Thank you for standing by, and welcome to the Planet Fitness, Inc. third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Miss Stacey Caravella. Thank you. Please go ahead, ma'am. Thank you, operator, and good morning, everyone. Speaking on today's call will be Planet Fitness Chief Executive Officer, Chris Rondeau, and Chief Financial Officer, Tom Fitzgerald. We also have Dorvin Lively, President of Planet Fitness, here, who will be available for questions during the Q&A session following the prepared remarks. Today's call is being webcast live and recorded for replay. Before I turn the call over to Chris, I'd like to remind everyone that the language on forward-looking statements included in our earnings release also applies to our comments made during this call. Our release can be found on our website, investor.planetfitness.com, along with any reconciliation of non-GAAP financial measures mentioned on the call with their corresponding GAAP measures. Now, I'll turn the call over to Chris. Thank you, Stacey, and thank you everyone for joining us today for Planet Fitness' Q3 earnings call. We are emerging from the COVID-19 pandemic stronger than ever, having achieved the highest sequential net member growth of any third quarter in company history, with membership levels reaching 97% of our all-time peak. We returned to positive system-wide same-store sales growth in Q3 of 7.2%, and 100% of our stores are opened up globally. The past several decades, we have democratized fitness with our differentiated model, breaking down the barriers of intimidation and affordability for the approximately 80% of the population that does not have a gym membership. As we look ahead to our 30th anniversary next year, there are four factors driving both near and long-term growth opportunities, including our expanded leadership position as we emerge from the pandemic, our franchisees' enthusiasm to continue to invest in the brand through new stores and equipment replacements ahead of their obligations, the consolidation from 16 national and local market agencies to one servicing our entire system to leverage our size and scale, and a number of factors driving a renewed appreciation for improving overall health and wellness. Let me address each one. First, we didn't have a single permanent closure as a result of the pandemic, a sign of the power of our brand and our model. This is a remarkable achievement when you consider that IHRSA, the fitness club industry group, estimates that 22% of all fitness and health club locations in the U.S. have permanently closed due to the pandemic. Our size and scale advantage, combined with the strength of our franchisees, put us in a strong financial leadership position entering the pandemic, and we are recovering quickly. We achieved the highest franchise segment revenue in company history in the third quarter. We're now capitalizing on industry consolidation as more people are realizing the broad range of benefits from exercise and looking for an affordable, non-intimidating workout environment. The second reason is franchisee sentiment. We've always had a strong relationship with our franchisees. I was recently invited to join our franchisees at their annual meeting, marking the first time that we've all been together since the pandemic began. It's a testament to the strength of our relationship that I was invited to join them to speak about our strategy and exciting opportunities that lie ahead. I believe that working together as closely as we did during the challenging days last year only strengthened our already powerful partnership, one that I believe is rare in the franchising world. Our franchisees' enthusiasm to continue to grow the brand, make fitness more affordable, and ultimately change people's lives is incredible. They are seeing strong trends in their businesses, which is driving them to look for new sites, build new locations, and actively replenish their development pipelines with prime locations, capitalizing on the favorable real estate environment. Tom will address this in more detail, but as a result, we are raising our 2021 new store guidance to 110-120 new locations. Third, we are flexing our marketing muscle in transitioning from 16 marketing agencies to one, Publicis Groupe. This transition, which is nearly complete, will unlock our full potential as a top-tier U.S. marketer by gaining significant efficiencies through the consolidation, enabling us to truly realize this competitive advantage. It will also ensure a consistent advertising strategy on the national and local levels. We already utilize the buying power of our system in other areas of our business, such as equipment and other common items across our clubs, providing a better value to our franchisees. Now we are doing it with our marketing. Collectively, we will be able to purchase on a scale unrivaled in the U.S. fitness industry, resulting in lower cost media, which means even more of the 9% advertising contribution will go to acquisition efforts to fuel incremental member growth. We are doing it at an important time of year. Pre-pandemic Q1 historically accounted for approximately 60% of net new joins for the full year, with January making up a large part of that growth. The agency will be fully on board for the creative and media placement in advance of our annual New Year's sale. Finally, the pandemic has taken a major mental and physical toll, creating a focus on improving overall health and wellness. The American Psychological Association found that more than half of U.S. adults have been less physically active than they wanted to be since the pandemic started, with the majority experiencing undesired weight changes, averaging between 30 and 40 pounds gained. Now there are fewer bricks-and-mortar options for people who are looking to start their fitness journey. In the eight years preceding the pandemic, we added approximately 11 million members, getting people off the couch to join Planet Fitness and growing industry membership by 87%. We also added approximately 1,500 new locations, representing 13% growth. In that same period, the rest of the industry added only 1.7 million members, but nearly 10,000 locations. In Q3, 40% of our joins were first-time gym members, a trend we've seen continue through 2021, which is up slightly from 2019. There is still tremendous untapped opportunity with 140 million non-gym members who live within 10 miles of a current Planet Fitness. We also believe that the continued evolution of our digital offerings will serve as an important gateway to make the initial step to get off the couch easier and less intimidating. It's not just about getting in better physical shape, it's also about mental health. The Centers for Disease Control and Prevention reports that even one vigorous to moderate workout can reduce one's risk of depression and anxiety while also improving sleep. Prior to World Mental Health Day in October, we commissioned a national study which showed that close to three in five Americans say they haven't made their mental wellness a priority in the past year, while feelings