Juliet Starrett & Alex Alimanestianu - Quarterly Reports: Peloton, Life Time, Planet Fitness, Garmin & The Bloodwork BOOM

Hey friends, welcome to the Future of Fitness, a top-rated fitness and wellness industry podcast for over five years and running. I'm your host, Eric Malzone, and I have the honor of talking to entrepreneurs, innovators, and cutting-edge technology experts within the extremely fast-paced industries of fitness, wellness, and health sciences. If you like the show, we'd love it if you took three minutes of your day to leave us a nice supporter review wherever you consume your podcast. If you're interested in staying up to date with the future of fitness, go to futurofitness.co to subscribe and get weekly summaries dropped into your inbox. Now on to the show. One theme keeps coming up: the right technology can make or break your business. That's why I'm thrilled to introduce our new presenting sponsor, Perfect Gym. Perfect Gym isn't just another gym management system. They are part of the Sport Alliance Group, Europe's leading fitness software company that has officially entered the US market. Now, I've seen this movie before, but here's the difference. They've opened up a U.S. headquarters in Boston because they understand that the American market deserves dedicated, localized support. After digging into the platform, one benefit especially stood out. They are simplifying the nightmare that keeps business owners up at night migrations. These guys were able to migrate one mega client with more than 250 locations in six different countries in just 20 days between two payment runs. No disrupting operations, no member loss, one seamless operation that simply works. Now, if you have ever switched platforms, you know how terrifying that process can be and how truly impressive that feat is. At a high level, here's their secret sauce. They give the power back to the operator. Instead of forcing you into their closed ecosystem, their Perfect Gym Marketplace connects with over 120 integration partners. So want to use your own app, your preferred payment processor, class pass for booking? No problem. Whether you're running a single studio or managing a multi-location enterprise, Perfect Gym was built from the ground up for multi-club operations. They've invested a ton into this platform, and now they're bringing that European engineering excellence to America. The migration experts have arrived. Check out perfectgym.com where enterprise level sophistication meets operator freedom. Today's episode of the Future of Fitness is brought to you by Flex, the only HSA FSA payments infrastructure built specifically for leading fitness and wellness brands. I have been so impressed with the Flex team and their vision to transform how people pay for fitness. They built a platform that makes HSA and FSA spending seamless, unlocking a new revenue stream for brands and giving consumers easier access to products and services that keep them healthy. Here's why this matters. Flex helps fitness brands increase average order value by up to 50% and boost checkout conversion by 30%. That is not just incremental growth, that is transformational revenue powered by consumer dollars that are already set aside for health and wellness. What excites me the most is that Flex is changing the game for the entire industry. They're bridging the gap between healthcare and fitness by making it simple for consumers to spend their pre-tax dollars on the products and services that help them feel and perform their best. Flex works with fitness leaders like iFit, Johnson Fitness, Tempo, and Aloe Moves. Honestly, this is a no-brainer, and I rarely say that.com. That is with Flex.com. Now onto the show.

What everybody does talk to me about now is mainlining all of their blood work and medical data into Chat GPT and getting feedback and information. And I think that's a big threat to these companies because if part of the value proposition with these isn't just doing blood work or doing these diagnostic tests, but actually analyzing them for you, that's where they're probably making the money. And those are probably the differentiators. And if really, you know, for free or for whatever you pay 20 bucks a month for, you know, upgraded Chat GPT, you can funnel in your blood work and whatever other medical information and start to track trends and you know get advice on what additional tests or diagnostics you should get. So to me, that's the big question mark is like, how are all those companies gonna compete with that?

Yes. Here we go. We're back. Juliet Staret. Alex, how are we doing? We are great. Yeah, glad to be here. It's a pleasure. This is like, you know, I feel like this is uh our reunion every quarter. It's like we all kind of go our separate ways for a few months, and then we come back and we share all of our thoughts and insights and life and what's going on. It's really fun. I really, I really look forward to it. So thank you guys being here for me.

It's yeah, thank you. Same, I feel the same. And it's one of my 2026 resolutions that we're gonna get together in person and maybe do a recreational activity and record this podcast, which would be a blast.

Come to Wyoming.

Yeah, I think that's the way.

Yeah, so it's somewhat middle. Yeah, they're all good. They're all good. We don't none of us live in a horrible place, right? Well, you guys, it's been uh it's been three months and we have a whole new set of reports, right? We have our big five, and we're gonna go through that. We're also gonna talk a little bit about um, you know, state of longevity. I don't know what you're gonna call like what do you call function health and and what they just the headlines they just hit, um, some of the events that have been going on. Um, so much always us always a talk about this very dynamic time for our industry. So let's start with a catch-up, of course. Alex, what's been going on in your life the last few months?

I have been traveling a little bit to New York and just around the west a little bit, and and I'm waiting for the snow to fly. We're we're we're kind of we're kind of lacking in the snow department here in Jackson. Although the the the bright side of that is that the winter lasts about six months. So if it starts a month late, that's not the end of the world.

Well, I I hope by the time this airs that people are gonna be like, what are these guys talking about? What are they complaining about? They have so much snow. That's the goal, which is only like a week away. So it's gonna be some miracles, but uh, you never know. You never know what's gonna happen. Juliet, what's you've been busy? You've been out and about.

Yeah, I mean, Kelly and I have been doing a lot of conferencing. We went to a new conference called the Assembly in San Diego. I don't know if that crossed your eye, but it's a new organization started by a guy named John Ward. And it was cool. It was what I really enjoyed about it was the size. I think it was like 75 or 80 people, and it was a little bit different from some of the sort of fitness-longevity stuff we go to because they did bring in some hospitality and more traditional healthcare folks into the mix. Um, so it was sort of like fitness, wellness, longevity, hospitality, healthcare. So I thought that was a cool mix of people, you know, and I learned some interesting stuff like that. Kohler, you know, the manufacturer of, you know, all of our faucets and things like that, is now, you know, dipping its toe into sort of the wellness longevity space by making like, you know, wellness-enabled toilets that can like analyze things, you know, and they're they're making saunas and cold plunges. So anyway, that was a really cool event size-wise. And then we literally just got back from the mother of all events, Eudaimonia, in West Palm Beach, Florida. And that was a wild ride. My voice is still hoarse from talking to people for four continuous days.

