239 |
Third Party Leases | |
Lessee, Lease, Description [Line Items] | |
Operating lease costs | 4,666 |
Variable lease costs | 856 |
Short-term lease costs | 108 |
Total | $ 5,630 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Rent expense | $ 5,651 | $ 3,133 |
Leases - Schedule of suppleme_2
Leases - Schedule of supplemental cash flow information related to operating leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Payment for Pension and Other Postretirement Benefits [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 4,717 |
Lease liabilities arising from new ROU assets | $ 20,966 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases (Details) | Dec. 31, 2022 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 7 years 6 months |
Weighted average discount rate | 8.80% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 6,621 | $ 3,713 |
2024 | 6,596 | 3,728 |
2025 | 6,625 | 3,635 |
2026 | 6,432 | 3,245 |
2027 | 5,564 | 3,088 |
Thereafter | 15,211 | 13,511 |
Total future lease payments | 47,049 | $ 30,920 |
Less: imputed interest | 12,680 | |
Total | $ 34,369 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Lease Payments (2021) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
2022 | $ 6,621 | $ 3,713 |
2023 | 6,596 | 3,728 |
2024 | 6,625 | 3,635 |
2025 | 6,432 | 3,245 |
2026 | 5,564 | 3,088 |
Thereafter | 15,211 | 13,511 |
Total future lease payments | $ 47,049 | 30,920 |
Related-party Lease | ||
Lessee, Lease, Description [Line Items] | ||
2022 | 321 | |
2023 | 331 | |
2024 | 225 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total future lease payments | 877 | |
Third Party Leases | ||
Lessee, Lease, Description [Line Items] | ||
2022 | 3,392 | |
2023 | 3,397 | |
2024 | 3,410 | |
2025 | 3,245 | |
2026 | 3,088 | |
Thereafter | 13,511 | |
Total future lease payments | $ 30,043 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Jul. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 23, 2021 | Aug. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||||||
Franchisee agreement term | 10 years | |||||||||
Accounts receivable, related parties | $ 0 | |||||||||
Contribution from related party | $ 49,443,000 | |||||||||
Accounts receivable, related parties | 32,157,000 | |||||||||
Contribution to related party | 19,443,000 | |||||||||
Borrowings from line of credit | $ 0 | 0 | $ 10,000,000 | |||||||
Class B Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Line of credit facility, bearing interest rate | 75 | |||||||||
2020 Facility | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Borrowings from line of credit | 53,760,000 | |||||||||
Multi Tranche Term Loan | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000 | |||||||||
Expiration period | 4 years | |||||||||
Line of credit facility, additional borrowings | $ 20,000 | |||||||||
Aggregate principal payment | $ 960,000 | |||||||||
Interest rate | 8.50% | |||||||||
Multi Tranche Term Loan | Restricted Stock Units | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Line of credit facility, bearing interest rate | $ 105 | |||||||||
Franchise Revenue, Marketing Fund Revenue and Merchandise Revenue | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Accounts receivable, related parties | 4,000 | 27,000 | ||||||||
Revenue from related parties | 577,000 | 507,000 | 327,000 | |||||||
Franchisees | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, notes receivable | 0 | 294,000 | ||||||||
Related party receivable (Note 9) | 0 | 1,744,000 | ||||||||
Row House | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Contingent consideration liability | 1,220,000 | |||||||||
Outstanding notes receivable | 1,834,000 | |||||||||
Row House | Restricted Stock Units | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Line of credit facility, bearing interest rate | 105 | |||||||||
H&W Investco Management LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction, management fee expense | 0 | 462,000 | 795,000 | |||||||
Reduction to member's equity | $ 31,735,000 | |||||||||
Contribution from related party | $ 10,000,000 | 49,443,000 | ||||||||
Accounts receivable, related parties | 32,157,000 | $ 31,735,000 | ||||||||
Term loan paid by related parties | 30,000,000 | |||||||||
Contribution to related party | $ 19,443,000 | |||||||||
H&W Investco Management LLC | 2020 Facility | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Borrowings from line of credit | 53,760,000 | |||||||||