of isolation and loneliness have increased. As the world realizes the multiple benefits of exercise, the tailwinds behind physical and mental well-being continued to drive historically unfeasible membership growth in Q3. In 2019, in line with our historical trends, member growth in mature stores declined sequentially from the second quarter to the third quarter. This year, it grew from Q2 to Q3, albeit slightly, and we ended the quarter with more than 15 million members. We believe this reflects that Americans are waking up to the fact that they need to prioritize their health. Members who are visiting our stores are visiting more frequently than in the past. We believe this demonstrates their commitment to overall wellness. Another potential long-term positive is that in 2021, Gen Z's are outpacing other age groups in terms of joins, which is notable as only half of the generation is even old enough to join. In general, we began to see the return to pre-pandemic seasonality of join patterns towards the end of Q3. This is encouraging as we can focus on what we do best, providing our members a community-based, judgment-free environment in which to get active and feel better about their overall health. Tom will address our positive updates to our 2021 outlook in his comments, and we will anticipate providing our performance targets for 2022 when we report our fourth quarter earnings next year. I hope that you can feel the enthusiasm as I truly believe that we are on the verge of a fitness boom. I am more excited than ever to leverage the collective passion and strength of our system to help millions of people in the U.S. and beyond get healthier, live better, improve their overall physical and mental well-being, as we've been doing so for the last 30 years. I believe there's no brand in the industry better positioned to do it than Planet Fitness. I'll now turn the call over to Tom. Thanks, Chris, and good morning, everyone. Over the past 18 months, we've demonstrated the resiliency and durability of our asset-light financial model and our store-level unit economics persevering through a devastating period for the health club industry. As Chris referenced, we withstood temporary store closures, some for up to 9 months, and not a single Planet Fitness location permanently closed because of the pandemic. We're proud of how our franchisees, headquarters staff, and club staff rallied together to provide a clean and safe fitness experience for our members. We've been confident in our ability to come out of the pandemic even stronger, but the pace of the rebound is even faster than we expected. As a result, we are revising our full year 2021 outlook. First, I will cover our Q3 financial results, and then I will address our updated guidance for the year. All of my comments will be comparing Q3 2021 to Q3 of last year, unless otherwise noted. We returned to positive same-store sales in the third quarter with system-wide same-store sales increasing 7.2%. Franchisee same-store sales grew 7.4%, and our corporate store same-store sales increased 3.1%. Approximately 60% of our Q3 comp increase was driven by net member growth, with the balance being rate growth. The rate growth was driven by a 180 basis point increase in our black card penetration to 62.5%. Q3 total revenue increased $49 million or 46.4% to $154.3 million from $105.4 million. The increase was driven by revenue growth across all three segments. The increase in franchise segment revenue was due in part to temporary store closures last year, with growth driven by royalties, new unit fees, and equipment placement fees. The increase in revenue in the corporate-owned store segment was primarily due to COVID-related temporary store closures last year, as well as the impact of seven new corporate-owned stores since July 2020. Equipment segment revenue increases were driven by higher equipment sales to existing franchisee-owned stores. For the quarter, replacement equipment accounted for 54% of total equipment revenue. Our cost of revenue, which primarily relates to the direct cost of equipment sales to franchisee-owned stores, amounted to $27.1 million compared to $15.3 million. Store operation expenses, which relate to our corporate-owned store segment, were $27.8 million compared to $21.4 million. The increase was primarily attributable to lower operating and payroll expenses with the COVID-related temporary closures last year, along with higher expenses with the new stores we opened since last July. SG&A for the quarter was $23.0 million compared to $18.3 million. The increase was primarily driven by higher incentive and stock-based compensation. National advertising fund expense was $15.6 million compared to $20.2 million. Adjusted EBITDA was $62.2 million compared to $32 million. By segment, franchise adjusted EBITDA was $52.1 million, corporate store adjusted EBITDA was $14.7 million, and equipment adjusted EBITDA was $7.9 million. Adjusted net income was $22 million, and adjusted net income per diluted share was $0.25. Now turning to the balance sheet. As of September, cash equivalents and restricted cash of $585.5 million compared to $515.8 million on December 31st, 2020. $527.3 million compared to $439.5 million, with $58.1 million and $76.3 million of restricted cash, respectively, in each period. Total long-term debt, consisting of our three tranches million of Variable Funding Notes. Now, as we've said before, our securitized debt structure is covenant light. We have two maintenance covenants, a debt service coverage ratio and a total system-wide sales threshold. Both are tested quarterly, calculated on a trailing 12 month basis and reported on roughly two-month lag. In our most recent debt covenant reporting period on September 5th, 2021, we had a 53% and a 143% cushion to the first triggering event for our debt service coverage ratio and system-wide sales covenant, respectively. We believe we have sufficient headroom for our two maintenance covenants, especially with Q2 2020, the quarter in which we had our worst financial performance last year, now out of the trailing twelve-month calculation. Now to our guidance for the balance of 2021. Similar to last quarter, our current view of 2021 assumes there is no major resurgence of COVID that causes member disruptions. As Chris noted, we now expect new store development to be between 110 and 120, up from the high end of 75 to 100. Continued strengthening of our franchisees' balance sheets. It also reflects their recognition that Planet Fitness is a premier retail investment, even with what we believe is a temporary slight setback in mature store-level EBITDA margins caused by the closures last year. We also continue to expect that replacement equipment will account for approximately 50% of our total equipment revenue this year. We now believe that our full-year revenue will be between $570 million and $580 million, up from the previous range of $530 million to $540 million, driven largely by higher equipment placement sales associated with our new store opening outlook. Based on the higher revenue, we are raising our adjusted