Document and Entity Information
Document and Entity Information - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 22, 2024 | Jun. 30, 2023 | |
Document Document And Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
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 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 441.3 | ||
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 2024 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 | 30,923 | ||
Class B | |||
Document Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 16,566 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Current Assets: | |||
Cash, cash equivalents and restricted cash | $ 37,094 | $ 37,370 | |
Accounts receivable, net (Note 10) | 32,751 | 25,555 | |
Inventories | 14,724 | 10,864 | |
Prepaid expenses and other current assets | 5,856 | 6,294 | |
Deferred costs, current portion | 6,620 | 4,131 | |
Notes receivable from franchisees, net | 203 | 1,520 | |
Total current assets | 97,248 | 85,734 | |
Property and equipment, net | 19,502 | 18,524 | |
Right-of-use assets | [1] | 71,413 | 30,079 |
Goodwill | 171,601 | 165,697 | |
Intangible assets, net | 120,149 | 137,175 | |
Deferred costs, net of current portion | 46,541 | 43,620 | |
Notes receivable from franchisees, net of current portion | 802 | 1,067 | |
Other assets | 1,442 | 795 | |
Total assets | 528,698 | 482,691 | |
Current Liabilities: | |||
Accounts payable | 19,119 | 16,185 | |
Accrued expenses | 14,088 | 12,295 | |
Deferred revenue, current portion | 34,674 | 31,996 | |
Current portion of long-term debt | 4,760 | 3,035 | |
Other current liabilities | 19,666 | 9,265 | |
Total current liabilities | 92,307 | 72,776 | |
Deferred revenue, net of current portion | 117,305 | 109,465 | |
Contingent consideration from acquisitions (Note 17) | 8,666 | 28,182 | |
Long-term debt, net of current portion, discount and issuance costs | 319,261 | 133,039 | |
Lease liability | 70,141 | 30,583 | |
Other liabilities | 9,152 | 8,633 | |
Total liabilities | 616,832 | 382,678 | |
Commitments and contingencies (Note 17) | |||
Stockholders' equity (deficit): | |||
Additional paid-in capital | 521,998 | 505,186 | |
Receivable from shareholder (Note 10) | (15,426) | (16,369) | |
Accumulated deficit | (630,127) | (641,903) | |
Treasury stock, at cost, 75 shares outstanding as of December 31, 2023 and 2022 | (1,697) | (1,697) | |
Total stockholders' deficit attributable to Xponential Fitness, Inc. | (125,247) | (154,778) | |
Noncontrolling interests | (77,547) | (53,284) | |
Total stockholders' deficit | (202,794) | (208,062) | |
Total liabilities, redeemable convertible preferred stock and stockholders' deficit | 528,698 | 482,691 | |
Redeemable Convertible Preferred Stock | |||
Current Liabilities: | |||
Redeemable convertible preferred stock, $0.0001 par value, 400 shares authorized, 115 and 200 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 114,660 | 308,075 | |
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, 2023 and 2022 | 0 | 0 | |
Class A Common Stock | |||
Stockholders' equity (deficit): | |||
Common stock | 3 | 3 | |
Class B Common Stock | |||
Stockholders' equity (deficit): | |||
Common stock | $ 2 | $ 2 | |
[1] For December 31, 2023, includes impact of write off of abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Treasury Stock, Common, Shares | 75,000 | 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 | 115,000 | 200,000 |
Redeemable preferred stock, Share outstanding | 115,000 | 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 | 30,897,000 | 27,571,000 |
Common stock, Share outstanding | 30,897,000 | 27,571,000 |
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 | 16,566,000 | 21,647,000 |
Common stock, Share outstanding | 16,491,000 | 21,572,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, net: | |||
Total revenue, net | $ 318,660 | $ 244,954 | $ 155,079 |
Operating costs and expenses: | |||
Selling, general and administrative expenses (Note 10) | 166,828 | 125,452 | 94,017 |
Impairment of goodwill and other assets | 16,667 | 3,656 | 781 |
Depreciation and amortization | 16,883 | 15,315 | 10,172 |
Marketing fund expense | 22,683 | 17,290 | 13,044 |
Acquisition and transaction expenses (income) | (17,964) | 2,438 | 26,618 |
Total operating costs and expenses | 278,987 | 229,818 | 185,898 |
Operating income (loss) | 39,673 | 15,136 | (30,819) |
Other (income) expense: | |||
Interest income | (1,611) | (1,805) | (1,164) |
Interest expense | 38,733 | 13,017 | 24,709 |
Other expense | 3,193 | 523 | 0 |
Gain on debt extinguishment | 0 | 0 | (3,707) |
Total other expense | 40,315 | 11,735 | 19,838 |
Income (loss) before income taxes | (642) | 3,401 | (50,657) |
Income taxes | 1,071 | 526 | 783 |
Net income (loss) | (1,713) | 2,875 | (51,440) |
Less: Net income (loss) attributable to noncontrolling interests | (810) | 945 | (32,611) |
Net income (loss) attributable to Xponential Fitness, Inc. | $ (903) | $ 1,930 | $ (18,829) |
Net income (loss) per share of Class A common stock: | |||
Basic | $ 1.18 | $ (0.87) | $ (2.85) |
Diluted | $ (0.44) | $ (0.87) | $ (2.85) |
Weighted average shares of Class A common stock outstanding: | |||
Basic | 31,742 | 25,295 | 22,403 |
Diluted | 39,705 | 25,295 | 22,403 |
Franchise revenue | |||
Revenue, net: | |||
Total revenue, net | $ 143,615 | $ 115,286 | $ 74,459 |
Equipment revenue | |||
Revenue, net: | |||
Total revenue, net | 56,454 | 43,461 | 22,583 |
Merchandise revenue | |||
Revenue, net: | |||
Total revenue, net | 34,146 | 27,073 | 20,140 |
Franchise marketing fund revenue | |||
Revenue, net: | |||
Total revenue, net | 27,292 | 20,384 | 13,623 |
Other service revenue | |||
Revenue, net: | |||
Total revenue, net | 57,153 | 38,750 | 24,274 |
Product revenue | |||
Operating costs and expenses: | |||
Costs of revenue | 57,979 | 47,220 | 28,550 |
Franchise and service revenue | |||
Operating costs and expenses: | |||
Costs of revenue | $ 15,911 | $ 18,447 | $ 12,716 |
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 | 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, 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 | ||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to Member | (10,600) | (10,600) | ||||||||||||||||||||||||||||||||||||||||||||||||
Payment received from Member, net | 1,456 | $ 1,456 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | (51,440) | (13,342) | (17,155) | (3,375) | $ (13,342) | $ (17,155) | $ (1,674) | (1,701) | ||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment of preferred stock to redemption value | (78,494) | (1,116) | (77,378) | |||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock dividends | (5,742) | (307) | (5,435) | |||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Class B shares | 176,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable from shareholder arising from the Rumble studios acquisition | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | $ (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 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 2,875 | 2,875 | 1,930 | 945 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock, Shares | 607,000 | 2,696,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment of preferred stock to redemption value | (31,185) | (31,185) | ||||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock dividends | (13,000) | (13,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 3,303,000 | (3,303,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B shares to Class A shares | 510,382 | (510,382) | ||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Class B shares | 1,981,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted share units, net of shares withheld for taxes, Shares | 370,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted share units, net of shares withheld for taxes | (1,908) | $ 1 | (1,909) | |||||||||||||||||||||||||||||||||||||||||||||||
Loan to shareholder and accumulated interest | (5,769) | (5,769) | ||||||||||||||||||||||||||||||||||||||||||||||||
Receivable from shareholder arising from the Rumble studios acquisition | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock, shares | 75,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
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 | 27,571,000 | 21,647,000 | 75,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | 20,025 | 20,006 | 19 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | (1,713) | (903) | (810) | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock, Shares | 1,620 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment of preferred stock to redemption value | 49,970 | 49,970 | ||||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock dividends | (7,652) | (7,652) | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 5,094,000 | (5,094,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B shares to Class A shares | 10,571 | (10,571) | ||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of Class B shares | 13,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted share units, net of shares withheld for taxes, Shares | 831,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted share units, net of shares withheld for taxes | (8,111) | (8,111) | ||||||||||||||||||||||||||||||||||||||||||||||||
Loan to shareholder and accumulated interest | (5,670) | (5,670) | ||||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution from redemption of preferred stock | 12,679 | 12,679 | ||||||||||||||||||||||||||||||||||||||||||||||||
Liability-classified restricted stock units vested | 2,250 | 2,250 | ||||||||||||||||||||||||||||||||||||||||||||||||
Receivable from shareholder arising from the Rumble studios acquisition | (1,450) | (1,450) | ||||||||||||||||||||||||||||||||||||||||||||||||
Consideration related to the Rumble studios acquisition | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase and retirement of Class A common stock, Shares | 2,599 | (2,599,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase and retirement of Class A common stock | (50,378) | (50,378) | ||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from disgorgement of stockholders short-swing profits (Note 10) | 516 | 516 | ||||||||||||||||||||||||||||||||||||||||||||||||
Distributions paid to Pre-IPO LLC Members | (12,901) | (12,901) | ||||||||||||||||||||||||||||||||||||||||||||||||
Excise tax on share repurchases | (360) | (360) | ||||||||||||||||||||||||||||||||||||||||||||||||
Payment received from shareholder | 8,062 | 8,062 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2023 | $ (202,794) | $ 3 | $ 2 | $ (1,697) | $ 521,998 | $ (15,426) | $ (630,127) | $ (77,547) | ||||||||||||||||||||||||||||||||||||||||||
Ending balance, Shares at Dec. 31, 2023 | 30,897,000 | 16,566,000 | 75,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (1,713) | $ 2,875 | $ (51,440) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 16,883 | 15,315 | 10,172 |
Amortization and write off of debt issuance costs | 463 | 126 | 5,749 |
Amortization and write-off of discount on long-term debt | 2,949 | 613 | 2,704 |
Change in contingent consideration from acquisitions | (18,933) | 2,440 | 25,640 |
Amortization of right-of-use assets | 13,005 | 2,655 | 0 |
Bad debt expense (recovery) | 2,232 | (712) | 410 |
Equity-based compensation | 17,997 | 29,044 | 9,699 |
Non-cash interest | (1,252) | (1,069) | 583 |
Gain on debt extinguishment | 0 | 0 | (3,707) |
Loss (gain) from disposal of assets | (2,120) | (78) | 483 |
Impairment of goodwill and other assets | 16,667 | 3,656 | 781 |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (7,738) | (12,720) | (6,608) |
Inventories | (3,525) | (3,936) | (768) |
Prepaid expenses and other current assets | 438 | (1,023) | (4,220) |
Operating lease liabilities | (9,049) | (2,496) | 0 |
Deferred costs | (5,440) | (2,024) | (7,122) |
Notes receivable, net | (3) | 33 | 137 |
Accounts payable | 1,390 | 469 | (3,013) |
Accrued expenses | 1,959 | (5,008) | 3,596 |
Related party payable | 0 | 0 | (1) |
Other current liabilities | 2,896 | 2,226 | 1,449 |
Deferred revenue | 7,287 | 18,223 | 30,011 |
Other assets | (648) | (240) | 1 |
Other liabilities | 1,677 | 3,301 | (85) |
Net cash provided by operating activities | 35,422 | 51,670 | 14,451 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (7,430) | (8,955) | (3,638) |
Purchase of studios | (164) | 0 | (450) |
Proceeds from sale of assets | 60 | 65 | 433 |
Purchase of intangible assets | (1,783) | (7,177) | (1,220) |
Notes receivable issued | (581) | (1,782) | (2,258) |
Notes receivable payments received | 776 | 3,236 | 820 |
Acquisition of businesses | (3,467) | 0 | (44,322) |
Net cash used in investing activities | (12,589) | (14,613) | (50,635) |
Cash flows from financing activities: | |||
Borrowings from long-term debt | 189,150 | 7,425 | 255,980 |
Payments on long-term debt | (4,203) | (2,978) | (310,600) |
Debt issuance costs | (411) | (55) | (996) |
Proceeds from the issuance of Class A common stock, net of underwriting costs | 0 | 0 | 122,016 |
Payments of costs related to IPO | 0 | 0 | (3,082) |
Payments to purchase 750,000 LLC units/Class B Shares | 0 | 0 | (9,000) |
Proceeds from issuance of redeemable convertible preferred stock, net of offering costs | 0 | 0 | 198,396 |
Payment to purchase all of the shares of LCAT from LCAT shareholders | 0 | 0 | (144,485) |
Payment of H&W Cash Merger Consideration | 0 | 0 | (11,720) |
Payments to acquire the Preferred Units and LLC Units | 0 | 0 | (20,493) |
Exchange of LLC units for Class B shares | 0 | 0 | 2 |
Payment of preferred stock dividend and deemed cash dividend | (7,092) | (16,250) | (8,992) |
Payment of contingent consideration | (1,412) | (2,190) | (12,154) |
Payments on loans from related party (Note 10) | 0 | 0 | (85) |
Member contributions | 0 | 0 | 562 |
Payments for taxes related to net share settlement of restricted share units | (8,111) | (1,909) | 0 |
Distributions to Member | 0 | 0 | (10,600) |
Payment for tax receivable agreement | (1,163) | 0 | 0 |
Payments for redemption of preferred stock | (130,766) | 0 | 0 |
Payments for distributions to Pre-IPO LLC Members | (12,901) | 0 | 0 |
Repurchase of Class A common stock | (50,378) | 0 | 0 |
Payment received from shareholder (Note 10) | 8,062 | 0 | 0 |
Loan to shareholder (Note 10) | (4,400) | (5,050) | 0 |
Receipts from Member, net (Note 10) | 0 | 0 | 1,456 |
Proceeds from disgorgement of stockholders short-swing profits (Note 10) | 516 | 0 | 0 |
Net cash provided by (used in) financing activities | (23,109) | (21,007) | 46,205 |
Increase (decrease) in cash, cash equivalents and restricted cash | (276) | 16,050 | 10,021 |
Cash, cash equivalents and restricted cash, beginning of year | 37,370 | 21,320 | 11,299 |
Cash, cash equivalents and restricted cash, end of year | 37,094 | 37,370 | 21,320 |
Supplemental cash flow information: | |||
Interest paid | 34,786 | 11,631 | 16,136 |
Income taxes paid, net | 1,567 | 2,785 | 1,403 |
Noncash investing and financing activity: | |||
Capital expenditures accrued | 1,023 | 1,407 | 595 |
Contingent consideration converted to equity (Note 10) | 0 | 29,070 | 0 |
Deemed contribution from redemption of convertible preferred stock | 12,679 | 0 | 0 |
Parent contribution of Rumble assets | 0 | 0 | 20,483 |
Original contingent consideration related to Rumble | 0 | 0 | 23,100 |
Rumble note receivable from shareholder | 0 | 0 | 10,600 |
Collateralization of note from shareholder with treasury shares (Note 10) | 0 | 1,697 | 0 |
Adjustment of preferred stock to redemption value | (49,970) | 31,185 | 78,494 |
Fair value of promissory note entered into in connection with acquisition | 6,463 | 0 | 0 |
Liability-classified restricted stock units vested | 2,250 | 0 | 0 |
Accrued tax withholding related to convertible preferred stock dividend | 112 | 0 | 0 |
Adjustment of redeemable noncontrolling interest | 0 | 0 | 174,450 |
Deferred offering costs reclassified into equity | 0 | 0 | 4,429 |
Accrued deemed dividend | 0 | 0 | 3,250 |
Intangible asset acquired in exchange for deferred revenue | 0 | 4,800 | 0 |
Receivable from shareholder arising from the Rumble studios acquisition | 1,450 | 0 | 0 |
Excise tax liability accrued | 360 | 0 | 0 |
Preferred stock dividend accrued | $ 448 | $ 0 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 shares | |
Number of LLC units/Class B Shares purchased | 750,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (903) | $ 1,930 | $ (18,829) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Business and Operatio
Nature of Business and Operations | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 , 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, 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. 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 22 , 55 and 25 company-owned transition studios as of December 31, 2023, 2022 and 2021, 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. Reclassifications – To conform with current year presentation, the Company has reclassified impairment charges of $ 3,656 and $ 781 from selling, general and administrative expenses to impairment of goodwill and other assets in the operating costs and expenses section of the consolidated statements of operations for the years ended December 31, 2022, and 2021, respectively. 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, 2023 | |