Yeah, I was really, I had a lot of FOMO on the uh on the assembly. That was when I was like, oh, let's look just look like a fun group of people to be at. And I'd interviewed John prior to it, and I just I was I wasn't able to make it. I was out of the country. And but the eudaimomia just seems humongous. What makes you say it's the mother of all?

Well, you know, Kelly and I were like among the first people to go to like, you know, Dave Asprey's Bulletproof Conference and some of the early conferences. I mean, obviously we've been to like Idea and all the traditional fitness ones too, but this just felt like it was one of those conferences on steroids. Like the vendor hall was gigantic. I mean, hundreds and hundreds of vendors. And then just I have to give them props. I mean, just the amount of content and speakers that they were able to pull together. I mean, actually, it was it was kind of overwhelming a little bit because there was so much to choose from. And, you know, a couple of things I have to give them real props about because I do feel like they brought in, you know, they first of all did bring in some different voices. And for example, I went to sort of a face-off between Dr. Will Cole and Dr. Jessica Nurik about like, are we actually making America healthy again? That was a doozy.

Fine.

And it wasn't just in that space either. There definitely were sort of competing voices, which I thought was cool, so that we're not just all in our echo chamber. So I thought they did a really good job of that. You know, overall, it was like it felt like a reunion. I really think you guys should have been there because, you know, it was just as we just saw almost everybody besides you two in the space.

Yeah, I was worried that that those events feel are gonna feel a little too um sort of biohacker-ish, if that's a thing.

Yeah, I mean, there is some fringy stuff there, for sure. You know, in fact, I we ran into some, I won't name any names, but we ran into some people that we've known that have been in the industry for a long time who I think back in 2012, they themselves would have been considered fringy. And then we ran into them at this conference, they're like, wow, there's some fringy stuff here. So if like the old go, OG fringy people are saying the you know, the new breed of stuff is fringy. Um, so there's definitely some fringy stuff there for sure. And at the same time, there's a lot of, you know, like really just reasonable, smart people. Um, and I was interested to see how many of the speakers really did try to make this point that it's like, all this stuff is cool, but you got to do the basics, you know, like that that theme seemed to go throughout. And the one thing I think maybe was slightly missing, and we're definitely gonna give them this feedback and try to fill that hole a little bit, is and I think this often happens in the longevity spaces, any sort of real conversation about what strength and conditioning is and means and how to do it well. I think, you know, Kelly and I have we have it in our minds that if we go next year, we're gonna actually try to figure out a way to both talk about and do some real strength and conditioning. Cause I think for all of us, and if you even look at Tia and Huberman and all the big, you know, thought leaders in the space, it's like strength and conditioning is sort of at the core of this effort to live long. Like I think everybody pretty much agrees that like exercise is the thing. And there certainly was, you know, there was some exercising-y like things there. You know, there was like rebounders classes and dance classes, and you know, TRX was there, so props to them. But and I do know it's hard in a conference environment to have the right equipment to do real strength and conditioning, but Kelly and I are determined to help them set up some kind of real thing and have a conversation about that because, you know, otherwise people are just biohacking their way, which we know doesn't work if you aren't doing the basics.

Are you gonna do anything differently after coming back from the conference?

Like in my own personal habits. Yeah, the only there was a the one sort of gadgety thing is we we met a guy who runs a company called Apollo, and he has this vagus nerve stimulator. And try I tried that, and actually that was really cool. I dug that and it was not stupidly expensive. And we talked to the founder of the company, and he's like an MD PhD and kind of a genius. So I really liked that. So I might try to get my hands on one of those. I thought that was cool. But yeah, in terms of sort of like what I do day to day, really, but I guess that would be a great question to ask of sort of the more like lay people attendees in the conference. In fact, I have a couple friends who went and I should ask them that question, you know, what are they gonna do differently? So that's like the question, right?

Well, it is. I mean, you you create relationships with people, and something can come of, you know, the serendipitous sort of interactions. And it yeah, I was talking to another friend and he he was saying, yeah, it's about relationships. It's not really about specific, concrete things. That I don't know. That feels a little bit I don't know. I don't know what the ROI is on that in terms of.

Yeah, I mean, that was how what Kelly and I, we felt like we would have this totally different experience than like the attendees, like the attendees of the conference were going to learn actual information about health and wellness and longevity. And we really went to try to, you know, connect with people and you know, maybe set up some brand partnerships. And like we really went for like a business reason. And I do think, you know, hopefully some some things will come out of that. You know, we were we were part of the Fit Insider Health Innovation Lab and we met a bunch of great people there. So yeah, that was really our mission was to, you know, just see if we could make connections in the space and see if anything comes out of it from a business perspective. But yeah, we shall see.

What was the mix of the attendees? Was it like, you know, consumers, kind of gen pop plus industry people? Was it mostly industry people? Was it vendors? Like what at a general level, what is it?

There were it was it was just a lot of people. There was this mix of speakers because there were so many speakers, and then there were a lot of there was a lot of overlap between vendors and speakers. So a lot of the speakers are also, you know, promoting something. So there was overlap between vendors and speakers. And then there was this whole other subset of like investor types, and and maybe we interacted with more of those folks just because we were part of the health innovation lab. So it could have been, you know, our experience could have been biased towards that. And it definitely was not a very diverse event. I'm sure you're not surprised to learn from an attendee standpoint. And you know, so yeah, it was it was a real mix. It was a mix. Yeah, and I think the only challenge with events like that, you know, if I compare it to like a thing like the assembly, is you know, just in an event like the assembly, you just can really have real deep, long connections with people because it's just such a smaller event. So, and eudaimonia is just a completely different thing.