EBITDA guidance range by $10 million to $210 million-$220 million for the year, with adjusted earnings per share now projected to be between $0.75 to our prior range of $0.65-$0.70. Our investment thesis has only strengthened as we emerge from the pandemic with significant industry consolidation. Our franchisees desire to continue to invest and grow the brand. Leading market share given the strength of our value proposition and simple operating model that produces strong economics. With that, I will turn it over to the operator for Q&A. At this time, if you would like to ask a question, press star then one on your telephone keypad. Again, it's star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Randal Konik from Jefferies. Your line is open. Please ask your question. Hey, guys. Good morning. Can you hear me? Sure can, yeah. Hey, Randal. All right, great. Hey, how are you? I guess the first question is on store guidance. It was revised, it looks like, slightly upward for 2021 implying, you know, things are getting back towards normal. How should we be thinking about the turn towards normalization as we go into 2022 and beyond? I know you're not giving guidance on how we should be thinking. Thanks, guys. Hey, Randal, it's Dorvin. Good morning. As we indicated in the release in Chris's comments, we're increasing that up from we had. I think that what that means is, you know, it's reflecting the enthusiasm of the business where it is today, you know, how it's built, when you compare us where we were, you know, kind of this time last year and the pipeline itself, as I've said in the past, was really stopped. But given what we've seen, certainly since say March, April, May time period, we started looking at sites and started putting sites into the pipeline. Some of those have been open this year, hence the increase in our guidance. I think on a you know kind of a little bit more of a macro basis we continue to see a lot of availability in real estate out there. You know we obviously didn't have You know, the other fitness companies had et cetera. As you guys know, you know, IHRSA has reported, I think it's like 22% of the gyms have closed. A lot of those are, you know, smaller mom-and-pops, et cetera. But when we sat back and we and the franchisees just look at, you know, where we're at today that's in front of us to continue to take share, continue to penetrate markets where we may have a lot of stores, but, you know, there's still a lot of penetration left. You've heard us talk about whether it's in California or Texas or some of the other markets where there's a lot of population, but we don't have as high a penetration rate there as maybe we do in the Northeast. All of those are kind of the factors. One, what's happening in a year hence of guidance. To your point, we're not really talking about 2022 yet, but we've continued to say that, you know, we believe we're gonna get back into that 200+ range, and it was just a matter of versus, you know, if and this now reflects the fact that franchisees are in the market on these sites for the pipeline. Super helpful. Then one more last question. You know, can you give some perspective on, you announced a recent partnership, I think, with Shell Corporation, gas and so on and so forth. It kind of reminds me of what Costco tries to do with their membership and give their members a lot of other enhancements or value for their membership. So can you give us an update on what you've been doing there around partnerships? Because it seems as if, you know, the number of partnerships have been increasing and that should, you know, potentially lead to an impact on churn as well. Thanks, guys. Sure. Randal, sure. This is Chris. We launched the app almost two years ago now, leading into COVID. The idea with the perks side of things is we really had no central depository that members knew and could get routinely guided to go open up this place that they all sat, right? To know where to go and to see what the discounts are this week or this month or new partners. Now with the app being built and that allows us now to not only have that feature, but also capture data from that feature and who's clicking through and how to go to partners and supply them data on the number of eyeballs that they're seeing and getting every day. Roughly, you know, eight million or so check-ins into the gym, and we're roughly having about today, about six million of those using the app to check in. six million people open the app every single week to check in, and there's other features there. Now they have the badges to check out perks and stuff. That's allowed us to open doors with a tech go now within Shell Corporation, for example. Shell Corporation is definitely probably the best one we've launched so far as far as take rate. It's more to come on it, but there's no doubt that offering more value to help people live a better life and if you offer them to save money on other parts of their world. As you know, as we've talked about forever, you know, 50% of our members won't use the store in a 30-day period. You know, their schedules get busy and or season, you know, the Christmas season comes up, but they just can't make it in, or kids got soccer practice for the spring. If you can bring the facility or the content workouts, it can only drive customer satisfaction and ultimately drive retention. Very helpful. Thanks, guys. Thank you. Your next question comes from the line of Oliver Chen from TD Cowen. Your line is open. Please ask your question. Hi. The customer trends are usage across regions as well as churn. Would also love your thoughts on the rationale behind the timing of the agency consolidation and what synergies you're most encouraged by. That sounds really interesting as well. Thank you. Yeah. The usage side of things, we're about 90% of 2019 workouts, so not quite 100%, but very close at this point, which is great to see. I'm not seeing any huge material changes from regionality right now, so that's not really affecting anything. We have roughly 400 or so clubs that are under some sort of mask or vaccination mandate, peppered throughout the system. But nothing we're not seeing that's really material in that sense. We're seeing about 30%-40% of our members using the club in a 30-day period, so not quite that 50%-50% that I used to see. But I think that's just made up of the 90% usage rate right now. I think we'll keep going in the right direction, which is great. The boomers, which are the ones that have lagged the most naturally, they continue to go in the right direction. I think it's just a matter of time before they kind of get back to normal as well. The agency thing is something that I've always wanted to do this for many years. If you think about Oliver, everything else we do in this business, whether it's the decor and wallpaper we sell, the equipment we purchase, the flooring we use, we buy in bulk and jointly, and brand consistency is important. But the value the franchisees get from that is also important. Here we are today. The marketing is, you know, should have probably done earlier, but