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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to ______________
Commission file number: 001-37534
PLANET FITNESS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 38-3942097
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
4 Liberty Lane West, Hampton, NH 03842
(Address of Principal Executive Offices and Zip Code)
(603) 750-0001
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 Par ValuePLNTNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
    
Non-accelerated filer   Smaller reporting company 
       
Emerging growth company     
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  
As of May 2, 2024 there were 87,528,804 shares of the Registrant’s Class A Common Stock, par value $0.0001 per share, outstanding and 650,531 shares of the Registrant’s Class B Common Stock, par value $0.0001 per share, outstanding.




PLANET FITNESS, INC.
TABLE OF CONTENTS
  
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2


Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “goal,” “plan,” “prospect,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “ongoing,” “contemplate,” “future,” “strategy” and the negative thereof and other similar words or expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:
future financial position;
business strategy;
budgets, projected costs and plans;
future industry growth;
financing sources;
potential return of capital initiatives;
the impact of litigation, government inquiries and investigations; and
all other statements regarding our intent, plans, beliefs or expectations or those of our directors or officers.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include, among others, risks and uncertainties associated with the following:
Our success depends substantially on the value of our brand, which could be materially and adversely affected by the high level of competition in the health and fitness industry, our ability to anticipate and satisfy consumer preferences, shifting views of health and fitness and our ability to obtain and retain high-profile strategic partnership arrangements.
Our and our franchisees’ stores may be unable to attract and retain members, which would materially and adversely affect our business, results of operations and financial condition.
Our intellectual property rights, including trademarks, trade names, copyrights and trade dress, may be infringed, misappropriated or challenged by others.
We and our franchisees rely heavily on information systems, including the use of email marketing, mobile application and social media, and any material failure, interruption or weakness may prevent us from effectively operating our business, damage our reputation or subject us to potential fines or other penalties.
If we fail to properly maintain the confidentiality and integrity of our data, including member credit card, debit card, bank account information and other personally identifiable information, our reputation and business could be materially and adversely affected.
The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business.
If we fail to successfully implement our growth strategy, which includes new store development by existing and new franchisees, our ability to increase our revenues and operating profits could be adversely affected.
Our planned growth and changes in the industry could place strains on our management, employees, information systems and internal controls, which may adversely impact our business.
If we cannot retain our key employees and hire additional highly qualified employees, we may not be able to successfully manage our businesses and pursue our strategic objectives.
Economic, political and other risks associated with our international operations could adversely affect our profitability and international growth prospects.
Our financial results are affected by the operating and financial results of, our relationships with and actions taken by our franchisees.
We are subject to a variety of additional risks associated with our franchisees, such as potential franchisee bankruptcies, franchisee changes in control, franchisee turnover, rising costs related to construction of new stores and maintenance of existing stores, including rising costs due to inflation and supply chain disruptions, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition.
We and our franchisees could be subject to claims related to health and safety risks to members that arise while at both our corporate-owned and franchise stores.
3


Our business is subject to various laws and regulations including, among others, those governing indoor tanning, electronic funds transfer, ACH, credit card, debit card, digital payment options, auto-renewal contracts, membership cancellation rights and consumer protection more generally, and changes in such laws and regulations, failure to comply with existing or future laws and regulations or failure to adjust to consumer sentiment regarding these matters, could harm our reputation and adversely affect our business.
Our failure to address evolving environmental, social and governance (“ESG”) issues may have an adverse effect on our business, financial condition and results of operations.
We are subject to risks associated with leasing property subject to long-term non-cancelable leases.
If we and our franchisees are unable to identify and secure suitable sites for new franchise stores, our revenue growth rate and profits may be negatively impacted.
Opening new stores in close proximity may negatively impact our existing stores’ revenues and profitability.
Our franchisees may incur rising costs related to construction of new stores and maintenance of existing stores, including rising costs due to inflation, supply chain disruptions and other market conditions, which could adversely affect the attractiveness of our franchise model, and in turn our business, results of operations and financial condition.
Our dependence on a limited number of suppliers for equipment and certain products and services could result in disruptions to our business and could adversely affect our revenues and gross profit.
The other factors identified under the heading “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission.
The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Report. Unless legally required, we undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.
4

