Greetings and welcome to Xponential Fitness, Inc. First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kimberly Esterkin from Investor Relations. Please go ahead, ma'am. Thank you, operator. Good afternoon, and thank you all for joining our conference call to discuss Xponential Fitness's first quarter 2022 financial results. I am joined by Anthony Geisler, Chief Executive Officer, Sarah Luna, President, and John Meloun, Chief Financial Officer. A recording of this call will be posted on the Investors section of our website at investor.xponential.com. We remind you that during this conference call, we will make certain forward-looking statements, including discussions of our business outlook and financial projections. These forward-looking statements are based on management's current expectations, and involve risks and uncertainties that could cause our actual results to differ materially from such expectations. For more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligations to update the information provided on today's call. In addition, we will be discussing certain non-GAAP financial measures in this conference call. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures that we provide. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release that was issued earlier today prior to this call. Please also note that all numbers reported in today's prepared remarks refer to global figures unless otherwise noted. I will now turn the call over to Anthony Geisler, Chief Executive Officer of Xponential Fitness. Thanks, Kimberly, and good afternoon, everyone. We appreciate you joining our first quarter earnings call. Xponential Fitness is the largest global franchisor of boutique fitness workout brands. As of the end of the first quarter, our franchisees and master franchise partners collectively operated over 2,222 studios in 14 countries around the world across 10 leading brands in major workout modalities. Our business model is straightforward. We license our boutique studio operations, share our business processes and branding with franchisees, and in exchange, charge royalties and other fees for our services. As our AUVs grow and as we increase the number of studios, we become more profitable. Given that the royalties generated from system-wide sales are virtually 100% margin flow through, and given our SG&A platform scales. Let's take a moment to review our first quarter financial highlights before turning to discuss our progress against our core growth strategies. We are pleased with our financial and operational execution in the first quarter. On the heels of a very strong fourth quarter, Xponential Fitness entered 2022 with great momentum. First quarter actively paying members and visitation rates in North America increased by approximately 60% and 45%, respectively, year-over-year. Sequentially, these figures also showed solid growth and both improved 17% compared to the fourth quarter of 2021. Our Q1 North American system-wide sales grew for the 7th consecutive quarter, up 70% year-over-year. Importantly, performance during the first quarter continued to strengthen month-over-month. We reached a significant milestone in the month of March with monthly run rate North American AUV of $477,000, rebounding to the peak pre-COVID quarterly run rate AUV. We expect that AUVs will continue to increase with the ongoing execution of our growth strategies. Quarter to date, we continue to see positive momentum in our system. While we are in a period of unprecedented inflation and macroeconomic pressures, our member counts are increasing, both overall and at the individual studio level, as our customers continue to prioritize their health. Further, we believe our model is more insulated from macroeconomic pressures as our customers, who in general are on recurring membership packages, do not view fitness as discretionary spend, and our membership fees tend to be a relatively small piece of their overall budgets. Based on this solid performance, we posted net revenue of $50.4 million, increasing 73% year-over-year, and adjusted EBITDA of $14.4 million or 29% of revenue, compared to $3.6 million or 12% of revenue in the prior year period. Compared to the prior quarter, adjusted EBITDA improved by $5.9 million, an increase of 68%. This drove adjusted EBITDA margins to nearly double quarter-over-quarter. With that as a background on the quarter, let's move to our four key strategic areas of growth, beginning with our first two growth levers, increasing our franchise studio base across all of our brands in North America, and expanding our brands and studio base internationally. We ended the quarter with 2,229 global studios, the largest studio count in our company's history. Having opened 99 net new studios in the first quarter as expected, we remain on track to open over 500 new studios this year. We also experienced strong demand for our franchise licenses, selling 260 licenses globally in Q1. In North America, we have over 1,800 licenses sold and contractually obligated to open and have a replenishing pipeline of organic new studio expansion, offering us 4-5 years of visibility into our long-term growth. Another driver of North American studio growth is our nationwide partnership with LA Fitness, giving us the exclusive right to open our Xponential Fitness brand studios within LA Fitness locations, with a minimum development commitment of 350 franchise locations over five years. While still early, we are seeing strong interest from franchisees. In terms of international growth, we now have almost 1,000 studios obligated to be open internationally, paving the way for further expansion. I'm happy to announce that during the first quarter, we added two additional countries to our international