Greetings, and welcome to the Xponential Fitness, Inc. fourth quarter and fiscal year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. 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. It is now my pleasure to introduce to you host Kimberly Esterkin from Investor Relations. Thank you, and you may begin. Thank you, operator. Good afternoon, and thank you all for joining our conference call to discuss Xponential Fitness's fourth quarter and full year 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 investor 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 a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligation 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. Good afternoon, everyone. We appreciate you joining our fourth quarter earnings conference call. I'll begin today's discussion with an overview of our quarterly performance and operational highlights. Sarah will then speak further about our progress against our core growth strategies. John will conclude with a review of our fourth quarter financials and provide our 2023 outlook. As will be evident from the results we discussed today, 2022 was another successful year for Xponential Fitness. For the year, we achieved double-digit growth across North America membership, same-store sales, and AUVs, all of which are representative of the fact that boutique fitness is considered a must-have, not discretionary spend by studio members. The demand for our offerings is demonstrated by our North American studios generating over $1 billion in system-wide sales in 2022. We are especially encouraged by the fact that our mature studio cohorts still exhibit strong same-store sales growth and have a profile that's similar to our younger studios. For the full year, North American studios over three years old comped at 25% same-store sales growth. More recently, in the fourth quarter of 2022, North American studios over three years old comped at 18% same-store sales growth. While we do expect this percentage to come down over time as growth profiles normalize, we are encouraged to see this level of performance. It is clear from these numbers that each year, Xponential continues to raise the bar on its operational performance and deliver on its financial results, 2022 was no exception. Together, we have built a resilient business, I want to thank every one of our franchisees and employees. All your hard work has enabled Xponential to reach record annual results and to continue to deliver on its mission to make boutique fitness accessible to everyone. I had the opportunity to meet with a large number of our franchisees this past December at our annual franchise convention in Las Vegas. Over 2,000 enthusiastic attendees gathered to share best practices and discuss innovative ways to promote the growth of our brands. We are seeing this excitement reinforced in the momentum we are already experiencing in early 2023. As the largest boutique fitness franchisor globally, with franchisees operating over 2,600 studios, we have grown our studio footprint by 24% year-over-year. We now have a combination of franchise, master franchise, and international license agreements in place in 16 countries and will continue to grow our footprint globally. Turning to our membership performance, total members across North America increased by approximately 32% year-over-year in 2022 to a total of 590,000. This momentum in membership growth has carried into 2023, and in the month of January, we officially surpassed 600,000 North American members. With nearly 90% of these customers on recurring membership packages, these figures are representative of the long-term growth of a passionate, loyal customer base. As our membership base has grown, so too have visits to our studios. North American studio visits for the 12 months ending in December 2022 increased by 32% year-over-year, reaching a total of 39.2 million. Increased utilization at studios resulted in record North American system-wide sales. North American system-wide sales increased 46% in 2022 and surpassed $1 billion annual sales for the first time in Xponential Fitness's history. We believe that our studios' quarterly run rate Average Unit Volumes or quarterly AUVs, ultimately offer the most direct measure of the health of our franchise system. We ended 2022 with fourth quarter run rate North American AUVs of $522,000, up from $446,000 in Q4 of 2021. This represents the tenth straight quarter of AUV growth. While we don't know maximum AUV potential, we know that our studios have plenty of capacity to add more members and classes. The strong same-store sales exhibited by even our more mature cohorts that I discussed earlier make us confident in our studios growth prospects. Turning to revenue. For the year, we posted net revenue of approximately $245 million, an increase of 58% year-over-year. Adjusted EBITDA for 2022 totaled $74.3 million or 30.3% of revenue, an increase of 172% from $27.3 million or 17.6% of revenue in the prior year period. With that as a background, let's turn to our strategic growth areas. I'll discuss the first three levers of our growth plan and then turn the call over to Sarah to discuss the fourth. Let's begin with increasing our franchise studio base. We ended Q4 with 2,641 global open studios, opening 156 net new studios in the fourth quarter alone. For the full year, we opened 511 net new studios globally or a new studio opening approximately every 17 hours. We also experienced strong demand for our franchise licenses, selling 257 licenses globally in Q4, bringing total sold licenses to 5,450. In North America, we have almost 2,000 licenses sold and contractually obligated to open, offering us multi-year visibility into our growth. Keep in mind that over time, as we continue to sell through prime geographic territories in each of our existing brands, we would eventually need to acquire another brand to maintain this elevated run rate of licensed sales. Turning to our second growth driver, expanding internationally. On the international front, we have over 1,000 studios obligated to be opened, and we continue to gain traction. In November, we announced a Master Franchise Agreement in Portugal to license Club Pilates studios. In December, we announced a Master Franchise Agreement in Japan for our Rumble and AKT brands to open a minimum of 100 new studios across both brands. As a reminder, our MFAs are structured to provide Xponential with high-margin flow-through, given that we require minimal incremental SG&A to support MFA growth. Our third key growth driver is to expand margins and drive free cash flow conversion. As our business continues to grow, we are increasingly reaping the benefits of our asset-light, scalable operating model, providing us with consistent and growing margin performance. We are especially pleased with where our adjusted EBITDA margins ended for the year. We continue to expect our adjusted EBITDA margins to expand into the 35%-39% range in 2023, and we remain on track to achieve our adjusted EBITDA margin target of 40% in 2024. Our boutique in-studio offerings are exactly what consumers post-pandemic are gravitating toward. Consumers have shifted their interest towards smaller classes that offer community and entertainment in a safe, healthy environment. Our members come to our studios not only to work out, but also to socialize with one another and studio staff. It's this sense of community that makes our studio membership so sticky, and why the thought of giving up one studio membership equates with also giving up a community and a lifestyle. People are just not willing to make that trade-off. Furthermore, as our brands and community continue to grow, we are increasingly capitalizing on opportunities to engage with consumers far beyond just the physical studio space. As Sarah will discuss shortly, our B2B XPLUS and XPASS offerings are great examples of how we are increasingly engaging with our consumers in a more holistic omni-channel way. With that, I'll pass the call on to Sarah to discuss our fourth and final growth driver, increasing our same-store sales and AUVs. Thank you, Anthony. In the fourth quarter, not only did we continue to drive strong in-studio performance, but as Anthony just mentioned, we also further established Xponential's omni-channel fitness offering. Throughout the year, we welcome numerous B2B partners while also enhancing our XPASS and XPLUS offerings. The success of our omni-channel fitness experience, which is helping drive more customers into our studios, is apparent in our growing visits. For the full year, North America visitation rates grew 32% over 2021. This momentum, as Anthony noted, has continued into the new year with our North America membership base now exceeding 600,000 in January. Let's discuss how we continue to connect with our members, increase retention, and reduce churn, all of which are essential to growing our same-store sales and AUVs. I'll begin with our XPass offering, which provides our members frictionless access to all 10 of our brands on a single recurring monthly membership platform. XPass serves as a lead generator for our franchisees to drive in-studio memberships. In 2022, 17% of XPass North America members had never interacted with Xponential brands prior to purchasing an XPass membership. 