My name's Megan Alexander. I'm the leisure analyst at Morgan Stanley. Excited to be joined today by the Xponential Fitness team. We have Anthony Geisler, John Meloun, Sarah Luna. So, you know, maybe we could start off, you pre-announced some year-end metrics yesterday, same-store sales 16% for the year, you know, implies a strong fourth quarter. Maybe give some color around 4Q performance, anything you're seeing to start January? Yeah, Q4 was at 14%, so pretty great number, still flat for the most part to the last Q. You know, when you look at the cohorts of, call it, 24 months and 36 months historically, and same in Q4, you see kind of a 1% pickup. So, you know, 14 months, 15 months, 16 months, when, you know, we reported 15 months before, you'll see 15 months, 16 months, 17 months. That's kind of how it's been running, so same cadence, but, yeah, 16% for the year. Sold about 806 franchises, opened 557 locations on a guide from 550 locations-600 locations a while ago. So it really kind of shows that, you know, we have a lot of visibility into the math and the numbers. I really looked at how many franchisees in 2023 that opened were existing franchisees opening additional units, and the answer is about half. And then I looked at that same cohort for Q4 to say, "Well, what, what is that in Q4?" To make sure that the year matches the quarter, and it does, so 46% and 47%. And so we're, you know, we're really happy with those numbers. You know, we've materially completed the transition stores, as we said we would. And so, you know, so we're, we're excited for, you know, for 2024, and everything that's going forward. Awesome. You know, maybe we could... You know, franchisee health's been a popular topic of conversation. You know, when you think about measuring the overall health of your franchisee base, how is that something you measure, and what are you hearing from both your current franchisee base and prospective franchisees more recently? Yeah, I mean, when we actually look at a lot of KPIs, you know, other than collecting 3,000, you know, P&Ls, the easiest way to really assess franchisee health is your average unit volumes. You know, when you look across our, our portfolio, AUVs have, you know, in general, climbed up to, you know, $590,000 by the end of 31st December of last year. But when you look across each of the brands, you see good, strong growth, not only in older brands but even the younger brands. You also see when you look at cohort data, when you look at our 2023 cohort, the health of the franchisee in 2023, for those who had just opened, was stronger than it was in 2022, stronger than it was in 2021, and stronger than it historically has. So AUV is probably our best indicator. When you look at it brand by brand, you also want to make sure that your older studios are performing just as well as your younger. We talked about same-store sales. There's not much of a discrepancy when you look at same-store sales in studios that have been open 3+ years versus those that have opened and just hit the 13-month in comp. So we're seeing really strong performance across the portfolio, really being driven by new members per studio and not price. We take about 5% price a year, that's what shows up in our system-wide sales. 95% of it is coming from new members entering studios, so our franchisees are making more money than they ever have, you know, as of 12/30/2023. Awesome- The other indicator that we kind of look at is, like I said, franchisees coming back to buy more, franchisees coming back to open more, and franchisees just looking to open in general, whether it's their first store or not. So you know, we had 160 grand openings in Q4 alone. So when you look at the year, it wasn't like they were in the first half or, you know, majority were in the back half of the year, and the majority of the quarter, you know, the quarter's performance was in Q4. So, we're still seeing franchisees wanting to buy, and wanting to open. You've been candid that there's been some brands that have maybe been slower to recover since COVID or the modality has, you know, gone in and out of favor. You know, you, you've now 11 brands, you have 3,000 studios. So, you know, maybe just to put things in perspective, can you try and, you know, either quantify the number of franchisees or studios that you would describe as challenged, and maybe talk about the brands that are underperforming a bit and what the plan is there? Yeah, there's three brands that if you looked at it, you would say they're inside of Xponential, they're underperforming, right? So something like Row House, for instance, when it has 93 open stores. In the rest of the world, somebody having 93 open stores is a good thing. When you look at the Xponential world and you say: Well, you've got brands that have 900 open or 600 open, or 400 openor 500 open, it really becomes sort of resources. Do we want to spend our time on something at 93 brands or something at, you know, 93 units in a brand or 50 units in a brand or something like that? So we definitely take a look at that across the brands, but 94% of