presence, Mexico and the U.K. In Mexico, we signed a new master franchise agreement, or MFA, for three of our brands, StretchLab, AKT, and Rumble. BFT has also sold its first license in the U.K., marking our first entry point into the country. As a reminder, our MFAs are structured to provide Xponential with virtually 100% margin flow-through. To support our international expansion, we are very pleased to announce that Dan Adelstein has recently joined Xponential Fitness as our Senior Vice President of International Development. His main focus will be supporting our real estate development and studio openings. Dan previously served as the Senior Vice President of International Development at Orangetheory Fitness. On the M&A front, the integration of BFT remains on track. As a reminder, BFT supports our global growth trajectory with over 170 franchise studios currently open, and an additional 180 studios sold and contractually obligated to open globally. Lastly, in terms of future M&A, we will continue to opportunistically evaluate potential brands and new modalities, taking a disciplined approach to capital allocation. I'd like to now pass the call on to Sarah to discuss our third growth driver, increasing our same-store sales and AUVs. Thank you, Anthony. As many of you know, I've been working closely with our teams to develop new ways to expand our class offerings to current and prospective members, while also increasing overall retention levels across our boutique fitness network. Having a wider reach and offering a robust experience will allow us to continue enjoying growth in our studios, resulting in improved AUVs and overall system-wide sales. I'd like to take a moment now to speak to these efforts in further detail, but first, a quick refresher. As previously discussed, the key to Xponential Fitness' ongoing success is our ability to proactively manage the health of our franchise system, and collectively collaborate with franchise partners to bring a best-in-class studio experience to communities worldwide. We continuously track our core KPIs using our technological capabilities and data analytics tools to understand our business performance in real time. Beyond looking at these key performance indicators, we also monitor our ability and success of connecting with new and existing members through our omni-channel boutique fitness offering, in which we provide both in-person and digital classes across our brands. Beginning with our in-person offering, XPASS provides subscribers access across our U.S. studio locations under a single monthly recurring subscription. XPASS has been a powerful engagement platform for us, helping us attract new, retain existing, and re-engage previously churned consumers. XPASS does this by offering a comprehensive fitness program with flexibility across premium fitness modalities and geographies. XPASS officially launched nationwide in Q4 of last year, and its primary goal is to fill underutilized classes. By driving more bookings into existing classes, XPASS helps our studios increase revenue, and profit. In Q1 2022, the first full quarter of XPASS being fully rolled out, we significantly reduced our customer acquisition cost, and simultaneously increased customer order values with the introduction of new plans. These operational improvements specifically focused on increasing profitability and have resulted in XPASS already breaking even for the quarter on a relatively small booking set of about 10,000 classes. We are optimistic about XPASS's differentiated nature and expect that XPASS will help us continue to optimize our franchise system in 2022. In terms of digital engagement, XPLUS, which officially launched in April, will offer all 10 of our brands thousands of live and on-demand digital workouts on a single platform. Subscribers now have even greater access to our robust fitness portfolio to supplement their in-person class attendance. To further promote brand engagement and drive revenue and customers into our studios, the platform allows users to find nearby Xponential studio locations and contact the studios for class schedules and memberships. In addition, as a standalone digital platform that interfaces with consumers around the world, XPLUS is highly conducive to B2B subscription options and direct marketing partnerships. We believe we are ideally suited to help our corporate partners maximize their health and wellness programs, and we are enthusiastic about the opportunity to access a large number of new customers efficiently and at scale. Finally, subsequent to the end of the quarter, we announced the expansion of our digital offering in collaboration with lululemon and its home gym technology, the Mirror. Beginning this fall, four of our brands, Pure Barre, Rumble, YogaSix, and AKT, will create original fitness programming content for the Mirror. We are thrilled to introduce Xponential's offerings to the Mirror community, and believe this partnership will help us increase brand awareness and reduce overall customer acquisition costs, given that lululemon, Mirror, and Xponential all target a similar customer demographic. This is just the beginning, and we will provide updates on the progress of our collaboration in future quarters. With that, I'd like to turn the call back to Anthony to speak to our final growth driver. Thanks, Sarah. As is evident, our 10 brands have created a diverse portfolio that differentiates us from any other fitness franchisor. Our complementary brands and modalities have been carefully curated to ensure longevity and long-term sustainable growth trajectories, both protecting our position as the industry leader in boutique fitness franchising and providing the scale and breadth needed to participate in meaningful B2B