64% of XPass North American members were inactive before purchasing an XPass membership. We are looking forward to driving continued growth in the XPass membership in 2023. We are also connecting with our members virtually through XPlus, our fitness on-demand digital offering. 2022 marked the first full year of XPlus. At the end of the year, we had over 117,000 subscribers. Importantly, of these subscribers, many also hold in-studio memberships. XPLUS drives retention and engagement by providing subscribers the ability to work out anytime, anywhere. With 72% of fitness club owners, according to ClubIntel, offering on-demand and live stream workouts, we understand the need to continue to invest in our XPLUS platform. We are constantly developing new content for our XPLUS platform and are offering on lululemon Studio. We're excited to see this digital channel translate into increased awareness for our brands and studio offerings. Speaking of partnerships, the third leg of our omni-channel offering is our B2B partnerships, which enable our brands to reach an even broader demographic. As I noted previously, we welcome numerous B2B partners in 2022, ranging from lululemon Studio and Optum Health, a division of UnitedHealth, to Aktiv Solutions and Princess Cruises. The International Health, Racquet and Sportsclub Association, or IHRSA, reports that there are 15 million American adults who are currently inactive, finding unique ways to connect our brands to these individuals remains one of our core areas of focus. Our growth in B2B partnerships has continued in 2023 with LG, Territory Foods, and ONE Brands now all on board. We are particularly excited about XPLUS's new partnership with LG, announced at the Consumer Electronics Show in Las Vegas this January. Under the partnership, LG televisions will feature an application providing access to our full XPLUS library, helping us reach millions of consumers globally. Xponential's partnership with LG is another example of our holistic approach to fitness, engaging with our consumers, and raising awareness for our brands far beyond the physical studio locations. Overall, each of our B2B partnerships aligns with our long-term strategic goal of joining forces with industry-leading companies that can expand the reach of our brands, drive customer leads to franchisees at no cost, and make our boutique fitness offering even more sticky. 2022 was an exciting year for Xponential's omni-channel fitness offering. 2023 is proving to be just as energizing. Thank you again for your time. I'll now turn the call over to John to discuss our 4th quarter results in 2023 outlook. Thanks, Sarah. It's great to speak with everyone to discuss Xponential's fourth quarter 2022 results. Fourth quarter North America system-wide sales of $294.1 million were up 38% year-over-year. The growth in North American system-wide sales was largely driven by our existing base of open studios that continued to acquire new members, complemented by 375 net new North American studios that opened in 2022. On a consolidated basis, revenue for the fourth quarter was $71.3 million, up 44% year-over-year. All five of the components that make up revenue grew during the quarter. Franchise revenue was $32.2 million, up 40% year-over-year. This growth was primarily driven by an increase in royalty revenue as member visits and associated system-wide sales are at all-time highs. Amortized revenue from franchise license sales continued to increase as we open more studios domestically and sell more franchise licenses internationally. Equipment revenue was $11.5 million, up 64% year-over-year. This increase in equipment revenue continues to be driven primarily by higher volumes of global equipment installs. Merchandise revenue was $8 million, up 22% year-over-year. The increase during the quarter was primarily driven by the higher number of studios operating and increased foot traffic when compared to the prior year. Franchise marketing fund revenue of $5.8 million was up 42% year-over-year, primarily due to strong system-wide sales and Average Unit Volume growth. Lastly, the other service revenue was $13.8 million, up 57% from the prior year period, primarily due to rebates driven from processing of studio-level system-wide sales, vendor sponsorships for our annual franchise conference, revenue from our B2B partnerships, and revenue generated by temporarily owned transition studios. Turning to our operating expenses, cost of product revenue were $12.3 million, up 32% year-over-year. The increase was driven by higher equipment installations for new studio openings and merchandise revenues in the period. Cost of franchise and service revenue were $4.9 million, up 18% year-over-year. The increase continued to be driven by amortized commissions associated with franchise license sales on a higher base of open studios. Selling, general and administrative expenses of $34.7 million were up 6% year-over-year. As a percentage of revenue, SG&A expenses were 49% of revenue in the fourth quarter, down from 66% in the prior year period. As projected on our third quarter 2022 call, our annual franchise convention added approximately $4.5 million in sequential SG&A expenses, which were largely offset by sponsorship revenues from the event that brought the net expense down to $0.9 million for the fourth quarter. As I noted on prior calls, costs related to temporarily owned transition studios are included in our SG&A for the fourth quarter. We continue to optimize operating costs for these studios and to find new owners for them as we've done in the past. Depreciation and amortization expense was $4.1 million, an increase of 23% from the prior year period. Marketing fund expenses were $4.6 million, up 23% year-over-year, driven by increased national marketing spend afforded by higher marketing fund revenues because of higher system-wide sales. Acquisition and transaction expenses were $8.2 million, primarily related to the non-cash contingent consideration as part of our acquisition of Rumble. As I noted on prior earnings calls, the Rumble contingent consideration is driven by our share price. We mark to market it each quarter and accrue for the earn-out. We recorded net loss of $0.4 million in the fourth quarter compared to a net loss of $29.8 million in the prior year period. The increase was the result of $14.9 million of higher overall profitability, a $14.2 million dollar decrease in non-cash contingent consideration, primarily related to the Rumble acquisition, and a $0.4 million decrease in non-cash equity-based compensation expense. We continue to believe that adjusted net income is a more useful way to measure the performance of our business. A reconciliation of net income to adjusted net income is provided in our earnings press release. Adjusted net income for the fourth quarter was $6.8 million, which excludes $8.2 million change in fair value of non-cash contingent consideration and a $1.1 million liability decrease related to the fourth quarter remeasurement of the company's Tax Receivable Agreement liability. Adjusted EBITDA was $22.2 million in the fourth quarter, compared to $8.6 million in the prior year period. Adjusted EBITDA margin grew to 31% in the fourth quarter, compared to 17% in the prior year period. As a reminder, our 2023 outlook anticipates adjusted EBITDA margins reaching the 35%-39% range, and we expect this number to grow to 40% in 2024. Turning to the balance sheet, as of December 31, 2022, cash equivalents and restricted cash were $37.4 million, up from the $21.3 million as of December 31, 2021. Total long-term debt was $137.7 million as of December 31, 2022, compared to $133.2 million as of December 31, 2021. We continue to look for ways to simplify our capital structure and have made progress already in the first quarter. In January, we announced the repurchase of 85,340 shares of convertible preferred stock at a price of $22.07 per share, which