Yeah. Well, I don't know if I'm exactly sold on it.

I'm impressed that you could pronounce eudaimonia. Can you spell it?

It took me, I'm telling you, Alex, they invited us to it like six months before the event, and I couldn't get it right until like two months ahead of time. And now I can finally spell it, but I can't really even spell it because you know, one of the E's has like an you know, a little umlaut or something over it if you spell it correctly. So I really can't spell it.

Yeah, it's okay. I still can't spell entrepreneur. It's been a every time I get spell checked on.

Yeah, I think you guys should go one time. Think, I think, uh one. I think you guys should go one time.

Yeah. You know, it's it's tough because a lot of these get in in a way with my recreational life, which is which is tough.

Well, yeah, and you can't go you cannot go to the mall. There are so many conferences and events you've got to pick and choose. So I do think it's I don't know if I'm doing a great job of selling it, but I I think we we had a great time. Part of it was maybe it felt like a reunion. We just saw so many people we know and have known in this industry for so long. So that in and of itself was just fun. And we did have these opportunities to get into smaller groups with the Health Innovation Lab. And so I think it was worth it. I think you guys should go. Cool.

We'll do. All right. Well, let's get into it. So um, we'll start with the big five. And uh, so I changed my format. I hope you guys like it. Let's see what's gonna happen here.

Let's see.

So we're gonna start with lifetime. So headline is premium big box is showing its pricing power. So high-level performance for them. Revenue was up 12.9% year over year, 782.6 million. We'll talk about hopefully a little bit of dynamic personal training, DPT, and how that contributed to that. They're adjusted EBITDA, 220 million. So that's up 22% year over year. Comparable center revenue up 10.6 year over year, average revenue per member, 907. So that's up 11%. The membership's up, you know, 1.7%. And uh, one of the things I took away too was that the um 12 to 14 new locations opening next year, and they're already in the works. So that's that's a we'll talk about that pace. And the quote from CEO of Baram Akradi was nearly all of next year's planned 12 to 14 new clubs are currently under construction, they are moving and moving fast. So what do you guys say? Who would like to start? Professor Alex.

Yeah, Professor Alex, let's go.

Okay. So um they're there they continue to grow nicely. So that's impressive. And I think the the big picture here is that Lifetime Planet are growing and doing well, and then the connected fitness and the boutiques are as represented by Expo and Peloton are not. But so lifetime continues to impress, and you know, they they're growing, they're spending a lot of money. Their capital expenditures are in the hundreds of millions of dollars every quarter. And so as a as a result, Wall Street is a little bit, I would say, nervous about how much capital they're spending. So they like the revenue, they like the profitability, but in order to get that revenue and that growth and that profitability, they have to spend hundreds of millions of dollars of capital to build new clubs, and that I think is holding the stock back. So over the last three months, they're down 10% uh on stock price, you know, year to date they're up. Uh over the past year they're up five percent, whereas the market's up double that. So they're not getting a lot of love on Wall Street, and I think if you're uh an investor in their stock, you're not that happy. If you're a member, I think you're very happy because they're taking great care of their members. Yeah. Yeah, I mean join the club and buy the stock. What do you think? What do you think, Jason? Advice, by the way.

Yeah, I mean, I think what I think is I don't have a ton to add to that, although I do have a uh question for Professor Alex because we've talked about this ad nauseum about how their membership isn't really growing, but they're just trying to make their clubs more fancy and resort style and you know, double down on this dynamic personal training and you know, more spend per member. Is there like a ceiling to that? Like, are they gonna reach a point where, you know, again, we've just talked about how, you know, clubs where people are paying up to $1,200 a month. So I don't know what the ceiling is on what people are willing to spend per month for something like this. But do you think that that's gonna start to catch up with them? Like, will they have optimized as much as they can in terms of making their clubs nicer and getting people to spend more and more personal training? And then like, do you see sort of is that part could that be part of the reason why Wall Street's like or I don't know, what's your take on that? Because that's what I wonder when I see them, like they're doing great, but is there an end to this?

Yeah, I think my father used to say trees don't grow to the sky, and whatever, whatever that old expression was. So yeah, at some point they hit the they hit the the uh the limit. But they they're up uh I think they're up 10% year over year on on spend uh per member or per membership. And as Eric said, they're uh the overall number of members is growing uh at about two percent, uh whereas the revenue is growing uh at you know 13%. So you know there's a limit on the number of people who can afford it already. Those folks, I I don't know how much they're gonna be willing to spend. You know, is it 250? Is it 300 a month? Is it 350? Uh you know, you keep pushing it until you get resistance and then and then you you stop. But uh I don't know that there's an easy answer for that. It is kind of jarring that you know you can join, you know, Planet Fitness for 15 bucks a month and you know, and 20 some million people are doing that. Um and then if you want to join Lifetime, it's gonna be about you know 20 times that price. Is it is the experience worth 20 times more? I don't, you know, I don't know. I don't know.

Well, I think we'll find out. I mean, it seems to be a pretty straight trajectory that we're gonna find out in you know, maybe the next five years. Like it's it's it keeps going up. And you know, right now the economy, I don't know, we don't have to get into the economy, but it seems like people are starting to feel a bit of pressure there too. You know, one of the things that yeah, which you you put to your point, Jay Star is like the revenue is up, but the members are flat, right? That was one of the big takeaways, is like they're they keep finding ways and this dynamic personal training. I mean, it sounds like it's a nice name, but it sounds like personal training with some nutrition and lifestyle coaching, right? Which I guess makes things dynamic. So yeah. Well, good job lifetime, as always. Okay, so uh Peloton. My headline for this one is Peloton is executing a profitability pivot. I don't know if that's true or not, but it sounds good. So revenue uh is down six percent year over year at 551 million, gross margin down 30 basis points at 51.5 percent. Adjusted EBITDA is up 2% year over year, so 118 million, which confused me a little bit. Net income up is at 14 million, so that's up. Free cash flow is up 67 million, connective fitness subscribers up or no, sorry, are down six percent at 2.73 million. Inchurn is 1.6%, which they say is best ever. So a lot of mixed signals here, and CEO with CEO Pete Stern said our continued momentum on bottom line performance sets the stage for top line improvement as we progress through the year. Some big signals there. So you want to kick off on Peloton? What do you guys think? Julia, go ahead.