opportunities. Our partnership with lululemon and Mirror, as well as the previously announced partnership with LA Fitness and other business-to-business offerings, are all expected to drive incremental revenue opportunities. Contributions from our first three growth levers, as just discussed, coupled with continued operating excellence, will support our fourth growth lever, expanding our operating margins and driving free cash flow conversion. The asset-light nature of our franchise model, together with the many benefits we experience because of our scale and shared services platform, have supported our margins to date. As previously mentioned, our adjusted EBITDA margins nearly doubled from Q4 2021 to Q1 2022, reaching 29%. We continue to expect our adjusted EBITDA margin will be in the low 30% range for the full year 2022, strengthened by the growth and maturation of our business. In summary, we are very pleased with our solid start to 2022. Xponential is well positioned for continued growth as we open new studios, drive same-store sales, and expand our operating margins. These factors, combined with the ongoing execution of our four strategic growth initiatives, continue to solidify our position as the largest and most differentiated global franchisor in the boutique fitness industry. Thank you again for your time. I'll now turn the call to John Meloun to discuss our first quarter results and our guidance in more detail. Before John begins, I am thrilled to let you all know that John recently won the Orange County Business Journal Public Company, CFO of the Year award. John was selected in a competitive process for his remarkable leadership at Xponential. On behalf of our entire company and board of directors, I'd like to highlight how proud we are of John, and thank him for his great contributions to our company. Thanks, Anthony, for the kind words, and good afternoon, everyone. It's great to speak with you today as we discuss Xponential's strong start to 2022. First quarter North American systemwide sales of $224.5 million were up 70% from $131.9 million in the first quarter of 2021. This number again represented an Xponential record and was driven by new member growth, adding new studios, and strong visitation across all our brands. On a consolidated basis, revenue for the quarter was $50.4 million, up 73% from $29.1 million in the prior year period. All five of the components that make up revenue grew during the quarter. Franchise revenue was $25.5 million, up 85% from $13.8 million in the prior year period. The growth was largely driven by higher royalties as well as a significant increase in franchise license fees. Equipment revenue was $7.8 million, up 91% from $4.1 million in the prior year period. This increase in equipment revenue was largely driven by a higher number of equipment installs along with a greater concentration of installs within equipment-intensive brands. Xponential maintains a diversified supply chain, most of which is based here in the United States. We have been focused on procuring equipment to avoid any slowing or disruptions of future openings. To that end, I am pleased to note that we have secured the equipment packages required for brands with a high volume of new studio openings expected in the coming quarters, such as Club Pilates and CycleBar. In addition, while we operate on a cost-plus basis, the advanced purchases also ensures that we protect our equipment costs against inflationary adjustments. Merchandise revenue was $6.1 million, up 44% from $4.2 million in the prior year period. The improvement during the quarter was primarily driven by a higher number of studio openings along with increased foot traffic across all our studios. Franchise marketing fund revenue of $4.4 million was up 79% from $2.5 million in the prior year period, primarily due to strong system-wide sales and average unit volume growth. Lastly, other service revenue was $6.6 million, up 45% from $4.5 million in the prior year period. The increase in other service revenue in the quarter was primarily driven by an increase in credit card rebates and revenues from transfer studios that we temporarily own for short periods. Turning to our operating expenses, cost of product revenues were $9.6 million, up 79% from $5.3 million in the prior year period. The increase during the quarter was driven by higher equipment and merchandise revenues in the period. Cost of franchise and service revenue was $4.2 million, up 83% from $2.3 million in the prior year period. The increase during the quarter continued to be driven by costs related to franchise sales commissions and from technology fee revenues from a higher number of studios operating. Selling, general, and administrative expenses of $33.9 million were up 104% from $16.6 million in the prior year period. This increase was largely due to costs associated with public company expenses and higher non-cash equity-based compensation, as well as expenses related to a litigation settlement. As a percentage of revenue, SG&A expenses were 67% of revenue in the first quarter, compared to 57% in the prior year period. Keep in mind, when considering our SG&A as a percentage of revenue, the current year period includes stock-based compensation expenses, which was not included in the prior year. Depreciation and amortization expense was $3.5 million, an increase of 70% from $2.1 million in the prior year period. Marketing fund expenses, which include expenses related to corporate marketing, were $4.4 million, up 66% from $2.6 million in the prior year period. The increase was driven by a higher spend afforded by higher marketing fund revenue and due to lower spend in the prior year period due to the pandemic. Acquisition and transaction expenses totaled $9.5 