Subsidiary of the Parent | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction, amounts of transaction | 1,456,000 | |||||||||
Rumble Holdings LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Contribution to related party | $ 10,600,000 | |||||||||
Interest rate on receivables from parent | 11% | |||||||||
Percentage of payment in cash | 10% | |||||||||
Debt instrument, face amount | 5,050,000 | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 5,900,000 | |||||||||
Interest receivable | 719,000 | |||||||||
Line of credit facility, additional borrowings | $ 5,900,000 | |||||||||
Rumble Holdings LLC | Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest rate on debt financing | 11% | |||||||||
Rumble Holdings LLC | Minimum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest rate on debt financing | 7.50% | |||||||||
Rumble Holdings LLC | Receivable from Stockholder | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Receivable from shareholder for debt financing provided to seller | $ 10,600,000 | |||||||||
ICI | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Duration of notes receivable begin to accrue interest | 45 days | |||||||||
Related party, notes receivable | $ 92,000 | 96,000 | ||||||||
Related party, Interest Income | 11,000 | 11,000 | 13,000 | |||||||
Related party, Interest expense | 0 | 5,000 | 19,000 | |||||||
Von Karman Production L L C | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Payment of monthly rent | $ 25,000 | |||||||||
Lessee, term of contract | 5 years | |||||||||
Lease expiration date | Aug. 31, 2024 | |||||||||
Operating lease, expense | $ 239,000 | $ 319,000 | $ 319,000 | |||||||
Percentage of annual rent increase subsequent initial twelve months | 3% |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Additional Information (Details) - Convertible Preferred Stock - USD ($) | Jul. 23, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
Temporary Equity [Line Items] | |||
Convertible preferred stock, shares sold | 200,000 | ||
Preferred stock redemption value | $ 308,075,000 | $ 276,890,000 | |
Preferred stock, share outstanding | 200,000 | ||
Deemed dividend charge to additional paid in capital | $ (31,185,000) | ||
Deemed dividend charge to additional paid in capital and accumulated deficit | $ 78,494,000 | $ 78,494,000 | |
Private Placement | |||
Temporary Equity [Line Items] | |||
Convertible preferred stock, shares issued | 200,000 | ||
Convertible preferred stock, shares sold | 200,000 | ||
Convertible preferred stock, par value | $ 0.0001 | ||
Proceeds from issuance of convertible preferred stock | $ 200,000,000 | ||
Preferred stock dividend rate | 6.50% | ||
Convertible preferred stock, liquidation preference value | $ 1,000 | ||
Convertible fixed liquidation preference increased PIK rate | 7.50% | ||
Convertible preferred initial conversion price | $ 14.40 | ||
Convertible preferred stock redemption term | 8 years | ||
Preferred stock, share outstanding | 200,000 |
Member's_Stockholder's Equity_3
Member's/Stockholder's Equity (Deficit) - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Apr. 11, 2022 | Apr. 07, 2022 | Apr. 06, 2022 | Aug. 24, 2021 | Jul. 23, 2021 | Aug. 31, 2021 | Feb. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Members Equity [Line Items] | ||||||||||
Member's contribution | $ 49,443 | |||||||||
Receivable from the Member | 32,157 | |||||||||
Outstanding term loan paid | 30,000 | |||||||||
Contribution to related party | $ 19,443 | |||||||||
Proceeds from borrowings | $ 0 | $ 0 | $ 10,000 | |||||||
Proceeds from issuance of common stock net of underwriters discounts and commissions | $ 0 | $ 122,016 | 0 | |||||||
Class A Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Number of shares issued | 4,500,000 | 12,994 | ||||||||
Shares Issued, Price Per Share | $ 20 | |||||||||
Common Stock, Shares, Issued | 27,571,000 | 23,898,000 | ||||||||
Common stock outstanding | 22,994,000 | 27,571,000 | 23,898,000 | |||||||
Class B Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Number of shares issued | 2,696,000 | |||||||||
Common Stock, Shares, Issued | 21,647,000 | 22,969,000 | ||||||||
Common stock outstanding | 21,572,000 | 22,969,000 | ||||||||
Initial Public Offering | Class A Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Number of shares issued | 10,000,000 | 607,000 | ||||||||