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, 2023, 2022 and 2021 , the Company generated $ 13,398 , $ 12,823 and $ 2,741 of revenue outside of the United States, respectively. As of December 31, 2023 and 2022 , 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. The Company's restricted cash consists of marketing fund restricted cash and guarantee of standby letter of credit. Restricted cash was $ 9,333 and $ 5,381 at December 31, 2023 and 2022 , 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, 2023 and 2022 , the Company had cash, cash equivalents and restricted cash that total $ 34,359 and $ 33,961 , 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 expected credit losses – 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 expected credit losses 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. 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. 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, 2023, 2022 and 2021 were insignificant. 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. 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 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. The Company determines if an arrangement contains a lease at the inception of a contract. 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 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. Non-lease components primarily include payments for common area maintenance. 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. When evaluating goodwill for impairment, the Company may decide to first perform a qualitative assessment, or “step zero” impairment test, 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 does not perform a qualitative assessment, or if the Company determines that it is not more likely than not that the fair value of its reporting units exceeds their carrying amounts, the Company performs a quantitative assessment and calculates the estimated fair value of the respective reporting unit. The Company generally determines the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in the amount the carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. During the year ended December 31, 2023, the Company determined that the Stride and Row House reporting units had indicators of impairment based on a qualitative assessment and performed a quantitative assessmen t. As a result, the Company recognized an impairment loss to write-off the goodwill associated with the Stride and Row House reporting units. Additionally, the Company recorded a goodwill impairment related to the assets held for sale classification of the Rumble Held for Sale Studios, as defined below in Note 3. During the year ended December 31, 2022, the Company recognized an impairment loss to write-off the goodwill associated with the AKT reporting unit. For further discussion related to goodwill impairments, see Note 7. There were no impairments recorded for the year ended December 31, 2021. 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 impairments recorded for the years ended December 31, 2023, 2022 and 2021 . 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 $ 8,853 , $ 280 and $ 118 were recorded for the years ended December 31, 2023, 2022 and 2021, respectively. Definite-lived intangible asset impairments during the year ended December 31, 2023, related to a) trademark and franchise agreements of the Stride and Row House reporting units for which the carrying value was deemed not recoverable in the amount of $ 410 , b) intangible assets related to franchise agreements, net of reacquired franchise rights, in the amount of $ 7,238 in connection with the acquisition of 14 Rumble studios as discussed below in Note 3, and c) impairment related to reacquired franchise rights in the amount of $ 1,205 in connection with the Rumble Held for Sale Studios, as defined and discussed further in Note 3. 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 (ten 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, 2023, 2022 and 2021. 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 – Effective January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, which required the recognition of expected credit losses for accounts and notes receivable. The adoption of the new standard did not have a material impact on the Company's consolidated financial statements as the expected credit loss model was not significantly different from the Company's prior policy and methodology for determining the allowance for doubtful accounts. The Company’s accounts and notes receivable are recorded at net realizable value, which includes an appropriate allowance for expected credit losses. The estimate of expected 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, 2021 $ 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 Bad debt expense recognized during the year 696 — 1,536 2,232 Write-off of uncollectible amounts ( 426 ) — ( 71 ) ( 497 ) Balance at December 31, 2023 $ 1,135 $ — $ 2,184 $ 3,319 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, 2023, 2022 and 2021, the Company had appr oximately $ 9,246 , $ 7,685 and $ 6,890 , 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 17). Accrued expenses – Accrued expenses consisted of the following: December 31, 2023 2022 Accrued compensation $ 4,798 $ 4,611 Contingent consideration from acquisitions, current portion 1,564 2,203 Sales tax accruals 1,642 3,186 Legal accruals 1,343 464 Other accruals 4,741 1,831 Total accrued expenses $ 14,088 $ 12,295 Other current liabilities – Other current liabilities consisted of the following: December 31, 2023 2022 Lease liabilities, short-term $ 9,109 $ 3,786 Promissory note, current portion 3,345 — Tax receivable agreement liability, current portion 2,892 1,163 Other current liabilities 4,320 4,316 Total other current liabilities $ 19,666 $ 9,265 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 approximate 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 may 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 net income (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding for the period. Shares of Class B common stock do not share in the earnings o |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Note 3 – Acquisitions and Dispositions The Company completed the following acquisitions and dispositions which contain Level 3 fair value measurements related to the recognition of goodwill and intangibles. Studios On June 5, 2023 , the Company entered into an Asset Purchase Agreement to purchase 14 studios to operate as company-owned transition studios from the original founder sellers of the Rumble brand, which was acquired by the Company in 2021, (the “Rumble Sellers”) and were franchisees and shareholders of the Company. This acquisition is expected to enhance the operational performance of the 14 Rumble studios as the Company prepares them to be licensed to new franchisees. 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 also entered into a mutual termination agreement with the Rumble Sellers to terminate their existing franchise agreements, resulting in cash received and a gain of $ 3,500 , which is included within selling, general and administrative expenses. Under the Asset Purchase Agreement, consideration for the acquisition included $ 1 , which was recorded as a reduction to receivable from shareholder. The Company also agreed to assume liabilities aggregating $ 1,450 , which is expected to be reimbursed to the Company upon the sale of XPO Inc. common stock owned by the Rumble Sellers. In connection with the transaction, the Company wrote down intangible assets related to franchise agreements, net of reacquired franchise rights, in the amount of $ 7,238 (see Note 7). The Company determined the estimated fair values assigned to assets acquired and liabilities assumed after review and consideration of relevant information as of the acquisition date. The fair values are based on management's estimates and assumptions, which include Level 3 unobservable inputs, and are determined using generally accepted valuation techniques. The following summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Amount Accounts receivable $ 154 Inventories 98 Property and equipment 1,113 Right-of-use assets 42,016 Goodwill 4,133 Deferred revenue ( 3,269 ) Lease liabilities ( 44,244 ) Reduction to receivable from shareholder $ 1 The resulting goodwill is primarily attributable to synergies from the integration of studios, increased expansion for market opportunities and the expansion of studio membership and is expected to be tax deductible. The fair value of the property and equipment was based on the replacement cost method. The fair value of the right of use assets was determined using the income approach. The deferred revenue represents prepaid classes and class packages. The Company will recognize revenue over time as the members attend and utilize the classes. The fair value of the reacquired franchise rights after termination of the existing franchise agreements was based on the excess earnings method and is considered to have an eight-year life. The acquisition was not material to the results of operations of the Company. During the year ended December 31, 2023 , the Company entered into an agreement with a franchisee under which the Company repurchased one studio to operate as a company-owned transition studio. The purchase price for the acquisition was $ 164 , less $ 8 of net deferred revenue and deferred costs resulting in total purchase consideration of $ 156 . The following summarizes the aggregate fair values of the assets acquired and liabilities assumed: Amount Property and equipment $ 19 Reacquired franchise rights 137 Total purchase price $ 156 The fair value of reacquired franchise rights was based on the excess earnings method and is considered to have an approximate six-year life. The acquisition was not material to the results of operations of the Company. During the years ended December 31, 2023, 2022 and 2021, the Company refranchised operations a t 79 , 21 , and 53 company-owned transition studios, respectively, received proceeds o f $ 60 , $ 0 , and $ 433 respectively, and recorded a net loss of $ 635 , $ 0 , and $ 483 on disposal of the studio assets, respectively. During the years ended December 31, 2023, 2022 and 2021, the Company also ceased operations at 22 , 0 , and 0 company-owned transition studios, respectively. The Company is actively seeking to refranchise or close company-owned transition studios under its restructuring plan that started in the third quarter of 2023. See Note 18 for further discussion of the Company's restructuring plan. 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. On December 31, 2023, the Company entered into agreements to sell six Rumble company-owned transition studios (the “Rumble Held for Sale Studios”). The transactions are expected to close during the first quarter of 2024. These agreements triggered the reclassification of Rumble Held for Sale Studios to assets held for sale. Based on the expected net sales proceeds the Company determined the Rumble Held for Sale Studios to be fully impaired and recognized an impairment of $ 2,190 , within impairment of goodwill and other assets, for studio assets during the year ended December 31, 2023, consisting of property and equipment of $ 985 and reacquired franchise assets of $ 1,205 . See Note 7 for discussion of goodwill impairment related to the Rumble Held for Sale Studios. During the years ended December 31, 2022 and 2021, included within impairment of goodwill and other assets, the Company recorded $ 0 and $ 781 of impairment charges related to studio assets, respectively, which is a Level 3 measurement. See Note 9 for discussion of impairment charges related to right-of-use assets during the year ended December 31, 2023. Xponential Procurement Services Acquisition On December 29, 2023 , the Company entered into a Membership Interest Purchase Agreement with C&R Components, LLC (the “Seller” ) whereby the Company acquired 100 % of the membership rights in Xponential Procurement Services, LLC ( “XPS” ) from the Seller. The aggregate purchase consideration for the acquisition was $ 9,930 . The purchase price consisted of cash consideration of $ 3,467 and a promissory note with a fair value of $ 6,463 payable in two equal installments due on July 1, 2024 and July 1, 2025. The current portion of the promissory note is included in other current liabilities and the non-current portion is included in other liabilities in the Company’s consolidated balance sheets. XPS specializes in the custom manufacturing of display cases, engraved wood signs, point of sale displays, custom acrylic panels, and other products. Prior to the acquisition, the Company was XPS's sole customer. The acquisition contributes to the Company’s vertical integration of its product offerings to its franchisees. 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 acquisition was not material to the results of operations of the Company. The following summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Inventory $ 237 Property and equipment 10 Goodwill 8,507 Intellectual property 671 Other intangible assets 560 Total assets acquired 9,985 Accounts payable and accrued expenses 55 Net assets acquired $ 9,930 The goodwill recognized in this acquisition was attributable to the synergies that the Company expects to achieve. Goodwill and intangible assets recognized from this acquisition are expected to be tax deductible. 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 1 0-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, 2023. 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. The aggregate amount of such payments 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 . 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 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. The Company believes the likelihood of a cancellation fee payment being required is remote as of December 31, 2023, and, therefore, no accrual has been recorded. At the acquisition date, there were certain claims and lawsuits against the Seller for which the Company agreed to indemnify the Seller. 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). 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. 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. During the years ended December 31, 2023, 2022 and 2021 , the Company incurred $ 969 , $ 0 and $ 978 , respectively, of transaction costs related to acquisitions, which is included in acquisition and transaction expenses in the consolidated statements of operations. Pro forma financial information and revenue from the date of acquisition have not been provided for these acquisitions as they are not material either individually or in the aggregate. |
Contract Liabilities and Costs
Contract Liabilities and Costs from Contracts with Customers | 12 Months Ended |
Dec. 31, 2023 | |
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 de velopment and brand fee contract liabilities for the years ended December 31, 2023, 2022 and 2021 . Other deferred revenue amounts of $ 22,277 an d $ 18,576 f or the years ended December 31, 2023 and 2022 , 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, 2021 $ 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 Revenue recognized that was included in deferred ( 16,435 ) ( 4,250 ) ( 20,685 ) Deferred revenue recorded as settlement in ( 1,278 ) — ( 1,278 ) Increase, excluding amounts recognized as revenue 28,631 149 28,780 Balance at December 31, 2023 $ 127,162 $ 2,540 $ 129,702 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, 2023. 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 2024 $ 10,685 $ 1,712 $ 12,397 2025 11,232 414 11,646 2026 12,534 414 12,948 2027 13,347 13,347 2028 13,316 — 13,316 Thereafter 66,048 — 66,048 $ 127,162 $ 2,540 $ 129,702 The following table reflects the components of deferred revenue: December 31, 2023 2022 Franchise and area development fees $ 127,162 $ 116,244 Brand fees 2,540 6,641 Equipment and other 22,277 18,576 Total deferred revenue 151,979 141,461 Non-current portion of deferred revenue 117,305 109,465 Current portion of deferred revenue $ 34,674 $ 31,996 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, 2023 and 2022 , there were approximately $ 4,126 and $ 3,589 of current deferred costs and approximately $ 46,221 and $ 43,445 in non-current deferred costs, respectively. The Company recognized approximately $ 7,327 , $ 11,049 and $ 6,006 in franchise sales commission expense for the years ended December 31, 2023, 2022 and 2021 , respectively. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2023 | |
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 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, 2023 and 2022 , the principal balance of the notes receivable was approximately $ 3,189 and $ 3,306 , 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. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment Property and equipment consisted of the following: December 31, 2023 2022 Furniture and equipment $ 4,258 $ 4,182 Computers and software 20,231 14,075 Vehicles 635 171 Leasehold improvements 7,434 7,533 Construction in progress 2,505 3,115 Less: accumulated depreciation ( 15,561 ) ( 10,552 ) Total property and equipment $ 19,502 $ 18,524 Depreciation expense for the years ended December 31, 2023, 2022 and 2021 was $ 5,560 , $ 3,931 and $ 3,002 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