prior to the repurchase, would have been convertible into 5.9 million shares of Class A common stock. In addition, we recently completed a secondary offering of 5 million shares, which closed on February 10, 2023, followed by a greenshoe execution for an additional 0.75 million shares. The selling shareholders included Snapdragon Capital Partners, which is controlled by Mark Grabowski, the Chairman of our Board, and our CEO, Anthony Geisler. Xponential Fitness did not receive any proceeds from the sale, Our CEO remains Xponential's largest individual shareholder. Let's now discuss our outlook for 2023. Based on current business conditions and our expectations as of the date of this call, we are initiating guidance for the current year as follows. We expect 2023 global net new studio openings to be in the range of 540-560. This range represents the highest number of studio openings in our company's history and an 8% increase at the midpoint over 2022. We project North America system-wide sales to range from $1.34 billion-$1.35 billion, or a 30% increase at the midpoint from the prior year and the highest North America system-wide sales in our history. Total 2023 revenue is expected to be between $285 million-$295 million, an 18% year-over-year increase at the midpoint of our guided range. Adjusted EBITDA is expected to range from $101 million-$105 million, a 39% year-over-year increase at the midpoint of our guided range. This range translates into roughly a 35.5% adjusted EBITDA margin at the midpoint. In terms of capital expenditures, we anticipate approximately $10 million-$12 million for the year or 4% of revenue at the midpoint. Going forward, capital expenditures will be primarily focused on the BFT integration, XPASS and XPLUS new features, and maintenance on other technology investments to support our digital offerings. For the full year, our tax rate is expected to be mid to high single digits, share count for purposes of EPS calculation to be 32.3 million and $1.9 million in quarterly dividends to be paid related to our 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, as well as our corporate structure and capitalization FAQ on our investor website. Thank you again for your time today and your support of Xponential. We look forward to speaking with you on our next earnings call. We'll now open the call for questions. Operator? Thank you. We will now be conducting a question and answer session. If you'd 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'd 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 take our first question from the lineup. Randy Konik with Jefferies, please go ahead. Yeah, thanks a lot, and good afternoon, guys. How are you? Good, thank you. How you doing, Randy? Thanks, guys. I guess I have a number of questions. I just wanna first attack. Your international prospects, because you gave us some perspective. You talked about, I think, 1,000 units on tap to open over time in the international market. It seems like franchisee demand is off the charts there. Maybe give us a reminder of education around where was international, let's say, a couple years ago. We know it's in 16 countries today. You gave us great color on the Master Franchise Agreement approach. Maybe frame out where we were a couple years ago, and then, you know, where you think we might be with international, let's say, about five y years from now in terms of potentially number of countries, and kind of the TAM you kind of see for that, for that, you know, the rest of world, 'cause it looks pretty powerful from here. Thanks, Randy. Appreciate it. Yeah, I mean, prior to, you know, call it pre-COVID, for an easy timeframe, prior to the BFT acquisition, you know, international was obviously not what it was for us today. Thus, a big portion of that BFT acquisition was to get a bigger international footprint that we could kind of spring from. And then also, of course, with BFT not having a lot of locations in the US, it gave us, you know, full opportunity to scale the domestic market but also expand the international market. That's why, you know, that deal was a, you know, a double great deal for what we were trying to do. From there, we've been springing forward. In 2019, we had planted a lot of seeds in the ground internationally, but didn't have a lot of openings. With COVID, we kind of took a couple years off as everybody was figuring everything out globally. You're kind of seeing a couple things happening. One, the acquisition of BFT and its expansion in primarily APAC, but also UK and other regions. You're seeing the seeds that we planted pre-COVID that should have come out in 2021, 2022 or even 2021, 2022. You're seeing those start to happen in 2022 and 2023. Where our openings in 2021 used to be 90/10 domestic, they were 75/25 in 2022. We expect that to be pretty close to the same in 2023. As we get into, you know, 2024 and 2025 and later years, we think it'll probably grow to an overall kind of 70/30 split ultimately. You know, and of course, as we reiterated before, discussed before, the international footprint for us, given that we get, you know, 30%, 40%, sometimes 50% of the revenues and none of the SG&A, and the cash that comes over gets treated as cash without any amortization over time, like we would have in the US, it is truly incremental to EBITDA margin as well. Very helpful. If we have a global growth kind of story, I think one thing we always get from investors, they're looking for stories with, you know, pricing power in a world where pricing power seems to be eroding for many consumer discretionary business models. Can you give us some perspective around your thoughts on the different levers you have at your disposal from, you know, let's say, class pricing, royalty rate fees, et cetera? Maybe give some perspective there on the different levers you have at your disposal to kind of continue to kind of, you know, you know, have that pricing power at in your toolkit beyond just the nice member growth that you're seeing and traffic and utilization growth that you're seeing at the core. Yeah. Randy, I'll take that one. I mean, when you look at the top line, obviously the scale of the business, you know, when you look at some of the fees, like on royalty, you know, we typically charge a 7% fee across our portfolio. Club Pilates today has been moved up to 8%. As brands get to larger scales, as AUVs continue to climb, it gives us the ability on future openings to consider maybe, you know, moving from a 7% to an 8% royalty. We have a little bit of pricing power there. When you talk about other scale items, things like our tech fee, you know, those become opportunistic in the sense that they become somewhat profit centers as we open more and more studios. They'll drive higher margin pass through to the business. On an OpEx standpoint, we've looked at a lot of opportunities already, and we continue to explore, you know, how do we drive more margin out of things like equipment and merchandise, you know, giving pricing power. Being able to go back to vendors and ask for, you know, discounts based off of volume commitments. We've done that with Club Pilates. We've done that with CycleBar. You know, StretchLab is another opportunity as we continue to open up high volumes there, we could look at. When you think about some of our other vendors too, given our scale, the B2B opportunity has been really great for us because we do have so many distribution points across the US. It's what do you layer on top of this, you know, massive network that we have on a domestic footprint. Eventually, you know, we can consider that on the international in countries like Australia, where they have a considerable number of units. You know, we've done a good job so far of creating partnerships with the lululemons of the world, the C4 beverage companies of the world, where we can now start putting them into our studios to drive higher margins. We've looked at all areas of the supply chain. We continue to look at that. You know, we announced a number of new partnerships related to, like, LG on this call, where, you know, that's another opportunity for us to use our scale and our ability to drive volume to generate higher margins. Very helpful. Thanks, guys. Thank you. We take the next question from the line of Brian Harbour with Morgan Stanley. Please go ahead. Yeah, good afternoon. Thank you, guys. You know, John, you had said just on the 2023 outlook, it's about a 35.5% EBITDA margin at the midpoint. I think there was also a comment, you know, could get to 35%-39% in 2023. I guess the question is just, you know, what could drive some