Okay, I'll go. I mean, it's great that they're profitable, but it seems like they're shrinking. I can't remember in these, we've done so many of these, but I feel like their member base has always been either flat if not up. Um, and I feel like this is one of the first times our subscriptions have been down. And maybe I'm just not remembering that correctly, but I think I've always been like, okay, well, their moneymaker is this subscriptions thing, and you know, this is where the money is. And then, you know, they just the recall thing, and then the second point I'll make is the recall thing just continues to be a drag on them, both from an image perspective and financially. But yeah, I mean, I guess what do you think about the subscriptions thing? Because I've always thought this is where this is where they could grow, although we have talked about like, is everyone who's ever gonna be a Peloton subscriber already one? And have we reached that point?

Right. Yeah, well, they have had five years of declining revenue. That's a lot. I just looked at that today. That's a lot more than I thought. So that's a long time, well. That's a lot of years without any any growth. And they they're innovating. I mean, I gotta give them credit. They came out in uh October 1st with you know a revamp line of of equipment. Every piece was had some innovation in it, and they've gone to the swivel screen on all their equipment so that you can get off the bike and do your you know, strength training. They added uh a breath work app. They bought a breath work company, which which is sort of their entree into mental fitness, mental health, uh which I like, but you know, we've always said they're they're throwing a lot of a lot of darts. And um the previous CEO threw a lot of darts. You know, remember you had the the Michigan, University of Michigan branded uh telecon bike for Michigan alums. And so they, you know, eventually I'm hoping that they figure out how to grow again. Uh, it's not evident in the numbers yet that they they figured that out. The uh, you know, the stock is not performing. It's it's down 11% in the last three months, down 20% year to date. You know, the CEO, you know, in his defense, he just started in January. You know, you gotta give the guy a chance, right? It's it's uh it's been nine months, ten months, and uh, you know, they the the other thing that was we talked about last time we we met was that we expected a dues increase, and you know, October 1st they raised their dues five dollars, six dollars from 44 to close to you know $49.99. And that was, I think, a really smart thing to do. We'll see what the churn, what happens to churn. But so far they said that the dropout rates hadn't really increased much. We'll see that in the in the fourth quarter or in the you know the the the the last three months of the year where that ends up. And then really we'll see in the holiday season how their sales are, because that's their biggest, you know, that's their biggest uh period for for hardware sales. And with the revamp line, that's a little more expensive. Is that gonna is that gonna impact sales? Um, if they have a good holiday season, then I think the strategy, you know, the the CEO gets gets some credit for for uh making some good decisions. Uh, they did spend about 60 million dollars on research and development in the last quarter.

Yeah, I saw that too.

I mean, among fitness companies, nobody is spending that level on research and development. So, you know, hopefully they come up with some great some.

You know, we had talked about a couple of these episodes ago about how Peloton's growth strategy can involve acquisition. And this is the first one we've seen, right? Breathwork.

Yeah, the breathwork app.

I mean, what what do we know about that acquisition? Do we know anything specific about the the numbers or no?

They didn't disclose the purchase price. I assume it was de minimis.

But I what does that mean to you, Alex? Like what would de minimis mean? What would de minimis mean to you?

Yeah, I mean, I know, but I'd like to hear you explain.

I would sell a under $10 million. But I don't for them, that would be they wouldn't have to disclose it. I was not familiar with the app. I don't know how many subscribers they had or you know how big a how big a uh revenue they had. So but they're trying a lot of different things. They have an injury prevention program with hospital for special surgery, which I I thought was kind of interesting. I don't know what you guys think. They have Peloton, I Peloton IQ, so they're personalizing the experience more and making more suggestions and recommendations. And uh that you know, that seems like a like a smart idea to me. I don't know how it translates into growth and revenue and profitability, but I you know, I think I think overall maybe people and they did say engagement was up a bit, about five percent, I think, over the prior year, so number of hours or minutes or whatever time spent. So that's that's good. And I think churn, you know, 1.6% a month is is is really good.

I think it all comes down to this, and you know, this is anecdotal. What we also hear is like I haven't heard anybody in years say, Oh, I just got a Peloton.

Yeah, me either.

It's been a long, long time. And it used to be when someone got a Peloton, they wouldn't shut up about it, right? So I think when you look at like kind of the pop culture shift, I think that's that's a tough thing to overcome. You know, it's just things go in and out of fashion, right? So, and especially in our industry, we've seen a couple fashions come and go.

So the place that I see it, and I'm not 100% convinced because I know there's multiple apps like this, but I feel like I witness it in when I'm in a hotel gym and I see people doing little workouts on their iPad. Um, they brought their iPad into the hotel gym and it's like looks to me like that's some Peloton going on in the background. So that's where I see it, but obviously that has nothing to do with their hard goods. You know, that's just people who are probably subscribers to the app and using that.

Well, we'll see. Let's go to uh let's go to exponentials. So um my headline for this one is exponential's unit growth is doing the heavy lifting. So system-wide sales are rising as same stores sales dip, uh, efficiency gains. Mass some of the franchise level strain for sure. Uh the revenue is at 78.8 million, so that's negative two year over year. Adjusted EBITDA is 33.5 million, so that's up nine percent year over year. System wide sales at 432 million, that's up 10%. Run rate 68K up 2%, members 796k up 7%. One of the things that on same source sales are same store sales are minus one year over year. The thing that struck out to me here, too, and we could talk about it, I'm sure, is the uh long-term debt. And I'm curious to get both of your insights on that. And the CEO quote that I have from Mike Nuzo is there is significant potential for improvement across our opportunity.

I wrote that down too.