the business is focused around our top five brands, right, that we have. And so, you know, the other 5 brands, now 6 brands as of a week ago, but really the driver of 2023 was 5 brands that was 94% of the economic and 5 brands that was 6% of the economic. And when you look at some of the challenged modalities and brands like dancing or rowing or running, which when we bought those, we never thought rowing was gonna be better than yoga or something. I mean, there are mainstream modalities that are out there, but it allows us to go out and buy brands and modalities like rowing, where we spent $1 million to buy Row House. It gives us option value on going out and trying to run and scale a brand, right? And so when you look at it, you're talking about aggregating together, when you look at the open amount of stores in dancing, rowing, and running together, it's about 100 locations of our 3,100 locations. And so it is a from a units perspective and even dollars perspective, a less than 1% part of the business. So we've just rebranded AKT with Kinrgy with Julianne Hough from Dancing With the Stars, and using her Kinrgy brand. So we're beginning that rebranding now, which will happen, and then the, you know, from paint rebranding type will happen in January, and the reopenings will kinda happen in February. And then, you know, we'll look at that over a 90-day, 180-day window, look and see, is that, is that, you know, rebranding gonna help? And if it helps, great. If it doesn't help, then, you know, we'll have to assess if it's worth having the portfolio. That's helpful. And you've alluded to it a bit, but, you know, transition studios also been a bit of a popular topic of conversation. So maybe just give us an update on where that stands today, kind of, but, you know, how that's progressed over the last 12 months, and if you could quantify kind of the EBITDA drag that it was on 2023 EBITDA, how we should think about it for 2024. Yeah, I mean, I think it's, it's a strategy, right? And a lot of franchisors as a strategy is, if stores aren't performing, you just let 'em close. That's probably the normal strategy. My strategy has always been, in my 20-year career, that as stores or as brands are ramping, if you have a store that's challenged, right, of course, you're sending people to the store, you're providing support, you're doing all those kind of things. But if you're seeing a store that either is ramping slow and/or starts to ramp down, something may be happening in the franchisee's life. They may have gotten divorced, they may have a sick child, they may be sick themselves. There's, there's humanity in franchising. So for whatever reason, you start to see a ramp down or a slope in the ramp, we would buy those stores back, and we always say we buy 'em back for a dollar, and then people ask if it really is a dollar. But it's... We would take the stores back virtually for no money, and then we would re-franchise them back out as a strategy. In doing that, as a store goes from losing money, getting closer to break even, or making money as we're running it, it's a lot easier to sell, the less it's losing. It's just logical, right? So we're always stuck with the bottom of that, you know, that few percent of stores that are not performing. And so in 2023, 2022, and really for a couple of years, John's been saying: "Hey, look, over time, as, you know, the open store count grows, right, 500 store-600 store a year, and you've got 3%-4% that are, you know, not operating properly, that number's, that drag on EBITDA is gonna grow." And so as we went into 2023, you know, if you think about it, if you have, you know, 3,000 stores, and it's, you know, 3%-4%, you know, you have 90-100 stores that you're supporting. And so if you look at Q1's report, we reported 85, I think we reported 85 again in Q2. And so that was the drag. The drag in 2023 in total was about $10 million of EBITDA. If you looked at, you know, we've guided $104.5-$106.5, so if you used $106.5 and said: "What would it have been without the drag?" It would've been $116.5, right? And so, you know, we said in July we were gonna stop buying stores back and just re-franchise out, keep the part of the strategy where we re-franchise out the 85 stores. And if by the end of the year we had losing stores, we would close those stores down, to make sure that we started January 1st 2024 with the, that 116 kind of run rate. And we've done that. And so, you know, we're happy about, you know, getting that kind of mission completed. We have a handful of stores that we're transferring leases on right now, over the next week or two. We did say we would keep our nine LA Fitness locations, and so now we're kinda focused on operationally making those work to test out that model still, which we haven't spent a lot of time really testing out that model. So, you know, our corporate store count will be in the, I don't know, 15-ish range or something like that as we keep stores, but we've got that, that NOL in 2024 solved for. The change really put 2024 into us in a good position because all the restructuring charges