upside to that? What would enable you to perhaps do better than that on EBITDA margins? Yeah. The largest contribution to the margin expansion that we'll realize is royalties, right? We had really strong AUV growth in 2022. The momentum so far into 2023 is very promising. For us, you know, the more studios we get open, the more our install base continues to exceed expectations. You know, 2022, 25% same-store sales, you know, high teens in Q4. You know, so far in Q1, we're seeing that carry into the year. We've taken kind of a conservative approach on same-store sales in our models, given the macro and not having, you know, a crystal ball to see what it looks like in the second half of this year. If studios continue to perform in a similar fashion as they did in 2022, you know, that 100% royalty margin flows right to the bottom line. Again, taking a watch and see approach, providing the best outlook we have with the information we have right now for 2023. You know, top line growth driven by royalties. Some B2B opportunities could be helpful for us too in 2023 as we start to sign more deals on that front, which carry typically very high margins. International business continuing to grow ahead of expectations, you know, as Anthony just talked about. Those are all really strong high margin pass-through, top line line items that, you know, could flow to the bottom line to push revenues into the, you know, the high 30s. The same comments apply for 2024 is when you think about how do you get to 40%+ margin. Again, it's just growing that install base, you know, executing on these B2B opportunities and continuing to, you know, add more studios, both domestically and internationally. Okay, great. Thank you. Sarah, anything more you could say about just the XPASS at this point in terms of, you know, out of that member count, how many of those are XPASS members? How much do you think that's benefiting at this point on, from a revenue and EBITDA perspective? What we're continuing to see on the XPass is that it is driving great awareness across the broader ecosystem. CAC, you know, was down. We're driving incremental leads into the system, acquiring brand new customers into Xponential and all the brands that we haven't seen before. It's continued to operate the way that we've anticipated it would. We will be developing a new app and gamification platform that will drive even greater awareness in 2023. So far, we're not seeing, you know, that it's a huge revenue driver into the system. Thank you. Okay. Thank you. We take the next question from the line of Alex Perry with Bank of America. Please go ahead. Hi. Thanks for taking my questions. Congrats on another strong quarter. I guess just first, the system-wide sales guidance at +30%, total rev guide at 18%, I guess that would sort of imply that maybe franchise revenue growth should be higher than equipment revenue as your sort of new studio opening cadence is, you know, 8%. I guess first is that right? Should we assume sort of equipment rev growth in line with your openings, or will it be more significant if you're opening more equipment-intensive brands? Just as a follow-up to the last question that was asked, the high teens same-store sales growth, you know, sort of quarter to date, what's been the key driver there? Is that, you know, mostly very strong January member growth versus last year? Thanks. Thanks, Alex. I'll take this one. When you look at 2022, equipment revenue was roughly about 18% of the total revenue we derived. You know, kind of moving into 2023, we'll still be in a very high, heavy growth phase, so you'll see a lot of equipment installs, which we recognize that revenue at the time we do the installation, which is only, you know, a couple weeks before a studio opens. My expectation around 2023 is that it'll roughly be, you know, around 20% of our total revenue for 2023. When you look at franchise revenue, the largest component of that obviously is royalties, which made up about 30% of the total franchise revenue line. It'll be slightly higher in 2023, the royalties as a% of the total franchise revenue. You'll continue to see equipment revenue be a large portion of the total revenue as a% for the coming years because we're in this high growth phase with a lot of new installations and new openings happening. In regards to your comments around same-store sales or system-wide sales, 95% of the growth in system-wide sales is coming from new members. You remember when a member signs up at a studio, they in essence lock in their monthly rate, unless they cancel and come back, most likely because we're constantly taking price as studios, you know, have more and more members and there's less and less capacity in the studio, we raise price. It's supply and demand type pricing. Ninety-five percent of the growth in the last four quarters has been us signing up more members per studio. 5% is price. We have opportunity to continue to take price, as we, you know, raise it in the studios, which you do every day, but majority of the growth is coming from the fact that we are acquiring more and more members in our studios. That's incredibly helpful. I guess just my second question is: What is the right SG&A run rate to be using? I think it was running a bit higher last year due to more corporate-run transition studios. Are you gonna sort of downsize that? Like, is the right SG&A run rate to be using is, like, low $30 million, or where should we be there? Thanks. Yeah. In 2022, it ran roughly excluding stock-based comp expense or equity-based compensation expense, it ran roughly about 41% of revenue. In 2023, the objective is to obviously get SG&A closer to being more efficient in line because we won't have as many costs related to some of the transfer studios. I would assume around, you know, 35%-36% is the optimal point for us in 2023 that we'll drive down to. My expectation is Q1 and Q2 will slightly be above that 36%, and it'll drive into the lower 30s as we get into Q3 and Q4. You'll see kind of a ramp down. The average year will be about 35%-36% on average excluding stock-based comp. That's incredibly helpful. Best of luck going forward. Thanks, Alex. Thank you. Take the next question from the line of John Heinbockel with Guggenheim Partners. Please go ahead. Hey, can you guys just remind us, right, when you think about members per studio, and particularly, right, you know, how they open up. What are the outliers, right, in terms of, you know, which brands, you know, will typically start with more members versus less. I think, you know, if I look at your pipeline for 2023, I mean, it's fairly broad-based, but is there any big difference in terms of 2023 openings by brand versus 2022? You know, will we see, you know, more StretchLab, you know, which is a pretty big pipeline? I think you'll see StretchLab, you'll see Club Pilates still, you'll see Rumble and BFT. Obviously Rumble and BFT coming from the most recent sales of those brands 'cause they're the newest brands with the most white space. We start to sell those. We start selling Rumble before BFTs, we'll start opening more Rumbles before we start opening more BFTs. You know, you see quite a decent backlog at StretchLab, about 500 units. Yep. That's why there's, you know, there's a lot of those to open. With Club Pilates really because that brand is doing so well, there's still a few hundred of those to open. Okay, maybe as a follow-up to that, right? You because you talked about capacity. If you think about, maybe you look at across brands. I know they're different, right, in terms of capacity. When you look at the highest AUV studios, you know, and you think about where you can add capacity, right? Because, in some cases, you can't add capacity to those classes, so you'd have to add additional classes. You don't wanna add during the middle of the day, right? You know, when you think about where you can pick up capacity, where would that be, do you think? I'm sorry, this is the operator. We seem to have lost the line of the management. Kindly stay connected, ladies and gentlemen. We will reconnect management. Thank you. Thank you for patiently holding, ladies and gentlemen. We have the management line back in the conference. John, you may please go and ask your question again. Thank you. No, just it was a follow-up to the prior one, which was when you think about adding capacity. When you look at your highest AUV studios, where do you think the opportunity is to add capacity, right? I think it's difficult, right, to add capacity to individual classes. You're thinking about adding additional classes adjacent to what your