Shares Issued, Price Per Share | $ 12 | |||||||||
Reorganization Transactions | Class B Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Common Stock, Shares, Issued | 23,543,000 | |||||||||
Underwriters | Class A Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Number of shares issued | 675,000 | 904,000 | ||||||||
Proceeds from issuance of common stock net of underwriters discounts and commissions | $ 10,116 | |||||||||
Proceeds from issuance of common stock for working capital requirements | 1,116 | |||||||||
Underwriters | Class A Common Stock | Chief Executive Officer | ||||||||||
Members Equity [Line Items] | ||||||||||
Proceeds from issuance of common stock used to purchase LLC units | $ 9,000 | |||||||||
Number Of L L C Units Purchased | 750,000 | |||||||||
Secondary Public Offering | Class A Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Sale of shares, Number | 2,479,000 | |||||||||
Secondary Public Offering | Class B Common Stock | ||||||||||
Members Equity [Line Items] | ||||||||||
Sale of shares, Number | 2,696,000 | |||||||||
2020 Facility | ||||||||||
Members Equity [Line Items] | ||||||||||
Proceeds from borrowings | $ 53,760 | |||||||||
Rumble | ||||||||||
Members Equity [Line Items] | ||||||||||
Fair value of assets contributed | $ 20,483 |
Member's_Stockholder's Equity_4
Member's/Stockholder's Equity (Deficit) - Summary of Ownership of XPO LLC (Details) | 12 Months Ended |
Dec. 31, 2022 shares | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 49,218,000 |
XPO Inc. | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 27,571,000 |
Noncontrolling interests | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 21,647,000 |
XPO LLC | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Ownership percentage | 100% |
XPO LLC | XPO Inc. | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Ownership percentage | 56% |
XPO LLC | Noncontrolling interests | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Ownership percentage | 44% |
Equity Compensation - Additiona
Equity Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
May 09, 2022 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 23, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total compensation expense | $ 3,926,000 | $ 352,000 | ||||
Unrecognized compensation expense | $ 3,597,000 | |||||
Number of performance-based restricted stock units, minimum threshold | 18 | |||||
Income tax benefit | $ 526,000 | $ 783,000 | $ 369,000 | |||
Class A Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock outstanding | 27,571,000 | 23,898,000 | 22,994,000 | |||
2021 Omnibus Incentive Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for future grants | 3,648 | |||||
2021 Omnibus Incentive Plan | Class A Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock outstanding | 511 | |||||
Interest rate of common stock outstanding | 2% | |||||
Maximum | 2021 Omnibus Incentive Plan | Class A Common Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for issuance | 5,746 | |||||
Phantom Share Units PSUs | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total compensation expense | $ 0 | $ 0 | ||||
Phantom Share Units PSUs | Club Pilates | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares granted | 14 | |||||
Number of shares cancelled | 14 | 14 | ||||
Phantom Share Units PSUs | Cycle Bar | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares granted | 0.2 | |||||
Number of shares cancelled | 0.2 | 0.2 | ||||
Performance Based Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting conditions modification | The amendment of these units was treated as a modification with the compensation cost of the amended units of $18,127 recognized over the new estimated service period through November 2022. In March 2022, the units vested when the average trading price condition was met. During the years ended December 31, 2022 and 2021, the Company recognized $12,003 and $6,069 of expenses, respectively. | |||||
Compensation cost of the amended units | $ 18,127,000 | |||||
Number of shares granted | 3 | 53 | ||||
Total compensation expense | $ 12,003,000 | $ 6,069,000 | ||||
Number of shares cancelled | 14 | |||||
Number of shares vested | 1,921 | |||||
Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares granted | 1,642 | 1,123 | ||||
Total compensation expense | $ 12,925,000 | $ 2,372,000 | ||||