are now contained to 2023. You'll see SG&A decline dramatically. I mentioned in the Investor Day back in September, just expect SG&A, including stock-based comp, in that $110 million-$115 million range. We'll provide more information around that in our next earnings call. But you'll see that drop from, you know, $160 million-$170 million in 2023, down to, like, $110 million-$115 million. So you get immediate margin expansion simply by not carrying the weight of these studios. So really position 2024 for optimal EBITDA expansion. Maybe, you know, coming back to the top line for 2024, obviously, you know, still running at mid-teens as of the fourth quarter, you know, what do you think... unit growth should still be, you know, a positive tailwind to comps, as things mature. But beyond that, you know, how should we think about the drivers of comps and AUVs in 2024? Maybe if you could bucket between membership, pricing, things like Gymp ass and XPASS? ... Yeah, I think, yeah, I think it'll mirror much of 2023, where 95% of the driver was volume and members. Like, the average member unit count per store is up, right? And so, you know, our average member was paying $130 in 2022. They're paying $135 in 2023. We do increase price. We have 5-tier pricing across the country, and so if we're seeing supply and demand that dictates we should go from tier 5-tier 4 or tier 3-tier 2 or whatever it might be, we're gonna take price at each of the store levels. We're not taking a price nationally on January 1st or something like that. We're trying to take price on a daily basis in each of the stores based on that supply and demand. Are we closing deals too quickly, right? Or we have too many people waiting in line to take a class. If the demand is there at the store level, then we're gonna increase price. But when we increase price, we're increasing price on the new member coming in the door, not the members that are already members, right? And so everybody kinda has the price that they bought in at, and then where the pricing is today, kinda gives them that equity value, which keeps them, right, keeps the member more sticky. As opposed to if you go back and raise price on everybody, and they may not be utilizing as much, even a $5-$10 increase could make people, you know, realize that they, they wanna cancel, or it may just kinda put them over that edge. And so we increase price on the new member coming in. And so we only had about a $5 increase on the average member from $130- $135 year-over-year. So you could see, maybe see $135-$140 or something like that in 2024. We'll see how that works out, but the main driver is always gonna be volume. It's gonna be the demand for our product. Mm-hmm. And then for the unit opens, and you've talked about lease signings being the best, you know, forward indicator of your visibility to that. You know, can you just maybe update us on where those sit today and how that drives your confidence in the, you know, 500+ unit opens over the next two years? Yeah, I think, you know, like I said at the start, we've got a lot of visibility in it. That's why we can peg something like $550-$560 pretty far out and hit $557. So you know, it'll continue. You know, we said at Investor Day, and then I think we even updated our last earnings call, it was, you know, we said: "Hey, we've got about 450," and that, that's domestically where we can say today, at any given time, we can see out, you know, six, seven, eight months, depending on kinda where it is. And we can say: "Hey, we've got 450 leases that are, that are here," right? So we can get brands and addresses and franchisees' contact info of, you know, call it 450 openings of our 550 openings. And we can see that really at any given time. So we're always... as we get to our year-end call or, you know, year forward call, like end of February, early March, when we, kinda set guidance for 2024, you're in month three, you can see six to seven months out. You're really sitting- you're really betting on late October, November, and December. You know, you're really looking at the last 10 weeks of the quarter of Q4, kinda figuring out, you know, what you think that cadence is. Wanted to, you know, shift gears to Lindora. So, you know, you recently announced you acquired your first brand outside of the, you know, traditional, I guess, fitness space, maybe outside of StretchLab. But, you know, can you give us some more perspective on the rationale for the acquisition, what else you were looking at, any key metrics you'd like to share, and you know, how we should think about how the brand should ramp, just given it is a bit more complicated of an industry and a model? Yeah. Well, let Sarah give you the, the color on that, and let John work on the ramp for you. Yeah. So that, that brand has 31 locations, so 30 locations in California and 1 location in Washington. We're super excited about that brand, just given the fact that it, it's focused in wellness and primarily in health and, and weight loss. So they've, they've been around for a long time. They've got a good member following. They've got AUVs