here we are doing it today, which really just streamlines and strengthens our dollar. You know, the efficiencies that we get from that, not unlike the equipment business, for example, is that, you know, before, you know, you had 16 agencies and everybody's paying their own independent agency fees and creative fees and everything else. Now we pay one agency and a lot less and a big, much bigger company that's buying media cheaper. You know, it's the same dollars, but working dollars, acquisition dollars are used more as opposed to just, you know, administration fees. It's almost like a whole other NAF in a lot of ways with about a 20% savings. It really should help member acquisition going forward. We're onboarding now. We should be fully onboarded to this one agency. We're already working on our January promotions and first quarter promotions with them, so we're ready to ramp up for our first quarter and the January sale. It's exciting. The other side of it too, as you think of the insight we have is we have one agency fee that's responsible. We have all the data that we need from best practices throughout the country on a local level. Because before it was very hard for us to capture what each independent franchisee was doing in every DMA across the country and then capture data to figure out best practices. There's a lot of good comes out of this and looking forward for the future working this way. Thanks. Last question. On the digital experience that the member has in store, what's next? What's on the roadmap that we should focus on as well as, the key opportunities for in-app and continuing enhancement of your mobile app? Thanks, Chris. Yeah, sure. I'll yeah. You know, besides the content and exercise stuff, which we're continuing to fine-tune and tweak and moving the paywall around to figure out how much free content we offer, how much paid content is behind the paywall. We're still working on that part of it. As I said in the past, you know, that also the platform's there now. We haven't yet, but get into more maybe diet and food, nutritional guidance, meditation type guidance as well. I think also the app, when you think about friction points, you know, Crowd Meter is a prime example that we have launched during COVID, which is something we thought about even pre-COVID, just so we could help customer experience and the people wanting to avoid crowds or low usage. They could, you know, we move the schedules around without having to come to the club and get frustrated. It's a huge feature that people love. Other friction point, being able to pay their balances before they get to the club if they happen to bounce your check EFT that month. You know, it's being able to Bring a Friend and invite them through the guest as opposed to walking through and have to sign paperwork when they come in. It's just ways to really reduce the friction points, which also helps with member, not only member, but also with staff satisfaction as well. You know, they're having to deal with it as well. It's all kind of help to help themselves without having that uncomfortable feeling at the front desk when somebody has to be confronted by a balance. A lot of friction points we get to alleviate through the app. That's recorded. Thank you. Your next question comes from the line of John Ivankoe from JP Morgan. Your line is open. Please ask your question. Sorry if I missed this. It's a multitasking morning. The total number of members at the end of October, did you say that number? I mean, I know, you know, in the press release you said over 15 million. 15 million was of course, you know, what, you know, you reported in July. Just kind of wanted to get your sense, you know, just in terms of that, you know, that underlying demand. I know seasonally third quarter is normally a fairly low, you know, add month. You know, any update on the total, the specific update on the total member side that you could repeat if you said it? Yeah, John, no, we did not. Pre-COVID we didn't either, but we kind of started doing that during COVID when we had a, you know, real-time updates. As we've now returned back to normal and coming out of this, we just announced right at the end of, you know, Q3. Okay. All right. Yeah, I think we're all fine getting back to 2019, so that's okay. You know, obviously, you know, I mean, you guys have been, you know, kind of pulling up your fiscal 2021 unit development basically since you gave it, you know, well above, you know, now for the year relative to that initial guidance or at least the lower end of that initial guidance. How much of that do you think is pull forward of things that maybe you thought previously could have opened in 2022, you know, versus, you know, kind of a start of a trend of an accelerating, you know, trend just as you as you look at that overall pipeline? You know, a little bit of an aside, but do put that in the context of, you know, all the supply chain challenges, you know, that we hear. Are there any significant or major pieces of equipment or if anything else, I guess, you know, any part of the FF&E package, you know, that's missing that could potentially, you know, affect that rate of unit openings? Hey, John, it's Tom. I'll start and maybe Dorvin will add. You know, I think if we step back a second, I think as you look at what we've said over the quarters, I think the headline is things have bounced back faster than we expected. You know, the old V versus U shape. I think our franchisees have seen that, their lenders have seen that, and it's allowed them to get their balance sheets and their covenant calcs back in line faster than they expected. In talking to them, their lenders have released some of the development capital that they might have had a bit of a grip on as they were providing waivers. I think it's just that's really what's happening. I think as we've gone through each quarter, we've gotten more and more confident about what we're saying and the numbers are going up. I think to your point about, you know, inflationary pressures and they're immaterial at the moment. They're not changing decisions from franchisees wanting to build a store to not wanting to build a store, categorically not happening. When you look at the new store development and the re-equip investments that they're making, both of which are ahead of their obligations, based on the extensions we gave them, that starts to feel a little bit more like where we were pre-COVID when they were ahead of their obligations. I think that's the headline for me. The supply chain issues as it relates to equipment. You know, we have a bigger say in that, given our concentration with our primary vendors there, and they frankly, you know, move mountains to make sure that we can open when we say we wanna open and re-equip when franchisees wanna re-equip. It's not like it's. There aren't any bumps in there. There are bumps, but we're managing through it, and any potential drags have been reflected in our outlook, you know, assuming something crazy doesn't happen. I think the macro view is faster than we thought, and that has caused everything