Number of shares cancelled | 176 | |||||
Total unamortized compensation expense | $ 29,490,000 | |||||
Compensation expense, expected weighted average period for recognition | 3 years 3 months 25 days | |||||
Number of shares vested | 487 | |||||
weighted average grant-date closing price | $ 19.82 | $ 13.76 | ||||
Income tax benefit | $ 445,000 | |||||
Restricted Stock Units | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Restricted Stock Units | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Time-based Profit Interest Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares granted | 3 | 53 | ||||
Vesting period | 4 years | |||||
Total unamortized compensation expense | $ 21,000 | |||||
Compensation expense, expected weighted average period for recognition | 1 year 29 days | |||||
Number of shares vested | 61 | 406 | 405 | |||
Time-based Profit Interest Units | SG&A expenses | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total compensation expense | $ 190,000 | $ 906,000 | $ 1,751,000 | |||
Performance Based Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available for future grants | 171 | |||||
weighted average grant-date closing price | $ 18.25 |
Equity Compensation - Summary o
Equity Compensation - Summary of Assumptions Used to Calculate Fair Value of Time-based Grants (Details) - Time-based Profit Interest Units | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Risk free interest rate, minimum | 0.05% | |
Risk free interest rate, maximum | 0.16% | |
Risk free interest rate | 0.15% | |
Weighted average volatility | 47.30% | 39.60% |
Expected terms (in years) | 10 months 9 days | 1 year 3 months 21 days |
Equity Compensation - Summary_2
Equity Compensation - Summary of Performance-based and Time-based Profit Interests Activity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Performance-based Profit Interests Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of units, Outstanding, Beginning balance | 1,935 | 1,932 | 1,879 |
Number of units, Issued | 3 | 53 | |
Number of units, Vested | (1,921) | ||
Number of units, Forfeited, expired, or canceled | (14) | ||
Number of units, Outstanding, Ending balance | 1,935 | 1,932 | |
Time-based Profit Interest Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of units, Outstanding, Beginning balance | 74 | 477 | 829 |
Number of units, Issued | 3 | 53 | |
Number of units, Vested | (61) | (406) | (405) |
Number of units, Outstanding, Ending balance | 13 | 74 | 477 |
Number of units, Expected to vest | 13 |
Equity Compensation - Summary_3
Equity Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of units, Outstanding, Beginning balance | 1,123 | |
Number of units, Issued | 1,642 | 1,123 |
Number of units, Vested | (487) | |
Number of units, Forfeited, expired, or canceled | (176) | |
Number of units, Outstanding, Ending balance | 2,102 | 1,123 |
Weighted Average Grant Date Fair Value per Share, Beginning balance | $ 13.76 | |
Weighted Average Grant Date Fair Value per Share, Issued | 19.82 | $ 13.76 |
Weighted Average Grant Date Fair Value per Share, Vested | 13.61 | |
Weighted Average Grant Date Fair Value per Share, Forfeited, expired, or canceled | 18 | |
Weighted Average Grant Date Fair Value per Share, Ending balance | $ 18.25 | $ 13.76 |
Income Taxes and Tax Receivab_3
Income Taxes and Tax Receivable Agreement - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Valuation Allowance [Line Items] | |||
Federal operating loss carryforwards | $ 100,976 | $ 109,182 | |
State net operating loss carryforwards | 91,397 | 109,560 | |
Federal net operating loss not expire | $ 94,640 | ||
Foreign tax credit | $ 247 | ||
Percentage of benefits expected to realize from tax benefits | 15% | ||
Payment obligation basis spread on interest rate | 100% | ||
Valuation allowance for deferred tax assets | $ 72,403 | $ 61,592 | |
Income tax return examination description | The Company’s tax returns remain open for examination in the U.S for years 2019 through 2022. | ||
Federal net operating losses taxable income limitation | 80% | ||
Foreign tax credits expiration date | Dec. 31, 2030 | ||
Percentage of ownership change as defined by Section 382 | 0.50 | ||
Foreign subsidiaries tax examination period in which tax obligation originated | 3 years | ||
Current portion of the TRA liability | $ 1,163 | ||
Noncurrent portion of the TRA liability | 801 | ||