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. During the year ended December 31, 2023, there was an increase of $ 12,641 in previously reported goodwill due to the acquisition of 14 Rumble studios and the acquisition of XPS as discussed in Note 3. The carrying value of goodwill at December 31, 2023 and 2022 , totaled $ 171,601 and $ 165,697 , respectively. Cumulative goodwill impairment was $ 10,113 and $ 3,376 at December 31, 2023 and 2022, respectively. The impairment charges are included within impairment of goodwill and other assets in the Company's consolidated statements of operations. As discussed in Note 3, the Company determined that the Rumble Held for Sale Studios were considered assets held for sale as of December 31, 2023. Accordingly, based on a relative fair value allocation, the Company reclassified $ 2,568 of goodwill related to the Company’s Rumble brand to assets held for sale. Based on the expected net sales proceeds from the Rumble Held for Sale Studios transaction the Company immediately recorded an impairment of the goodwill reclassified to assets held for sale in the amount of $ 2,568 . During the quarter ended September 30, 2023, the Company determined it was necessary to re-evaluate goodwill of the Stride and Row House reporting units for impairment due to indicators of potential impairment resulting from a decline in forecasted and actual cash flows. Therefore, the Company performed a quantitative assessment of the fair value of the reporting units using an income approach with assumptions that are considered Level 3 inputs and concluded that the carrying value of the Stride and Row House reporting units exceeded their fair value, resulting in a goodwill impairment of $ 3,469 and $ 700 , respectively, resulting in no goodwill remaining for the Stride and Row House reporting units. The fair value of the reporting units was determined by discounting estimated future cash flows, which were calculated based on revenue and expense long-term growth assumptions ranging from 8.0 % to 43.0 %, at a weighted average cost of capital (discount rate) of 16.0 %. In addition, the Company determined that the franchise agreements intangible assets and trademarks related to Stride and Row House were also impaired and recognized an aggregate impairment loss of $ 230 for the franchise agreements and an aggregate impairment loss of $ 180 for the trademarks in the third quarter of 2023. 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 declines 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, 2023 December 31, 2022 Amortization Gross Accumulated Net Gross Accumulated Net Trademarks 10 $ 20,710 $ ( 4,487 ) $ 16,223 21,110 ( 2,606 ) $ 18,504 Franchise agreements 7.5 – 10 57,700 ( 29,990 ) 27,710 69,100 ( 25,143 ) 43,957 Reacquired franchise rights 6.2 137 ( 13 ) 124 — — — Intellectual property 5 671 — 671 — — — Web design and domain 3 – 10 430 ( 307 ) 123 430 ( 196 ) 234 Deferred video production costs 3 5,829 ( 3,698 ) 2,131 4,046 ( 2,173 ) 1,873 Other intangible assets 1 560 — 560 — — — Total definite-lived intangible assets 86,037 ( 38,495 ) 47,542 94,686 ( 30,118 ) 64,568 Indefinite-lived intangible assets: Trademarks N/A 72,607 — 72,607 72,607 — 72,607 Total intangible assets $ 158,644 $ ( 38,495 ) $ 120,149 $ 167,293 $ ( 30,118 ) $ 137,175 Amortization expense for the years ended December 31, 2023, 2022 and 2021 was $ 11,323 , $ 11,384 and $ 7,170 , respectively. During the year ended December 31, 2023, the Company recorded a write down of franchise agreem ents, net of reacquired franchise rights, in the amount of $ 7,238 in connection with the acquisition of 14 Rumble studios and a write down of reacquired franchise rights in the amount of $ 1,205 in connection with the Rumble Held for Sale Studios, as discussed in Note 3, which are included within impairment of goodwill and other assets. The anticipated future amortization expense of intangible assets is as follows: Year ending December 31, 2024 $ 11,110 2025 9,810 2026 6,672 2027 5,259 2028 5,112 Thereafter 9,579 Total $ 47,542 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 – Debt 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”) maturing on February 28, 2025 . 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 term secured overnight financing rate (“Term SOFR”) plus a Term SOFR Adjustment (as defined in the Credit Agreement per the fifth amendment discussed below), plus a margin of 6.50 % or (b) the Reference Rate (as defined in the Credit Agreement) plus a margin of 5.50 % ( 12.14 % at December 31, 2023). 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 SOFR 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, 2023, 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 Company's previous credit facility aggregating $ 195,633 (including a prepayment penalty of approximately $ 1,929 , which is included in interest expense for the year ended December 31, 2021) and for working capital and other corporate purposes. Principal payments of the Term Loan were initially $ 530 and 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 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 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. On January 9, 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 , with an original issuance discount of $ 3,900 , (the “January 2023 Incremental Term Loan”), the proceeds of which were used to fund the repurchase of a portion of our outstanding Convertible Preferred (the “Repurchase Transactions” ) and the payment of fees, costs and expenses related to the Amendment and the Repurchase Transactions (see Note 11). The Fourth Amendment also (i) increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the January 2023 Incremental Term Loan) to $ 1,065 commencing on June 30, 2023 and (ii) amended the amount of the prepayment premium applicable in the event the January 2023 Incremental Term Loan is prepaid. In connection with the Fourth Amendment, the Company wrote off a pro rata portion of debt issuance costs related to the Term Loans aggregating $ 265 , which was included in interest expense for year ended December 31, 2023. On August 3, 2023, the Company entered into a fifth amendment (the “Fifth Amendment” ) to the Credit Agreement. The Fifth Amendment provides for, among other things, additional Term Loans in an aggregate principal amount of $ 65,000 , with an original issuance discount of $ 1,950 , (the “August 2023 Incremental Term Loan” ), the proceeds of which were used for funding the accelerated share repurchase program (see Note 12); the payment of fees, costs and expenses related to the Fifth Amendment; and general corporate purposes. The Fifth Amendment also (i) increased the amount of the quarterly principal payments of the loans provided pursuant to the Credit Agreement (including the August 2023 Incremental Term Loan) to $ 1,190 commencing on September 30, 2023 and (ii) replaces the benchmark interest rate based on the LIBOR rate (and related LIBOR-based mechanics) applicable to the loans under the Credit Agreement with a benchmark interest rate based on the forward-looking Term SOFR (and related Term SOFR-based mechanics). In connection with the Fifth Amendment, the Company wrote off a pro rata portion of debt issuance costs related to the Term Loans aggregating $ 84 , which was included in interest expense for year ended December 31, 2023. 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 $ 411 , $ 55 and $ 996 for the years ended December 31, 2023, 2022 and 2021, respectively. Debt issuance cost amortization and write off amounted to $ 463 , $ 126 and $ 5,749 for the years ended December 31, 2023, 2022 and 2021, respectively. Unamortized debt issuance costs as of December 31, 2023 and 2022, were $ 218 and $ 270 , respectively, and are presented as a reduction to long-term debt in the consolidated bal ance sheets. Unamortized original issue discount as of December 31, 2023 and 2022 , was $ 4,279 and $ 1,378 , respectively, and is 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, 2023 were as follows: Year ending December 31, Amount 2024 $ 4,760 2025 323,758 Total $ 328,518 The carrying value of the Company’s long-term debt approximated fair value as of December 31, 2023 and 2022 , 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, 2023 | |
Leases [Abstract] | |
Leases | Note 9 – Leases The Company leases office space, company-owned transition studios, warehouse, training centers and a video recording studio. ROU assets from operating leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present. ASC 360 requires three steps to identify, recognize and measure impairment. If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount. If the undiscounted cash flows used in the recoverability test are less than the carrying amount, the Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3). When determining the fair value of the ROU asset, the Company estimated what market participants would pay to lease the assets assuming the highest and best use in the assets' current forms. During the year ended December 31, 2023, the Company recognized ROU asset impairment charges of $ 92 , related to studio exits in conjunction with its restructuring plan (see Note 18). The impairment charges were recorded within impairment of goodwill and other assets in the consolidated statements of operations. There were no ROU asset impairment charges during the year ended December 31, 2022. Supplemental balance sheet information related to leases are summarized as follows: Operating leases Balance Sheet Location December 31, 2023 December 31, 2022 ROU assets, net (1) Right-of-use assets $ 71,413 $ 30,079 Lease liabilities, short-term Other current liabilities $ 9,109 $ 3,786 Lease liabilities, long-term Lease liability $ 70,141 $ 30,583 (1) For December 31, 2023, includes impact of write off of abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. Components of lease expense during the years ended December 31, 2023 and 2022, are summarized as follows: December 31, 2023 December 31, 2022 Amount Related-party lease Third-party leases Total Operating lease costs (1) $ 20,822 $ 239 $ 4,666 $ 4,905 Variable lease costs 1,699 — 856 856 Short-term lease costs — — 108 108 Total $ 22,521 $ 239 $ 5,630 $ 5,869 (1) For the year ended December 31, 2023, includes impact of accelerated expense on abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. 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. Rent expense was $ 5,651 for the year ended December 31, 2021. Supplemental cash flow information related to operating leases during the years ended December 31, 2023 and 2022, are summarized as follows: Years Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 14,525 $ 4,717 Lease liabilities arising from new ROU assets $ 70,455 $ 20,966 Other information related to leases for the years ended December 31, 2023 and 2022, are summarized as follows: Years Ended December 31, 2023 2022 Weighted average remaining lease term (years) 6.7 7.5 Weighted average discount rate 8.4 % 8.8 % Maturities of lease liabilities as of December 31, 2023 are summarized as follows: Amount 2024 $ 16,809 2025 16,253 2026 16,444 2027 15,704 2028 13,269 Thereafter 30,228 Total future lease payments 108,707 Less: imputed interest 29,457 Total $ 79,250 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions The Company had numerous transactions with the pre-IPO Member and pre-IPO Parent and its affiliates. The significant related party transactions consisted of borrowings from and payments to the Member and other related parties that were 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, 2023, 2022 and 2021 , the Company recorded approximately $ 0 , $ 0 and $ 462 , 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. 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 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 2023 and 2022, the Rumble Sellers borrowed an additional $ 4,400 and $ 5,050 , respectively, under the debt financing agreement which was recorded as receivable from shareholder within equity. During the year ended December 31, 2023 , the Company recorded $ 1,270 of interest in kind, which was recorded as an increase to receivable from shareholder within equity. During the year ended December 31, 2023 , the Company received $ 8,062 cash as partial payment for the receivable from shareholder. 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, 2023, 2022 and 2021 , the Company recorded expense related to this lease of $ 0 , $ 239 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 the issuance of 105 restricted stock units ( “RSU” ) which vest in full 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. As of December 31, 2023 , the former owner of Row House borrowed $ 320 , which was recorded as a reduction to liability. In March 2023, Spartan Fitness Holdings, LLC (“Spartan Fitness”), which currently owns and operates 78 Club Pilates studios, entered into a unit purchase agreement with Snapdragon Spartan Investco LP (the “Spartan SPV”), a special purpose vehicle controlled and managed by a member of the Company’s board of directors, pursuant to which Spartan SPV agreed to invest in the equity of Spartan Fitness. In addition, the same member of the Company’s board of directors also invested as a limited partner in the Spartan SPV. Spartan Fitness intends to use the investment from Spartan SPV to fund expansion of Club Pilates studios, among other concepts. Spartan Fitness also owns the rights to 89 Club Pilates licenses to open additional new units. The Company recorded franchise, equipment and marketing fund revenue aggregating $ 6,389 during the year ended December 31, 2023 from studios owned by Spartan Fitness. The Company earns revenues and has accounts receivable from a franchisee who is also a part of senior management of the Company. Revenues from this affiliate, primarily related to franchise revenue, marketing fund revenue, package and memberships revenue and merchandise revenue, were $ 506 , $ 577 and $ 507 for the years ended December 31, 2023, 2022 and 2021, respectively. Included in accounts receivable as of December 31, 2023 and 2022 , is $ 2 an d $ 4 , respectively, for such sales. The Company provided $ 120 of studio support during the year ended December 31, 2023 to this franchisee. In August 2023, the Company received payments from an officer and a director of the Company totaling $ 516 related to disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company recognized these proceeds as a capital contribution from stockholders and the amounts were recorded as increases to additional paid-in capital on the consolidated balance sheets. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
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 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 shares of Convertible Preferred 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 Paid-in-Kind rate of 7.50 %. The Convertible Preferred has an initial conversion price equal to $ 14.40 per share, is mandatorily convertible in certain circumstances, and is 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 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 was immaterial upon issuance and as of December 31, 2023. 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 any of the lenders party to the Credit Agreement 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. On January 9, 2023, pursuant to a preferred stock repurchase agreement (the “Repurchase Agreement”) between the Company and certain holders of the Convertible Preferred, the Company repurchased 85 shares of Convertible Preferred for an aggregate payment of $ 130,766 . The excess of fair market value of $ 12,679 over the consideration transferred was treated as deemed contribution and resulted in a decrease to accumulated deficit and was included in the calculation of earnings (loss) per share. At December 31, 2023 and 2022, the Company recognized the preferred maximum redemption value of $ 114,660 and $ 308,075 , 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 115 and 200 outstanding shares of Convertible Preferred at December 31, 2023 and December 31, 2022, respectively). In 2023, the recording of the preferred maximum redemption value was treated as deemed contribution, which was included in the calculation of earnings (loss) per share and resulted in a net increase of $ 49,970 to additional paid-in capital as of December 31, 2023. In 2022, the recording of the preferred maximum redemption value was treated as deemed dividend, which was not included in the calculation of earnings (loss) per share, and resulted in a net decrease of $ 31,185 to additional paid-in capital as of December 31, 2022 (see Note 15). |
Member's_Stockholder's Equity (
Member's/Stockholder's Equity (Deficit) | 12 Months Ended |
Dec. 31, 2023 | |
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 . 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. 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 an aggregate of 5,000 shares of Class A common stock in a secondary public offering at a public offering 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 fully 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 shares of Class B common stock 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. Additionally, during the years ended December 31, 2023 and 2022 , pursuant to the Amended Limited Liability Company Agreement of XPO Holdings (“Amended LLC Agreement”), certain Continuing Pre-IPO LLC Members exchanged their LLC units for 1,620 and 607 shares of Class A common stock on a one-for-one basis, respectively. 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 of XPO Holdings, removing the redemption option in cash, except to the extent that 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 2023 and 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, 2023: Owner Units Owned Ownership percentage XPO Inc. 30,897 65.1 % Noncontrolling interests 16,566 34.9 % Total 47,463 100.0 % Accelerated Share Repurchase program – On August 1, 2023, the Company's board of directors approved a $ 50,000 accelerated share repurchase program (the “ASR Program” ) to repurchase shares of the Company's Class A common stock. The Company accounted for the ASR Program as two separate transactions, a repurchase of the Company’s Class A common stock and an equity-linked contract indexed to the Company’s Class A common stock that met certain accounting criteria for classification in stockholders' equity. Under the ASR Program, the Company paid a fixed amount of $ 50,000 on August 9, 2023, to a third-party financial institution and received an initial delivery of 2,010 shares of the Company’s Class A common stock, which were retired immediately. The initial delivery of shares of the Company’s Class A common stock represented approximately 80 % of the fixed amount paid of $ 50,000 , which was based on the share price of the Company's Class A common stock on the date of ASR Program execution. On October 2, 2023, the final settlement of the Company's ASR Program occurred, and the Company received an additional 589 shares of the Company's Class A common stock from the third-party financial institution. The payment of $ 50,000 was recorded as reductions to stockholders' equity, consisting of a $ 40,000 decrease in additional paid-in capital, which reflects the value of the initial shares received and immediately retired, and a $ 10,000 decrease in additional paid-in capital, which reflects the value of the Class A common stock that was delivered by the financial institution upon final settlement. Under the ASR Program, the Company also incurred $ 439 in associated costs, consisting primarily of legal fees and a 1 % excise tax, which were recorded as a decrease in additional paid-in capital on the Company’s consolidated statements of stockholders’ equity. In total under the ASR Program, the Company repurchased and immediately retired 2,599 shares of Class A common stock. The final number of shares received by the Company was based on the daily volume-weighted average stock price of the Company’s Class A common stock during the duration of the ASR Program, less a discount and adjustments pursuant to the terms and conditions of the ASR Program agreement. |
Equity Compensation
Equity Compensation | 12 Months Ended |
Dec. 31, 2023 | |