to move at an accelerated pace from what we thought earlier in the year. I think the only thing, John, that's worth reiterating for everyone in the call, too, when it comes to supply chain that you see, you know, all over the news is that, you know, with the 2,200 stores that are open, you know, we're not like a retailer QSR that they're dependent daily on weekly deliveries and inventory coming through in order to stay open and do business. We don't require any of that. If the equipment was installed three years ago, it's business as usual. We're not under any kind of constraints when it comes to that stuff. Okay. Yeah, fair enough. You know, I guess as I've you know just you know just kind of you know you know think a little bit you know longer term in terms of you know your you know your organization you know in New Hampshire, I mean, as you you know kind of think about you know just the you know the various you know the you know the benefits from you know adding even more functionality you know to your business versus benefiting from the scale that you've already built. I mean, where are you you know I guess where's your your current mindset as you think about you know the the size of the organization today relative to what your store count is going to be three years out, for example? Well, I'll add something, John, I think. I think one thing that's the beauty of our organization is the fact that, you know, we have actually shrunk our number of franchisees in the system, right? We've done a lot of consolidation. We have, you know, the best of the best. We have the dream team of franchisees now of about 125 that run the entire system. We don't continue to bring in new franchisees to build out our stores every year. It's built out with the existing franchisees. Whereas, you know, it's not the point where we're back in the old days, I was, you know, I personally was teaching them how to clean a treadmill, you know. It's now they run the playbook. They have their own COOs, they have their own chief development officers. They're very sophisticated groups of franchisees in our system now. It's not like we're holding hands as closely as we had to many years ago. There should be definitely some benefit to that in the future. Yeah. The only other thing I'd add, John, is and we've talked about this is that you know with the concentration that we've had here over you know the past several quarters in the digital area and it's just part of our everyday life now. We've you know not only enhanced that area but we'll continue to enhance that area as it's just a given that we have to be you know with the consumer or our members. A whole host of things that quite frankly have been accelerated because of COVID to be able to reach out and touch our you know our customers and prospective members as well. That's an area that we've invested in and we'll continue to invest in. I think on a more broader kind of macro basis of our, you know, kind of franchisors headquarters here, you know, there's no area that, you know, that we look at and we say needs a significant amount of attention. The only one would be international, which we've talked about in the past. As we continue to grow that footprint even more, that's an area that we'll also have some investment in. Outside of those, you know, particularly Chris's comment on the concentration of really, you know, smart franchisee groups built out with their teams and the private equity guys that come in and help supplement those because these teams are, you know, running some really good businesses with scale. (inaudible) Your next question comes from the line of Jonathan Komp from Baird. Your line is open. Please ask your question. Since we're past the Delta spike here, Chris, I know you mentioned the new joins toward. Maybe ask what you're seeing there. Then as we think to the fourth quarter, typically your members per club decline seasonally in the fourth quarter. I'm wondering your thoughts. Yeah. I mean, like we did see towards the end of third quarter September and then they decided to come back to normal, which I think is not a bad thing. I think it's a good thing in a sense that it's not, you know, we pulled a bunch of people forward during the abnormal, which I think is good, and the usage has stayed in, like that 90% range. I think and the boomers continue to go in the right direction before, so that's really good news as well. I believe the fourth quarter will hold true to prior historical trends. I don't see anything wavering right now that's gonna make it materially change either way. Okay, great. Makes sense. Maybe one follow-up, Tom, on the SG&A outlook. It looks like the fourth quarter million dollar range. That is the incentive piece that you called out. As we think forward, should we think more to a baseline in the low $20 million range, which you had the first few quarters, and I know in 2019 you were under $20 million a quarter, or is that mid $20 million range more the baseline. Understand how to think about the fourth quarter moving parts and then the baseline. Yeah, John. Obviously we're not providing an outlook on 2022 yet. That'll be, you know, the next call. I think, as I said in my remarks earlier, you know, the lion's share of the increase in SG&A is really based on, you know, that notion of it's more V-shaped, you might expect wasn't fully captured in how we set our targets, so therefore our incentive comp is higher than we thought. There's also some inflationary pressures as you might, you know, insurance and different things. I think if you look at our SG&A from 2019 and sort of forward to now and there, it's happening sooner and maybe our moat might be even wider than we thought at the time. You know, as awful as all of this has been for the country and our team members, if we assume that our SG&A sort of as it did historically, yielding significant SG&A leverage. So I think it's really about us looking long-term, making sure we've got the right folks to really take advantage of what we're trying to do. Well, to Dorvin's point, you know, building out and Chris's point, building out digital capability because we wanna, as they say, skate to where the puck is going, not where it is. That's not just the digital team, right? There's a significant IT investment behind that. We think our scale affords us the ability to do that in a way that will differentiate our what we offer and importantly get more people off the couch. That's really what we're doing it all for, as that sort of a bit of a long-term view. We did take some short-term pain however, not really permanent. We have over the arc of our conversation since the pandemic that we would invest where we thought we needed to strategically to widen our moat, and that's reflected in what you're seeing. Okay. That's helpful color. Thank you. You bet. Thank you. Your next question comes from the line of John Heinbockel. Hey, guys. Want to start with the pricing pilot, right? Black Card pricing, 'cause I know you were testing multiple levels. Long term, when you think about pricing power, you know, what you're offering and