Unrecorded TRA liability | $ 57,842 | ||
Federal [Member] | |||
Valuation Allowance [Line Items] | |||
Federal and state net operating loss carryforward expiration date | Dec. 31, 2035 | ||
State [Member] | |||
Valuation Allowance [Line Items] | |||
Federal and state net operating loss carryforward expiration date | Dec. 31, 2032 | ||
XPO Holdings [Member] | |||
Valuation Allowance [Line Items] | |||
Economic interest in subsidiary | 56% | ||
Deferred tax assets valuation allowance to equity investment | $ 60,197 |
Income Taxes and Tax Receivab_4
Income Taxes and Tax Receivable Agreement - Summary of Income (loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||
U.S. income (loss) before income taxes | $ 3,421 | $ (50,599) |
Foreign loss before income taxes | (20) | (58) |
Income (loss) before income taxes | $ 3,401 | $ (50,657) |
Income Taxes and Tax Receivab_5
Income Taxes and Tax Receivable Agreement - Summary of Income Tax expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense (benefit), Federal | $ (142) | $ 322 | |
Current tax expense (benefit), State | 450 | 274 | |
Current tax expense (benefit), Foreign | 262 | 187 | |
Total current tax expense (benefit) | 570 | 783 | |
Deferred tax expense (benefit), Federal | (31) | ||
Deferred tax expense (benefit), State | (8) | ||
Deferred tax expense (benefit), Foreign | (5) | ||
Total deferred tax expense (benefit) | (44) | ||
Income tax expense (benefit) | $ 526 | $ 783 | $ 369 |
Income Taxes and Tax Receivab_6
Income Taxes and Tax Receivable Agreement - Summary of Reconciliation Between Effective Tax Rate and U.S. Federal Statutory Income Tax (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Tax computed at federal statutory rate | 21% | 21% |
State tax, net of federal tax benefit | 3% | (0.10%) |
Non-controlling interests | (31.10%) | (2.10%) |
Income (loss) from pass-through entities | (5.30%) | |
Permanent items | (1.50%) | |
TRA liability | (3.60%) | |
Executive compensation | 3.80% | |
Contingent consideration | 45.40% | (10.40%) |
Preferred stock dividend | (1.50%) | |
State rate differential | 22.50% | |
Other | 5.70% | (0.00%) |
Valuation allowance | (51.20%) | (1.60%) |
Effective tax rate | 15.50% | (1.60%) |
Income Taxes and Tax Receivab_7
Income Taxes and Tax Receivable Agreement - Summary of Company's Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Investment in partnership | $ 40,827 | $ 28,164 |
Net operating losses | 26,361 | 28,844 |
Tax receivable agreement | 332 | 59 |
Interest expense | 3,265 | 3,055 |
Deferred revenue | 1,383 | 1,111 |
Other | 279 | 379 |
Total deferred tax assets | 72,447 | 61,612 |
Valuation allowance for deferred tax assets | (72,403) | (61,592) |
Total deferred tax assets, net of valuation allowance | 44 | 20 |
Deferred tax liabilities: | ||
Property and equipment and intangible assets | 0 | (3) |
Other | 0 | (17) |
Total deferred tax liabilities | 0 | (20) |
Net deferred tax assets | $ 44 | $ 0 |
Earnings(Loss) Per Share - Addi
Earnings(Loss) Per Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class B | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 22,146 | 23,084 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule Presents Calculation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income (loss) | $ 2,875 | $ (51,440) | $ (13,640) |
Less: Net loss attributable to noncontrolling interests | 19,284 | 78,417 | |
Less: dividends on preferred shares | (13,000) | (5,742) | |
Less: deemed dividend | (31,185) | (84,994) | |
Net loss attributable to XPO Inc. | (22,026) | (63,759) | |
Net loss attributable to XPO Inc-diluted | $ (22,026) | $ (63,759) | |
Denominator: | |||
Weighted average shares of Class A common stock outstanding - basic | 25,295 | 22,403 | |
Weighted average shares of Class A common stock outstanding - diluted | 25,295 | 22,403 | |
Net loss per share attributable to Class A common stock - basic | $ (0.87) | $ (2.85) | |
Net loss per share attributable to Class A common stock - diluted | $ (0.87) | $ (2.85) | |
Rumble Class A Common Stock | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,300 | ||
Restricted Stock Units | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,102 | 1,123 | |
Convertible Preferred Stock | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,889 | 13,889 | |