million versus $0.4 million in the first quarter of 2021. The increase in acquisition expenses is due to $9.5 million in contingent consideration, primarily related to our acquisition of Rumble. As I noted on our Q4 call, the Rumble contingent consideration is driven by our share price. We mark to market it each quarter and accrue for the earn-out. Net income is reduced. However, the share count will not increase until these shares actually vest. We recorded a net loss of $15.2 million in the first quarter, compared to net loss of $4.8 million in the prior year period. The increase in net loss during the quarter is primarily the result of the previously mentioned non-cash contingent consideration related to our acquisition of Rumble and increased equity-based compensation, offset by higher revenue income and associated margins. We continue to believe that the adjusted net income figure is a more useful way to measure the performance of the business, which we provided in our earnings release for reference. On an adjusted basis for the first quarter, excluding the $9.5 million of non-cash contingent consideration, along with the $0.3 million related to the remeasurement of the tax receivable agreement according to our Up-C structure, adjusted net loss totaled $5.3 million compared to an adjusted net loss of $4.6 million in the prior year period. In order to calculate adjusted net loss per share, we isolate the portion of the net loss that is attributable to Xponential Fitness, Inc., which is $2.6 million, and we reduce this number by $1.6 million to account for the dividend paid on our preferred shares. This results in an adjusted net loss of $0.19 per diluted share on a share count of $22.7 million shares. Adjusted EBITDA was $14.5 million in the first quarter, compared to $3.6 million in the prior year period. Adjusted EBITDA margin grew to 29% in the first quarter, compared to 12% in the prior year period. As Anthony noted, our 2022 outlook anticipates adjusted EBITDA margins of over 30%. Long term, we expect this number to grow to over 40%. Turning to the balance sheet, as of March 31, 2022, cash and cash equivalents were $15.8 million, up from $7.3 million as of March 31, 2021. Total long-term debt was $130.3 million as of March 31, 2022, compared with $191.6 million as of March 31, 2021. Before turning to our outlook, I'd like to briefly discuss our recently announced secondary offering, which closed on April 11, 2022. The selling shareholder was H&W Investco or H&W, which is controlled by Mark Grabowski, the chairman of our board. H&W is the company's private equity sponsor and has been invested in Xponential Fitness since 2018. Prior to the April 2022 offering, H&W owned $24.2 million shares, or approximately 52% of the total Class A and B shares outstanding. H&W sold $5.2 million shares in the recent secondary offering and now owns $19.1 million shares, or approximately 41% of the Class A and B shares outstanding. The secondary offering has increased our public float by nearly 50%. Xponential Fitness did not receive any proceeds from this sale, and neither Anthony nor any other members of management sold any shares in the offering. Given the company is cash flow positive, there is no current need to raise capital to support our long-term growth strategy. Moving to our outlook, based on current business conditions and our expectations as of today, we reiterate our full year 2022 guidance as follows. We expect our total 2022 global new studio openings to be in the range of 500-520. This represents the highest number of studio openings in our company's history. We project North American system-wide sales to range from $995 million - $1.005 billion or $1 billion at the midpoint, which represents a 41% increase from the prior year and the highest North American system-wide sales in our history. Total 2022 revenue is expected to be between $201 million and $211 million, an increase of 33% from 2021 at the midpoint of our guided range. Adjusted EBITDA is expected to range from $67 million - $71 million, a 153% year-over-year increase at the midpoint of our guided range. We anticipate our capital expenditure budget for 2022 to be approximately $5 million-$7 million, and will be primarily focused on integrating BFT onto our website and mobile applications, completing the build-out of a Rumble studio, with the remainder being allocated to maintenance and other technology investments to support our digital platforms. Based on the visibility today, SG&A excluding equity-based compensation for 2022 will be roughly 33% of total revenues at the midpoint of the range. For the full year, we expect our tax rate to be in the mid to high single digits, share count for purposes of earnings per share calculation to be $25.1 million, and $3.25 million in quarterly dividends to be paid related to our $200 million convertible preferred stock. A full explanation of our share count calculation, and associated pro forma EPS and adjusted EPS calculations can be found in the tables at the back of our earnings press release. Thank you again for your time today and for your support of Xponential. We look forward to speaking with you on our next earnings call. We will now open the call for questions. Operator? Thank you very much. Ladies and gentlemen, at this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. We have a first question from the line of Joe Altobello with Raymond James. Please go ahead. Hey, guys. Good afternoon. First, I guess a couple quick questions. In terms of the 99 new studios you opened in the quarter, could you help us understand how that broke down between North America and international? Same question for the 500-520 that are expecting to open this year. How does that break down between North