And I'm excited to unlock that value, which when I use words such as these, it means we got problems and uh we're aware of them and uh we're working on it, right? So yeah, it's so funny.

I literally zeroed in on that exact thing too. I was like, significant potential for improvement.

Yeah, wow. Alex, you want to kick us off? What do you think about Xpo, man?

Well, the new CEO, this is his first quarter, and he comes out of a company called iMart, which I assume sells glasses. I'm not familiar with them. And then Petco. He spent a lot of time at Petco, um where he was CFO and COO. So he has not been a C. Well, he might have been a CEO at iMart, but yeah, no real fitness chops, which, you know, it's it's hard to find, I guess, you know, the the pool of potential CEOs in the fitness world is pretty small. So most of the time these companies go outside. He has not been CEO of a public company, so this is his first, you know, public foray. And you know, they interesting during the quarter, they sold Lindora, which they had just bought less than two years ago. That was their, I guess, longevity play, or more medical weight loss mostly. Yeah, and I don't know, that seems like corporate malpractice to buy a company and then sell it less than two years later. Like, what was the board thinking? You know, what and and the board, I don't know. Anyway, I I um uh you know, I think a lot of people blame the former CEO before Mark King, right? Anthony Geisler for driving the train off the tracks. But you know, the board has a lot of responsibility here for for acquisitions and things like that. So so I worry about that. The you know, same store sales down for the for for the quarter, and I think Pilates, the club Pilates numbers are really starting to flatline, and that's their crown jewel. So yeah, I don't know. It's a it's a it's a wounded, wounded animal. And hopefully they will, you know, now that they're down to five brands, they'll really focus on those five and figure out uh which is the next star. They still have yoga, bar, stretch, and be fit. Uh so I don't know what you guys think, where where the future is, where the future growth is among those brands, but I don't, it's not obvious to me.

You know what I was, you know, I always have questions for you, Alex, on this stuff. But I think we talked about this before, just relative to Peloton, and our business is you know subject to trends and things get cool. So I do wonder if a business like Exponential can survive without always bringing in like the latest, whether they just sort of need to churn businesses in a way, right? They've got to bring in like what's the next cool thing, and then they need to drop out the thing that's drunk gone out of favor. And then, you know, after that starts to get flat, they got to bring in the next cool thing and then drop out. So I don't know because I just, you know, I don't know if they're if I see major growth potential in those the existing brands they have. You know, they they seem fine.

Got to be able to pick the the future winners, right?

What's the next best thing? But that just definitely seems like a hamster wheel, like you're just sort of having to follow the trend and then drop off these other businesses. And I don't know how you ultimately make money doing that.

You know, I I get mixed signals on boutique in general. And I, you know, maybe just what we're seeing from exponential exponential is just the public signs of what's going on in that sector. Because I sometimes I hear like, oh, it's everyone's super optimistic, things are great, it's gonna be an amazing year for boutique. And other times I talk to operators who are running, you know, franchise, like natural franchise oars, and things are tough out there. Like nobody's buying fitness franchises, especially in the boutique sector. I mean, you see the the unicorns, you see the um you know alloy personal training and Rick Mayo and exponent, like super fast growth, right, in that sector. But it's it's tried and true personal training, right? That's what it is. Small group training, personal training. There's no like special, you know, red leg goat yoga type thing going on.

Like, right?

Like it's thank god. And you can look to New York and LA for the next trends, as always, but I haven't heard anything coming out like this is the next thing. And I feel like and I don't have the data to back this up in front of me, but I feel like Pilates is just really flattening out, you know, the the growth of that category starting to flatten out, and I think just because there's so much competition. So I don't know. I you know, I think we can point it exponential and say they're hurting, they're wounded for sure. But also it's like, is this a a sign of of a whole class of our industry that's seeing some trouble?

Yeah, I mean, it is interesting because you know, there was a long while as those of us that were in the early boutique universe in CrossFit, that we thought, oh, this Globo Gym thing that they're never gonna, you know, I don't even think anyone uses the word globo gym anymore. That's like a such emoji thing to say. But I think we all thought in the early boutique fitness days that like that was dead. And I feel like lifetime and planet and even equinox is starting to show that people do in some I think part of it is just simplicity. I think nobody really wants to do just one thing. You know, they want to be able to dabble around, and I think sometimes if financially it doesn't make sense to go to 16 different boutique gyms when you know you could just pay this one kind of hefty price to Equinox and do all the things there. So I I don't know. I just I do feel like maybe we're having a swing back to like let's just belong to the club where there's everything.

Yeah, I mean the the pendulum swings a little bit back and forth, and I'm always a little reluctant to agree or to to to um to write off a category. So so I would say the the really good operators are gonna do fine, you know, the solid core, the club Pilates, you know, the ones that that are well run, that uh, you know, don't try to expand too fast, don't cannibalize themselves, and there'll be some new, you know, some new concepts or or you know, new it's not going to be radically different, but there'll be there'll be people who tweak things, and you know, there's a there's a yoga studio concept in Florida that I've heard about that you know is yoga and hit, and just those two really simple alternating classes from yoga to hit to yoga, and apparently they're growing like like crazy.

So yeah, not on the I can go off Eric and I thank you for that since we come from the boutique fitness world. Do we? I guess we do have a love. I know CrossFit doesn't think of itself like that, but I think they were like almost the first. Yeah, besides yoga.

Yeah, okay.

It's just that boutique and CrossFit, those two words are they don't go together because boutique feels fancy and CrossFit does not feel fancy.

Yeah. Right? I think of little dust balls in the corner when I think of CrossFit gyms, right? Like maybe someone didn't get the vacuum all the way to the corner, like boutique.

I think there's no need. There's no need, Eric.

Yeah, well, we'll see. I mean, Alex, I want to get to you about the debt. So, how dangerous is that? 76 million in debt and 373 million year-to-date interest.