PART I-FINANCIAL INFORMATION
ITEM 1. Financial Statements
Planet Fitness, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share amounts)
March 31, 2024December 31, 2023
Assets  
Current assets:  
Cash and cash equivalents$301,707 $275,842 
Restricted cash46,190 46,279 
Short-term marketable securities93,362 74,901 
Accounts receivable, net of allowances for uncollectible amounts of $0 and $0 as of March 31, 2024 and December 31, 2023, respectively
23,837 41,890 
Inventory4,959 4,677 
Restricted assets - national advertising fund17,945  
Prepaid expenses18,945 13,842 
Other receivables12,513 11,072 
Income tax receivable1,324 3,314 
Total current assets520,782 471,817 
Long-term marketable securities
45,165 50,886 
Investments, net of allowance for expected credit losses of $18,164 and $17,689 as of March 31, 2024 and December 31, 2023, respectively
76,360 77,507 
Property and equipment, net of accumulated depreciation of $349,068 and $322,958, as of March 31, 2024 and December 31, 2023, respectively
382,019 390,405 
Right-of-use assets, net385,796 381,010 
Intangible assets, net359,750 372,507 
Goodwill719,074 717,502 
Deferred income taxes499,839 504,188 
Other assets, net3,993 3,871 
Total assets$2,992,778 $2,969,693 
Liabilities and stockholders’ deficit
Current liabilities:
Current maturities of long-term debt$20,750 $20,750 
Accounts payable20,560 23,788 
Accrued expenses43,709 66,299 
Equipment deposits7,594 4,506 
Deferred revenue, current77,263 59,591 
Payable pursuant to tax benefit arrangements, current41,294 41,294 
Other current liabilities35,331 35,101 
Total current liabilities246,501 251,329 
Long-term debt, net of current maturities1,959,032 1,962,874 
Lease liabilities, net of current portion390,399 381,589 
Deferred revenue, net of current portion33,820 32,047 
Deferred tax liabilities1,666 1,644 
Payable pursuant to tax benefit arrangements, net of current portion456,700 454,368 
Other liabilities3,891 4,833 
Total noncurrent liabilities2,845,508 2,837,355 
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
Class A common stock, $0.0001 par value, 300,000 shares authorized, 86,832 and 86,760 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
9 9 
Class B common stock, $0.0001 par value, 100,000 shares authorized, 1,071 and 1,397 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
  
Accumulated other comprehensive (loss) income(435)172 
Additional paid in capital581,332 575,631 
Accumulated deficit(677,321)(691,461)
Total stockholders’ deficit attributable to Planet Fitness, Inc.(96,415)(115,649)
Non-controlling interests(2,816)(3,342)
Total stockholders’ deficit(99,231)(118,991)
Total liabilities and stockholders’ deficit$2,992,778 $2,969,693 
See accompanying notes to condensed consolidated financial statements
5

Planet Fitness, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)

 Three Months Ended March 31,
(in thousands, except per share amounts)
20242023
Revenue:  
Franchise$84,234 $75,878 
National advertising fund revenue19,786 16,804 
Corporate-owned stores122,378 105,882 
Equipment21,619 23,661 
Total revenue248,017 222,225 
Operating costs and expenses:
Cost of revenue18,993 19,354 
Store operations74,353 66,015 
Selling, general and administrative29,193 27,767 
National advertising fund expense19,792 16,987 
Depreciation and amortization39,380 36,010 
Other losses, net484 3,936 
Total operating costs and expenses182,195 170,069 
Income from operations65,822 52,156 
Other income (expense), net:
Interest income5,461 3,931 
Interest expense(21,433)(21,599)
Other income, net647 113 
Total other expense, net(15,325)(17,555)
Income before income taxes
50,497 34,601 
Provision for income taxes14,324 9,567 
Losses from equity-method investments, net of tax
(1,200)(265)
Net income
34,973 24,769 
Less net income attributable to non-controlling interests
664 2,064 
Net income attributable to Planet Fitness, Inc.
$34,309 $22,705 
Net income per share of Class A common stock:
Basic$0.39 $0.27 
Diluted$0.39 $0.27 
Weighted-average shares of Class A common stock outstanding:
Basic86,909 84,444 
Diluted87,222 84,787 
 See accompanying notes to condensed consolidated financial statements.
6

Planet Fitness, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)

 
 Three Months Ended March 31,
(in thousands)20242023
Net income including non-controlling interests$34,973 $24,769 
Other comprehensive income, net:
Foreign currency translation adjustments(212)81 
Unrealized loss on marketable securities, net of tax(395) 
Total other comprehensive (loss) income, net(607)81 
Total comprehensive income including non-controlling interests34,366 24,850 
Less: total comprehensive income attributable to non-controlling interests664 2,064 
Total comprehensive income attributable to Planet Fitness, Inc.$33,702 $22,786 
 See accompanying notes to condensed consolidated financial statements.
7