America and international? Hey, Joe. Yeah. When it comes to the domestic versus international, about 23% or about 25% of the studios were international, about 75% were domestic. You know, on the international front, primarily driven by BFT. You know, international and BFT was about 23 studios in total. Then when you look out on domestic front, StretchLab had 22, Club Pilates 17, YogaSix 14, CycleBar 8. Pretty much our kind of the scale brands that we have that are well above the 150 kind of threshold for total open studios are pretty much driving the significant amount of growth domestically. Some of the younger growth brands like Rumble and STRIDE, you know, they're on the early growth stage, so they have less studio openings. About 75% were domestic and 25% international. That's for the full year as well, John? No, that was just for Q1. The mix should be about the same for the full year. If I look at your guidance, and I know it's, you know, it's May 12th, and it's still relatively early in the year. If I look at 2021, on revenue, for example, Q1 represented about 19% of your full year revenue. Here we are, you know, north of $50 million in Q1. Why wouldn't we see the same sort of cadence this year? You know, it seems like you guys are assuming maybe AUVs level off, or are you just being conservative at this point? In regards to, like, the revenue spread and how it'll build throughout the year, I mean, a large driver of the revenue will be coming from equipment packages as we continue to scale and open more studios in the second half of the year than the first half of the year. You will see revenue continue to scale throughout the quarters. From a perspective of conservatism, you know, we always maintain, you know, we wanna definitely underpromise, overdeliver from our perspective. AUVs continue to climb. The expectation is they will continue to climb throughout 2022. From our perspective, you know, the guidance and outlook we put up there, we wanna make sure we hit that, you know, based off of what we put out at this point in time. If we see overperformance in the P&Ls as we walk through the quarters, you know, we'll make adjustments to our outlook as necessary. At this point in time, we feel the outlook and the guidance we've provided for 2022 is a fair representation of what we know with high degree of confidence we'll be able to hit. Okay. Thanks, guys. Thank you. We have next question from the line of John Heinbockel with Guggenheim Partners. Please go ahead. Okay. Maybe start. If you look at the last time you guys were at the 477 of AUV, and I know the brands are all different, you know, how might members per studio and per member spend be different than last time? On a go-forward basis, which of those two do you think will grow faster, members or per member spend? Yeah. We are seeing that the member spend is increasing, especially as a studio matures. They have a little bit. Yep. More of an affiliation, and you know with the studio buying the retail, and just putting more of their dollars into the individual studio. We are seeing that come back. Retail sales at the studio levels have started to increase. So far things are looking very good. Maybe secondly, just remind us, particularly North America, right? As you sign licenses, you know, those are commitments to open, you know, whether they're one or multiple, over what time period? I ask that because, you know, if you think about the pipeline, is that just gonna continue to grow, right? You know, will it be 5-6 years and even more? Or do you think there, at some point, we get at least a little bit of a catch-up in actual studio openings, right? You know, you'll do 500-520 this year, but that ends up growing nicely over time, right, and the pipeline ends up flattening out or going down. Yeah. I think you'll see that pipeline continue to grow. Obviously, sales should be, you know, will outpace store openings and terminations, right? Which is what ends up being in the pipeline. Of course, during COVID, we felt that it wasn't good business to be terminating franchise agreements while people weren't allowed to be open. You know, there was kind of a year and a half to two years, call it, of not real terminations, and we started to fire those back up end of Q3, early Q4, with franchisees. You're starting to see us, you know, moving the needle a bit on openings, you know, this year versus last year. Okay, thank you. Thank you. We have next question from the line of Brian Harbour with Morgan Stanley. Please go ahead. Yeah, thanks. Hi, guys. On the AUV recovery, obviously we only kind of see it across all of your 10 brands. I guess I'm just curious whether, you know, each brand has fully recovered at this point, or if there's any element of brand mix that's kind of affected that, any that are doing better, perhaps some that are lagging. Yeah. When you think you look at AUVs, you know, in general from Q4 to Q1, we continue to grow in the first quarter, and we expect AUVs now with March, you know, the month of March AUV now meeting the highest point pre-COVID on a quarterly AUV level. Brands like Club Pilates and StretchLab continue to set new records as far as, you know, increasing AUVs. You know, prior to COVID, our average AUV never really hit its peak. A lot of our younger brands, you know, they had just started growing. We don't know where the top end of across all our brands, where the AUVs will ultimately get to. On a number of the brands, and we don't break it down or disclose that across all 10, but we are seeing a lot of the brands already getting back to pre-COVID levels. There's a few that, you know, still haven't actually got back to pre-COVID, but we have no concerns about them eventually getting there. As we mentioned in prior calls, you