schedule looks like today. Is that fair? Yeah. John, did you get to hear my answer to the first question on the openings-? I got... The first point? I got part of it, but maybe half of it. All right. I think in a nutshell, I was saying that in 2023, you will see, you know, StretchLab, Club Pilates, Rumble, and BFT. Yep. Yep. You know, when you look at those brands across, obviously Rumble and BFT, you know, will be opening because we sold Rumble to BFTS previously. Then StretchLab, we have about a 500 store backlog. CP, we've got a few hundred store backlog. We're pushing on them, you know, the CP brand to make sure that we handle the terminations quickly. Yep. We make sure we're staying on schedule with those. I think you had a follow-up question to that as well as far as 2022 and what we saw. Did you get the answer to that one? No. No. Okay. In 2022 was our best cohort of openings. Yep. Studios ramping when you look at the ramp curves. Yep. Yep. You know, when the team came back and said, "Hey, 2022 is the best year ever," I was like, "That's really great, but, you know, let's look at it quarter-over-quarter." We did. You know, Q4 beat 3, beat 2, beat 1. Now that we're seeing 2022 as kind of the best year in company history and the best ramps, we're actually seeing quarter-over-quarter, it gets better and better and better, you know, all the way through this last Q. Okay. Thank you. All right. John, did you wanna answer the follow-up question that he had? Yeah, you had talked about members and, you know, typically the way we model. Yep. kind of the as-designed curve is the expectation is that we have somewhere between, like, 275 to 300 members. Yep. -in the first year, and that grows to, like, $375-$400 by year two. When you look at the system as a whole, given how young it is and the number of studios we just opened, I think you're asking a question of, like, how will we continue to see growth there? What, what is the expectation? There is still, you know, a fair amount of capaci ty left in the install base for us to continue to add new members and grow AUVs. We still have the opportunity to take price as we add new members as well. There's, you know, there's plenty of opportunity for margin expansion based off of us continuing to add more members per studio, which we continue to set record every quarter. Okay. Thank you, guys. Thank you. We take our next question from the line of Warren Cheng with Evercore ISI. Please go ahead. Hey, guys. Very impressive result here in a really tough environment. I had a question on the new studio openings guidance. Obviously really strong momentum there based on your guidance. I was curious the extent to which macro headwinds like inflation or these longer construction timelines or higher interest rates are affecting your franchisees and their open plans here, and whether some of that's embedded in that 540 to 560 number. What are the biggest factors that could cause you to swing, you know, across that low end to the high end of that, of that range? Yeah. The only headwind that we really have, I mean, obviously there's macro headwinds, there's construction, there's all those kind of things. Even faced with those headwinds, the company is, you know, raising guidance on its openings year-over-year into those headwinds. Financing is not an issue for us. That hasn't been a headwind. Always for us, it's finding the best locations and negotiating the best leases for our franchisees' long-term health and value of the business. You know, I had said previously, you know, kind of publicly that yes, you could open a lot more, you run into the risk of putting them in, you know, worse locations or having franchisees put in harm's way by signing worse leases. You know, we don't have the, you know, some of the macro headwinds like air conditioning units or these massive build-outs of 20,000, 30,000, 40,000 sq ft. You gotta remember, we're building 1,500 to 2,000 sq ft. We're using whatever air conditioning was already sitting on the roof when it was a sandwich shop or a bike shop or an ice cream store or whatever it was before us. You know, we make sure it has air conditioning, and we make sure the air conditioning works. We don't have a certain, you know, specific, you know, air conditioning spec that we need. We're not facing the headwinds that some others are, unfortunately, in the fitness industry, right? Because it's tough. It's something you don't control. Financing has been an issue. Finding great locations obviously hasn't been an issue. Also as well, like, there's, you know, there's not a lot of retailers that I've heard of that are opening 500+ locations. We also are doing an amazing job last year at 511, and doing way better, you know, than we, you know, even would have done this last year. You know, they're small box pieces. There are not, you know, massive build-outs. There's not major construction that we do. It's really kind of modifying the previous use that was there into our use. In some brands like StretchLab or Club Pilates, it really is just a rectangular box with no walls and a single bathroom in the back. It's not, it's not major construction. The construction part is low cost. That's a really useful color. My follow-up, I wanted to ask about the B2B partnerships. You've done a pretty wide range here in the last year, and it seems like the pace of partnerships is picking up a little bit. Are there certain channels that are the most fruitful for customer acquisition? Has there been any thought about migrating some of these partnerships into some kind of subscription or fee or economic sharing maybe over time, maybe for some of your higher engagement channels? Yeah. I mean, look, we talked about it that this B2B partnership piece or brand access or corporate partnerships or, you know, whatever the term is that people would like to use. You know, at the end of the day, we're teaming up and partnering with other great companies to really exploit the Xponential name and its brands to deliver what I like to call negative CAC, which is where, you know, brands actually pay us to deliver customers into our studios. You see that with lululemon and Princess and LG and, you know, all the different deals that we're doing is really to, you know, start to make Xponential a, you know, lifestyle health and wellness brand on its own with the 10 brands underneath it and also allow us to leverage the other assets. You know, I like to tell the team that, you know, what do we do for a living? What's our day job? Like, we open gyms for a living. That's our day job. What do you do on evenings and weekends, right? Like, what else can we do with the assets here? Well, we have, you know, something like XPLUS. It's great. You know, we can operate XPLUS and try and operate in the digital space like everybody else and try and fight everybody for customers and drive CAC north. We can go and do deals like we did with lululemon, where we get paid from them, or do deals like we did with Princess, where we get paid for them. Our XPLUS ends up on, you know, the mirror, and it ends up playing on the mirror inside lululemon stores or Nordstrom stores or people's homes. They're in 23,000 staterooms when they're on a Princess Cruises. They go to turn on their LG TV when they get home, and it's there too. The idea is to really meet the customer in multiple places wherever we can. You know, it would be our goal that by the time someone, you know, parks at a Starbucks to get a coffee in the morning and they see a Pure Barre sign next door, that they're sick of seeing that brand everywhere, right? They've seen it on a cruise, they've seen it on a mirror, they've seen it in a lululemon store. They've seen it from, you know, one of their insureds, you know, sending them advertisements or Territory Foods or whoever it might be. We wanna make sure that we're getting a lot of those touch points out there to drive customer acquisition costs down, and not just, you know, be smarter than everybody else and not just sit out and compete and bang it out for the, you know, the most expensive pay per click we can, but find other ways that we can actually get paid and our franchisees can receive lead flow really free of cost. Thanks, Anthony. Thanks, John. Great job. Good luck. Great. Thank you. Thank you. We take the next question from the line of Jeff Van Sinderen with B. Riley. Please go ahead. Hi. Yes, hi, everyone. Let me add my congratulations. For 2023, did you say what's baked into your guidance or what you're targeting for sales of new franchise licenses? Then I guess, how is the evolving macro, macroeconomic backdrop factored