Planet Fitness, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
 Three Months Ended March 31,
(in thousands)
20242023
Cash flows from operating activities:
Net income$34,973 $24,769 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization39,380 36,010 
Amortization of deferred financing costs1,346 1,360 
Accretion of marketable securities discount(871) 
Losses from equity-method investments, net of tax1,200 265 
Dividends accrued on held-to-maturity investment(528)(483)
Credit loss on held-to-maturity investment475 255 
Deferred tax expense11,367 8,082 
Gain on re-measurement of tax benefit arrangement liability(362) 
Loss on disposal of property and equipment867  
Equity-based compensation expense975 2,049 
Other(41)(44)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable18,084 25,619 
Inventory(287)266 
Other assets and other current assets(6,444)2,010 
Restricted assets - national advertising fund
(17,945)(13,387)
Accounts payable and accrued expenses(18,530)(19,928)
Other liabilities and other current liabilities(548)4,907 
Income taxes1,943 2,736 
Equipment deposits3,088 4,408 
Deferred revenue19,519 19,395 
Leases2,071 (379)
Net cash provided by operating activities89,732 97,910 
Cash flows from investing activities:
Additions to property and equipment(26,311)(22,997)
Purchases of marketable securities(34,922) 
Maturities of marketable securities22,589  
Net cash used in investing activities(38,644)(22,997)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock450 6,748 
Principal payments on capital lease obligations(36)(56)
Repayment of long-term debt and variable funding notes(5,188)(5,188)
Repurchase and retirement of Class A common stock(20,005)(25,005)
Distributions paid to members of Pla-Fit Holdings(218)(1,106)
Net cash used in financing activities(24,997)(24,607)
Effects of exchange rate changes on cash and cash equivalents(315)198 
Net increase in cash, cash equivalents and restricted cash25,776 50,504 
Cash, cash equivalents and restricted cash, beginning of period322,121 472,499 
Cash, cash equivalents and restricted cash, end of period$347,897 $523,003 
Supplemental cash flow information:
Cash paid for interest$20,165 $20,373 
Net cash paid for (refund received) income taxes$1,013 $(1,016)
Non-cash investing activities:
Non-cash additions to property and equipment included in accounts payable and accrued expenses$11,400 $11,682 
See accompanying notes to condensed consolidated financial statements.
8

Planet Fitness, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity (Deficit) (Unaudited)

 Class A
common stock
Class B
common stock
Accumulated
other
comprehensive income (loss)
Additional paid-
in capital
Accumulated
deficit
Non-controlling
interests
Total (deficit)
equity
(In thousands)SharesAmountSharesAmount
Balance at December 31, 202386,760 $9 1,397 $ $172 $575,631 $(691,461)$(3,342)$(118,991)
Net income34,309 664 34,973 
Equity-based compensation expense975 — 975 
Repurchase and retirement of Class A common stock(314)— — 774 (20,169)(774)(20,169)
Exchanges of Class B common stock and other adjustments326 — (326)— (854)854  
Vesting of restricted share units and ESPP share purchase60 381 381 
Tax benefit arrangement liability and deferred taxes arising from exchanges of Class B common stock— — — — — 4,425 — — 4,425 
Distributions paid to members of Pla-Fit Holdings— (218)(218)
Other comprehensive loss(607)— (607)
Balance at March 31, 202486,832 $9 1,071 $ $(435)$581,332 $(677,321)$(2,816)$(99,231)

 Class A
common stock
Class B
common stock
Accumulated
other
comprehensive (loss) income
Additional paid-
in capital
Accumulated
deficit
Non-controlling
interests
Total (deficit)
equity
(In thousands)SharesAmountSharesAmount
Balance at December 31, 202283,430 $8 6,146 $1 $(448)$505,144 $(703,717)$(12,549)$(211,561)
Net income22,705 2,064 24,769 
Equity-based compensation expense2,049 — 2,049 
Repurchase and retirement of Class A common stock(318)— — (25,005)(25,005)
Exchanges of Class B common stock and other adjustments1,901 1 (1,901)(1)(4,353)4,353  
Exercise of stock options, vesting of restricted share units and ESPP share purchase217 6,524 6,524 
Tax benefit arrangement liability and deferred taxes arising from exchanges of Class B common stock— — — — — 45,903 — — 45,903 
Non-cash adjustments to VIEs— (233)(233)
Distributions paid to members of Pla-Fit Holdings— (1,106)(1,106)
Other comprehensive income81 — 81 
Balance at March 31, 202385,230 $9 4,245 $ $(367)$555,267 $(706,017)$(7,471)$(158,579)
See accompanying notes to condensed consolidated financial statements.
9

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)