know, for the most part, on average, across all our systems, AUVs at this point, we have a high degree of confidence will exceed pre-COVID levels, you know, before the end of Q2. Okay. Yeah, makes sense. I guess similar question, just, franchisee economics. Have those kind of recovered to pre-COVID levels in tandem with AUVs? Or is there any element of cost inflation that has limited that? Or maybe also, if you think about returns, has there been an increase in equipment prices? I'm just trying to kinda compare those two, as you've certainly seen a very strong AUV recovery here. Yeah. Expenses remain the same as they really were in pre-COVID levels, you know, be it that the two largest expenses are rent, which is locked in by a lease. If anything, it got better during the pandemic 'cause a lot of our leases we were able to renegotiate. Labor. You know, we don't have, you know, minimum wage employees, really. It's not our model. You know, if an instructor makes $40, $50 a class or whatever they may make in that location at that given, you know, modality or time, the, you know, minimum wage goes up a $1 or $2, they're not coming back to make, you know, $51 or $52. We didn't really see any, you know, labor rate hikes, and, you know, we definitely didn't see any increases in rent during the COVID period. If anything, landlords were happy just to get rent. Those are the two biggest components until you kinda start to get into our royalty, which of course is set, and then you're down into discussing stuff like utilities and things of that nature. Thank you. Thank you. We have next question from the line of Alex Perry with Bank of America. Please go ahead. Hi. Thanks for taking my questions. So just first, could you maybe give us a little more color on the lululemon partnership, maybe in terms of sort of the economics of that partnership? Are you doing anything with them on the apparel side, you know, aside from providing content? Yeah. We haven't disclosed the dollar amount in that agreement, but it was a one-time payment. Yes, we were already selling lululemon apparel. Of course, it just, you know, it makes sense that, you know, we're on a mission, lululemon definitely as well is on a mission to make sure that as a part of this partnership, we sell more retail. Perfect. That makes a lot of sense. Then, you know, maybe one for John. I think maybe core SG&A came in a bit higher than expected. What's driving that? Anything to call out there? I think maybe you added back stock-based comp last quarter, but not this quarter. Maybe sort of just help us square away the adjusted EBITDA and SG&A numbers on the quarter? Thanks. Yeah. As far as SG&A, the one thing that was impacting SG&A this quarter, that's one time in nature, a litigation which we settled with the AKT founder. It was an undisclosed amount, but that is included in SG&A this quarter. We also did get an ERC credit in the quarter, which was an offset which we added back as well. We did provide in the earnings release a walk or a bridge of all the add back items. Stock-based comp expense was added back as part of our EBITDA or adjusted EBITDA calculation, and it was about $15.2 million in the quarter. Yeah, elevated above normal run rate levels, which we expect to be around $3.6 million a quarter going forward. We had some equity that vested associated with some performance conditions from shareholders that own stock at the IPO. Got you. We do- That's very helpful. As I mentioned on previous calls, we do expect our SG&A to stay in that $65 million-$70 million range for the quarter, roughly 33% of revenue. Still holding to that and operating to that model. Got you. That makes sense. Thank you. Thank you. We have next question from the line of Warren Cheng with Evercore ISI. Please go ahead. Hey, good evening, gentlemen. Good evening, Sarah. I wanted to ask about your corporate partnerships, just to follow up. So your announcement with lulu and Mirror last month I thought was very creative, followed your announcement with LA Fitness, which I also thought was pretty innovative from a customer acquisition perspective. Is there a concerted effort or team in place pursuing more of these types of partnerships? You know, I know Dan's working more on the B2B kind of bulk sales partnerships, but I was curious if there's a team working on partnerships more like what you did with lulu and LA Fitness? Yeah, it's a good question. We started doing these brand partnerships when COVID happened, because we had nothing else that we were really working on when the stores were closed, other than trying to generate cash and use the assets that we had, like access to our network, which was an asset that, you know, kinda looks intangible, but it's an asset that we have. We started doing these brand partnerships during COVID, and we did them with various vendors. Then we ended up hiring Steve from the Los Angeles Chargers, the football team here locally, because we realized that the NFL and MLB and NHL and all the other teams have been doing these brand partnerships for decades. We looked at that and said, "Well, we could be doing that too." That was what we did. We actually hired Steve from the Chargers to come in and build that department. He really works hand in hand with Garrett, who's running XPLUS, and Dan, who is running the XPASS, to find creative ways to do these corporate partnerships that could, you know, use the XPASS, could use XPLUS, could use brand access, sometimes can use all three. You're correct that there is an ongoing monitored effort to do these types of brand partnerships. Got you. Just to follow up on the last question, am I hearing right that there isn't a revenue or cost share arrangement with the lululemon partnership? It's really more of a brand