I haven't looked at the ratio of Libitata debt, but my sense is that they they have enough cash flow to service their debt. So I have not heard that they're in distress, but but uh I'd have to look at the the ratio there. You know, I know the stock is under pressure, down 33% in the last three months, but that I think is because the same store sales are are sort of flat and Pilates is has flatlined. It could become an issue, Eric. Just I haven't heard that it is yet.

Well, maybe we'll cover that next time. Be curious what your thoughts are on that if it comes up again. Well, let's move on to something brighter. How about Planet Fitness? So my headline here is Planet is playing offense with national media. So a large ad fund and Gen Z Momentum have positioned Planet to own the value fitness conversation in 2026. Revenue, 330 million, up 13% year over year. Adjusted EBITDA, 144 million, that is up 14%, net income 59 million. Um, system-wide same club sales at are up 6.9%. Clubs are a total number of 2,795. So that's up 35 quarter over quarter. Uh, members are over 20 million now, so 20.7 million. Yeah, I feel like you should keep going. So uh marketing evolution. So 2026 shift of 1% local fund towards the national fund. So um, that's a conversation I think we could have as well. And long-term growth, 1 million net new members year to date, up 5% active visits through Q3. So the quote from Colleen Keating, their CEO, is we are recently ranked number 22 in the highest ranking fitness brand on this year's franchise times up 400 lists. So they are much bigger than just our industry now. They're they're part of a much larger conversation. So who would like to take it away?

Take it away, Alex.

All right. Well, the uh this has been a good year for high value, low price. Amazing.

Seriously.

Amazing year.

Seriously. Just banner, banner year. Yeah.

Yeah, I'm sure there are others. And and Planet, you know, they they have struck a line, you know, a main line here on getting the value proposition right for millions and millions of people. You know, 15, 20, 25 a month. And uh the you know, the crunch and Inios are a little different. Um, they do have classes. Planet does not. But I thought it was interesting that Planet um is focusing on this black card spa idea. So the recovery space that has there already has uh massage and tanning, and you know, they're looking at at I think they call it dry dry plunge. I don't know if you guys have heard of that. So it's cold plunge where you don't wear it, you're you're in like a waterbed or something. I've tried that. Yeah, I've done it.

Okay, did you try? I think I've seen that as well at a conference, but I've never tried it.

I mean, from what I remember, this was like three years ago, super expensive.

But yeah, but they're creating this whole you know space in the gym that is only accessible if you have a black card. They're raising the price on the black card from 25 to 30, and uh, and you get access to this this you know, black card spa space that uh they're they're adding different modalities to. Um, I thought that was interesting. They're not adding a group exercise, which EOS has, crunch has. So they're holding the line on that. I don't, I don't know. Do you guys, I mean, does that make sense or should they should they try to you know start offering group exercise to be more competitive with Crunch and and uh EOS?

Yeah, I mean, I definitely would say yes on the group exercise. Like every time we talk about them, I actually have to remind myself that they don't have group exercise, and I'm always surprised. I mean, obviously at that price point, but do you think they could keep that price point and offer group exercise, or would they need to raise their prices?

Well, I think, yeah, somehow or other crunch and else have figured it out. So it's a volume game, I guess. But it was interesting. They they had an investor day last week and they had about 150 slides in there in the deck. So they they covered a lot of ground. But I thought it was interesting. Their market their chief marketing officer uh put up a slide where he showed what groups they're focused on to grow. And they um they pretty he pretty much said they've given up on the couch potatoes. So there's like 40 million couch potatoes that they're not even gonna try to target. And then there's there's this is the adult population in the US, 80 to 90 million people who are active. I'm not sure how they define active, but unlikely to pay for a gym. So they're not focused on those guys, and then there's 50 to 60 million people who are active and likely to pay for a gym. So they're focused on those people, plus the 60 to 65 million people who were already fitness paying members, so taking from other people. And then uh, of course, they have 20 million already. So I thought that was that.

was uh yeah i'm sure they got they paid a million dollars to a consulting company or something uh to come up with that yeah um and but i guess that was uh i thought that was you know they they were they were pretty honest about who they were going after and traditionally they planet fitness did focus on couch potatoes that was you know we want to get people off the couch and so they've given up on that now they seem to which i'm like if planet fitness gives up on the couch potatoes that's a little bit sad from a public health perspective i feel like that's the last that was the last yeah because i mean that's right like you know part of you know part of it has to be the economics and you know what people can afford and man planet fitness is like there's no hope for those people that's not a great sign yeah yeah the other yeah the other focus is on Gen Z they they run this program during the summer uh where they they offer high school students free uh memberships so smart yeah and um they said that was up 30 percent this summer very successful and it was it was like giving away 170 million dollars of of free memberships well you know so I think our gym does that here too obviously n equals one but the thing I notice is like these kids need direction and I you know I think to a lot of the points you've made in the past Julia is like like you they just throw them into the weight room and hope that everything works out right and uh I see things you know I see some things when I'm in there sometimes that are alarming yes yes so maybe yes to to your point maybe some group classes would be very beneficial especially for those I mean I wonder if that's part of it if like they're giving up on the inactive couch potato person is it because they just walked in and like most new gym goers they get lost and they're like I don't have no idea I'm intimidated I don't have no idea what I'm doing everyone knows what they're doing except me maybe they do one workout they get sore they think this is going to last forever or they're hurt and then they walk out like that's I mean you could see we've seen that happen unfold many many times in my own gym my own experience as well and I can tell you that's they need instruction right I mean I would just move that out to adults too I mean I can't I I don't go to normal gyms very often but I go in there and I'm like what are these people doing like how do they know how many sets and reps to do how have they decided which moves they're going to do today and do tomorrow like the notion that it's a crazy notion to me especially with strengthing with strength training that you can just I mean maybe these people are following some kind of program I can't see but I do see what looks like a lot of random stuff going on. But yeah definitely kids I mean I have so many parents ask me you know they know they're they're youth athletes they know that their kids need to strength train and you know they're sending them off to the Bay Club or whatever we have around here. And I always direct those people to go to a CrossFit gym because I'm like that's where you can get actual strength engaging coaching. You can learn how to move and then if you want to quit that and go train at a regular gym great but at some point you got to get coached.