(1) Business organization
Planet Fitness, Inc. (the “Company”), through its subsidiaries, is a franchisor and operator of fitness centers, with approximately 19.6 million members and 2,599 owned and franchised locations (referred to as stores) in all 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia as of March 31, 2024.
The Company serves as the reporting entity for its various subsidiaries that operate three distinct lines of business:
Licensing and selling franchises under the Planet Fitness trade name;
Owning and operating fitness centers under the Planet Fitness trade name; and
Selling fitness-related equipment to franchisee-owned stores.
In 2012 investment funds affiliated with TSG Consumer Partners, LLC (“TSG”), purchased interests in Pla-Fit Holdings.
The Company was formed as a Delaware corporation on March 16, 2015 for the purpose of facilitating an initial public offering (the “IPO”) and related transactions in order to carry on the business of Pla-Fit Holdings, LLC and its subsidiaries (“Pla-Fit Holdings”). As of August 5, 2015, in connection with the recapitalization transactions, the Company became the sole managing member and holder of 100% of the voting power of Pla-Fit Holdings. Pla-Fit Holdings owns 100% of Planet Intermediate, LLC, which has no operations but is the 100% owner of Planet Fitness Holdings, LLC, a franchisor and operator of fitness centers. With respect to the Company, Pla-Fit Holdings and Planet Intermediate, LLC, each entity owns nothing other than the respective entity below it in the corporate structure and each entity has no other material operations.
The Company is a holding company whose principal asset is a controlling equity interest in the membership units (“Holdings Units”) in Pla-Fit Holdings. As the sole managing member of Pla-Fit Holdings, the Company operates and controls all of the business and affairs of Pla-Fit Holdings, and through Pla-Fit Holdings, conducts its business. As a result, the Company consolidates Pla-Fit Holdings’ financial results and reports a non-controlling interest related to the portion of Holdings Units not owned by the Company.
As of March 31, 2024, the Company held 100.0% of the voting interest and approximately 98.8% of the economic interest in Pla-Fit Holdings and the owners of Holdings Units other than the Company (the “Continuing LLC Owners”) held the remaining 1.2% economic interest in Pla-Fit Holdings. As future exchanges of Holdings Units occur, the economic interest in Pla-Fit Holdings held by Planet Fitness, Inc. will increase.

(2) Summary of significant accounting policies
(a) Basis of presentation and consolidation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation.
The condensed consolidated financial statements as of and for the three months ended March 31, 2024 and 2023 are unaudited. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024. The Company’s significant interim accounting policies include the proportional recognition of national advertising fund expenses within interim periods. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024.
10

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
(b) Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the condensed consolidated financial statements include revenue recognition, valuation of equity-based compensation awards, valuation of assets and liabilities acquired in business combinations, the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets, allowance for expected credit losses, the present value of lease liabilities, income taxes, including deferred tax assets and liabilities, and the liability for the Company’s tax benefit arrangements.
(c) Fair Value
ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and other current liabilities are carried at cost, which approximates their fair value because of their short-term nature. See Note 3 for investments that are measured at fair value on a recurring basis.
The carrying value and estimated fair value of long-term debt were as follows:
March 31, 2024December 31, 2023
Carrying value
Estimated fair value(1)
Carrying value
Estimated fair value(1)
Long-term debt(1)
$1,999,250 $1,851,357 $2,004,438 $1,829,286 
(1) The estimated fair value of the Company’s fixed rate long-term debt is estimated primarily based on current bid prices for the long-term debt. Judgment is required to develop these estimates. As such, the fair value of long-term debt is classified within Level 2, as defined under GAAP.
(d) Recent accounting pronouncements
The FASB issued ASU No. 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, in August 2023. The standard addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements. The new standard is effective prospectively for all joint ventures with a formation date on or after January 1, 2025. The Company will apply the standard to any relevant transactions subsequent to the adoption date.
The FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, in November 2023. The standard expands reportable segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adoption on our financial disclosures.
11

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
The FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, in December 2023. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of adoption on our financial disclosures.
(3) Investments
Marketable securities
The following tables summarize the amortized cost, net unrealized gains and losses, fair value, and the level in the fair value hierarchy of the Company’s available-for-sale investments in marketable securities. As of March 31, 2024, the marketable securities had maturity dates that range from less than 1 month to approximately 24 months. Realized gains and losses were insignificant for the three months ended March 31, 2024 and 2023.
Amortized CostUnrealized GainsUnrealized Losses
Fair Value(1)
Level 1Level 2
March 31, 2024
Cash equivalents
Money market funds$863 $ $ $863 $863 $ 
U.S. treasury securities10,922   10,922 10,922 
Commercial paper10,460  (8)10,452  10,452 
Total cash equivalents22,245  (8)22,237 863 21,374 
Short-term marketable securities
Commercial paper44,100  (29)44,071  44,071 
Corporate debt securities42,917  (28)42,889  42,889 
U.S. government agency securities6,394 8  6,402  6,402 
Total short-term marketable securities93,411 8 (57)93,362  93,362 
Long-term marketable securities
Corporate debt securities41,659 10  41,669  41,669 
U.S. government agency securities3,500  (4)3,496  3,496 
Total long-term marketable securities45,159 10 (4)45,165  45,165 
Total marketable securities$160,815 $18 $(69)$160,764 $863 $159,901 
12