Conversion of Class B common stock to Class A common stock | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 21,572 | 22,969 | |
Treasury share options | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 75 | ||
Rumble Contingent Shares | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,024 | 2,024 | |
Profit Interest Units Time Vesting | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 14 | 74 | |
Profit Interest Units, Performance Vesting | |||
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,935 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - 401(K) Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employee benefit plan, description | Employees who have completed one month of service and have attained age 18 are eligible to participate in elective deferrals under the 401(k) Plan. Employees are eligible to participate for purposes of matching contributions upon completion of one year of service. | ||
Expense for matching contribution | $ 481 | $ 483 | $ 338 |
Contingencies and Litigation -
Contingencies and Litigation - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Oct. 13, 2021 USD ($) | Oct. 13, 2021 AUD ($) | Mar. 31, 2020 USD ($) | Sep. 30, 2019 USD ($) | Dec. 31, 2022 USD ($) Milestone shares | Dec. 31, 2021 USD ($) Studio | Dec. 31, 2020 USD ($) | Jul. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jul. 23, 2021 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | |
Loss Contingencies [Line Items] | ||||||||||||
Rent expense | $ 5,651,000 | $ 3,133,000 | ||||||||||
Maximum obligation of guarantees of leases | $ 1,357,000 | 927,000 | ||||||||||
CycleBar | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Business combination estimated fair value of contingent consideration | $ 4,390,000 | |||||||||||
Number of milestones | Milestone | 2 | |||||||||||
Contingent consideration liability | $ 5,598,000 | |||||||||||
CycleBar | First Milestone | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Milestone payment | $ 5,000,000 | |||||||||||
Increased interest rate | 14% | |||||||||||
CycleBar | Second Milestone | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Milestone payment | $ 10,000,000 | |||||||||||
Reduced second milestone amount | $ 2,500,000 | |||||||||||
CycleBar | First and Second Milestone | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Imposed interest | 10% | |||||||||||
CycleBar | Discount Rate | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Probability of achievement, projected payment date and the discount rate | 8.50% | |||||||||||
Row House | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingent consideration liability | $ 1,220,000 | |||||||||||
Percentage of operational or change of control distributions | 20% | |||||||||||
Increase (decrease) in contingent consideration | 6,065,000 | |||||||||||
Acquisition and transaction expenses (income) | 6,280,000 | |||||||||||
Contingent consideration totaled | $ 0 | 840,000 | ||||||||||
Row House | Interest Expense | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Increase (decrease) in contingent consideration | 215,000 | |||||||||||
StretchLab | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingent consideration liability | $ 1,000,000 | $ 688,000 | $ 688,000 | |||||||||
Percentage of operational or change of control distributions | 20% | |||||||||||
Payments related to settlement agreement | $ 6,500,000 | |||||||||||
Discount rate related to settlement agreement | 8.345% | |||||||||||
YogaSix | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Probability of achievement, projected payment date and the discount rate | 8.50% | |||||||||||
YogaSix | Interest Expense | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Additional contingent consideration | 50,000 | 13,000 | ||||||||||
Stride | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Business combination estimated fair value of contingent consideration | $ 1,869,000 | |||||||||||
Number of milestones | Milestone | 2 | |||||||||||
Probability of achievement, projected payment date and the discount rate | 8.50% | |||||||||||
Increase (decrease) in contingent consideration | $ 0 | 250,000 | ||||||||||
Number of franchise studios | Studio | 2 | |||||||||||
Rumble Holdings LLC | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingent consideration liability | $ 27,690,000 | $ 48,200,000 | ||||||||||
Acquisition and transaction expenses (income) | 7,340,000 | 25,100,000 | ||||||||||