competitors are gonna. The Black Card ultimately closer to $30, and is the White Card still sacred? Yeah. I think the White Card is still sacred. I think that is, as I've always said, kind of our get you off the couch price. You know, the 140 million people within 10 miles of our current plan that aren't members, you know, we still have to get them off the couch before we need to, I think, touch that. I think that's something that we're sacred to. I think the fact that we're 62.5% Black Card, even though we only almost always advertise a $10 membership, is amazing when a customer comes in and pays more than double what they thought they were gonna pay based on the benefits of it, you know? You know, as I get it to 30, I don't, you know... I'd never really move it without adding more value. Without more perks, you know, whether it's more, you know, Shell gas type perks that are only Black Card incentives or it's more content perks, you know, more exercise or diet. The one thing we do have, which we've always talked about, is the reciprocity. That is still the number one used function of the Black Card. You know, when we have 3,000 stores, that's a better value than it is today. That's something, you know, whether or not it goes to 30, it's hard to say until we get there. I think the Black Card is probably the pricing power that we'll utilize to change the average ticket. That doesn't mean we, you know, we could come up with a third tier if we find some great benefit that we decide is a third tier option. I think the White Card, Black Card is an easy join scenario, right? It's A or B, essentially. It's not very confusing for a customer to come and make a decision, and a lot of our industry is not like that. It's like a menu of 20 you can choose from. We make it very simple, you know, in that sense. I think that's kinda how we look at it. Now, the pricing test right now is still in those 100+ clubs or so. That $24.99, that includes the PF+. Fine-tuning the kind of, I guess, how we present the offering, how we present the rate sheets and so on, how we sell it online. We'll continue to test at the end of the year and into for- Accelerate the process of, right, restructuring the marketing spend, you know, more national, less local. Is that, you know, is the 7%-9% right, still right if you, if you're getting a 20% reduction in cost on the national side? I think almost both, right, John? I think as we learn more from the data, and understand more of how the LAP is spent locally and the NAP is spent nationally and how they work together and they both, I guess, go in the right direction, there could be efficiencies there which could change the 9%. Then on top of that, both of those could be working towards what you're asking. You know, whether or not it's a 2% and 7% or it's a 2% and 6% or it's a 3% and 5%, I mean, we'll have to see when we get there. I think this is the beginning of all that long term. Okay. Thank you, guys. Thank you, John. Your next question comes from the line of James Hardiman. Your line is open. Please ask your question. Hi, good morning. You touched on this, I just wanted to clarify the visitation trends. I think you said in aggregate you're at 90% of 2019 sort of visitation levels or workout levels. In the prepared remarks, you I think you mentioned that members who are visiting a store are visiting more frequently. I just want to make sure I understand that. Is it that, you know, the people that are there are actually working out more than they were in 2019, and then there are some people that just aren't there or should I think about that a different way? That's exactly right. Yeah. The ones that are using are using slightly more than they had in the past, but we're not quite at the same percentage of members using this facility. Okay. That's what I thought. That's I appreciate the fact. As I think about where you're sourcing new customers from, the people you know basically sourcing from the couch, you're sourcing from other chains, maybe chains that have closed. Do you have any up-to-date numbers on sort of lifetime value of a customer that you get from another gym chain that's closed down? Thanks. Yeah, we haven't seen the retention side of an abandoned member coming to us from a closed club. We haven't really seen any impact there or change there. We do have the data that shows that, today in Q3, about 2% of our joins from competition. The same trend holds true with the rejoins, which is a great one, that 30% of our joins are rejoins. They're former Planet Fitness members that have come back. That runs usually historically and almost forever, 20%. It's up quite a bit. People are coming back faster than they have ever in the past by quite a bit. The Gen Z are joining way, which is exciting. There's almost 84 million that are even of age to join. There's a huge trend there. That's a tailwind that's gonna, you know, come each year as another bucket of Gen Z's fall into the age of joining, you know. Some great data there. Also 40% of our joins are still first timers. That's also a great point, and that's kind of historically been there for forever. People are coming back to bricks and mortar faster if they were former members and they're joining bricks and mortar as they were pre-COVID. I think it's been proven. I think everybody's seen this, you know, going into COVID. Got it. Just to clarify, if I previously were Planet Fitness members, people that have never been gym members and people that are coming from other gyms, the biggest opportunity is still the couch people. Is that fair? Yes. Yeah, absolutely. Absolutely. Got it. Chris O'Cull from Stifel, your line is open. Please ask your question. Tom, the revenue guidance looks like it implies revenue in the fourth quarter, well above this quarter's level. But adjusted EBITDA well below what you generated and what's built into that expectation, and whether you're seeing anything in the business that quarter? It's thanks, Chris. It's really just a mix. The equipment really has its strongest quarter in the fourth quarter, and so that, you know, given its margin differential compared to the franchise and the corporate segment, that's probably what. There's nothing by segment, if you will, that across the three that there's any individual margin pressure, quarter to quarter. It's just more the mix of the business. Okay. That's helpful. Then, you know, it's great to see the acceleration in new store openings. Can you provide a bit more color around how units opened this year are trending in terms of store maturation and new member acquisition relative to what you've seen historically? Yeah, sure thing. Back in 2020, Chris, stores that opened in 2020, you know, they weren't on the normal ramp curve for all the reasons you'd expect given what was happening, you know, across the country and within our business. Now since then, as things have, you know, through the earlier part of the year, and particularly into the second and third quarters, things have improved across our business. Their performance has improved as well. They're sort of tracking about 80% of where