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Amortized CostUnrealized GainsUnrealized Losses
Fair Value(1)
Level 1Level 2
December 31, 2023
Cash equivalents
Money market funds$761 $ $ $761 $761 $ 
U.S. treasury securities2,997 1  2,998  2,998 
Total cash equivalents3,758 1  3,759 761 2,998 
Short-term marketable securities
Commercial paper37,063 24  37,087  37,087 
Corporate debt securities34,632  (38)34,594  34,594 
U.S. government agency securities3,210 10  3,220  3,220 
Total short-term marketable securities74,905 34 (38)74,901  74,901 
Long-term marketable securities
Corporate debt securities47,388 328  47,716  47,716 
U.S. government agency securities3,151 19  3,170  3,170 
Total long-term marketable securities50,539 347  50,886  50,886 
Total marketable securities$129,202 $382 $(38)$129,546 $761 $128,785 
(1) Fair values were determined using market prices obtained from third-party pricing sources.
For marketable securities with unrealized loss positions, the Company does not intend to sell these securities and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis and they are therefore all categorized as available for sale. No allowance for credit losses was recorded for these securities as of March 31, 2024.
Held-to-maturity debt security
As of March 31, 2024, the Company’s debt security investment consists of redeemable preferred shares that are accounted for as a held-to-maturity investment. The Company’s investment is measured at amortized cost within investments in the condensed consolidated balance sheets. The Company reviews its held-to-maturity securities for expected credit losses under ASC Topic 326, Financial Instruments – Credit Losses, on an ongoing basis.
During the three months ended March 31, 2024 and 2023, the Company’s review of the investment indicated that an adjustment to its allowance for expected credit losses was necessary. The Company utilized probability-of-default (“PD”) and loss-given-default (“LGD”) methodologies to calculate the allowance for expected credit losses. The Company derived its estimates using historical lifetime loss information for assets with similar risk characteristics, adjusted for management’s expectations. Adjustments for management’s expectations were based on the investee’s recent financial results, current financial position, and forward-looking financial forecasts. Based upon its analysis, the Company recorded a credit loss expense of $475 and $255 for the three months ended March 31, 2024 and 2023, respectively, on the adjustment of its allowance for credit losses within other (income) expense, net on the condensed consolidated statements of operations.
The amortized cost, including accrued dividends, of the Company’s held-to-maturity debt security investment was $30,871 and $30,343 and the allowance for expected credit losses was $18,164 and $17,689, as of March 31, 2024 and December 31, 2023, respectively. The amortized cost, net of the allowance for expected credit losses, approximates fair value. The Company recognized dividend income of $528 and $483 during the three months ended March 31, 2024 and 2023, respectively, within other income (expense), net on the condensed consolidated statements of operations.
As of March 31, 2024, the Company’s held-to-maturity investment had a contractual maturity in 2026.
A roll forward of the Company’s allowance for expected credit losses on its held-to-maturity investment is as follows:
13

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Three Months Ended March 31,
20242023
Beginning allowance for expected credit losses$17,689 $14,957 
Loss on adjustment of allowance for expected credit losses475 255 
Write-offs, net of recoveries  
Ending allowance for expected credit losses$18,164 $15,212 
Equity method investments
For the following investments, the Company recorded its proportionate share of the investees’ earnings, prepared in accordance with GAAP, on a one-month lag, with an adjustment to eliminate unrealized profits on intra-entity sales, if any, and the amortization of basis differences, within losses from equity-method investments, net of tax on the condensed consolidated statements of operations. As of March 31, 2024, the Company determined that no impairment of its equity method investments existed.
As of March 31, 2024 and December 31, 2023, the Company held a 21.8% ownership interest in Bravo Fit Holdings Pty Ltd, a franchisee of the Company and store operator in Australia, which is deemed to be a related party, for a total investment carrying value of $12,912 and $13,220, respectively. The difference between the carrying amount of the Company’s investment and the underlying amount of equity in net assets of the investment was $6,326 and $6,812 as of March 31, 2024 and December 31, 2023, respectively. These basis differences are attributable to intangible assets, which are being amortized on a straight-line basis over a weighted-average life of 9 years, and equity method goodwill. For the three months ended March 31, 2024 and 2023, the Company’s proportionate share of the earnings in accordance with the equity method was a loss of $308 and $265, respectively, which included amortization of basis difference of $66 and $65, respectively.
As of March 31, 2024 and December 31, 2023, the Company held a 33.2% ownership interest in Planet Fitmex, LLC, a franchisee of the Company and store operator in Mexico, which is deemed to be a related party and classified as an equity method investment as a result of its organizational structure, for a total investment carrying value of $50,741 and $51,633, respectively. The difference between the carrying amount of the Company’s investment and the underlying amount of equity in net assets of the investment was $16,390 and $17,458 as of March 31, 2024 and December 31, 2023, respectively. This basis difference is attributable to intangible assets, which are being amortized on a straight-line basis over a weighted-average life of 9 years, and equity method goodwill. For the three months ended March 31, 2024, the Company’s proportionate share of the earnings in accordance with the equity method was a loss of $892, which included amortization of basis difference of $163.
(4) Acquisition
Florida Acquisition
On April 16, 2023, the Company purchased from one of its franchisees a majority of the assets associated with four franchisee stores operating in Florida (the “Florida Acquisition”) for cash consideration of $26,264. As a result of the transaction, the Company incurred a loss on unfavorable reacquired franchise rights of $110, which is included in other losses, net on the condensed consolidated statement of operations. The loss incurred reduced the net purchase price to $26,154. The Company financed the purchase through cash on hand. The acquired stores are included in the Corporate-owned stores segment.
14