Contingent consideration related to shares | $ 27,850,000 | |||||||||||
Fair value of shares issued in acquisition | $ 23,100,000 | |||||||||||
Rumble Holdings LLC | Class A Common Stock | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingency related to shares | shares | 1,300 | |||||||||||
BFT Acquisition | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingent consideration liability | $ 9,388,000 | |||||||||||
Additional contingent consideration | $ 4,634,000 | |||||||||||
Contingent consideration from acquisitions | 492,000 | 5,841,000 | ||||||||||
Acquisition and transaction expenses (income) | 5,280,000 | 0 | ||||||||||
Payment for contingent consideration liability investing activities | 2,190,000 | |||||||||||
BFT Acquisition | Asset Purchase Agreement | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Business combination estimated fair value of contingent consideration | 9,388,000 | |||||||||||
Aggregate minimum payments for next two years | 3,694,000 | $ 5,000,000 | ||||||||||
Aggregate maximum amount payment to seller | $ 10,342,000 | $ 14,000,000 | ||||||||||
BFT Acquisition | Interest Expense | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Additional contingent consideration | 130,000 | |||||||||||
Increase (decrease) in contingent consideration | 646,000 | 130,000 | ||||||||||
Letter of Credit | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Line of credit facility, additional borrowings | $ 750,000 | |||||||||||
Receivable from Stockholder | Rumble Holdings LLC | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Receivable From Shareholder For Debt Financing Provided To Seller | $ 10,600,000 | |||||||||||
Accrued Expenses | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Legal settlement amount | 464,000 | 2,931,000 | ||||||||||
Additional contingent consideration | 744,000 | $ 706,000 | ||||||||||
Accrued Expenses | BFT Acquisition | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Contingent consideration liability | 2,203,000 | |||||||||||
Contingent consideration from acquisitions | 3,678,000 | |||||||||||
Acquisitions and Transaction Expenses (Income) | Row House | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Additional contingent consideration | $ 380,000 | $ 540,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Feb. 15, 2023 | Apr. 11, 2022 | Apr. 07, 2022 | Apr. 06, 2022 | Jul. 23, 2021 | Feb. 28, 2023 | Jan. 31, 2023 | Aug. 31, 2021 | Dec. 31, 2022 | Jan. 09, 2023 | |
Class A Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 4,500,000 | 12,994 | ||||||||
Stock issued price per share | $ 20 | |||||||||
Class B Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 2,696,000 | |||||||||
Secondary Public Offering | Class A Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of shares, Number | 2,479,000 | |||||||||
Secondary Public Offering | Class B Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of shares, Number | 2,696,000 | |||||||||
Underwriters | Class A Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 675,000 | 904,000 | ||||||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Borrowed additional amount | $ 3,100 | |||||||||
Subsequent Event | Two thousand twenty three incremental term loan | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Debt instrument, aggregate principal amount | 130,000 | |||||||||
Principal payments due quarterly beginning on June 30, 2023 | $ 1,065 | |||||||||
Debt instrument principal payment beginning period | Jun. 30, 2023 | |||||||||
Subsequent Event | Repurchase Agreement | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Repurchase of Convertible Preferred Shares | 85 | |||||||||
Aggregate payment | $ 130,967 | |||||||||
Subsequent Event | Class B Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 3,474 | |||||||||
Subsequent Event | Secondary Public Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 5,000 | |||||||||
Stock issued price per share | $ 24.50 | |||||||||
Subsequent Event | Secondary Public Offering | Class A Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of shares, Number | 2,276 | |||||||||
Subsequent Event | Secondary Public Offering | Class B Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Sale of shares, Number | 3,474 | |||||||||
Subsequent Event | Underwriters | Class A Common Stock | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued | 750 |