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. Stock-based compensation related to profit interest units increases noncontrolling interests. 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 amendment. 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 ) and was calculated using a Black-Scholes option-pricing model with the following assumptions: Year ended December 31, 2021 Risk free interest rate 0.05 % – 0.16 % Weighted average volatility 47.3 % Dividend yield — % Expected terms (in years) (1) 0.86 (1) The Company had 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, 2023, 2022 and 2021 , the Company recognized $ 19 , $ 190 and $ 906 of compensation expenses, respectively, which was included within selling, general and administration expenses. At December 31, 2023 , the Company had $ 3 of unrecognized compensation expense. The unrecognized compensation expense is expected to be recognized over a weighted average period of approximately 0.61 years for the time-based grants. The following table summarizes activity for profit interest units for the years ended December 31, 2023, 2022 and 2021: Performance-based profit interests Time-based profit interests Number of units Number of units Outstanding at January 1, 2021 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 Issued — — Vested — ( 12 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2023 — 1 Expected to vest — 1 Phantom stock – Club Pilates issued 14 phantom stock units 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 year ended December 31, 2021 related to the phantom stock units as vesting was not considered probable. During the year ended December 31, 2021 the 14 phantom stock units issued by Club Pilates were cancelled. Liability classified restricted stock units – In November 2021, the Company granted 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. Management performs a regular assessment to determine the likelihood of meeting the targets and adjusts the expense recognized if necessary. During the first quarter of 2023, the performance condition of an award with a total fixed dollar value of $ 2,250 was met and 101 units were earned and issued as shares. During the fourth quarter of 2023, the Company determined that it is no longer probable that the EBITDA targets will be achieved for the remaining RSU awards granted in November 2021. Accordingly, the Company reversed $ 3,360 of previously recognized stock-based compensation expense including $ 1,332 recognized in 2023 through the quarter ended September 30, 2023. During the years ended December 31, 2023, 2022 and 2021 , the Company recognized ($ 2,028 ), $ 3,926 , and $ 352 of expense (benefit), respectively. Equity classified restricted stock units – 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, 2023 , there were 3,644 shares available for future grants under the 2021 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 year ended December 31, 2023: Shares Weighted Average Outstanding at January 1, 2023 2,102 $ 18.25 Issued 571 $ 21.60 Vested ( 1,016 ) $ 17.58 Forfeited, expired, or canceled ( 70 ) $ 20.05 Outstanding at December 31, 2023 1,587 $ 18.27 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. For the years ended December 31, 2023, 2022 and 2021, the weighted average grant-date fair value per share of RSUs granted was $ 21.60 , $ 19.82 and $ 13.76 , respectively. The total fair value of RSUs vested during the years ended December 31, 2023, 2022 and 2021 was $ 17,858 , $ 6,635 and $ 0 , respectively. During 2022, 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. During 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. During the first quarter of 2023, 36 performance-based RSUs were earned and issued as shares. During 2023, an additional 7 performance-based RSUs were cancelled or forfeited. As of December 31, 2023, the achievement of remaining performance metrics is considered probable. Total compensation expense recognized for RSUs was $ 20,006 , $ 12,925, and $ 2,372 for the years ended December 31, 2023, 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 years ended December 31, 2023 and 2022 , the Company recognized income tax benefits of $ 1,049 and $ 445 on vested RSUs, respectively. Included in the total compensation for RSUs described above, the Company recorded $ 2,489 of stock-based compensation for the year ended December 31, 2023, related to a stock-based incentive bonus plan that the Company plans to settle by issuing fully-vested restricted stock units to employees. The $ 2,489 recorded for the year ended December 31, 2023 is for the eligible employees included in the Company’s 2023 annual bonus plan and is expected to be settled during the first quarter of 2024. At December 31, 2023 , the Company had $ 23,211 of total unamortized compensation expense related to non-vested RSUs. That cost is expected to be recognized over a weighted-average period of 2.22 years. |
Income Taxes and Tax Receivable
Income Taxes and Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2023 | |
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 65.1 % economic interest in XPO Holdings. Income (loss) before income taxes is as follows for the years ended December 31: 2023 2022 2021 U.S. income (loss) before income taxes $ ( 736 ) $ 3,421 $ ( 50,599 ) Foreign income (loss) before income taxes 94 ( 20 ) ( 58 ) Income (loss) before income taxes $ ( 642 ) $ 3,401 $ ( 50,657 ) Income tax expense (benefit) consists of the following for the years ended December 31: 2023 2022 2021 Current tax expense (benefit): Federal $ 359 $ ( 142 ) $ 322 State 509 450 274 Foreign 160 262 187 Total current tax expense (benefit) 1,028 570 783 Deferred tax expense (benefit): Federal 30 ( 31 ) — State 8 ( 8 ) — Foreign 5 ( 5 ) — Total deferred tax expense (benefit) 43 ( 44 ) — Income tax expense $ 1,071 $ 526 $ 783 A reconciliation between the Company's effective tax rate and the applicable U.S. federal statutory income tax rate is as follows for the years ended December 31: 2023 2022 2021 Tax computed at federal statutory rate 21.0 % 21.0 % 21.0 % State tax, net of federal tax benefit 53.1 % 3.0 % ( 0.1 )% Non-controlling interests ( 144.1 )% ( 31.1 )% ( 2.1 )% Income (loss) from pass-through entities — % — % ( 5.3 )% Permanent items 13.3 % — % ( 1.5 )% TRA liability ( 27.5 )% ( 3.6 )% — % Executive compensation ( 148.3 )% 3.8 % — % Contingent consideration 647.8 % 45.4 % ( 10.4 )% Preferred stock dividend — % — % ( 1.5 )% State rate differential ( 186.2 )% 22.5 % — % Other 21.1 % 5.7 % ( 0.0 )% Valuation allowance ( 417.0 )% ( 51.2 )% ( 1.6 )% Effective tax rate ( 166.8 )% 15.5 % ( 1.6 )% Deferred 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: 2023 2022 Deferred tax assets: Investment in partnership $ 28,535 $ 40,827 Net operating losses 23,056 26,361 Tax receivable agreement 930 332 Interest expense 7,681 3,265 Deferred revenue 1,443 1,383 Other 311 279 Total deferred tax assets 61,956 72,447 Valuation allowance for deferred tax assets ( 61,924 ) ( 72,403 ) Total deferred tax assets, net of valuation allowance 32 44 Deferred tax liabilities: Property and equipment and intangible assets ( 12 ) — Other ( 20 ) — Total deferred tax liabilities ( 32 ) — 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, 2023 and 2022 , a valuation allowance of $ 61,924 and $ 72,403 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, 2023, the Company had federal and state net operating loss carryforwards of $ 92,378 and $ 67,308 , respectively. Of the total federal net operating losses, approximately $ 92,267 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 2036 and 2035 , respectively, unless previously utilized by the Company. As of December 31, 2023 , the Company has foreign tax credits of $ 278 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 2020 through 2023. The Company's foreign subsidiaries are generally subject to examination four 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 did no t have any unrecognized tax benefits as of December 31, 2023, and 2022. Accordingly, no interest and penalties related to unrecognized tax benefits were accrued on the consolidated balance sheets as of December 31, 2023 and 2022. Additionally, the Company did no t recognize any income tax expense related to interest and penalties on uncertain tax positions in the consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021. 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 (or a replacement rate) 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, 2023 , 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 $ 2,892 and $ 1,103 of the current and non-current portions of the TRA, respectively, $ 78,327 of the TRA liability was not recorded as of December 31, 2023 . 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, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 15 – Earnings (Loss) Per Share For the years ended December 31, 2023 and 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. There were no shares of Class A or Class B common stock outstanding prior to July 23, 2021. Diluted earnings (loss) per share of Class A common stock has been 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. 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 exists 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 (loss) per share attributable to common stockholders adjusts the basic earnings or losses 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 17,026 shares, 22,146 shares and 23,084 shares for t he years ended December 31, 2023, 2022 and 2021, respectively. The potentially dilutive impact of restricted stock units is calculated using the treasury stock method. The following table presents the calculation of basic earnings (loss) per share and diluted earnings (loss) per share of Class A common stock: Years Ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ ( 1,713 ) $ 2,875 $ ( 51,440 ) Less: net (income) loss attributable to noncontrolling interests ( 15,765 ) 19,284 78,417 Less: dividends on preferred shares ( 7,652 ) ( 13,000 ) ( 5,742 ) Less: deemed contribution (dividend) 49,970 ( 31,185 ) ( 84,994 ) Add: deemed contribution from redemption of convertible preferred stock 12,679 - - Net income (loss) attributable to XPO Inc. - basic $ 37,519 $ ( 22,026 ) $ ( 63,759 ) Add: dividends on preferred shares 7,652 - - Less: deemed (contribution) dividend ( 49,970 ) - - Less: deemed contribution from redemption of convertible preferred stock ( 12,679 ) - - Net income (loss) attributable to XPO Inc. - diluted $ ( 17,478 ) $ ( 22,026 ) $ ( 63,759 ) Denominator: Weighted average shares of Class A common stock outstanding - basic 31,742 25,295 22,403 Effect of dilutive securities: Convertible preferred stock 7,963 - - Weighted average shares of Class A common stock outstanding - diluted 39,705 25,295 22,403 Net earnings (loss) per share attributable to Class A common stock - basic $ 1.18 $ ( 0.87 ) $ ( 2.85 ) Net earnings (loss) per share attributable to Class A common stock - diluted $ ( 0.44 ) $ ( 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 1,477 2,102 1,123 Convertible preferred stock - 13,889 13,889 Conversion of Class B common stock to Class A common stock 16,491 21,572 22,969 Treasury share options 75 75 - Rumble contingent shares 2,024 2,024 2,024 Profits interests, time vesting 1 14 74 Profits interests, performance vesting - - 1,935 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023, 2022 and 2021, the Company recorded expense for matching contributions to the 401(k) Plan of $ 739 , $ 481 and $ 483 , respectively. |
Contingencies and Litigation
Contingencies and Litigation | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Note 17 – Contingencies and Litigation Litigation – 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 related to alleged patent and trademark infringements. Plaintiff alleged that plaintiff had suffered, and was likely to continue to suffer, loss and damage due to breach of the patents by the seller and was seeking damages or in the alternative an account of profits. The seller had filed a cross-claim alleging that the defendant’s two Australian patents were, and always had 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, plaintiff had brought related claims for patent infringement against the seller in the United States District Court for Delaware. In November 2022, the Court ruled in favor of the seller on a motion for summary judgment. In April 2023, plaintiff dismissed their appeal of that ruling, concluding the matter. On November 22, 2023, former employees of a former franchisee of the Company filed a putative class action complaint in the United States District Court for the Southern District of Ohio, captioned Shannon McGill et al. v. Xponential Fitness LLC, et al., Case No. 2:23-cv-03909, against the Company, as well as against a former franchisee of the Company and the franchisee’s legal entity, MD Pro Fitness, LLC. The complaint alleges violations of the Fair Labor Standards Act, as well as employment laws from different states in connection with the franchisee’s owner-operated studio locations. The Company was served with the complaint on December 4, 2023. The Company intends to defend itself in this litigation. The Company recorded an accrual for estimated loss contingencies associated with this matter in an amount equal to $ 900 , which is included in accrued expenses in the consolidated balance sheets as of December 31, 2023, based on currently available information. The accrual does not reflect the Company’s views of the merits of claims in this action. On February 9, 2024, a federal securities class action lawsuit was filed against the Company and certain of the Company’s officers in the United States District Court for the Central District of California. The complaint alleges, among other things, violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder, alleging misstatements and/or omissions in certain of the Company’s financial statements, press releases, and SEC filings made during the putative class period of July 26, 2021 through December 7, 2023. The Company intends to defend itself against this action. At this stage, the Company is unable to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any. SEC investigation – On December 5, 2023 the Company was contacted by the Securities and Exchange Commission (the “SEC”), requesting that the Company provide it with certain information and documents. The Company intends to cooperate fully with the SEC in this matter. The Company has incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with matters relating to or arising from the SEC investigation. At this stage, the Company is unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss. 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 t o resolve legal disputes and recorded $ 443 an d $ 464 , which is included in accrued expenses in the consolidated balance sheets as of December 31, 2023 and 2022, 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 of additional contingent consideration as interest expense for the year ended December 31, 2021. 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. 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, in December 2022, the Company recorded a reduction to the contingent consideration liability of $ 1,220 with an offsetting increase in additional paid-in capital. 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, 2023, 2022 and 2021 , the Company recorded a decrease of $ 19,811 , an increase of $ 7,340 , and an increase of $ 25,100 to contingent consideration, respectively, which was recorded as acquisition and transaction expense (income). 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, 2023 and 2022 , contingent consideration totals $ 7,879 and $ 27,690 , 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 min imum 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. The aggregate amount of such payments 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, 2023, 2022 and 2021 , the Company recorded an increase of $ 1,042 , a decrease of $ 4,634 , and an increase of $ 130 of contingent consideration, respectively, which was recorded as interest expense of $ 164 , $ 646 , and $ 130 , and acquisition and transaction expense (income) of $ 878 , ($ 5,280 ), and $ 0 , respectively. In addition, during the years ended December 31, 2023 and 2022 , the Company paid $ 1,412 and $ 2,190 of contingent consideration, respectively. At December 31, 2023 and 2022 , contingent consideration was $ 1,564 and $ 2,203 recorded as accrued expenses, respectively, and $ 787 and $ 492 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 was not material, and as of December 31, 2023 and 2022 , $ 536 and $ 0 accrual has been recorded for the Company’s potential obligation under its guaranty arrangement, respectively. Lease guarantees – The Company has guaranteed lease agreements for certain franchisees. The Company’s maximum obligation, as a result of its guarantees of leases, is approximately $ 2,755 and $ 1,357 as of December 31, 2023 and 2022, 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, 2023 and 2022 , no accrual has been recorded for the Company’s potential obligation under its guaranty arrangement. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 18 – Restructuring In the third quarter of 2023, the Company began a restructuring plan that involves exiting company-owned transition studios and other measures designed to reduce costs to achieve the Company’s long-term margin goals and focus on pure franchise operations. The plan was approved and initiated in the third quarter of 2023 and is expected to continue throughout 2024, however ultimate timing will depend on lease termination negotiations. During the fourth quarter of 2023 the Company's restructuring plan was expanded due to the addition of Rumble company-owned transition studios to the restructuring plan and a refranchising plan that was terminated by the Company due to the refranchisor’s non-compliance with the franchise agreements, and the subsequent closure of certain studios. This refranchise termination resulted in the Company incurring losses for contract termination expenses, other expenses associated with exiting the studios, and loss contingencies related to the refranchisor’s unpaid payroll. The Company expects to recognize additional restructuring charges throughout 2024 totaling approximately $ 23,000 to $ 27,000 , for rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, lease termination gains or losses, and other variable lease costs related to company-owned transition studios and other restructuring charges. The Company is negotiating lease terminations for operating leases for certain studios for which the Company has lease liabilities recorded and the expected cash payments and expenses to exit the lease may be greater than expected rent expense for that period, depending on the outcome of lease termination negotiations. During the year ended December 31, 2023 , the Company recognized total restructuring charges of $ 13,787 , primarily for accelerated amortization of right-of-use assets, contract termination and other associated costs, loss on lease termination and sale or disposal of assets, and other restructuring charges. The components of the restructuring charges are as follows: Year Ended December 31, 2023 Impairment and accelerated amortization of right-of-use assets (2) $ 6,113 Contract termination and other associated costs (1) 4,102 Loss on lease termination and sale or disposal of assets, net (3)(4) 1,524 Other restructuring costs (1) 2,048 Total restructuring charges $ 13,787 (1) These charges are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. (2) Charges of $ 92 are recorded in impairment of goodwill and other assets and charges of $ 6,021 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. (3) Charges of $ 384 are recorded in cost of product revenues and charges of $ 1,140 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations . (4) Loss on lease termination and sale or disposal of assets represents net losses on studio lease terminations and sales or disposals of studio assets primarily related to studio property and equipment. Amount is net of $ 1,647 for gains on lease terminations related to leases for which the Company had recognized accelerated right-of-use asset amortization. The following table provides the components of and changes in the Company’s restructuring charges, included in accounts payable and accrued expenses on the consolidated balance sheets: December 31, 2023 Balance at December 31, 2022 $ — Charges incurred 8,707 Payments ( 6,525 ) Balance at December 31, 2023 $ 2,182 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 – Subsequent Events Lindora acquisition On December 1, 2023 , the Company entered into an agreement to acquire Lindora Franchise, LLC, a Delaware limited liability company, the franchisor of the “Lindora” wellness brand (the “Lindora Franchisor”), for cash consideration of $ 8,500 . The transaction also includes up to $ 1,000 of contingent consideration which is subject to the achievement of certain milestones. The Lindora Franchisor was a subsidiary of Lindora Wellness, Inc. Lindora Wellness, Inc. has owned and operated each of the Lindora Clinics in California for at least 25 years and currently owns and operates 30 Lindora Clinics in California and a single Lindora Clinic in the state of Washington. Immediately prior to the execution of the purchase agreement on December 1, 2023, Lindora Wellness, Inc. signed 31 franchise agreements with the Lindora Franchisor pursuant to which Lindora Wellness, Inc. will continue to operate its Lindora Clinics as a franchisee of the Lindora Franchisor . The acquisition of the Lindora Franchisor was completed on January 2, 2024. Lindora complements the Company's existing brands and will help the Company deliver on consumers’ increasing demand for a holistic approach to health. Due to the timing of the completion of the acquisition, the Company is currently unable to provide a preliminary purchase price allocation as of the date of this filing. Sixth amendment to Credit Agreement On February 13, 2024, the Company entered into a sixth amendment to the Credit Agreement. The amendment provides for, among other things, additional term loans in an aggregate principal amount of approximately $ 38,701 (the “Sixth Amendment Incremental Term Loans”), the proceeds of which will be used to repay an aggregate of $ 38,701 million in existing term loans under Credit Agreement and for the payment of fees, costs and expenses related to the making of the Sixth Amendment Incremental Term Loans. The Amendment also extends the maturity date for all outstanding term loans under the Credit Agreement to March 15, 2026. Divestiture of Stride brand On February 13, 2024, the Company entered into an asset purchase agreement with a buyer, pursuant to which the Company divested the Stride brand, including the intellectual property, franchise rights and franchise agreements for open studios. The buyer of the Stride brand is a member of management and stockholder of the Company. The Company received no consideration from the divestiture of the Stride brand and will assist the buyer with transition support including cash payments of approximately $ 265 payable over the next year. The divestiture allows the Company to better focus and utilize its resources on its other brands. The assets divested did not meet all criteria to be classified as assets held for sale as of the balance sheet date, and as such are not presented and disclosed as assets held for sale in the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
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. |
Reclassifications | Reclassifications – To conform with current year presentation, the Company has reclassified impairment charges of $ 3,656 and $ 781 from selling, general and administrative expenses to impairment of goodwill and other assets in the operating costs and expenses section of the consolidated statements of operations for the years ended December 31, 2022, and 2021, respectively. |
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, 2023, 2022 and 2021 , the Company generated $ 13,398 , $ 12,823 and $ 2,741 of revenue outside of the United States, respectively. As of December 31, 2023 and 2022 , 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. The Company's restricted cash consists of marketing fund restricted cash and guarantee of standby letter of credit. Restricted cash was $ 9,333 and $ 5,381 at December 31, 2023 and 2022 , 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, 2023 and 2022 , the Company had cash, cash equivalents and restricted cash that total $ 34,359 and $ 33,961 , 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 expected credit losses | Accounts receivable and allowance for expected credit losses – 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 expected credit losses 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. |
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. |
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, 2023, 2022 and 2021 were insignificant. |
Leases | 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. 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 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. The Company determines if an arrangement contains a lease at the inception of a contract. 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 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. Non-lease components primarily include payments for common area maintenance. |
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. When evaluating goodwill for impairment, the Company may decide to first perform a qualitative assessment, or “step zero” impairment test, 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 does not perform a qualitative assessment, or if the Company determines that it is not more likely than not that the fair value of its reporting units exceeds their carrying amounts, the Company performs a quantitative assessment and calculates the estimated fair value of the respective reporting unit. The Company generally determines the estimated fair value using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in the amount the carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. During the year ended December 31, 2023, the Company determined that the Stride and Row House reporting units had indicators of impairment based on a qualitative assessment and performed a quantitative assessmen t. As a result, the Company recognized an impairment loss to write-off the goodwill associated with the Stride and Row House reporting units. Additionally, the Company recorded a goodwill impairment related to the assets held for sale classification of the Rumble Held for Sale Studios, as defined below in Note 3. During the year ended December 31, 2022, the Company recognized an impairment loss to write-off the goodwill associated with the AKT reporting unit. For further discussion related to goodwill impairments, see Note 7. There were no impairments recorded for the year ended December 31, 2021. 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 impairments recorded for the years ended December 31, 2023, 2022 and 2021 . |
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 $ 8,853 , $ 280 and $ 118 were recorded for the years ended December 31, 2023, 2022 and 2021, respectively. Definite-lived intangible asset impairments during the year ended December 31, 2023, related to a) trademark and franchise agreements of the Stride and Row House reporting units for which the carrying value was deemed not recoverable in the amount of $ 410 , b) intangible assets related to franchise agreements, net of reacquired franchise rights, in the amount of $ 7,238 in connection with the acquisition of 14 Rumble studios as discussed below in Note 3, and c) impairment related to reacquired franchise rights in the amount of $ 1,205 in connection with the Rumble Held for Sale Studios, as defined and discussed further in Note 3. 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 (ten 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, 2023, 2022 and 2021. 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 – Effective January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, which required the recognition of expected credit losses for accounts and notes receivable. The adoption of the new standard did not have a material impact on the Company's consolidated financial statements as the expected credit loss model was not significantly different from the Company's prior policy and methodology for determining the allowance for doubtful accounts. The Company’s accounts and notes receivable are recorded at net realizable value, which includes an appropriate allowance for expected credit losses. The estimate of expected 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, 2021 $ 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 Bad debt expense recognized during the year 696 — 1,536 2,232 Write-off of uncollectible amounts ( 426 ) — ( 71 ) ( 497 ) Balance at December 31, 2023 $ 1,135 $ — $ 2,184 $ 3,319 |
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, 2023, 2022 and 2021, the Company had appr oximately $ 9,246 , $ 7,685 and $ 6,890 , 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 17). |
Accrued expenses | Accrued expenses – Accrued expenses consisted of the following: December 31, 2023 2022 Accrued compensation $ 4,798 $ 4,611 Contingent consideration from acquisitions, current portion 1,564 2,203 Sales tax accruals 1,642 3,186 Legal accruals 1,343 464 Other accruals 4,741 1,831 Total accrued expenses $ 14,088 $ 12,295 |
Other current liabilities | Other current liabilities – Other current liabilities consisted of the following: December 31, 2023 2022 Lease liabilities, short-term $ 9,109 $ 3,786 Promissory note, current portion 3,345 — Tax receivable agreement liability, current portion 2,892 1,163 Other current liabilities 4,320 4,316 Total other current liabilities $ 19,666 $ 9,265 |
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 approximate 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 may 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 net income (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding for the period. 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 potentially dilutive 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, in loss periods related amounts are excluded from the computation of diluted earnings per share of Class A common stock because the effect would be anti-dilutive under the if-converted and two-class methods. For further discussion, see Note 15. |
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 a) 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 b) 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 uncertain tax positions. The Company recognizes potential interest and penalties, if any, related to income tax matters in income tax expense. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements – Credit Losses – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326).” This standard provides a new model for recognizing credit losses on financial instruments based on an estimate of expected credit losses and applies to trade and notes receivables. The adoption of this accounting standard on January 1, 2023 did not have a material impact on the Company's consolidated financial statements as the expected credit loss model was not significantly different from the prior policy and methodology for determining the allowance for doubtful accounts. For additional information refer to the section above titled “Credit Losses.” 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”). 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 London Interbank Offered Rate (“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”). ASU 2022-06 defers the sunset date of ASC Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC Topic 848. ASU 2022-06 was effective upon issuance. The adoption of this accounting standard did 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” ). 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 a) the circumstances in which the acquirer should recognize contract assets and contract liabilities that are acquired in a business combination and b) 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, did not have an impact on the Company's consolidated financial statements. |
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. Segment Reporting – In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. Income Taxes Disclosures – In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2021 $ 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 Bad debt expense recognized during the year 696 — 1,536 2,232 Write-off of uncollectible amounts ( 426 ) — ( 71 ) ( 497 ) Balance at December 31, 2023 $ 1,135 $ — $ 2,184 $ 3,319 |
Summary of Accrued Expenses | Accrued expenses consisted of the following: December 31, 2023 2022 Accrued compensation $ 4,798 $ 4,611 Contingent consideration from acquisitions, current portion 1,564 2,203 Sales tax accruals 1,642 3,186 Legal accruals 1,343 464 Other accruals 4,741 1,831 Total accrued expenses $ 14,088 $ 12,295 |
Summary of Other Current liabilities | Other current liabilities consisted of the following: December 31, 2023 2022 Lease liabilities, short-term $ 9,109 $ 3,786 Promissory note, current portion 3,345 — Tax receivable agreement liability, current portion 2,892 1,163 Other current liabilities 4,320 4,316 Total other current liabilities $ 19,666 $ 9,265 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Studios | |
Business Acquisition [Line Items] | |
Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed | The following summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Amount Accounts receivable $ 154 Inventories 98 Property and equipment 1,113 Right-of-use assets 42,016 Goodwill 4,133 Deferred revenue ( 3,269 ) Lease liabilities ( 44,244 ) Reduction to receivable from shareholder $ 1 The following summarizes the aggregate fair values of the assets acquired and liabilities assumed: Amount Property and equipment $ 19 Reacquired franchise rights 137 Total purchase price $ 156 |
Xponential Procurement Services Acquisition | |
Business Acquisition [Line Items] | |
Summary of Aggregate Fair Values of the Assets Acquired And Liabilities Assumed | The following summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation: Inventory $ 237 Property and equipment 10 Goodwill 8,507 Intellectual property 671 Other intangible assets 560 Total assets acquired 9,985 Accounts payable and accrued expenses 55 Net assets acquired $ 9,930 |
Contract Liabilities and Cost_2
Contract Liabilities and Costs from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 de velopment and brand fee contract liabilities for the years ended December 31, 2023, 2022 and 2021 . Franchise Brand fees Total Balance at January 1, 2021 $ 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 Revenue recognized that was included in deferred ( 16,435 ) ( 4,250 ) ( 20,685 ) Deferred revenue recorded as settlement in ( 1,278 ) — ( 1,278 ) Increase, excluding amounts recognized as revenue 28,631 149 28,780 Balance at December 31, 2023 $ 127,162 $ 2,540 $ 129,702 |
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, 2023. 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 2024 $ 10,685 $ 1,712 $ 12,397 2025 11,232 414 11,646 2026 12,534 414 12,948 2027 13,347 13,347 2028 13,316 — 13,316 Thereafter 66,048 — 66,048 $ 127,162 $ 2,540 $ 129,702 |
Summary of Components of Deferred Revenue | The following table reflects the components of deferred revenue: December 31, 2023 2022 Franchise and area development fees $ 127,162 $ 116,244 Brand fees 2,540 6,641 Equipment and other 22,277 18,576 Total deferred revenue 151,979 141,461 Non-current portion of deferred revenue 117,305 109,465 Current portion of deferred revenue $ 34,674 $ 31,996 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following: December 31, 2023 2022 Furniture and equipment $ 4,258 $ 4,182 Computers and software 20,231 14,075 Vehicles 635 171 Leasehold improvements 7,434 7,533 Construction in progress 2,505 3,115 Less: accumulated depreciation ( 15,561 ) ( 10,552 ) Total property and equipment $ 19,502 $ 18,524 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: December 31, 2023 December 31, 2022 Amortization Gross Accumulated Net Gross Accumulated Net Trademarks 10 $ 20,710 $ ( 4,487 ) $ 16,223 21,110 ( 2,606 ) $ 18,504 Franchise agreements 7.5 – 10 57,700 ( 29,990 ) 27,710 69,100 ( 25,143 ) 43,957 Reacquired franchise rights 6.2 137 ( 13 ) 124 — — — Intellectual property 5 671 — 671 — — — Web design and domain 3 – 10 430 ( 307 ) 123 430 ( 196 ) 234 Deferred video production costs 3 5,829 ( 3,698 ) 2,131 4,046 ( 2,173 ) 1,873 Other intangible assets 1 560 — 560 — — — Total definite-lived intangible assets 86,037 ( 38,495 ) 47,542 94,686 ( 30,118 ) 64,568 Indefinite-lived intangible assets: Trademarks N/A 72,607 — 72,607 72,607 — 72,607 Total intangible assets $ 158,644 $ ( 38,495 ) $ 120,149 $ 167,293 $ ( 30,118 ) $ 137,175 |
Schedule of Anticipated Future Amortization Expense of Intangible Assets | The anticipated future amortization expense of intangible assets is as follows: Year ending December 31, 2024 $ 11,110 2025 9,810 2026 6,672 2027 5,259 2028 5,112 Thereafter 9,579 Total $ 47,542 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 were as follows: Year ending December 31, Amount 2024 $ 4,760 2025 323,758 Total $ 328,518 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases are summarized as follows: Operating leases Balance Sheet Location December 31, 2023 December 31, 2022 ROU assets, net (1) Right-of-use assets $ 71,413 $ 30,079 Lease liabilities, short-term Other current liabilities $ 9,109 $ 3,786 Lease liabilities, long-term Lease liability $ 70,141 $ 30,583 (1) For December 31, 2023, includes impact of write off of abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. |
Summary of components of lease expense | Components of lease expense during the years ended December 31, 2023 and 2022, are summarized as follows: December 31, 2023 December 31, 2022 Amount Related-party lease Third-party leases Total Operating lease costs (1) $ 20,822 $ 239 $ 4,666 $ 4,905 Variable lease costs 1,699 — 856 856 Short-term lease costs — — 108 108 Total $ 22,521 $ 239 $ 5,630 $ 5,869 (1) For the year ended December 31, 2023, includes impact of accelerated expense on abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases during the years ended December 31, 2023 and 2022, are summarized as follows: Years Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 14,525 $ 4,717 Lease liabilities arising from new ROU assets $ 70,455 $ 20,966 |