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
The allocation of the purchase consideration was as follows:
Amount
Property and equipment$3,851 
Right of use assets5,424 
Other long-term assets95 
Intangible assets6,880 
Goodwill14,812 
Deferred revenue(687)
Other current liabilities(17)
Lease liabilities(4,204)
Total
$26,154 
The goodwill created through the purchase is attributable to the assumed future value of the cash flows from the stores acquired. The goodwill is amortizable and deductible for tax purposes over 15 years.
The following table sets forth the components of identifiable intangible assets acquired in the Florida Acquisition and their estimated useful lives in years as of the date of the acquisition:
Fair valueUseful life
Reacquired franchise rights (1)
$6,650 6.8
Customer relationships (2)
230 6.0
Total intangible assets subject to amortization$6,880 
(1) Reacquired franchise rights represent the fair value of the reacquired franchise agreements using the income approach, specifically, the multi-period excess earnings method.
(2) Customer relationships represent the fair value of the existing contractual customer relationships using the income approach, specifically, the multi-period excess earnings method.
The acquisition did not have a material effect on the results of operations of the Company.
(5) Goodwill and intangible assets
Goodwill and related changes in its carrying amount were as follows:
Amount
Goodwill at December 31, 2023
$717,502 
Acquisition1,572 
Goodwill at March 31, 2024
$719,074 
The Company completed an immaterial acquisition of an operating entity in Spain during the first quarter of fiscal 2024, which resulted in the addition of $1,572 in the carrying value of goodwill. The Company intends to open corporate-owned stores through this entity.
15

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
A summary of intangible assets is as follows:
March 31, 2024December 31, 2023
Gross
carrying
amount
Accumulated
amortization
Net carrying
Amount
Gross
carrying
amount
Accumulated
amortization
Net carrying
Amount
Finite-lived intangible assets:
Customer relationships$199,043 $(173,087)$25,956 $199,043 $(169,155)$29,888 
Reacquired franchise rights274,708 (87,514)187,194 274,708 (78,689)196,019 
Total finite-lived intangible assets473,751 (260,601)213,150 473,751 (247,844)225,907 
Indefinite-lived intangible assets:
Trade and brand names146,600 — 146,600 146,600 — 146,600 
Total intangible assets$620,351 $(260,601)$359,750 $620,351 $(247,844)$372,507 
The Company determined that no impairment charges were required during any periods presented.
Amortization expense related to the finite-lived intangible assets totaled $12,768 and $12,587 for the three months ended March 31, 2024 and 2023, respectively. The anticipated amortization expense related to intangible assets to be recognized in future periods as of March 31, 2024 is as follows:
 Amount
Remainder of 2024$36,433 
202536,713 
202632,079 
202727,956 
202827,300 
Thereafter52,669 
Total$213,150 
(6) Long-term debt
Long-term debt consists of the following: 
 March 31, 2024December 31, 2023
2018-1 Class A-2-II notes$590,625 $592,187 
2019-1 Class A-2 notes526,625 528,000 
2022-1 Class A-2-I notes416,500 417,563 
2022-1 Class A-2-II notes465,500 466,688 
Total debt, excluding deferred financing costs1,999,250 2,004,438 
Deferred financing costs, net of accumulated amortization(19,468)(20,814)
Total debt, net1,979,782 1,983,624 
Current portion of long-term debt20,750 20,750 
Long-term debt, net of current portion$1,959,032 $1,962,874 
16