into that target? Yeah. In regard to the license sales, I mean, when you look at what we did in 2022, we did 1,000 licenses, about 250 on average a quarter. You know, as we look forward into 2024, we don't-- or, sorry, 2023, we don't guide on license sales, but we have kind of provided some forward-looking view that, you know, we continue to sell through the available inventory that's out there or white space that's out there. As we continue to do that, you'll naturally see a decline in license sales. Brands like, you know, BFT and Rumble are still, you know, we're still selling through those brands given that they're relatively new. But, you know, the inventory is diminishing. When you look at 2023, could you expect to see, you know, somewhere between, you know, 600-800 license sales? Yeah, I think it's a realistic target for us to keep, you know, pushing forward. International is still a huge opportunity. There's still a lot of white space international. As we continue to identify new MFAs and the MFAs that we have put in place for them to sell through their white space internationally, you know, that'll continue, you know, to help, you know, keep us at the high elevated levels of license sales. Does that answer your question? Yeah. in consideration- Yeah. -to the other macro too, I should answer, like we haven't really seen a slowdown on macro causing people not to wanna buy licenses. That hasn't been one of the reasons we've seen. It's really more about matching a franchisee in a territory where it's available. Okay, that's helpful. Just sort of as a follow-up to that, I think this dovetails a little bit. Can you give us your latest thoughts on how you're approaching potential acquisitions for 2023, maybe how you're evaluating those, what you're more willing to go after than not, what you're seeing out there in general? Is there any shift in multiples that sellers are willing to consider, things of that nature? I don't know that there's any massive shift in multiples that are out there. As far as acquisition goes, you know, like John said, we have a decent still amount of inventory. You know, selling 250 franchises a quarter, I don't know too many people that are out doing that. Even if we were selling 150-200 a quarter, that's still outstanding comp compared to, you know, what else is happening out there globally. You know, the only real reason for us to buy an 11th brand at this point is if we're, you know, capturing a major deal, right? You know, getting some great deals, great opportunity in the market. If we want to pick up that, you know, franchise sales number back up to 1,000, we could, you know, we could do that with an eleventh brand, not a problem. You know, I'm always in talks with, you know, four or five or six different potential targets. You know, when we're ready, you know, we'll be able to do an acquisition and then, you know, just kind of embed that into our current, you know, shared services model and begin to sell it, so. Okay, great. Thanks for taking my questions and continued success. Thank you. Thank you. We'll take the next question from the line of Jonathan Komp with Baird. Please go ahead. Yeah. Hi, good afternoon. John, I wanna ask just a follow-up on the adjusted EBITDA guidance. The highest I can get to is a 37% margin with the ranges you gave. I'm, I'm just wondering, did you misspeak on the 39% or are you signaling there could be upside? When I look at the dollar growth for adjusted EBITDA compared to the dollar growth of revenue, it looks like a implied flow-through rate for the year above 60%. I'm just wondering, is there anything unique this year or is that sort of the flow-through rate we should think about going forward? Yeah. I mean, the flow-through is coming from royalties. You know, the fact that we opened 500 studios last year, you know, those are relatively lower AUVs as they ramp to their first, you know, kind of, you know, $380,000-ish, or $400,000 is kind of range for that first year, as designed. When those start really kind of generating higher levels of royalties as they get more mature, that margin is, you know, it's a 100% margin. It flows right to the bottom line. That's, that's the biggest area of growth you'll see in our revenue line is on the royalty component. Equivalent revenues, those carry, you know, closer to a 30% margin. Those will be a little bit of a drag to the P&L as we continue to open more and more studios that they don't, you know, they don't generate north of 35%-40% margins on equivalent and merchandise. Royalties are the key driver there. The B2B as well, your other service revenue line, that's very high margin flow through. You typically see our other service revenue at 90%+ margin. As we continue to do B2B deals, our system-wide sales grow. We get rebates on processing our system-wide sales. That will be a key contributor to the business as well. When you talk about, you know, margin and the highest you think you can get to, again, you know, we do take a conservative approach to our guidance. We wanna make sure that we guide to a level that we know we can achieve. As we continue to deliver upside, then we could, you know, let you guys know how we adjust our guidance from there. At this point, you know, that's. We're providing an outlook based off of today, given, you know, uncertainty of any macro that hasn't hit us. If there is a GAAP moment that we don't over-commit on margin level. Yeah, that's helpful. Then just one more on the same-store sales you're embedding for the year. Should we think roughly close to your long-term guidance or could you just give any more insight? You know, the 30% increase in system-wide sales relative to kind of a low 20% increase in units. You know, what bridges the gap between those two? Yeah. We did, what, 25% same-store sales in 2022. When you think about 2023, you know, what is the right way to look at in regards to AUVs? You know, based off of what we're seeing right now, it's interesting because there's the pre-COVID, we averaged 8% per quarter on average, you know, for the two years prior to COVID. You look post-COVID, it seems like studios are ramping at a very rapid pace still. We did an analysis on studios that are 36+ months in operation, and those comped at 25% last year. When you look at it in Q4, those same 36+ month in operation studios were, I think, 17%-18%. Very strong comps still, even in the aged studios. I think a good kind of assumption as in regards to how you should look at AUVs and what the same-store sales comp for next year, probably looking somewhere in the very low double digits. I you know, I think 12%, 11%, you know, that kind of area seems to be aligned with what we're thinking, you know. If we continue to see strong performance as we have, then, you know, possibly a little bit higher than that. Right now, I think from an assumption, you know, very low double digits is probably the way to think about it. Like I said, that 10%-12% range. Okay. Very helpful. Thank you. Thank you. We'll take the next question from the line of Joe Altobello with Raymond James. Please go ahead. Thanks. Hey, guys. Good afternoon. kind of wanna talk about the studio growth. You mentioned the 540 to 560 you expect this year. It sounds like, you know, that number will have a five in front of it for the next, you know, probably three or four years. I think you alluded to this earlier, but at what point do you guys think you need to add an additional brand to hit that 500, you know, studio target every year? Yeah, I mean, when you look at it today, let's just say for easy math, you were at, you know, 500 openings a year and we have about 2,000. As we said today, we have about 2,000 sold, but not open in development domestically and almost 1,000, you know, committed to internationally. If you looked at it from a global perspective, you're talking about five to six years. If you looked at it domestically, you know, on a 75, 25 split, you're talking about opening about 400 units domestically against 2,000, so, you know, about four to five years here domestically. You know, that was our consideration as we look to an 11th brand. We already have, you know, many years of runway. Given the macro, we wanted to be conservative and not potentially take some operational risk, you know, some implementation infrastructure risk, And or, you know, potential leverage or cash off the balance sheet or whatever it might be to do the acquisitions. Our acquisitions are usually, you know, fairly relatively small from a, you know, a dollars or cash perspective. We thought, "Hey, we're, you know, we're selling more franchises than anyone