Schedule of other information related to leases | Other information related to leases for the years ended December 31, 2023 and 2022, are summarized as follows: Years Ended December 31, 2023 2022 Weighted average remaining lease term (years) 6.7 7.5 Weighted average discount rate 8.4 % 8.8 % |
Schedule of future minimum lease payments | Maturities of lease liabilities as of December 31, 2023 are summarized as follows: Amount 2024 $ 16,809 2025 16,253 2026 16,444 2027 15,704 2028 13,269 Thereafter 30,228 Total future lease payments 108,707 Less: imputed interest 29,457 Total $ 79,250 |
Member's_Stockholder's Equity_2
Member's/Stockholder's Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Members' Equity [Abstract] | |
Summary of Ownership of XPO LLC | The following table summarizes the ownership of XPO LLC as of December 31, 2023: Owner Units Owned Ownership percentage XPO Inc. 30,897 65.1 % Noncontrolling interests 16,566 34.9 % Total 47,463 100.0 % |
Equity Compensation (Tables)
Equity Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 for the years ended December 31, 2023, 2022 and 2021: Performance-based profit interests Time-based profit interests Number of units Number of units Outstanding at January 1, 2021 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 Issued — — Vested — ( 12 ) Forfeited, expired, or canceled — — Outstanding at December 31, 2023 — 1 Expected to vest — 1 |
Summary of Restricted Stock Units Activity | The following table summarizes activity for RSUs for the year ended December 31, 2023: Shares Weighted Average Outstanding at January 1, 2023 2,102 $ 18.25 Issued 571 $ 21.60 Vested ( 1,016 ) $ 17.58 Forfeited, expired, or canceled ( 70 ) $ 20.05 Outstanding at December 31, 2023 1,587 $ 18.27 |
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 recognized as compensation expense over the vesting period (generally four years ) and was calculated using a Black-Scholes option-pricing model with the following assumptions: Year ended December 31, 2021 Risk free interest rate 0.05 % – 0.16 % Weighted average volatility 47.3 % Dividend yield — % Expected terms (in years) (1) 0.86 (1) The Company had 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, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of Income (loss) Before Income Taxes | Income (loss) before income taxes is as follows for the years ended December 31: 2023 2022 2021 U.S. income (loss) before income taxes $ ( 736 ) $ 3,421 $ ( 50,599 ) Foreign income (loss) before income taxes 94 ( 20 ) ( 58 ) Income (loss) before income taxes $ ( 642 ) $ 3,401 $ ( 50,657 ) |
Summary of Income Tax Expense (Benefit) | Income tax expense (benefit) consists of the following for the years ended December 31: 2023 2022 2021 Current tax expense (benefit): Federal $ 359 $ ( 142 ) $ 322 State 509 450 274 Foreign 160 262 187 Total current tax expense (benefit) 1,028 570 783 Deferred tax expense (benefit): Federal 30 ( 31 ) — State 8 ( 8 ) — Foreign 5 ( 5 ) — Total deferred tax expense (benefit) 43 ( 44 ) — Income tax expense $ 1,071 $ 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 is as follows for the years ended December 31: 2023 2022 2021 Tax computed at federal statutory rate 21.0 % 21.0 % 21.0 % State tax, net of federal tax benefit 53.1 % 3.0 % ( 0.1 )% Non-controlling interests ( 144.1 )% ( 31.1 )% ( 2.1 )% Income (loss) from pass-through entities — % — % ( 5.3 )% Permanent items 13.3 % — % ( 1.5 )% TRA liability ( 27.5 )% ( 3.6 )% — % Executive compensation ( 148.3 )% 3.8 % — % Contingent consideration 647.8 % 45.4 % ( 10.4 )% Preferred stock dividend — % — % ( 1.5 )% State rate differential ( 186.2 )% 22.5 % — % Other 21.1 % 5.7 % ( 0.0 )% Valuation allowance ( 417.0 )% ( 51.2 )% ( 1.6 )% Effective tax rate ( 166.8 )% 15.5 % ( 1.6 )% |
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: 2023 2022 Deferred tax assets: Investment in partnership $ 28,535 $ 40,827 Net operating losses 23,056 26,361 Tax receivable agreement 930 332 Interest expense 7,681 3,265 Deferred revenue 1,443 1,383 Other 311 279 Total deferred tax assets 61,956 72,447 Valuation allowance for deferred tax assets ( 61,924 ) ( 72,403 ) Total deferred tax assets, net of valuation allowance 32 44 Deferred tax liabilities: Property and equipment and intangible assets ( 12 ) — Other ( 20 ) — Total deferred tax liabilities ( 32 ) — Net deferred tax assets (liabilities) $ — $ 44 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 (loss) per share of Class A common stock: Years Ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ ( 1,713 ) $ 2,875 $ ( 51,440 ) Less: net (income) loss attributable to noncontrolling interests ( 15,765 ) 19,284 78,417 Less: dividends on preferred shares ( 7,652 ) ( 13,000 ) ( 5,742 ) Less: deemed contribution (dividend) 49,970 ( 31,185 ) ( 84,994 ) Add: deemed contribution from redemption of convertible preferred stock 12,679 - - Net income (loss) attributable to XPO Inc. - basic $ 37,519 $ ( 22,026 ) $ ( 63,759 ) Add: dividends on preferred shares 7,652 - - Less: deemed (contribution) dividend ( 49,970 ) - - Less: deemed contribution from redemption of convertible preferred stock ( 12,679 ) - - Net income (loss) attributable to XPO Inc. - diluted $ ( 17,478 ) $ ( 22,026 ) $ ( 63,759 ) Denominator: Weighted average shares of Class A common stock outstanding - basic 31,742 25,295 22,403 Effect of dilutive securities: Convertible preferred stock 7,963 - - Weighted average shares of Class A common stock outstanding - diluted 39,705 25,295 22,403 Net earnings (loss) per share attributable to Class A common stock - basic $ 1.18 $ ( 0.87 ) $ ( 2.85 ) Net earnings (loss) per share attributable to Class A common stock - diluted $ ( 0.44 ) $ ( 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 1,477 2,102 1,123 Convertible preferred stock - 13,889 13,889 Conversion of Class B common stock to Class A common stock 16,491 21,572 22,969 Treasury share options 75 75 - Rumble contingent shares 2,024 2,024 2,024 Profits interests, time vesting 1 14 74 Profits interests, performance vesting - - 1,935 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Components of Restructuring Charges | The components of the restructuring charges are as follows: Year Ended December 31, 2023 Impairment and accelerated amortization of right-of-use assets (2) $ 6,113 Contract termination and other associated costs (1) 4,102 Loss on lease termination and sale or disposal of assets, net (3)(4) 1,524 Other restructuring costs (1) 2,048 Total restructuring charges $ 13,787 (1) These charges are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. (2) Charges of $ 92 are recorded in impairment of goodwill and other assets and charges of $ 6,021 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. (3) Charges of $ 384 are recorded in cost of product revenues and charges of $ 1,140 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations . (4) Loss on lease termination and sale or disposal of assets represents net losses on studio lease terminations and sales or disposals of studio assets primarily related to studio property and equipment. Amount is net of $ 1,647 for gains on lease terminations related to leases for which the Company had recognized accelerated right-of-use asset amortization. |
Schedule of Changes in Restructuring Charges | The following table provides the components of and changes in the Company’s restructuring charges, included in accounts payable and accrued expenses on the consolidated balance sheets: December 31, 2023 Balance at December 31, 2022 $ — Charges incurred 8,707 Payments ( 6,525 ) Balance at December 31, 2023 $ 2,182 |
Nature of Business and Operat_2
Nature of Business and Operations - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 06, 2022 shares | Jul. 23, 2021 shares | Feb. 28, 2023 shares | Dec. 31, 2023 USD ($) Brand Studio shares | Dec. 31, 2022 USD ($) Studio shares | Dec. 31, 2021 USD ($) Studio | |
Impairment charges | $ | $ 16,667 | $ 3,656 | $ 781 | |||
Number of brands | Brand | 10 | |||||
Number of company-owned studios | Studio | 22 | 55 | 25 | |||
Class A Common Stock | ||||||
Number of shares issued | 4,500,000 | 12,994 | 5,000 | |||
Initial Public Offering | Class A Common Stock | ||||||
Number of shares issued | 10,000,000 | 1,620 | 607,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||
Jun. 05, 2023 Studio | Sep. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) Segment Studio | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jul. 31, 2022 USD ($) | |
Accounting Policies [Line Items] | ||||||
Number of reportable segment | Segment | 1 | |||||
Number of operating segment | Segment | 1 | |||||
Revenue from related parties | $ 13,398,000 | $ 12,823,000 | $ 2,741,000 | |||
Line of credit facility, maximum borrowing capacity | 20,000 | |||||
Restricted cash | 9,333,000 | 5,381,000 | ||||
Cash, cash equivalents and restricted cash | 37,094,000 | 37,370,000 | ||||
Impairment charge | $ 3,376,000 | 10,113,000 | 3,376,000 | |||
Impairment of brand assets | $ 280,000 | |||||
Impairment of definite-lived intangible asset | $ 8,853,000 | $ 280,000 | $ 118,000 | |||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Costs and Expenses | 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 | $ 151,979,000 | $ 141,461,000 | ||||
Franchise royalty percentage | 7% | |||||
Franchise marketing fees percentage | 2% | |||||
Contract with customer, threshold period | 30 days | |||||
Advertising costs | $ 9,246,000 | 7,685,000 | $ 6,890,000 | |||
Trademark and Franchise Agreements | ||||||
Accounting Policies [Line Items] | ||||||
Impairment of definite-lived intangible asset | 410,000 | |||||
Franchise Agreements | ||||||
Accounting Policies [Line Items] | ||||||
Impairment of definite-lived intangible asset | 7,238,000 | |||||
Reacquired Franchise Rights | ||||||
Accounting Policies [Line Items] | ||||||
Impairment of definite-lived intangible asset | $ 1,205,000 | |||||
Studios | ||||||
Accounting Policies [Line Items] | ||||||
Number of studios purchased | Studio | 14 | 14 | ||||
AKT reporting unit | ||||||
Accounting Policies [Line Items] | ||||||
Impairment charge | 0 | |||||
Trademark | ||||||
Accounting Policies [Line Items] | ||||||
Impairment of brand assets | $ 0 | 0 | $ 0 | |||
Letter of Credit | ||||||
Accounting Policies [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 750,000 | |||||
Credit Concentration Risk | ||||||
Accounting Policies [Line Items] | ||||||
Cash, cash equivalents and restricted cash | $ 34,359,000 | $ 33,961,000 | ||||
Master Franchise Agreements | ||||||
Accounting Policies [Line Items] | ||||||
Franchisee agreement term | 10 years | |||||
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, 2023 |
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]: 2024-01-01 | 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]: 2024-01-01 | 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]: 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 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | |
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) | Dec. 31, 2023 |
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] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeTermOfLeaseMember |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | $ 1,584 | $ 4,761 | $ 4,743 |
Bad debt expense recognized during the year | 2,232 | (712) | 410 |
Write-off of uncollectible amounts | (497) | (2,465) | (392) |
Receivable, allowance for credit loss, ending balance | 3,319 | 1,584 | 4,761 |
Accounts Receivable | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 865 | 2,193 | 2,405 |
Bad debt expense recognized during the year | 696 | (705) | 102 |
Write-off of uncollectible amounts | (426) | (623) | (314) |
Receivable, allowance for credit loss, ending balance | 1,135 | 865 | 2,193 |
Other Receivables | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 429 | 429 | |
Bad debt expense recognized during the year | (429) | ||
Receivable, allowance for credit loss, ending balance | 429 | ||
Notes Receivable | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Receivable, allowance for credit loss, beginning balance | 719 | 2,139 | 1,909 |
Bad debt expense recognized during the year | 1,536 | 422 | 308 |
Write-off of uncollectible amounts | (71) | (1,842) | (78) |
Receivable, allowance for credit loss, ending balance | $ 2,184 | $ 719 | $ 2,139 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 4,798 | $ 4,611 |
Contingent consideration from acquisitions, current portion | 1,564 | 2,203 |
Sales tax accruals | 1,642 | 3,186 |
Legal accruals | 1,343 | 464 |
Other accruals | 4,741 | 1,831 |
Total accrued expenses | $ 14,088 | $ 12,295 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Liabilities, Current [Abstract] | ||
Lease liabilities, short-term | $ 9,109 | $ 3,786 |
Promissory note, current portion | 3,345 | 0 |
Tax receivable agreement liability, current portion | 2,892 | 1,163 |
Other current liabilities | 4,320 | 4,316 |
Total other current liabilities | $ 19,666 | $ 9,265 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Details) $ / shares in Units, shares in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 29, 2023 USD ($) | Jun. 05, 2023 USD ($) Studio | Oct. 13, 2021 USD ($) | Oct. 13, 2021 AUD ($) | Mar. 24, 2021 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) Studio | Dec. 31, 2022 USD ($) Studio | Dec. 31, 2021 USD ($) Studio | Jul. 23, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||||
Aggregate purchase price for the acquisition | $ 3,467,000 | $ 0 | $ 44,322,000 | |||||||
Proceeds from sale of assets | 60,000 | 65,000 | 433,000 | |||||||
Loss (gain) from disposal of assets | (2,120,000) | (78,000) | 483,000 | |||||||
Impairment charges | 16,667,000 | $ 3,656,000 | $ 781,000 | |||||||
Gain on termination | $ 1,647,000 | |||||||||
Asset Purchase Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Date of asset purchase agreement | Jun. 05, 2023 | Oct. 13, 2021 | ||||||||
Membership Interest Purchase Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Date of asset purchase agreement | Dec. 29, 2023 | |||||||||
Studios | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of studios repurchased | Studio | 1 | |||||||||
Aggregate purchase price for the acquisition | $ 164,000 | |||||||||
Net deferred revenue and deferred costs | 8,000 | |||||||||
Total purchase consideration | $ 156,000 | |||||||||
Number of studios refranchised | Studio | 79 | 21 | 53 | |||||||
Proceeds from sale of assets | $ 60,000 | $ 0 | $ 433,000 | |||||||
Loss (gain) from disposal of assets | $ 635,000 | $ 0 | $ 483,000 | |||||||
Number of ceased studios | Studio | 22 | 0 | 0 | |||||||
Number of studios purchased | Studio | 14 | 14 | ||||||||
Reduction to receivable from shareholder | $ 1,000 | |||||||||
Intangible assets | $ 7,238,000 | $ 7,238,000 | ||||||||
Studios | Asset Purchase Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of studios purchased | Studio | 14 | |||||||||
Reduction to receivable from shareholder | $ 1,000 | |||||||||
Receivable from shareholder | 1,450,000 | |||||||||
Studios | Goodwill and Other Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Impairment charges | 2,190,000 | |||||||||
Studios | Goodwill and Other Assets | Property and Equipment | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Impairment charges | 985,000 | |||||||||
Studios | Goodwill and Other Assets | Franchise Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Impairment charges | $ 1,205,000 | |||||||||
Studios | Selling General and Administrative Expenses | Asset Purchase Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Gain on termination | $ 3,500,000 | |||||||||
Studios | Level 3 | Goodwill and Other Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Impairment charges | $ 0 | $ 781,000 | ||||||||
Studios | Franchise Rights | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life of intangible assets | 6 years | |||||||||
Intangible assets | $ 137,000 | |||||||||
Xponential Procurement Services Acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Aggregate purchase price for the acquisition | $ 9,930,000 | |||||||||
Total purchase consideration | $ 3,467,000 | |||||||||
Membership rights | 100% | |||||||||
Xponential Procurement Services Acquisition | Promissory Note | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Promissory note, fair value | $ 6,463,000 | |||||||||
Debt instrument description | a promissory note with a fair value of $6,463 payable in two equal installments due on July 1, 2024 and July 1, 2025. | |||||||||
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 | |||||||||
BodyfitTrademark | 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 | ||||||||
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 | |||||||||
Rumble | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of studios purchased | Studio | 14 | |||||||||
Amount agreed to provide debt financing to selling parties | $ 20,000,000 | |||||||||
Transaction costs directly related to the acquisitions | $ 969,000 | $ 0 | $ 978,000 | |||||||
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 |
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, 2023 | Dec. 29, 2023 | Jun. 05, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 171,601 | $ 165,697 | ||
Studios | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 154 | |||
Inventories | 98 | |||
Property and equipment | 19 | 1,113 | ||
Right-of-use assets | 42,016 | |||
Goodwill | 4,133 | |||
Deferred revenue | (3,269) | |||
Lease liabilities | (44,244) | |||
Intangible assets | 7,238 | 7,238 | ||
Reduction to receivable from shareholder | $ 1 | |||
Total purchase price | 156 | |||
Studios | Franchise Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 137 | |||
Xponential Procurement Services Acquisition | ||||
Business Acquisition [Line Items] | ||||
Inventories | $ 237 | |||
Property and equipment | 10 | |||
Goodwill | 8,507 | |||
Intellectual property | 671 | |||
Other intangible assets | 560 | |||
Total assets acquired | 9,985 | |||
Accounts payable and accrued expenses | 55 | |||
Total purchase price | $ 9,930 |
Contract Liabilities and Cost_3
Contract Liabilities and Costs from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Other deferred revenue | $ 151,979 | $ 141,461 | |
Expected duration of contracts | one year or less | ||
Franchisee agreement term | 10 years | ||
Deferred costs, current portion | $ 6,620 | 4,131 | |
Deferred costs, net of current portion | 46,541 | 43,620 | |