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Future principal payments of long-term debt as of March 31, 2024 are as follows: 
 Amount
Remainder of 2024$15,562 
2025600,438 
2026419,313 
202710,250 
202810,250 
Thereafter943,437 
Total$1,999,250 
On August 1, 2018, Planet Fitness Master Issuer LLC (the “Master Issuer”), a limited-purpose, bankruptcy remote, wholly-owned indirect subsidiary of Pla-Fit Holdings, LLC, entered into a base indenture and a related supplemental indenture (collectively, the “2018 Indenture”) under which the Master Issuer may issue multiple series of notes. On the same date, the Master Issuer issued Series 2018-1 4.262% Fixed Rate Senior Secured Notes, Class A-2-I (the “2018 Class A-2-I Notes”) with an initial principal amount of $575,000 and Series 2018-1 4.666% Fixed Rate Senior Secured Notes, Class A-2-II (the “2018 Class A-2-II Notes” and, together with the 2018 Class A-2-I Notes, the “2018 Notes”) with an initial principal amount of $625,000. In connection with the issuance of the 2018 Notes, the Master Issuer also entered into a revolving financing facility that allows for the incurrence of up to $75,000 in revolving loans and/or certain letters of credit (the “Letters of Credit”) under the Master Issuer’s Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “2018 Variable Funding Notes”). The Company fully drew down on the 2018 Variable Funding Notes on March 20, 2020. On December 3, 2019, the Master Issuer issued Series 2019-1 3.858% Fixed Rate Senior Secured Notes, Class A-2 (the “2019 Notes” and, together with the 2018 Notes, the “Notes”) with an initial principal amount of $550,000. The 2019 Notes were issued under the 2018 Indenture and a related supplemental indenture dated December 3, 2019 (together, the “2019 Indenture”). On February 10, 2022, the Company completed a prepayment in full of its 2018 Class A-2-I Notes and an issuance of Series 2022-1 3.251% Fixed Rate Senior Secured Notes, Class A-2-I with an initial principal amount of $425,000 and Series 2022-1 4.008% Fixed Rate Senior Secured Notes, Class A-2-II with an initial principal amount of $475,000 (the “2022 Notes” and, together with the 2018 Notes and 2019 Notes, the “Notes”), and also entered into a new revolving financing facility that allows for the issuance of up to $75,000 in Variable Funding Notes (“2022 Variable Funding Notes”) and certain Letters of Credit (the issuance of such notes, the “Series 2022-I Issuance”). The 2022 Notes were issued under the 2018 Indenture and a related supplemental indenture dated February 10, 2022 (together, with the 2019 Indenture, the “Indenture”). Together, the Notes, 2018 Variable Funding Notes and 2022 Variable Funding Notes will be referred to as the “Securitized Senior Notes”.
The Notes were issued in securitization transactions pursuant to which most of the Company’s domestic revenue-generating assets, consisting principally of franchise-related agreements, certain corporate-owned store assets, equipment supply agreements and intellectual property and license agreements for the use of intellectual property, were assigned to the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly-owned indirect subsidiaries of the Company that act as guarantors of the Securitized Senior Notes and that have pledged substantially all of their assets to secure the Securitized Senior Notes.
Interest and principal payments on the Notes are payable on a quarterly basis. The requirement to make such quarterly principal payments on the Notes is subject to certain financial conditions set forth in the Indenture. The legal final maturity date of the 2018 Class A-2-II Notes is in September 2048, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2018 Class A-2-II Notes will be repaid in or prior to September 2025. The legal final maturity date of the 2019 Notes is in December 2049, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2019 Notes will be repaid in or prior to December 2029. The legal final maturity date of the 2022 Notes is in February 2052, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the 2022 Class A-2-I Notes will be repaid in or prior to December 2026 and the 2022 Class A-2-II Notes will be repaid in or prior to December 2031 (together, the “Anticipated Repayment Dates”). If the Master Issuer has not repaid or refinanced the Notes prior to the respective Anticipated Repayment Dates, additional interest will accrue pursuant to the Indenture.
If outstanding, the 2022 Variable Funding Notes will accrue interest at a variable interest rate based on (i) the prime rate, (ii) overnight federal funds rates, (iii) the secured overnight financing rate for U.S. Dollars, or (iv) with respect to advances made by conduit investors, the weighted average cost of, or related to, the issuance of commercial paper allocated to fund or maintain such advances, in each case plus any applicable margin and as specified in the 2022 Variable Funding Notes. There is a commitment fee on the unused portion of the 2022 Variable Funding Notes of 0.5% based on utilization. It is anticipated that
17