partnership and a plug-in for customer acquisition. Yes, it's both of those. I mean, they did pay us real dollars for that access. It's not just a, you know, marketing partnership. We were paid to do that deal, but there is not a, you know, rev share going forward on the subscription basis because of what we, you know, did up front on that. But there are partnerships on the retail side and a marketing side that'll continue forward outside of the original access fee. Got you. Thank you, and good luck. Thank you. We have next question from the line of Peter Keith with Piper Sandler. Please go ahead. Hey, this is Matt Edgar on for Peter Keith. Just a quick one. Can we maybe get an update on the member sign-up trends? We're kind of assuming January was sluggish and it's gotten better later in Q1. Kinda how has April done with some of the lifting of mask mandates? Yes. So far in April, we're seeing new members outpacing cancellation or churn that we're seeing at the studio level, inclusive of freezes. So far, the trends are increasing, and we're very pleased with the studio performances. Okay, great. Thanks. Y'all mentioned in the prepared remarks that you believe you're a little bit insulated from some macro pressures, at least your- Excuse me, sir. This is the operator. We're not able to hear you very properly. Could you please use the handset or speak a little closer to the mic? Thank you. Sorry. Can you hear me better now? Yes, much better. Please go ahead. Okay. Sorry about that. You mentioned in your prepared remarks that you believe you're a little insulated from macro pressure. Maybe can you maybe walk us through, is there any pressure that you might would think you would see from new franchisees during a recession? Is there any risk of that pulling back? Appreciate it. Yeah, I mean, look, if we went into a recession, which we're not in one, but if we went into a recession, typically what we'll see is you'll see some pressure on franchise sales. When I went through the recession in 2008 in boutique fitness franchising, which is something that, you know, nobody else can really say in the industry, when I went through that, you see franchise sales start to slow, but you actually see openings continue. The reason you see that is 'cause people are leaving their jobs or don't have their jobs. They're looking for a job. They're looking for something to open that's gonna generate income for themselves. We actually, you know, back when I owned LA Boxing in 2008 and owned that business through 2012 when I sold it successfully, the reason I sold it in 2012 was because the business was actually doing much better in 2012 than it was in 2008. That, that's what's good. Much like in that business is the same with Expo. We have a massive backlog of already prepaid for pre-contracted territories and franchises. You know, people would convert their 401Ks or take the investment money that they had, and then they would now, you know, virtually buy themselves a job, off of a franchise that they already owned and had already paid for. You know, yes, franchise sales can slow, but of course, you know, we don't generate our revenue from franchise sales. We generate our revenue on recurring revenue, which comes from open stores and royalty and equipment packages that get it going. We used to see landlords actually putting up the equipment package money as additional tenant improvement allowances on leases back in 2008, 2009, and 2010 as we, you know, partnered with large REITs at that point. You know, we're not in a recession. We don't, you know, really know what that looks like in 2022 or if we ever get there. You know, we do have the team on staff that lived through 2008 as the majority of my team from 2008 is still with me. That's very, very helpful. I appreciate it. Thank you. We have next question from the line of JP Wollam with ROTH Capital Partners. Please go ahead. Hi, everyone, and thank you for the time tonight. John, congrats on the award. I wanted to quickly start with a question on XPASS and with the full quarter kind of under the belt, I was just curious if you guys are noticing any trends kind of about user engagement between brands. Also I think there was a comment about subscribers there. I was curious if you could comment on what percent were kind of dead leads originally, if you have those kind of mixed numbers. Thank you. Hi. Yes. We are continuing to see that XPASS continues to be a great funnel for new customers. We're seeing that 15% of account holders are still brand new to the ecosystem, and they're coming into our studios for the very first time. We're also seeing that 60% of account holders were previously lapsed from an Expo brand or deemed inactive by a studio sales staff member, and they're coming back into the ecosystem through XPASS. This was a really great quarter in that we were fully launched, and we have over 80% of our studios that have opted in. We're seeing more inventory on the system and more bookings. Things are looking really good on the XPASS front. Great. Thank you. That was, you said 15% were brand new to the ecosystem? Yes, that's correct. Great. Thank you very much. Second question would just be kind of on cadence of studio openings. In Q1, it looks like it was 99 openings. I think prior comments maybe were that openings were gonna be towards the back half of the year. I was just curious, you know, you have the equipment packages ready for new openings, have you seen any other kind of delays in timelines, whether that's labor challenges or costs in build-out? Have there been any delays on the timeline? Thank you. As we mentioned on the previous earnings call, we expected around 20% of our openings to be in the first quarter, which is exactly where we came in at. We said that