we know. We're opening more stores than anyone we know, and we're executing very well. Let's just keep our head down and continue to do that, into today's macro to make sure that, you know, we can deliver the guidance that we set out. You know, if it's a quarter 2, 3, 4, whatever it might be, and we've all kind of seen the pivot point in this macro, or we feel like it, you know, is it really gonna get worse or whatever it might be, as we, you know, we get further into this, we get more and more visibility, and we wanna go buy an 11th brand, that's easy money for us, right? That's, that's not a big deal. You know, we can do acquisitions from hello, what is your name, to we own you in six weeks. You know, given that we've got, you know, four or five or six current conversations going on, that window could be even shorter. You know, for us, it's just, you know, when does opportunity strike and when do we feel we need to go forward? But even if you look at the unit number run rate we've been talking about on franchise sales, we'll still open enough and still add, you know, 150+ units to our backlog, you know, just this year alone without an 11th brand. You know, in summation, we're not in a hurry to buy an 11th brand. We don't necessarily need an 11th brand for the next few years, but, you know, we'll most likely be opportunistic, when need be. Okay. Got it. Maybe on AUVs, obviously, you know, continue to make a lot of progress there, you know, north of $500,000 here in the fourth quarter. Could you remind us what your highest AUV studios are doing today? Is there anything unusual about those studios or is it just a matter of time before they sort of get to those levels? I mean, look, the AUVs vary across brands, but the, you know, the ROIs and margins, you know, kind of end up being the same depending on what brand you're in. Something like a StretchLab will have higher AUVs, but has higher labor costs 'cause it's one-on-one. Something like a Pure Barre will have lower AUVs, but it's more of an owner-operator model. You've got a lot of the owners that are teaching class or working the front desk, and so labor's a lot less. You'll have something like a Club Pilates in the middle, which will have, you know, higher AUVs, but the majority of those franchisees are semi-absentee owners. You know, they're hiring at the front desk and hiring for the classes as well. I mean, when you look at sort of high-end capacity of certain things, I mean, there are, there are Club Pilates that are, you know, doing $1.2 million-$1.3 million, you know, out of their boxes. You know, there is the ability to do that. You know, we've talked about, you know, Club Pilates when we bought it was the AUVs are about $250,000, and they're kind of triple above that now. What we like that we're seeing is the newer brands like Rumble and BFT, even some of our YogaSixes that are opening, they're kind of opening at twice where Club Pilates started, right? We would love to say that those are gonna, those are gonna triple like Club Pilates has. I don't know if that'll necessarily be the case. What's nice is that we're at an all-time company high AUV, and our new stores that are opening and those new brands are opening at that AUV and higher. While brands like Club Pilates or StretchLab, their individual AUVs continue to climb as well, you know, as we comp year-over-year at double digits. Yeah, that's the point I was trying to get at, is that you're not approaching a ceiling at all when it looks like AUVs here. Okay. We had nine quarters, a quarter-over-quarter prior to COVID. We got back a year ago after seven quarters of climbing back out of COVID. Since then, we've continued to see it climb. In a pre-COVID world, we never found the top end of AUV, and in a post-COVID world, we're still not finding that top end yet. Perfect. Thanks, guys. Thank you. We take the next question from the line of George Kelly with Roth MKM. Please go ahead. Hey, everybody. Thanks for taking my questions. First one on your royalty rates. Curious, I guess two-part question. Were there any surprises after you took the rate higher with Club Pilates? Anything kind of unexpected that you saw? Part two of the question is, do you have plans this year to raise royalty rates to additional brands? No, no change at 8%. Remember, when we do these royalty increases, it's on the openings going forward. It's not retroactive. The people that have already signed their franchise agreement at 7% are locked in at 7%. The franchise agreements that get signed and the area development agreements that are getting signed, after that 8%, really, it's mostly the stores that are opening, after we increase it. Those go to 8%. You know, as far as considerations on brands going from 7% to 8%, we look at that much like we look at the consumer, it's supply and demand based. When you see brands that we're selling a lot of, that we've opened a lot of, we run out of territories, people still are demanding the product, and the product's performing very well, it allows us to take price, right, through a royalty increase. As discussed before, there are other ways to increase price to the franchisee other than increasing royalty rate, right? If an AUV was 500 and you want a 1% increase. You could institute a tech fee or something that would be $400 or $450 a month, and you would virtually get that 1% increase across the system, and something like that could be retroactive. But we always wanna guard the health of our franchise units. You know, we're very careful to make sure we're not instituting fees, whether it's royalty rate increases or any other fees, are increasing in any pricing, that is gonna put a franchisee in harm's way. You know, 'cause first and foremost, we wanna make sure that we have, you know, kind of healthy, happy franchisees out there that are working for us. Okay, that's helpful. Second question from me, on your balance sheet. Like, how much leverage are you comfortable with? There's been a fair amount of discussion about M&A. Just curious, you also have a bit of that convert preferred. I mean, more than a bit. There's still, you know, a pretty big chunk out there. Just curious how you kind of balance those two uses of capital. I mean, the business right now is highly cash flow positive. You know, we generated cash last year. The expectation for the foreseeable future is that the business will be generate a lot of equity liquidity and stack up on the balance sheet. When you look at, you know, M&A opportunities, it really depends on the size. Most of the acquisitions we've done historically are very low. You know, they don't carry, you know, $20 million, $30 million, $50 million, $100 million. They're a couple million bucks. We would be able to finance most of acquisitions off the balance sheet. In regards to leverage ratio, we did complete the reacquisition of roughly 40% of the preferred convert in Q1 of 2023. Right now, we're carrying about 3.5x leverage. You know, we've always said to The Street, you know, 3 to 4 times leverage for us is not a problem at all given how much cash this business generates. You know, to answer that question, could we easily carry, you know, 3.5 times, which we're at right now? Yeah. It's not an issue at all to service any ad debt levels there. In regards to the preferred, there's about 8 million equivalent Class A shares of preferred left. You know, we've, that is a better focus for me as far as getting that cleaned up. We do not wanna see those shares get converted, you know, in the future because they're diluted to us and obviously, you know, a lot of us are shareholders internally within the company, so we don't want the dilution, nor do our shareholders want it. We'll continue to look to leverage, you know, the cash that we have on the balance sheet and opportunities to, you know, retire those shares over time. It is a focus for us. We have talked about other instruments like something like a securitization, which is, you know, familiar to Planet. And we like to model ourselves after them. You know, we could use that as an opportunity when a window presents itself as a way to retire the preferred. At this point forward, comfortable with our debt levels, comfortable with the amount of cash that's being generated off the business, and we'll continue to look for ways to streamline our capital structure to make it as efficient as possible. Okay, that's helpful. Thank you. Thank you. We'll take the next question from the line of Peter Keith with Piper Sandler. Please go ahead. Hi, this is Matt Edgar on for Peter. Thanks for taking our questions, and congrats on the good