we would expect them to be on a pre-COVID new store ramp. The stores that have opened in the latter part of Q4 and into this year are 90%+ of that normal new store ramp. You know, kind of tracking where our business is, if you will, in terms of visits and things. Very encouraged to see those store ramps returning more closer to normal pre-COVID levels. I think that's another confident sign for our system too early. Great. Thanks, guys. Thank you. Your next question comes from the line of Brian Harbour from Morgan Stanley. Your line is open. Please ask your question. Yeah. Hi, good morning, guys. Just maybe another question on new member sign-ups. You mentioned a number of clubs that have, you know, still have masking or maybe some vaccine requirements. I'm curious about how sign-ups trend when some of those restrictions end or, you know, obviously in the vaccine case, that'll kind of stay in place. Do you think that's good for sign-up, where it gives people more confidence, or do you think that's somewhat of a limit to kind of recovering memberships? Yeah. The mask thing we don't see being much of an issue. The vaccine mandates, which luckily is only a very few number of clubs, 50 clubs, I think, roughly, that have vaccine mandates. That's not a huge amount, which that definitely is a little bit more of a hurdle to get through. The mask mandate, we haven't seen that affect. Even during COVID with the ones that had it and didn't have it, we didn't see it really affect member joins or so. Okay, great. Maybe another question just on the digital content too. I'm curious how usage of that has kind of trended. Has it decreased perhaps as people come more in person, or do you see it kind of continuing to grow? I guess I'm just curious about kind of how you think about that as more of a revenue generator in the future. Sure, yeah. We actually, you know, even since once the stores started to reopen, even a year ago this past summer when we started to have the stores open, we began to see just even the usage of the free stuff. We hadn't even launched the paid stuff. Even the free stuff started to decline some. But I think the trends around the paid subscriptions, which is probably the most interesting, where when you look at the paid subscription side of things, 80% of the members who have subscribed visited the club. Even though they're subscribing, they're actually using the club too. It's not like they're using it as a replacement, I guess, if you will. Using it as a supplement to their bricks-and-mortar, which is great to see because a lot of people, you know, coming from the industry think they're gonna, you know, people are gonna work out at home, not gyms. They're actually using it as a supplement as opposed to a substitute. 40% of the PF subscriber, PF+ subscribers, so they started off with a digital membership to begin with, goes to that hints to that kind of gateway, if you will, where they kinda get them to convert to a bricks-and-mortar. Almost a lot of it's an acquisition tool, whether there's not a Planet close by or they wanna, you know, maybe they wanna get a little bit more in shape before they join the gym. A good gateway. I think as we the members are using different content, different trainers and different likes and dislikes, we can only get better with it. Then down the road, like I mentioned, get into maybe diet, nutrition, meditation and so on, so we can hit different segments of our member base that are getting that today. Sounds good. Thank you. Thank you. Hi. Thanks for taking my question, and congrats on the strong quarter here. Nice to see the recovery trends. I just wanted to ask on the inside of the business, does this change the outlook? How would you sort of treat that? Would you pass that through to the franchisees there? Yeah, sure thing. It's Tom. I think, as I said, we're very important to our two primary vendors, Matrix and Life Fitness. You know, they have passed along, after a period of months of not passing it along. They did pass along a slight increase to our system. It's viewed as temporary until steel prices pull back. It varies a little bit based on type of equipment and vendor, but it's sort of low- to mid-single-digit price increases. It's not anything significant and, you know, it doesn't really affect our margin, as I said earlier, which is really the most important thing, franchisees' willingness to move forward. I mean the impact of the fact that they're not only driving that new store activity that allowed us to take up our outlook. They're also investing in re-equipping to how they feel about the brand, the customer and member experience that they wanna have, and making those investments ahead of when they need to, you know, I think is testament that those slight inflationary pressures are not affecting how they think about the business and how they're investing in it. Great. I wanted to ask about the higher Black Card pricing and the pilot that you're doing there, and maybe you touched on this a bit earlier. Has there been any decision in terms of, you know, maybe rolling that out to the rest of the chain or just sort of how, you know, how you're thinking about the cadence of the Black Card pricing from here? Thank you. Yeah. This is Chris. Thanks for the question. Yeah. We'll continue to test it, as I mentioned, through the end of the year and probably into first quarter before making any longer-term decision or broader rollout decision. Still watching, you know, all of the clubs. There's a little over 100 clubs roughly that are in that test, fine-tuning, you know, the rate sheet, sales process, to make sure we get the right Black Card conversion. We don't want to diminish the Black Card conversion from the price increase, so that's really where we have to watch the data, how that falls. Then the retention, which takes time to figure out the higher price. You know, it's only $2, but you gotta make sure that we're not driving a higher attrition because it's a little higher price point, no one's using the club. It just takes time. That's all. Hopefully more in the first quarter, we'll have some data here to share and to make a decision that we can move with. Your next question comes from the line of Simeon Siegel from BMO Capital Markets. Your line is open. Hey. Good morning, everyone. Congrats on the ongoing progress. Thanks. Chris, just to follow up quickly on that, the Black Card member penetration for new members and the existing. Is there any differential between the new members you're seeing in terms of that Black Card penetration? Does that impact your view on the ultimate company-level Black Card penetration opportunity? Earlier, you brought up the Bring a Friend perk that we have seen, or some form of data capture on conversion of those friends to members. Thanks. Yeah. Sure. Thanks for the question. Yeah, Black Card penetration, I mean, it's been great 'cause it ekes up a little bit each year, right, as you've seen it last few years and we've continued to raise the price, you know, slightly over the last, you know, four or five years. I don't see any reason why it shouldn't