Yeah well said go CrossFit seriously still alive they're still going they're still going still going well the other thing that was interesting internet fitness has been a public company for 10 years now and they have have uh performed really well I think they went public around $15. They're around 105 now and so they really are a leader in the industry as far as representing the a success story in the public market. So you know good good for them on that score. And I'm impressed with you know the new C the CEO she's not that new I think a year and a half close to two years and um she's built a good team and seems like you know she's executing us a strategy that that makes sense. It's not that creative or that radical but but it seems incrementally to be you know improving the business.

Yeah and I feel like Planet is like the not the business where anything radical needs to happen either because that that seems to be their moneymaker is just doing a few things really well over and over again.

Yep. Funny how that works right yeah let's um let's get on to my favorite Garmin so Garmin's fitness engine is humming is the headline I have so hardware innovation and health research partnerships fuel record revenue and positions for services growth doing great guys love the brand so revenue record revenue so 1.77 billion so that's up 12% year over year operating income at 457 million up 4% margin 25.8% pretty good right Professor Alex fitness segment 601 million up 30% year over year so that's still leading the fitness segment um 60% gross and 32% operating margin 194 million operating income so new launches some of the cycling computers kids smartwatch all metal wearable which is interesting venue one of the things I loved about their uh about their product we'll talk about the uh Phoenix 8 Pro has a uh search beacon on it now so you don't have to have two pieces of of equipment personal thing like that and then uh partnership so King's College London um for AI supported maternity maternal health research so that was kind of cool so the quote from the CEO Cliff Pemble is we are well positioned for the holiday season with a strong lineup of innovative products.

So yeah Garmin J Star I know you love him I'm gonna just kick this off because you'll be both happy and disappointed in me Eric there was a guy named Andy Beckman from Garmin at the assembly. I know Andy yeah and I basically like attached myself to him like glue like a fan and I don't think he really knew knew what to think of me. And I was like you know he'd heard of our podcast and I was so excited to meet him and talk about I was like talking to him about the Garmin financials because we hadn't had our thing that like I was able to actually like rattle off like some numbers and I think he found me endearing and also a little strange because I was like I mean meeting him for me was like meeting like Justin Bieber or something. I was so excited to meet him and talk to him like maybe a little too excited. So but it was very fun to meet him.

So I in the last LinkedIn post that we have for this I tagged him and I said something like Andy we're looking for a particular sponsor and we love Garmin.

He's like that's great we love Garmin too Yeah I I think um I've heard from some other people since then and athletes that I don't maybe they're just doing so well there's you know they I don't think that they they need to be sponsoring podcasts Eric.

Yeah I know I know I know especially this one.

Well we'll keep trying you know I've heard no a lot of times in my life so but I love this company and I myself want a new garment for Christmas if that says anything. Yeah even though mine works well and perfectly fine.

I'm waiting to see what Santa brings from you as well.

But you know the the um the challenge for them apparently and that Wall Street was not very happy so the stuff's gone 16% in the last three months what the the outdoor category was below expectation. So I'm not exactly sure I guess they were going up against the launch last year that was really successful maybe a Phoenix 7 or 8 maybe the Phoenix 8 and then they didn't have anything this quarter that was of that you know level of success at that level of success. So yeah so Wall Street's not that happy but yeah it's an amazing amazing company and the fitness side yeah 30% growth up to 600 million of revenue just in that category is pretty astounding. So maybe it's a buy opportunity.

Yeah yeah J SR any uh any takeaway nothing but I'm just impressed I I will say as we do these and I learn more more from Alex about Wall Street I sometimes am surprised to learn why I like when I see Garmin I'm like why doesn't Wall Street like them?

But you know that's not my world so well sometimes it's it's more about expectations than it is about performance. So if you're expecting a company to perform at you know 40% growth on their outdoor category and they only put up 25% you're disappointed right so you're and you've you built into the price that they were going to go to grow at 40% and now they only grow at 25 so the value is not what you expected it to be. So it's not that they're not doing great it's just that they are not doing as great as the analysts and the investors they didn't meet the expectations interesting.

Well I like that they can move strategically and I like that they're moving into women's health I mean that's that's a tremendous category for for wearable data because it can really uh it can make a huge impact, right? If we can make sense of all the data and actually apply it to women's health especially is really interesting. And at this point Andy Beckman even if you just send us some stickers for our water bottles we'd be happy. So that would be a win we'll take it we'll take anything we'll say we're sponsored okay well uh I know we only have a few minutes left but I do want to get into so function health and this is through Athletech news I'm sure other media outlets but raises 289 million at a 2.5 billion valuation so they're heading into New Year as a celebrity and athlete backed unicorn raising an oversubscribed 298 million series B round. So and they're unveiling their medical intelligence labs. So there's a lot of this a lot of this going on I don't know if we call it if I can call it the quantified self moving 2.0 but I just did. So there. But it seems like you know the consumers are getting access to more and more health data from more and more data points and it's uh it's a it's a very interesting time. So and this category is getting really competitive right I mean I was looking at a list of competitors you know I work with uh Vitality Blueprint and Andy Gallupin's team there and we we have I was looking at a list of 40-50 competitors that we know of in in that space and how you know how they differentiate and things like that. And that's a lot of money yeah that's a lot of money they just raised or for something like that. So what's your guys' overall take on this category you know the the blood work the health analysis how many how big is this market like how many people really care? You know who cares? Right? Should it be a B2C play a D2C play? Should it be a B2B play? What do you what are your guys' takeaways on this?