quarter. First off, for most, it's a question on advertising. We're curious the best advertising mediums for your banners or maybe what mediums are being utilized the most and working the best? We currently use, multiple, you know, different, marketing initiatives and ways that we bring in different leads. Digital marketing is always going to be very strong, but of course, the B2B, as it's continuing to ramp, is giving us access to additional leads within the studios as well. Mentioned XPASS earlier, that that's really helping from a top of the funnel, you know, perspective and driving leads into the system. Lastly, we've done a good amount of work around SEO and making sure that we're, there as customers are starting to look for fitness online and that we're the first to pop up and, really meet the customer where they are in their fitness journey, both online and in brick and mortar. Great. I guess on M&A, you mentioned, well, curious if you're interested in only, like, boutique fitness brands or would you reach out to other different types of health and wellness concepts? Curious on what y'all would be looking at? Yeah. I I mean, if you look at the business today, you know, we've done an amazing job with StretchLab, which is clearly not fitness and clearly a wellness product. If you know, if you look at the name H&W Investco, that was the original name of the company, that was not super clever on health and wellness investment company. You know, from day one, you know, we've kind of projected this company to be in the health and fitness space. There are still, you know, a handful of modalities in the fitness space in which we could acquire, and even more so on the wellness side. I think we've proven that, you know, we can do an amazing job with something like a Club Pilates in the fitness space, or amazing job with something like StretchLab in the wellness space. You know, I don't think you'll find us, at least not today, doing anything in, you know, restaurants or services or something like that. I think, you know, anything that's a 1,500-2,000 sq ft franchise retail box in the health and wellness space is something that is, right up our alley. Great. Thanks. Thank you. We'll take our next question from the line of Max Rakhlenko with TD Cowen. Please go ahead. Hey, great. Thanks a lot. First, can you speak to the competitive environment out there? Your AUV suggests that your franchisees are in healthy shape How do you think the independents are doing out there? If the sector is starting to get more promotional and competitive? How are you thinking about potentially playing offense if the backdrop were to soften later this year? From a competitive environment, and we continue to take market share. I think when you look at the boutique space and you look at our white space, you know, we see ourselves being able to grow to about roughly 8,000 studios in the U.S. alone. You know, as we continue to distribute more and more of our brands into new markets, we're educating consumers on boutique fitness and expanding our total TAM and driving more member growth. When it comes to the competitive landscape, boutique fitness has primarily or historically been very fragmented. The fact that we're bringing national brands across things like StretchLab, which really didn't exist in a national scale, and then tying it all together with things like our XPASS and introducing members in StretchLab or Club Pilates to these new concepts, I think we're growing the boutique fitness market. If we were a one concept type brand, it's very difficult. If a member joins and leaves, they're not typically gonna end back up in the brand that they were already in. We are actually capturing people who are being introduced by members in other concepts and seeing us and moving over. You know, we've added more members per studio, and we have more members per studio than we've ever had historically. We've seen a significant growth post-COVID. I think people are more aware of health and wellness and living a healthier lifestyle given, you know, the pandemic and the learnings from that. I think that answered the first part. I think there was a second part of your question, too, I might have missed. What was the second part? Just how would you look to play offense? You know. How do we? a little bit more or... Yeah, I think that part goes back to what I was talking about before with negative CAC. You know, we didn't want to, and we started looking at this about, you know, a year and a half, two years ago, as, you know, customer acquisition costs were rising in boutique fitness and digital and, you know, everything kind of across the board. We started to figure out, you know, how can we be smart, right? How can we be scrappy and do things that other people aren't doing? This brand access originally was just providing, you know, cash to the business during COVID. Then, you know, in a post-COVID world, we started looking at how do we implement, you know, getting more eyeballs in front of our product, right, and delivering what I've always referred to as negative CAC, you know, into our franchise stores, right. So, you know, that's what you'll continue to see from us, continue to see promotional items that are happening. You know, I just received pictures from Princess Cruises where they're, you know, debuting a new Porsche out at the Porsche Club of America tomorrow. It's got a huge X on the hood for Xponential and all the brands around it and XPASS and XPLUS and everything, you know, plastered all over this car that'll be at the, you know, Porsche Club of America debut with, you know, Princess Cruises on it. You know, true partners like Princess, when we do these things together, and I work with JP, the CEO there, all the time, it's kinda like, yeah, we have in our agreement, but we're partners, and so how do we do things back and forth to help each other? You know, the idea is to continue to put Xponential and its brands in the, you know, forefront of people's minds and not just have it be a brick-and-mortar location that, you know, is sitting next to a Starbucks in some grocery anchored center, and the only way they're gonna know that that space is there is to go inside or to get a local digital ad or to get a flyer on their, you know, their doorstep or see it in a newspaper. I mean, it's I've been in this business for 20 years. We used to put The Wall Street Journal ads back in the day, you know, because people used to get their stock information from The Wall Street Journal 'cause that was how life went. Now they get it on their iPhone or on their Apple Watch, you know, every millisecond. You know, the world has changed. We change with it. We think that this sort of negative CAC concept and this B2B partnership concept is kind of the new wave of, you know, customer acquisition. Yeah, no, that makes sense. You touched on Princess, but can you speak to how that partnership is going and if we could see potentially an expansion into more ships over time? Yeah. I mean, as far as Princess, we'll obviously be expanding into all of Princess's ships as we bring them into port, when it's, you know, time appropriate to do so and add our, you know, our brick-and-mortar, you know, kind of capabilities to the ship, our digital capabilities. You know, we're in the middle of, you know, training new instructors to put on board and, you know, all those kind of things. It will continue to roll out. You know, we're selling retail through the cruise ship, so both branded and co-branded retail is out and available. You know, people are able to get off the cruise ship and, you know, take an XPASS with them after using XPLUS or using our brick-and-mortar and walk off with, you know, with retail from us as well. Like I said, we're, you know, we're trying to find ways and continue to execute on ways that, you know, that, you know, Xponential becomes a lifestyle health and wellness platform that we can use in kind of all parts of people's lives. Great. Thanks a lot, guys. Good luck. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, I'd like to turn the call back over to Anthony Geisler, CEO, for closing remarks. Over to you, sir. Thank you. Thank you again for joining today's earnings call and for your continued support. I'd also like to acknowledge our entire Xponential Fitness team and franchisees for their strong operational execution in the fourth quarter. We look forward to seeing many of you at the upcoming Raymond James, Roth, BofA, and Citi conferences this month, and we'll speak to you again in May on our first quarter call. Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.