percent will grow to 30% by Q4. It will be a continued trending of studio openings. In regards to delays, you know, one of the things that we did is we did go ahead and acquire all the equipment packages to ensure that, one, we kinda insulate ourselves from any inflationary risks on cost of equipment. You know, again, that helps the franchisees out 'cause it keeps costs down for them to get studios open, and ensures that we have the packages and no supply chain or logistics issues from studios getting open. I think the only place that we've seen some delays is more on the micro level within certain markets as far as getting certification or building permits and stuff from a construction standpoint. It hasn't materially disrupted the ability for us to get open. We're still, you know, confident in our ability to get, you know, north of 500 studios open this year. Great. Thank you very much for the time. Thank you. We have our next question from the line of Jonathan Komp with Baird. Please go ahead. Yeah. Hi, good afternoon. Thank you. I wanna ask about new unit performances. Could you maybe further quantify just what you're seeing for new unit AUVs, you know, opened up over the last few quarters or, you know, and looking back into 2021? And then as we go forward, should we be thinking any, you know, sort of mix changes, if you will? I know you had a lot of YogaSix units sold prior to the pandemic as an example. Just, you know, thinking about the new unit productivity going forward. Yes, we are seeing that as studios are opening, as a cohort post-COVID, that they're opening stronger than they did even pre-COVID. We are seeing some great tailwinds coming out of COVID, a lot of interest from customers that are coming into boutique fitness for the very first time. Seeing a lot of openings across YogaSix and where yoga is a very popular modality, that is attracting, you know, good, customer interest and membership levels as well. As John had mentioned earlier, just higher portion of the mix is attributed to our scaled brands, which already have, you know, great brand, awareness, and interest. Opening very strongly with, the higher level of members and spend right out of the gate. Yeah, that's great. Maybe a separate question for John. Just looking at free cash flow, it looks like, yeah, you've had, you know, lower cash flow generation relative to the adjusted EBITDA. Could you maybe just highlight any if there's any sort of timing differences impacting the balance sheet? I know you mentioned maybe securing some equipment inventory, and just more thoughts on what you'd expect, you know, operating or free cash flow for the year? Yeah. From an optics perspective, it looks like we're using cash, but we're using it in the right places to ensure that we have growth in the future. We kind of looked at as we saw inflation and some of those things starting to pop up in supply chain, we wanted to make sure that we invested in having the equipment, the merchandise, you know, coming, you know, into the U.S. or into the markets where we need them, so we don't slow our opening. From a Club Pilates perspective and a CycleBar perspective, we went ahead and prepaid for a lot of equipment packages that'll get studios open for the rest of this year. We did burn some cash in that sense, but it's really investing in future openings and future revenue streams. We did have in the quarter, you know, as I mentioned earlier, a confidential settlement related to our AKT founder, where we used cash to settle that agreement. Overall, the business was cash flow generative, but we made some investments primarily to drive future revenue and settle a legal issue. Should we expect to see, you know, incremental investments, you know, the next few quarters throughout the year or just any thoughts on, you know, what the full year might look like? Yeah. I mean, from a going forward perspective, I mean, we have, you know, our free cash flow conversion is high. We're, you know, asset light, so we're not gonna be investing a lot of capital in CapEx. I think that $5.5 million-$7 million range of CapEx will hold for the full year. As you go quarter to quarter to quarter through the rest of this year, cash generation and piling up on the balance sheet is the expectation. Now, if we have to make additional investments to ensure we have equipment or merchandise, you know, we'll continue to do that. But at this point in time, the high volume opening brands that were expected, we've made that investment now. I would anticipate through the next coming quarters that cash will continue to increase from what I would consider the low point in Q1. Okay. Best of luck. Thank you. Thank you. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I'd like to turn the call back to Anthony Geisler, CEO, for closing remarks. Over to you, sir. Thanks again for joining our call today and for your support of Xponential. I'd like to thank the entire Xponential Fitness team and our franchisees for your hard work and dedication to our business. I'd also like to note that we have an active marketing schedule coming up in May and June later this month. We will be participating in the inaugural Credit Suisse [inaudible] Investment Summit and the 22nd annual B. Riley Securities Institutional Investor Conference. In early June, we'll be attending Baird's 2022 Global Consumer, Technology, & Services Conference and the Stifel 2022 Cross Sector Insight Conference. Finally, in late June, we'll be participating at the Jefferies Consumer Conference. We're excited for these great opportunities to meet our investors in person and hope to see many of you at these events. Thank you, and make it a great day. Thank you very much, sir. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.