that are around the $1 million benchmark. So, you know, we just reported the $590 AUV across Xpo, so we're super excited to bring a brand in that will have higher AUVs right from the get-go, and that's without us applying the sales and marketing engine that Xponential brings to all the brands that we bring into our house. From the corporate practice and medicine standpoint, it's actually not gonna be that complicated. The franchisee will still be able to own and operate their business. They'll partner with a local MD, and there's a lot of networks out there that they'll be able to do some like an MSA or a master service agreement with. And they'll have oversight of the LVNs and the nurse practitioners, and then from there, they can administer everything from you know, the vitamins to the weight loss therapy programs, GLP-1s and hormone replacement therapies. But a lot of the business, the bulk of the business is going to be in the weight loss. So we like that 'cause there's a lot of overlap with our current customer and our current customer is getting fitness at a majority of our brands, but they're not getting the weight loss, they're not getting the nutrition. So there's massive overlap between what Lindora offers and what our brands offer. So we'll be able to start to take the nutritional component and put that into our newsletters, put that into our digital, applications for other members so that they can start to hear about and learn about and receive the benefit of Lindora. And then, as we continue to build out Lindora, they'll already know the Lindora name and the product offering and the service and be able to go into those clinics, to take advantage of, of the services ultimately. So it's a perfect marriage. I think it's, you know, very complementary to what it is that we offer. So far, broker networks across the country have, have been very excited to go out and bring this to their customers. And we have a pipeline already of 130 applications, and we've owned the company for seven days. So far, all the indicators are looking very positive, and now our team is getting in there underneath the hood and seeing what type of additional opportunity upside there is. ... And how many of those applications are from your current franchisee base? So we've got 50% so far. So we did a pre-launch at our convention, and we had franchisees that raised their hand. And in fact, I've had franchisees that had Club Pilates businesses, they sold it, and they came back over the weekend and said, "Hey, we wanna, we wanna get back in on the game." So that's exciting, too, to see that, you know, previous franchise partners are coming back, and they want to re-franchise with us. Yeah. From a ramp perspective, I mean, 2024 is really about selling licenses in Lindora. You'll see maybe a few units open up in probably the back half of the year. The majority of the licenses we sell this year, you'll see the fruits of that with new studio openings in 2025 and 2026. As Sarah mentioned, they did about a $1 million AUV on the 31 units. They did that even prior to the more recent pharmaceuticals that have kind of entered the market, so we feel really good about the weight loss management as a modality in general, even without the pharmaceutical component. We do expect to see similar unit economics that we have today in our system with higher AUVs. There is a slightly higher labor component, given the medical profession working in the units, but the margins and the expected build-out costs are very similar to what we see today across our portfolio, just running on a higher AUV. Great. So, in shifting gears again a bit, you know, the majority of current licensed sales and unit opens have been from Club Pilates and StretchLab, which has obviously been great for, you know, system-wide sales and AUV growth. But, there is, you know, some concern that as those brands perhaps approach their TAM, that that growth could stagnate. So how do you think about other brands like Rumble, BFT, you know, some of the non-scaled brands that are doing well? You know, the timing of those, you know, how we should think about seeing the acceleration and licensed sales and opens to kind of drive growth beyond the current run rate? Yeah, I mean, 2024 will look a lot like 2023. I mean, you still have a lot of growth left in Club Pilates, a lot of growth left in StretchLab. BFT and Rumble will be a larger percentage of the mix next year, and the year after, as we've sold a lot of those, and you're seeing them come to market. You still have a lot of middle brands, like YogaSix, that are kind of infilling with good, steady growth. Brands like Pure Barre, where they've, you know, historically had, you know, not as much growth from new openings. We're seeing really good performance from an AUV perspective in 2023. That brand has had mid-double-digit same-store sales every quarter of 2023. In Q4, they hit the highest AUV in that brand's history, even prior to us owning it. Seeing kind of like resurgences of brands like that could trigger more growth of new units, even in some of our older brands. But