Well I have one early thought what I wonder when I see these because I know speaking of like nobody talking about Peloton what everybody does talk to me about now is mainlining all of their blood work and medical data into chat GPT and getting feedback and information. And I think that's a big threat to these companies because if part of the value proposition with these isn't just doing blood work or doing these diagnostic tests but actually analyzing them for you, that's where they're probably making the money and those are probably the differentiators and if really you know for free or for whatever you pay 20 bucks a month for you know upgraded chat GPT, you can funnel in your blood work and whatever other medical information and start to track trends and you know get advice on what additional tests or diagnostics you should get. So to me that's the big question mark is like how are all those companies going to compete with that I mean do you think that's a thing I 1000% think that's a thing.

And you know uh many internal conversations, you know, I think with a lot of businesses like this, the competition isn't the other people in the market it's it's AI. It's chat GPT it just is right I use it it's the first place I go and I have access to you know I use Vitality which is excellent. Like interpretation I'm not here to sell it but I will if you ask me to like it's an excellent platform. The interpretation and the protocols it produces are top notch, world class. But most people are now learning to go to chat be chat GPT first for everything that comes to workout programming right that comes to nutrition that comes to basically anything that you maybe you wouldn't want to ask a doctor or a coach because you may be embarrassed to ask.

Yeah so I I'm sure this is yeah I mean to me that's the big question mark because I think it's amazing. I mean we talked about you know doing full body MRIs and I mean you know it's pretty amazing to me that you can go into these longevity clinics now and get like extreme super comprehensive bud blood work and a DEXA and get a VO2 max test and a mobility test. And you know I mean it's pretty amazing and comprehensive what's possible, you know, if you can afford it you know but some and some of these diagnostics you can't do on your own. You still have to pay for those but again you know I don't think these companies are making their money on putting people through their tests they're making their money on the programming and the coaching and you know all that. And if AI can do that out of the gate that makes it difficult.

Alex have you tried any of these function was one of their main initiatives here is to lower the price of admission. So that speaks to one of the biggest challenges for people they just they don't have an unlimited budget for for their uh you know self-care healthcare spending um you know I I just have a big question about the quality of the information and then the follow-up and how much of the follow-up is really a completely different relationship with your primary care physician with a nutritionist with a so is this just a starting point and then and then it leads to you know a big commitment of time and a big commitment of money for other experts to guide you along your way and and who really has that time and money it's not a lot of people in my view. But it I mean this is progress and if they bring the cost down and make it more affordable I'm I'm sure everybody at Eudaimonia was talking about democratizing all this stuff. You know that's yes that's a buzzword for sure um and and so they talk about it but I don't I don't know that we're they're really able to deliver all the promises in a way that's affordable and accessible and time efficient.

I think the other thing that is strange is we are all getting all these diagnostics but often what that means you know again a lot of these companies can't really help people through the full path so you know you can go to any number of longevity clinics and get a full body MRI but if you find cancer you're just going back to your doctor. Right. Right or so I think that oftentimes these things just trigger your need to go actually interact back with your sort of traditional normal medical care system. And you know I imagine in many cases you're doing again you're spending a bunch more time and money and maybe getting repunted back into the medical care system without need.

A lot of the success stories seem to be you know they we I found out that I had this problem that my primary care physician didn't didn't you know figured out or that was missed or I you know I hadn't gone to to the give it a checkup in a while but yeah but then you just get kicked back into the medical system and is it you know is that really an improvement yeah well we'll see right yeah we will see how this thing unfolds I know everyone's got to uh get on with their their busy days hold on one second Eric I know I'm the one that had to go but can I tell you I forgot to tell you guys because I think you'll both like it and it is sort of a health related piece of tech that I wanted to pump up even though the owner of it makes me sad.

And that is that I bought the Meta AI glasses and they're so awesome. Are you wearing them if you ever want to film anything you're doing recreationally I am remiss to promote a Mark Zuckerberg product but you put on these glasses and you're on your mountain bike or your skis or paddling or whatever you're doing and you're like you know hey Meta start filming and it films or you're like hey Meta turn on my music and you know it just is turns on your music like I have to say I'm giving I'm just giving a promotion to these for all the outdoor recreational people listening to this that they are really cool. Yeah I think both of you would like them.

Okay. Would you would you put the would you post some of that video on your Strava so that you know yeah I will I will become you know there's a lot of content on there now that's kind of cool.

And uh yeah we've just for years we've been trying to figure out how to capture footage of you know we're always doing so many outdoor recreational activities and it's like well nobody wants to like I've never been able to work well with a GoPro and I don't want to strap something on my body and so I just I feel like you guys are both nerds like me and like skiing and doing outdoor activities. So I'm telling you they're pretty awesome. You should check them out.

Do you put prescription lenses in them?

I don't because I don't need them when I'm outside I just need glasses to read but I bet you can yeah I would need that.

Yeah that on my Christmas well you guys it's always a pleasure and uh to that note let's you know let's all pray for snow praise Ulur right I think we all we're all want that really bad and uh always a pleasure you guys um super interesting stuff and I'm excited overall where the industry is going I think 2026 can be a fascinating year and uh it just keeps evolving at this breakneck pace and changing all the time which is is really yeah captures the imagination moment so thank you guys always brilliant yeah thank you so much Eric and Alex it's always a total pleasure guys and hope maybe we'll have some new public companies in the new year that would be fun that would be so fun I like Strava I heard Strava might go public and that'd be a great one to follow oh that'd be so fun to follow right on you guys happy holidays thank you guys happy holidays happy thanksgiving hey wait don't leave yet this was your host Eric Malzone and I hope you enjoyed this episode of Future of Menace if you did I'm gonna ask you to do three simple things it takes under five minutes and it goes such a long way we really appreciate it. Number one please subscribe to our show wherever you listen to it iTunes Spotify Castbox whatever it may be number two please leave us a favorable review number three share put on social media talk about it to your friends send it in a text message whatever it may be please share this episode because we put a lot of work into it we want to make sure that as many people are getting value out of it as possible. Lastly if you'd like to learn more get in touch with me simply go to the futurofitness dot co. You can subscribe to our newsletter there or you can simply get in touch with me as I love to hear from our listeners. So thank you so much. This is Eric Malzone and this is the Future of Fitness have a great day