Franchise Agreements | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Deferred costs, current portion | 4,126 | 3,589 | |
Deferred costs, net of current portion | 46,221 | 43,445 | |
Equipment and Other | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Other deferred revenue | 22,277 | 18,576 | |
Franchise revenue | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Sales commission and fees | $ 7,327 | $ 11,049 | $ 6,006 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | $ 122,885 | $ 106,633 | $ 81,756 |
Revenue recognized that was included in deferred revenue at the beginning of the year | (20,685) | (24,076) | (13,217) |
Deferred revenue recorded as settlement in purchase accounting | (1,278) | (395) | (667) |
Increase, excluding amounts recognized as revenue during the year | 28,780 | 40,723 | 38,761 |
Ending Balance | 129,702 | 122,885 | 106,633 |
Franchise Development Fees | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | 116,244 | 100,653 | 76,371 |
Revenue recognized that was included in deferred revenue at the beginning of the year | (16,435) | (20,631) | (11,320) |
Deferred revenue recorded as settlement in purchase accounting | (1,278) | (395) | (667) |
Increase, excluding amounts recognized as revenue during the year | 28,631 | 36,617 | 36,269 |
Ending Balance | 127,162 | 116,244 | 100,653 |
Brand Fees | |||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | |||
Beginning Balance | 6,641 | 5,980 | 5,385 |
Revenue recognized that was included in deferred revenue at the beginning of the year | (4,250) | (3,445) | (1,897) |
Increase, excluding amounts recognized as revenue during the year | 149 | 4,106 | 2,492 |
Ending Balance | $ 2,540 | $ 6,641 | $ 5,980 |
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, 2023 USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 129,702 |
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 | $ 12,397 |
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 | $ 11,646 |
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 | $ 12,948 |
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 | $ 13,347 |
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 | $ 13,316 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2029-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 66,048 |
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 | $ 127,162 |
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 | $ 10,685 |
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 | $ 11,232 |
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 | $ 12,534 |
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 | $ 13,347 |
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 | $ 13,316 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Franchise Development Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2029-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 66,048 |
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 | $ 2,540 |
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 | $ 1,712 |
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 | $ 414 |
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 | 1 year |
Brand Fees | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2029-01-01 | |
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, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 129,702 |
Franchise Development Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | 127,162 |
Brand Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation amount | $ 2,540 |
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, 2023 | Dec. 31, 2022 |
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | $ 151,979 | $ 141,461 |
Deferred revenue, net of current portion | 117,305 | 109,465 |
Deferred revenue, current portion | 34,674 | 31,996 |
Franchise and Area Development Fees | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | 127,162 | 116,244 |
Brand Fees | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | 2,540 | 6,641 |
Equipment and Other | ||
Contract Liabilities And Costs From Contracts With Customers [Line Items] | ||
Total deferred revenue | $ 22,277 | $ 18,576 |
Notes Receivable - Additional I
Notes Receivable - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loans And Leases Receivable Disclosure [Line Items] | ||
Unsecured advances arrangement term | 18 months | |
Notes receivable, principal balance | $ 3,189 | $ 3,306 |
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, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Less: accumulated depreciation | $ (15,561) | $ (10,552) |
Total property and equipment | 19,502 | 18,524 |
Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 4,258 | 4,182 |
Computers and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 20,231 | 14,075 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 635 | 171 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | 7,434 | 7,533 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment gross | $ 2,505 | $ 3,115 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 5,560 | $ 3,931 | $ 3,002 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 05, 2023 USD ($) Studio | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) Studio | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Goodwill [Line Items] | ||||||
Goodwill | $ 171,601 | $ 165,697 | ||||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges | |||||
Impairment charge | $ 3,376 | 10,113 | 3,376 | |||
Weighted average cost of capital discount rate | 16% | 16% | ||||
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill) | $ 280 | |||||
Amortization expense | 11,323 | $ 11,384 | $ 7,170 | |||
Rumble Held for Sale | $ 2,568 | |||||
Studios | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 4,133 | |||||
Number of studios purchased | Studio | 14 | 14 | ||||
Intangible assets | $ 7,238 | $ 7,238 | ||||
Rumble Held for Sale | 1,205 | |||||
Rumble | ||||||
Goodwill [Line Items] | ||||||
Goodwill increased due to acquisition | $ 12,641 | |||||
Number of studios purchased | Studio | 14 | |||||
Reclassification of goodwill | $ 2,568 | |||||
Stride | ||||||
Goodwill [Line Items] | ||||||
Impairment charge | $ 3,469 | |||||
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill) | 230 | |||||
Row House | ||||||
Goodwill [Line Items] | ||||||
Impairment charge | 700 | |||||
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill) | 180 | |||||
Stride and Row House | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 0 | |||||
Minimum | ||||||
Goodwill [Line Items] | ||||||
Estimated future net cash flows discounted rate | 8% | 2% | ||||
Maximum | ||||||
Goodwill [Line Items] | ||||||
Estimated future net cash flows discounted rate | 43% | 5% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | $ 86,037 | $ 94,686 |
Accumulated amortization | (38,495) | (30,118) |
Total | 47,542 | 64,568 |
Gross amount | 158,644 | 167,293 |
Net amount | $ 120,149 | 137,175 |
Trademark | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Gross amount | $ 20,710 | 21,110 |
Accumulated amortization | (4,487) | (2,606) |
Total | 16,223 | 18,504 |
Gross amount | 72,607 | 72,607 |
Net amount | 72,607 | 72,607 |
Franchise Agreements | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | 57,700 | 69,100 |
Accumulated amortization | (29,990) | (25,143) |
Total | $ 27,710 | 43,957 |
Franchise Agreements | Maximum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Franchise Agreements | Minimum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 7 years 6 months | |
Reacquired Franchise Rights | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 6 years 2 months 12 days | |
Gross amount | $ 137 | |
Accumulated amortization | (13) | |
Total | $ 124 | |
Intellectual Property | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 5 years | |
Gross amount | $ 671 | |
Total | 671 | |
Web Design and Domain | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Gross amount | 430 | 430 |
Accumulated amortization | (307) | (196) |
Total | $ 123 | 234 |
Web Design and Domain | Maximum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 10 years | |
Web Design and Domain | Minimum | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 3 years | |
Deferred Video Production Costs | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 3 years | |
Gross amount | $ 5,829 | 4,046 |
Accumulated amortization | (3,698) | (2,173) |
Total | $ 2,131 | $ 1,873 |
Other Intangible Assets | ||
Acquired Indefinite Lived Intangible Assets [Line Items] | ||
Amortization period | 1 year | |
Gross amount | $ 560 | |
Total | $ 560 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Anticipated Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 11,110 | |
2025 | 9,810 | |
2026 | 6,672 | |
2027 | 5,259 | |
2028 | 5,112 | |
Thereafter | 9,579 | |
Total | $ 47,542 | $ 64,568 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 03, 2023 | Jan. 09, 2023 | Apr. 19, 2021 | Dec. 31, 2022 | Jul. 31, 2021 | Apr. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | 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 | $ 328,518,000 | ||||||||||
Gain on debt extinguishment | 0 | $ 0 | $ 3,707,000 | ||||||||
Debt issuance costs | $ 55,000 | 411,000 | 55,000 | 996,000 | |||||||
Amortization of debt issuance cost | 463,000 | 126,000 | 5,749,000 | ||||||||
Unamortized debt issuance costs | 270,000 | 218,000 | 270,000 | ||||||||
Repayments of debt | 4,203,000 | 2,978,000 | 310,600,000 | ||||||||
Original issue discount on long term debt | 1,378,000 | $ 4,279,000 | $ 1,378,000 | ||||||||
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 | ||||||||||
January 2023 Incremental Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal payments due | $ 1,065,000 | ||||||||||
Debt instrument, face amount | 130,000,000 | ||||||||||
Original issue discount on long term debt | $ 3,900,000 | ||||||||||
August 2023 Incremental Term Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal payments due | $ 1,190,000 | ||||||||||
Debt instrument, face amount | 65,000,000 | ||||||||||
Original issue discount on long term debt | $ 1,950,000 | ||||||||||
Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument maturity date | Feb. 28, 2025 | ||||||||||
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 | SOFR | |||||||||||
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% | 12.14% | |||||||||
Term Loan Facility | Interest Expense [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment penalty | 413,000 | ||||||||||
Debt issuance costs and debt discount amortized | $ 265,000 | $ 2,454,000 | |||||||||
Term Loan Facility | Interest Expense [Member] | August 2023 Incremental Term Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs and debt discount amortized | $ 84,000 |
Debt - Schedule of Principal Pa
Debt - Schedule of Principal Payments on Outstanding Balances of Long-term Debt (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 4,760 |
2025 | 323,758 |
Total | $ 328,518 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
ROU asset impairment charges | $ 92 | $ 0 | |
Rent expense | $ 5,651 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | |||
ROU assets, net | [1] | $ 71,413 | $ 30,079 |
Lease liabilities, short-term | $ 9,109 | $ 3,786 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current | |
Lease liabilities, long-term | $ 70,141 | $ 30,583 | |
[1] For December 31, 2023, includes impact of write off of abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | [1] | $ 20,822 | $ 4,905 |
Variable lease costs | 1,699 | 856 | |
Short-term lease costs | 0 | 108 | |
Total | $ 22,521 | 5,869 | |
Related Party Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | [1] | 239 | |
Variable lease costs | 0 | ||
Short-term lease costs | 0 | ||
Total | 239 | ||
Third Party Leases [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease costs | [1] | 4,666 | |
Variable lease costs | 856 | ||
Short-term lease costs | 108 | ||
Total | $ 5,630 | ||
[1] For the year ended December 31, 2023, includes impact of accelerated expense on abandoned right-of-use assets and impairment charge related to the restructuring plan. See Note 18 for additional information. |
Leases - Schedule of suppleme_2
Leases - Schedule of supplemental cash flow information related to operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Payment for Pension and Other Postretirement Benefits [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 14,525 | $ 4,717 |
Lease liabilities arising from new ROU assets | $ 70,455 | $ 20,966 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 6 years 8 months 12 days | 7 years 6 months |
Weighted average discount rate | 8.40% | 8.80% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 16,809 |
2025 | 16,253 |
2026 | 16,444 |
2027 | 15,704 |
2028 | 13,269 |
Thereafter | 30,228 |
Total future lease payments | 108,707 |
Less: imputed interest | 29,457 |
Total | $ 79,250 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2023 USD ($) | Jul. 31, 2022 | Mar. 31, 2021 USD ($) | Sep. 30, 2019 USD ($) | Dec. 31, 2023 USD ($) Studio | Dec. 31, 2022 USD ($) Studio | Dec. 31, 2021 USD ($) Studio | Dec. 31, 2020 USD ($) | Jul. 23, 2021 USD ($) | |
Related Party Transaction [Line Items] | |||||||||
Total revenue, net | $ 318,660,000 | $ 244,954,000 | $ 155,079,000 | ||||||
Revenue from related parties | $ 13,398,000 | 12,823,000 | $ 2,741,000 | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000 | ||||||||
Number of company-owned studios | Studio | 22 | 55 | 25 | ||||||
Additional number of company owned studios | Studio | 89 | ||||||||
Related party disgorgement of short-swing profits | $ 516,000 | $ 516,000 | $ 0 | $ 0 | |||||
Accounts receivable, related parties | 0 | ||||||||
Common Class B [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Borrowings | 75 | ||||||||
Row House | |||||||||
Related Party Transaction [Line Items] | |||||||||
Contingent consideration liability | 1,220,000 | ||||||||
Reclassification of Outstanding Notes Receivable | 1,834,000 | ||||||||
Debt instrument, face amount | 320,000 | ||||||||
Row House | Restricted Stock Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Borrowings | 105 | ||||||||
Franchise Revenue, Marketing Fund Revenue and Merchandise Revenue | |||||||||
Related Party Transaction [Line Items] | |||||||||
Accounts receivable, related parties | 2,000 | 4,000 | |||||||
Revenue from related parties | 506,000 | $ 577,000 | 507,000 | ||||||
Franchisees | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue from related parties | 120,000 | ||||||||
Multi Tranche Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Line of Credit Facility, Expiration Period | 4 years | ||||||||
Line of Credit Facility, Annual Principal Payment | $ 960,000 | ||||||||
Line of Credit Facility, Interest Rate During Period | 8.50% | ||||||||
Multi Tranche Term Loan | Restricted Stock Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Borrowings | $ 105 | ||||||||
H&W Investco Management LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, management fee expense | 0 | 0 | 462,000 | ||||||
Subsidiary of the Parent | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, amounts of transaction | $ 1,456,000 | ||||||||
Rumble Holdings L L C [Member] | |||||||||
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% | ||||||||
Interest receivable | 1,270,000 | ||||||||
Debt instrument, face amount | 4,400,000 | 5,050,000 | |||||||
Cash | 8,062,000 | ||||||||
Rumble Holdings L L C [Member] | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest rate on debt financing | 11% | ||||||||
Rumble Holdings L L C [Member] | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest rate on debt financing | 7.50% | ||||||||
Rumble Holdings L L C [Member] | Receivable from Stockholder | |||||||||
Related Party Transaction [Line Items] | |||||||||
Receivable from shareholder for debt financing provided to seller | $ 10,600,000 | ||||||||
Von Karman Production L L C [Member] | |||||||||
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 | 0 | $ 239,000 | $ 319,000 | ||||||
Percentage of annual rent increase subsequent initial twelve months | 3% | ||||||||
Spartan Fitness [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total revenue, net | $ 6,389,000 | ||||||||
Number of company-owned studios | Studio | 78 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Additional Information (Details) - Convertible Preferred Stock - USD ($) | Jan. 09, 2023 | Jul. 23, 2021 | Dec. 31, 2023 | Dec. 31, 2022 |
Temporary Equity [Line Items] | ||||
Preferred stock redemption value | $ 114,660,000 | $ 308,075,000 | ||
Convertible preferred stock, shares repurchased | 85 | |||
Convertible preferred stock, aggregate payment | $ 130,766,000 | |||
Excess of fair value from convertible preferred stock | $ 12,679,000 | |||
Preferred stock, share outstanding | 115 | 200 | ||
Deemed contribution resulted in increased (decreased) additional paid in capital | $ 49,970,000 | $ (31,185,000) | ||
Private Placement [Member] | ||||
Temporary Equity [Line Items] | ||||
Convertible preferred stock, shares issued | 200 | |||
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 | $ 14.4 | |||
Convertible preferred stock redemption term | 8 years | |||
Preferred stock, share outstanding | 200 |
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 | ||||||||||||
Oct. 02, 2023 | Aug. 09, 2023 | Aug. 01, 2023 | Feb. 15, 2023 | Apr. 11, 2022 | Apr. 07, 2022 | Apr. 06, 2022 | Aug. 24, 2021 | Jul. 23, 2021 | Feb. 28, 2023 | Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Members Equity [Line Items] | ||||||||||||||
Associated costs | $ 439 | |||||||||||||
Excise tax percentage | 1% | |||||||||||||
Repurchase of Class A common stock | $ 50,378 | $ 0 | $ 0 | |||||||||||
Proceeds from issuance of common stock net of underwriters discounts and commissions | $ 0 | $ 0 | 122,016 | |||||||||||
Accelerated Share Repurchase Program | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Additional shares as final settlement | 589 | |||||||||||||
Payments For Repurchase of Common Stock Initial Delivery | $ 50,000 | |||||||||||||
Percentage of Repurchase of Common Stock | 80% | |||||||||||||
Repurchase of IPO shares | 2,010 | |||||||||||||
Repurchase shares | $ 50,000 | |||||||||||||
Repurchase of Class A common stock | 50,000 | |||||||||||||
Accelerated Share Repurchase Program | Additional Paid-In Capital | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Repurchase shares | 40,000 | |||||||||||||
Class A Common Stock | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Additional shares as final settlement | 2,599 | |||||||||||||
Number of shares issued | 4,500,000 | 12,994 | 5,000 | |||||||||||
Shares Issued, Price Per Share | $ 20 | $ 24.5 | ||||||||||||
Common Stock, Shares, Issued | 30,897,000 | 27,571,000 | ||||||||||||
Common stock outstanding | 22,994,000 | 30,897,000 | 27,571,000 | |||||||||||
