Planet Fitness reported a solid Q3 2024 with revenue of $292.2 million, up 5.3% year-over-year, supported by ongoing member demand in a price-sensitive fitness segment. The period delivered meaningful profitability, with gross margins around 53% and EBITDA of $127.3 million (EBITDA margin approximately 43.6%), driving a net income of $42.0 million and earnings per share of $0.50. Free cash flow was robust at $78.2 million, underscoring the franchise model’s operating leverage and cash-generation capability, even as capex remained modest at roughly $48.6 million.
From a balance-sheet perspective, liquidity remains solid with cash and short-term investments totaling about $407.4 million and total cash of $366.5 million at period-end. However, the company carries a heavy debt load (total debt of $2.583 billion) and records negative stockholders’ equity (-$266.1 million), reflected in a debt-to-capitalization ratio above 1.0 and an equity base that may constrain covenant headroom and deleveraging optionality. Net debt stood at approximately $2.285 billion, signaling elevated financial leverage that investors should monitor in a rising-rate environment. The company’s operating cash flow of $126.8 million supports a healthy albeit leveraged cash conversion profile (free cash flow of $78.2 million), suggesting capacity to reinvest in growth or reduce leverage if needed.
With no formal management-provided forward guidance in the materials, the outlook hinges on membership momentum, same-store sales performance, and the pace of franchise expansion versus deleveraging needs. The platform’s scalable franchise model and strong cash generation position Planet Fitness to pursue selective growth while balancing debt load, though investors should remain mindful of negative equity and elevated leverage as interim risk factors.