the mix in 2024 will look largely like 2023, but just with brands like BFT and Rumble making up a larger percentage. But again, those brands have good AUVs as well, so it'll help, you know, pull up the system. Awesome. Maybe talking about international a bit, you know, you recently hired a president, you signed a master franchise agreement in Japan. You know, maybe talk about how that's going, how we should think about that contributing to growth over the next three years. Yeah, I think it'll be a big driver to growth over the next three years. I mean, you know, John's model that he laid out in Investor Day assumed really no growth, right? International assumed, you know, the current comps going, you know, almost in half of where they are today or normalizing back to kind of mid or to high single digits, and no acquisitions, you know? And since September, we've done an acquisition, we've signed a handful of master franchise agreements, and we're kind of seeing that double-digit comp, right? And so International will be a big driver 'cause it's not actually modeled to grow so much in our 2024, 2025, and 2026 numbers. And kind of like most franchisors, we're a domestic business, you get international lead flow. You say: "Hey, it's great, you want to go open a Club Pilates in Japan, go for it," and it just becomes kind of extra upside for the business. But as we bought BFT a couple of years ago, had a couple of 100 international units, you know, international started becoming a bigger piece of our business. And now that we have agreements in 23 countries, it's becoming an even bigger piece, and we've probably about 8 of our brands that are represented domestic and internationally today. And so with that, we really needed to build an international team that mimicked domestic, right? Where we had a me or a Sarah, right? You had a president of the brand, of the brands that is out there driving that franchise sales, franchise operations, construction, real estate, everything, you know, equipment procurement, all the things that you kind of see. And so we built that team in 2023, and then we hired Bob to lead that team. And so that was what we did. He was at Mathnasium, which is our company. He was Coffee Bean & Tea Leaf before that, and for the people that are as old as I am, he did all the international for Tower Records. And so, you know, he's been doing it a long time. He knows what he's doing, so we brought him in to lead that team. It was about 12 executives we interviewed. And then it went from me to Sarah and Ryan doing interviews, and then the team ultimately doing interviews, and we all collectively chose Bob. So we're, we're happy to have him on board. It's been seven weeks, so we're not expecting him to, you know, split the Earth in seven weeks. But he's out on the road, meeting with our partners, and then we'll have... you know, be able to start to get real global figures, probably in 2025, to say, you know: "Okay, this is where we're seeing AUV, system-wide sales," things like that. It's a bit premature to get, you know, kind of in the beginning of 2024, but that's what we'll be, we'll be working towards. Same thing domestically, right? Selling more master franchise agreements, opening more stores, driving AUV, and then trying to keep that international team, SG&A efficient. Mm-hmm. Great, and maybe with a minute left, you know, you've give it some breadcrumbs, but we could, you know, maybe end with the long-term targets that you gave at your Investor Day. So 500+ unit opens over the next couple of years, 47% EBITDA margins. Maybe you could just talk about, one, your confidence in those targets today and how we should think about upside and downside to those. Yeah, I mean, the 500 unit-600 unit openings for the next couple of years, we have the backlog. I feel confident that we'll deliver very similar to this year, you know, another 500 units-600 units in 2024. You know, as far as top-line growth, bottom-line growth, those are all based off of what I consider a conservative base of the assets we have today. As Anthony mentioned, we've already added a new brand, so you could expect that brand to contribute above those targets in 2025, 2026. You know, as far as the same-store sales, you know, we've been outperforming expectations there. I continue to see a normalization happening over time, just being somewhat conservative. But overall, I do feel that the estimates that we've provided to you and the Street are achievable. The margin expansion will come from the install base, the new studios that we're going to add over the next couple of years, the growth in international. We've done the SG&A work that was required to happen to get that instant kind of EBITDA expansion. So I do see us in 2024 getting past the 40% adjusted EBITDA mark, and then, you know, driving our way up to closer to that 45% over the next coming year. So I am confident in the estimates that I put out there, and the work that we've done will get us there. Great. Good place to end. Thank you guys so much. Thank- ... and thank you, everyone, for joining. Thank you.