Class A Common Stock | Accelerated Share Repurchase Program | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Repurchase shares | $ 50,000 | |||||||||||||
Class A Common Stock | Accelerated Share Repurchase Program | Additional Paid-In Capital | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Repurchase shares | $ 10,000 | |||||||||||||
Class B Common Stock | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Number of shares issued | 3,474 | 2,696,000 | ||||||||||||
Common Stock, Shares, Issued | 16,566,000 | 21,647,000 | ||||||||||||
Common stock outstanding | 16,491,000 | 21,572,000 | ||||||||||||
Initial Public Offering | Class A Common Stock | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Number of shares issued | 10,000,000 | 1,620 | 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 | 750 | 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 | 2,276 | ||||||||||||
Secondary Public Offering | Class B Common Stock | ||||||||||||||
Members Equity [Line Items] | ||||||||||||||
Sale of shares, Number | 2,696,000 | 3,474 | ||||||||||||
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, 2023 shares | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 47,463,000 |
XPO Inc. | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 30,897,000 |
Noncontrolling interests | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Units Owned | 16,566,000 |
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 | 65.10% |
XPO LLC | Noncontrolling interests | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Ownership percentage | 34.90% |
Equity Compensation - Additiona
Equity Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
May 09, 2022 | Apr. 06, 2022 | Jul. 23, 2021 | Feb. 28, 2023 | Jun. 30, 2021 | Dec. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 1,332,000 | $ (2,028,000) | $ 3,926,000 | $ 352,000 | |||||||
Share Based Payment Arrangement Reserved Amount | $ 3,360,000 | ||||||||||
Number of performance-based restricted stock units, minimum threshold | 18,000 | ||||||||||
Income tax benefit | 1,071,000 | $ 526,000 | 783,000 | ||||||||
Equity-based compensation | $ 17,997,000 | $ 29,044,000 | 9,699,000 | ||||||||
Class A Common Stock | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of shares issued | 4,500,000 | 12,994 | 5,000 | ||||||||
Common stock outstanding | 22,994,000 | 30,897,000 | 30,897,000 | 27,571,000 | |||||||
2021 Omnibus Incentive Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for future grants | 3,644,000 | 3,644,000 | |||||||||
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% | ||||||||||
2023 annual bonus plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Equity-based compensation | $ 2,489,000 | ||||||||||
Maximum | 2021 Omnibus Incentive Plan | Class A Common Stock | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares available for issuance | 5,746,000 | ||||||||||
Phantom Share Units PSUs | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 0 | ||||||||||
Phantom Share Units PSUs | Club Pilates | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of shares granted | 14,000 | ||||||||||
Number of shares cancelled | 14,000 | ||||||||||
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 | 3,000 | ||||||||||
Total compensation expense | $ 12,003,000 | $ 6,069,000 | |||||||||
Number of shares cancelled | 14,000 | ||||||||||
Number of shares vested | 1,921,000 | ||||||||||
Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of shares granted | 571,000 | ||||||||||
Total compensation expense | $ 20,006,000 | $ 12,925,000 | $ 2,372,000 | ||||||||
Number of shares cancelled | 70,000 | ||||||||||
Stock Issued During Period, Value, New Issues | $ 2,250,000 | ||||||||||
Number of shares issued | 101,000 | ||||||||||
Total unamortized compensation expense | $ 23,211,000 | $ 23,211,000 | |||||||||
Compensation expense, expected weighted average period for recognition | 2 years 2 months 19 days | ||||||||||
Number of shares vested | 1,016,000 | ||||||||||
weighted average grant-date closing price | $ 21.6 | ||||||||||
Income tax benefit | $ 1,049,000 | $ 445,000 | |||||||||
Weighted average grant-date fair value per share of RSUs granted | $ 21.6 | $ 19.82 | $ 13.76 | ||||||||
The total fair value of RSUs vested during the period | $ 17,858,000 | $ 6,635,000 | $ 0 | ||||||||
Equity-based compensation | $ 2,489,000 | ||||||||||
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 | 3,000 | ||||||||||
Vesting period | 4 years | ||||||||||
Total unamortized compensation expense | $ 3,000 | $ 3,000 | |||||||||
Compensation expense, expected weighted average period for recognition | 7 months 9 days | ||||||||||
Number of shares vested | 12,000 | 61,000 | 406,000 | ||||||||
Time-based Profit Interest Units | SG&A expenses | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Total compensation expense | $ 19,000 | $ 190,000 | $ 906,000 | ||||||||
Performance Based Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of shares cancelled | 7,000 | ||||||||||
Number of shares issued | 36,000 | ||||||||||
Shares available for future grants | 171,000 | ||||||||||
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 | |
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% |
Weighted average volatility | 47.30% |
Expected terms (in years) | 10 months 9 days |
Equity Compensation - Summary_2
Equity Compensation - Summary of Performance-based and Time-based Profit Interests Activity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Performance-based Profit Interests Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of units, Outstanding, Beginning balance | 1,935,000 | 1,932,000 | |
Number of units, Issued | 3,000 | ||
Number of units, Vested | (1,921,000) | ||
Number of units, Forfeited, expired, or canceled | (14,000) | ||
Number of units, Outstanding, Ending balance | 1,935,000 | ||
Time-based Profit Interest Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of units, Outstanding, Beginning balance | 13,000 | 74,000 | 477,000 |
Number of units, Issued | 3,000 | ||
Number of units, Vested | (12,000) | (61,000) | (406,000) |
Number of units, Outstanding, Ending balance | 1,000 | 13,000 | 74,000 |
Number of units, Expected to vest | 1,000 |
Equity Compensation - Summary_3
Equity Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of units, Outstanding, Beginning balance | shares | 2,102,000 |
Number of units, Issued | shares | 571,000 |
Number of units, Vested | shares | (1,016,000) |
Number of units, Forfeited, expired, or canceled | shares | (70,000) |
Number of units, Outstanding, Ending balance | shares | 1,587,000 |
Weighted Average Grant Date Fair Value per Share, Beginning balance | $ / shares | $ 18.25 |
Weighted Average Grant Date Fair Value per Share, Issued | $ / shares | 21.6 |
Weighted Average Grant Date Fair Value per Share, Vested | $ / shares | 17.58 |
Weighted Average Grant Date Fair Value per Share, Forfeited, expired, or canceled | $ / shares | 20.05 |
Weighted Average Grant Date Fair Value per Share, Ending balance | $ / shares | $ 18.27 |
Income Taxes and Tax Receivab_3
Income Taxes and Tax Receivable Agreement - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Valuation Allowance [Line Items] | ||||
Federal operating loss carryforwards | $ 92,378 | |||
State net operating loss carryforwards | $ 67,308 | |||
Federal net operating loss not expire | $ 92,267 | |||
Foreign tax credit | $ 278 | |||
Percentage of benefits expected to realize from tax benefits | 15% | |||
Payment obligation basis spread on interest rate | 100% | |||
Valuation allowance for deferred tax assets | $ 61,924 | 72,403 | ||
Income tax return examination description | The Company’s tax returns remain open for examination in the U.S for years 2020 through 2023. | |||
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 | 4 years | |||
Amount of unrecognized tax benefits | $ 0 | 0 | ||
Income tax penalties and interest accrued | 0 | 0 | ||
Unrecognized tax expense | 0 | $ 0 | $ 0 | |
Current portion of the TRA liability | 2,892 | |||
Noncurrent portion of the TRA liability | 1,103 | |||
Unrecorded TRA liability | $ 78,327 | |||
Federal [Member] | ||||
Valuation Allowance [Line Items] | ||||
Federal and state net operating loss carryforward expiration date | Dec. 31, 2036 | |||
State [Member] | ||||
Valuation Allowance [Line Items] | ||||
Federal and state net operating loss carryforward expiration date | Dec. 31, 2035 | |||
XPO Holdings [Member] | ||||
Valuation Allowance [Line Items] | ||||
Economic interest in subsidiary | 65.10% | |||
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, 2023 | 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 | $ (736) | $ 3,421 | $ (50,599) |
Foreign loss before income taxes | 94 | (20) | (58) |
Income (loss) before income taxes | $ (642) | $ 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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Current tax expense (benefit), Federal | $ 359 | $ (142) | $ 322 |
Current tax expense (benefit), State | 509 | 450 | 274 |
Current tax expense (benefit), Foreign | 160 | 262 | 187 |
Total current tax expense (benefit) | 1,028 | 570 | 783 |
Deferred tax expense (benefit), Federal | 30 | (31) | |
Deferred tax expense (benefit), State | 8 | (8) | |
Deferred tax expense (benefit), Foreign | 5 | (5) | |
Total deferred tax expense (benefit) | 43 | (44) | |
Income tax expense (benefit) | $ 1,071 | $ 526 | $ 783 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax computed at federal statutory rate | 21% | 21% | 21% |
State tax, net of federal tax benefit | 53.10% | 3% | (0.10%) |
Non-controlling interests | (144.10%) | (31.10%) | (2.10%) |
Income (loss) from pass-through entities | (5.30%) | ||
Permanent items | 13.30% | (1.50%) | |
TRA liability | (27.50%) | (3.60%) | |
Executive compensation | (148.30%) | 3.80% | |
Contingent consideration | 647.80% | 45.40% | (10.40%) |
Preferred stock dividend | (1.50%) | ||
State rate differential | (186.20%) | 22.50% | |
Other | 21.10% | 5.70% | (0.00%) |
Valuation allowance | (417.00%) | (51.20%) | (1.60%) |
Effective tax rate | (166.80%) | 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, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Investment in partnership | $ 28,535 | $ 40,827 |
Net operating losses | 23,056 | 26,361 |
Tax receivable agreement | 930 | 332 |
Interest expense | 7,681 | 3,265 |
Deferred revenue | 1,443 | 1,383 |
Other | 311 | 279 |
Total deferred tax assets | 61,956 | 72,447 |
Valuation allowance for deferred tax assets | (61,924) | (72,403) |
Total deferred tax assets, net of valuation allowance | 32 | 44 |
Deferred tax liabilities: | ||
Property and equipment and intangible assets | (12) | 0 |
Other | (20) | 0 |
Total deferred tax liabilities | (32) | 0 |
Net deferred tax assets | $ 0 | $ 44 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | 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) | 17,026 | 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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income (loss) | $ (1,713) | $ 2,875 | $ (51,440) |
Less: net (income) loss attributable to noncontrolling interests | (15,765) | 19,284 | 78,417 |
Less: dividends on preferred shares | (7,652) | (13,000) | (5,742) |
Less: deemed contribution (dividend) | 49,970 | (31,185) | (84,994) |
Add: deemed contribution from redemption of convertible preferred stock | 12,679 | 0 | 0 |
Net income (loss) attributable to XPO Inc. - basic | 37,519 | (22,026) | (63,759) |
Add: dividends on preferred shares | 7,652 | 13,000 | 5,742 |
Less: deemed (contribution) dividend | (49,970) | ||
Less: deemed contribution from redemption of convertible preferred stock | (12,679) | ||
Net income (loss) attributable to XPO Inc. - diluted | $ (17,478) | $ (22,026) | $ (63,759) |
Denominator: | |||
Weighted average shares of Class A common stock outstanding - basic | 31,742 | 25,295 | 22,403 |
Weighted average shares of Class A common stock outstanding - diluted | 39,705 | 25,295 | 22,403 |
Net earnings (loss) per share attributable to Class A common stock - basic | $ 1.18 | $ (0.87) | $ (2.85) |
Net earnings (loss) per share attributable to Class A common stock - diluted | $ (0.44) | $ (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 | 1,477 | 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 | 7,963 | 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 | 16,491 | 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 | 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 | 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 | 1 | 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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
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 | $ 739 | $ 481 | $ 483 |
Contingencies and Litigation -
Contingencies and Litigation - Additional Information (Details) shares in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Oct. 13, 2021 USD ($) | Oct. 13, 2021 AUD ($) | Mar. 31, 2020 USD ($) | Dec. 31, 2023 USD ($) Milestone | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Jul. 31, 2022 USD ($) | Jul. 23, 2021 USD ($) | |
Loss Contingencies [Line Items] | ||||||||
Accrual amount for estimated loss contigencies | $ 900,000 | |||||||
Increase (decrease) in contingent consideration | $ 1,220,000 | |||||||
Line of credit facility, maximum borrowing capacity | 20,000 | |||||||
Letter of credit accrued potential obligation | 536,000 | 0 | ||||||
Maximum obligation of guarantees of leases | 2,755,000 | 1,357,000 | ||||||
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% | |||||||
Rumble Holdings LLC | ||||||||
Loss Contingencies [Line Items] | ||||||||
Contingent consideration liability | $ 7,879,000 | 27,690,000 | ||||||
Acquisition and transaction expenses (income) | 19,811,000 | 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 | 1,042,000 | $ 4,634,000 | 130,000 | |||||
Contingent consideration from acquisitions | 787,000 | 492,000 | ||||||
Acquisition and transaction expenses (income) | 878,000 | 5,280,000 | 0 | |||||
Payment for contingent consideration liability investing activities | 1,412,000 | 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] | ||||||||
Increase (decrease) in contingent consideration | 164,000 | 646,000 | 130,000 | |||||
Letter of Credit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 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] | ||||||||
Accrual amount for estimated loss contigencies | 443,000 | 464,000 | ||||||
Additional contingent consideration | 744,000 | |||||||
Accrued Expenses | BFT Acquisition | ||||||||
Loss Contingencies [Line Items] | ||||||||
Contingent consideration liability | $ 1,564,000 | 2,203,000 | ||||||
Acquisitions and Transaction Expenses (Income) | Row House | ||||||||
Loss Contingencies [Line Items] | ||||||||
Additional contingent consideration | $ 380,000 | $ 540,000 |
Restructuring -Additionnal Info
Restructuring -Additionnal Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2024 | Dec. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 13,787 | |
Forecast | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 27,000 | |
Forecast | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 23,000 |
Restructuring - Schedule of Com
Restructuring - Schedule of Components of Restructuring Charges (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) | ||
Restructuring and Related Activities [Abstract] | ||
Impairment and accelerated amortization of right-of-use assets (2) | $ 6,113 | [1] |
Contract termination and other associated costs (1) | 4,102 | [2] |
Loss on lease termination and sale or disposal of assets, net (3)(4) | 1,524 | [3],[4] |
Other restructuring costs (1) | 2,048 | [2] |
Total restructuring charges | $ 13,787 | |
[1] Charges of $ 92 are recorded in impairment of goodwill and other assets and charges of $ 6,021 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. These charges are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations. Charges of $ 384 are recorded in cost of product revenues and charges of $ 1,140 are recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations Loss on lease termination and sale or disposal of assets represents net losses on studio lease terminations and sales or disposals of studio assets primarily related to studio property and equipment. Amount is net of $ 1,647 for gains on lease terminations related to leases for which the Company had recognized accelerated right-of-use asset amortization. |
Restructuring - Schedule of C_2
Restructuring - Schedule of Components of Restructuring Charges (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill | $ 3,376 | $ 10,113 | $ 3,376 |
Restructuring charges | 13,787 | ||
Gains on lease terminations | 1,647 | ||
Cost of Product Revenues | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 384 | ||
Selling General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill | 92 | ||
Other asset impairment charges | 6,021 | ||
Restructuring charges | $ 1,140 |
Restructuring - Schedule of Cha
Restructuring - Schedule of Changes in Restructuring Charges (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring and Related Activities [Abstract] | |
Beginning Balance | $ 0 |
Charges incurred | $ 8,707 |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Expenses |
Payments | $ (6,525) |
Ending Balance | $ 2,182 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 01, 2023 USD ($) Franchise Clinics | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 13, 2024 USD ($) | |
Subsequent Event [Line Items] | |||||
Cash considration | $ 3,467 | $ 0 | $ 44,322 | ||
Lindora Franchise, LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash considration | $ 8,500 | ||||
Aquisition date | Dec. 01, 2023 | ||||
Contingent consideration | $ 1,000 | ||||
Term of franchise agreements | The Lindora Franchisor was a subsidiary of Lindora Wellness, Inc. Lindora Wellness, Inc. has owned and operated each of the Lindora Clinics in California for at least 25 years and currently owns and operates 30 Lindora Clinics in California and a single Lindora Clinic in the state of Washington. Immediately prior to the execution of the purchase agreement on December 1, 2023, Lindora Wellness, Inc. signed 31 franchise agreements with the Lindora Franchisor pursuant to which Lindora Wellness, Inc. will continue to operate its Lindora Clinics as a franchisee of the Lindora Franchisor | ||||
The number of franchises purchased | Franchise | 31 | ||||
Number of Clinics | Clinics | 30 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash payments | $ 265 | ||||
Subsequent Event | February Two Thousand Twenty Four Incremental Term Loan [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, aggregate principal amount | 38,701 | ||||
Repayment of term loan under credit agreement | $ 38,701,000 |