be able to continually year after year, slightly tweak up as I mentioned earlier, open more stores. Reciprocity is number one. You know, when we have 3,000 stores, it's a better value than it is today. That's always in our back pocket as we build out our system. Any other new pilots or tests that we do that discounts in our perks button, that's maybe a Black Card-only perk, right? I think more of that stuff, anything that add value, I think can drive Black Card percentage, and that's kind of how we're looking at that. I think even without that, I think we'll still slowly tweak up year-over-year on that side of things. Bring a Friend conversion, right now we have it in the app, so it captures data on who those friends are. We have about 60% of our member base has the app. Out of 15 million, about 60% do. We are capturing some of those guests today, but people that are using the app. Again, it's not our entire member base that has the app, so we're still capturing more of that. That is definitely low-hanging fruit for us that we didn't have that ability to really market to them. We've done some small tests here and there with those guests. The other one too is we have the Refer a Friend button that's on the app, which, you know, if you think about it, we didn't even have a way to formally have a member invite a friend to join. That's been working extremely well. We just started doing a little bit of gamifications with it, where if a member refers up to three friends, they could get up to three months free, if they get their friends to join. A little bit way to reward members for referring. That's all new to us. We didn't even really have a formal way to do that. Once we get, you know, 80, 90% of our members with the app, it's even better for us. It's when you think about cost per acquisition there, you know, we already paid for the first member to join. The cost per acquisition for those members is almost nothing except for the free month we give the current member. It's extremely lucrative. Sounds great. Thanks, guys. Best of luck with your head. Your next question comes from the line of Sharon Zackfia from William Blair. Your line is open. Please ask your question. Hi. I think the queue went in alphabetical order today. Thanks for taking the question. I guess I was really intrigued by the 140 million people that you mentioned are within 10 miles, and it made me wonder kind of where your brand awareness is at this point. I mean, is that the number one opportunity? Or if it's not, I mean, what is the main reason that your research would indicate that you haven't captured, I guess, a greater share of that 140 million? Yeah, I think it's the brand awareness did retract. You know what I remember, I mentioned that, I think it was first quarter. It did retract some when we weren't marketing all last year. We're still number one by far in the industry, but we did retract some. My guess now, we're definitely getting back on track and probably after this New Year's, we'll be hopefully back where we were. Yeah, I mean, that is the low-hanging fruit. I mean, I look at. It was interesting when you talk about, like, unit growth, and we've talked about this a lot over the last couple of years. We are, you know, we look at these area development agreements that we sold, you know, eight, nine years ago that we thought we could fit 10 clubs and we find we look back at it now, and you could probably fit 15 clubs in that same area. Just because we're getting more people off the couch and the bigger our marketing flywheel gets, the more people we get in front of. Whether it's brand awareness or it's the right offer or it's just another club built closer to the population in less drive time or more on their way they drive to work, you know? That's really low-hanging fruit. The more we penetrate that 140 million people that are just not gym members, you know. Maybe it's messaging. Maybe it's more getting into talking about it. A lot of people don't realize that working out can make you sleep better. They don't realize working out can relieve stress or anxiety. You know, they think it's all vanity. There might be other ways to, you know, what haven't we said already? We're spending $250 million a year, let's say, in the current year in marketing. You know, there's more messaging we can get in front of them that maybe gets another group of people to give it a shot. You know, Sharon. Sorry. Sharon, we've said this in the past. I think you've heard Chris talk about it. Even in, say, New Hampshire, where, you know, we have the highest kind of penetration rates and one out of every two, you know, health club members are members of Planet Fitness. Even our, you know, a lot of our oldest clubs are here in New Hampshire. If you go back over the last three, four, five years, they still comp. You know, the thing about our brand is that because of those people that are on the couch Even with the kind of penetration rates we have here, we can still get more and more off the couch and grow, you know, grow our comps in those older stores in those markets. Which then what that tells us, and we've said this, is that when you go in then to some of the markets where we have not had as many stores and that much penetration, we're still able to grow the comps in those markets, which gives us then that expansion opportunity and then that confidence level that you first talked about to get to that 4,000 or even more. That's really helpful. I guess one other question. There are obviously a lot of wearables out there, right? I feel like every day I hear of a new fitness tracker of some sort. Have you explored any kind of partnerships there as a means for, you know, building awareness or, you know, new member acquisition? Yeah. We definitely, you know, between the wearables connecting to our app, the Apple, the Garmin and Fitbit and stuff like that, we're working to make sure all those are piped through our app as well, heart rate collection, all that. Also partnership wouldn't be out of the question. I mean, there's always something here that's, you know, either partner or come up with your own is probably the bigger question. Probably partnering might be the better option because there's some brand awareness with other companies that are already in that space. It would be great data capture, right? I mean, the app is already great data capture, but that one more component would just be probably top it off. Okay, great. Thank you. Thanks, Sharon. There are no further questions at this time. You may continue. Okay. Well, thank you, everybody. We had a great morning. As you've heard, the business is performing extremely well. I couldn't be more pleased. We all couldn't be more pleased. You know, we never wavered in confidence that we came out of this, that we would come back and come back stronger than we were before. I strongly believe that our future is gonna be brighter. I look forward to our fourth quarter release and then going into our first quarter for new year, which should be pretty spectacular. Thank you. Have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.