Q4 2024 Fitness Industry Deep Dive: From Unicorns to Earnings

The fitness industry closed out 2024 with significant developments that signal both maturation and innovation. Our quarterly analysis brought together two compelling segments: an exclusive conversation with EGYM's CEO following their landmark funding round, and our regular public company analysis.

EGYM: The Industry's Newest Unicorn

EGYM's $200 million Series G round, led by Eldridge and Maritzcap, marks a significant milestone for fitness technology. CEO Philipp Roesch-Schlanderer shared several insights about their approach:

• Focus on Integration: EGYM's cloud platform serves as an API hub connecting major equipment manufacturers and software providers, creating a unified digital experience.

• Operator Success: Only 3% customer churn over 14 years demonstrates their commitment to gym operator success.

• ROI-Driven: Equipment deployment decisions are based on agreed-upon ROI metrics with operators.

• AI Innovation: Their GENIUS AI leverages 14 years of data from 16,000 gyms to create personalized workout programs across all equipment types.

Public Company Performance

Peloton (PTON)

• New CEO Pete Stern brings Apple Fitness+ experience

• 1,171% EBITDA growth through aggressive cost reduction

• Revenue and membership remain flat

• New partnerships include Costco retail presence and TrueMed for HSA/FSA access

• Focus on content and software innovation

Life Time (LTH)

• Sophisticated financial engineering through sale-leaseback transactions

• Strong pricing power with ~$200 average monthly dues

• Growing ancillary revenue through personal training and spa services

• 5% membership growth but 20% revenue growth showing strong yield management

• Miora longevity program launching with accessible pricing

Xponential Fitness (XPOF)

• New CEO Mark King shifting focus from franchise sales to operator success

• Club Pilates remains strongest brand

• Addressing struggling franchisee locations

• Culture change emphasizing operational excellence over sales

• Lindora expansion adds complexity but differentiation

Planet Fitness (PLNT)

• First price increase in 25 years for new members

• Reducing cardio equipment footprint for more strength and open space

• New CEO Colleen Keating attempting to broaden brand appeal beyond beginners

• Challenge of maintaining low-churn "sleeping giant" membership base

• Solid financial performance with 5% revenue growth

Industry Trends and Debates

The Blue Zones Controversy Our discussion touched on Peter Attia's critique of Blue Zones research, highlighting the tension between data-driven longevity approaches and lifestyle-based wellness. While questions exist about data collection in original Blue Zone studies, the practical application of these principles in urban environments shows promising results.

GLP-1 Impact The rise of GLP-1 medications continues to create both challenges and opportunities for the industry. Rather than viewing these medications as a threat, forward-thinking operators are developing complementary services around strength training and nutrition coaching.

The Evolution of Fitness Perhaps most significantly, we're witnessing an organic industry rebranding from traditional "fitness" to comprehensive wellness and preventive health. This shift is evident in:

• Integration of longevity services

• Expansion of recovery offerings

• Focus on mental wellness

• Growing acceptance of HSA/FSA payments

• Emphasis on medical-grade testing and monitoring

Looking Ahead to 2025

The industry appears positioned for continued evolution with several key themes emerging:

1. Technology integration becoming essential rather than optional

2. Focus on operator success over pure growth

3. Expansion of preventive health services

4. Premium pricing power for differentiated offerings

5. Growing institutional investor interest in fitness tech

The combination of EGYM's unicorn status and public companies' strategic shifts suggests an industry gaining sophistication while maintaining innovation potential. The challenge ahead lies in balancing technology adoption with human connection, and premium services with broad accessibility.