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
the principal and interest on the 2022 Variable Funding Notes, if any, will be repaid in full on or prior to December 2026, subject to two additional one-year extension options. Following the anticipated repayment date (and any extensions thereof), additional interest will accrue on the 2022 Variable Funding Notes equal to 5.0% per year.
In connection with the issuance of the 2018 Notes, 2019 Notes, and 2022 Notes, the Company incurred debt issuance costs of $27,133, $10,577, and $16,193 respectively. The debt issuance costs are being amortized to interest expense through the Anticipated Repayment Dates of the Notes utilizing the effective interest rate method.
The Securitized Senior Notes are subject to covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Securitized Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Securitized Senior Notes are in stated ways defective or ineffective, (iv) a cap on non-securitized indebtedness of $50,000 (provided that the Company may incur non-securitized indebtedness in excess of such amount, subject to the leverage ratio cap described below, under certain conditions, including if the relevant lenders execute a non-disturbance agreement that acknowledges the bankruptcy-remote status of the Master Issuer and its subsidiaries and of their respective assets), (v) a leverage ratio cap incurrence test on the Company of 7.0x (calculated without regard for any indebtedness subject to the $50,000 cap) and (vi) covenants relating to recordkeeping, access to information and similar matters.
Pursuant to a parent company support agreement, the Company has agreed to cause its subsidiary to perform each of its obligations (including any indemnity obligations) and duties under the Management Agreement and under the contribution agreements entered into in connection with the securitized financing facility, in each case as and when due. To the extent that such subsidiary has not performed any such obligation or duty within the prescribed time frame after such obligation or duty was required to be performed, the Company has agreed to either (i) perform such obligation or duty or (ii) cause such obligations or duties to be performed on the Company’s behalf.
The Securitized Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, certain manager termination events, an event of default, and the failure to repay or refinance the Notes on the applicable scheduled Anticipated Repayment Dates. The Securitized Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Securitized Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments.
In accordance with the Indenture, certain cash accounts have been established with the Indenture trustee (the “Trustee”) for the benefit of the trustee and the noteholders, and are restricted in their use. The Company holds restricted cash which primarily represents cash collections held by the Trustee, interest, principal, and commitment fee reserves held by the Trustee related to the Securitized Senior Notes. As of March 31, 2024, the Company had restricted cash held by the Trustee of $46,190.
18

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
(7) Leases
The right-of-use assets and lease liabilities for operating and finance leases, including their classification in the condensed consolidated balance sheets, were as follows:
LeasesBalance Sheet ClassificationMarch 31, 2024December 31, 2023
Assets
OperatingRight of use asset, net$385,796 $381,010 
FinanceProperty and equipment, net 144 179 
Total lease assets$385,940 $381,189 
Liabilities
Current:
OperatingOther current liabilities$31,895 $33,849 
FinanceOther current liabilities109 125 
Noncurrent:
OperatingLease liabilities, net of current portion390,399 381,589 
FinanceOther liabilities42 63 
Total lease liabilities$422,445 $415,626 
Weighted-average remaining lease term - operating leases8.0 years8.0 years
Weighted-average discount rate - operating leases5.5%5.4%
The components of lease cost were as follows:
Three Months Ended March 31,
20242023
Operating lease cost$17,475 $14,904 
Variable lease cost6,203 5,751 
Total lease cost$23,678 $20,655 
The Company’s costs related to short-term leases, those with a duration between one and twelve months, were immaterial.
Supplemental disclosures of cash flow information related to leases were as follows:
Three Months Ended March 31,
20242023
Cash paid for lease liabilities$15,303 $13,302 
Operating lease ROU assets obtained in exchange for operating lease liabilities
$16,064 $4,661 

19

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Maturities of lease liabilities as of March 31, 2024 were as follows:
Amount
Remainder of 2024$34,723 
202572,448 
202673,431 
202771,432 
202866,344 
Thereafter212,861 
Total lease payments$531,239 
Less: imputed interest(108,794)
Present value of lease liabilities$422,445 
As of March 31, 2024, future operating lease payments exclude approximately $32,239 of legally binding minimum lease payments for leases signed but not yet commenced.
(8) Revenue from contracts with customers
Contract liabilities consist primarily of deferred revenue resulting from initial and renewal franchise fees and area development agreement (“ADA”) fees paid by franchisees, as well as transfer fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement, and national advertising fund (“NAF”) revenue collected in advance of satisfaction of the Company’s performance obligation. Also included are corporate-owned store enrollment fees, annual fees and monthly fees as well as deferred equipment rebates relating to its equipment business. The Company classifies these contract liabilities as deferred revenue in its condensed consolidated balance sheets.
The following table reflects the change in contract liabilities between December 31, 2023 and March 31, 2024:
Amount
Balance at December 31, 2023
$91,638 
Revenue recognized that was included in the contract liability at the beginning of the year(34,438)
Increase, excluding amounts recognized as revenue during the period53,883 
Balance at March 31, 2024
$111,083 
The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, as of March 31, 2024. The Company has elected to exclude short-term contracts, sales and usage-based royalties and any other variable consideration recognized on an “as invoiced” basis.
Contract liabilities to be recognized in:Amount
Remainder of 2024$72,982 
20257,970 
20263,630 
20273,325 
20283,071 
Thereafter20,105 
Total$111,083 
Equipment deposits received in advance of delivery as of March 31, 2024 were $7,594 and are expected to be recognized as revenue within the next 12 months.
20

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
(9) Related party transactions
Activity with franchisees considered to be related parties is summarized below:
 Three Months Ended March 31,
 20242023
Franchise revenue - interim CEO
$1,280 $1,006 
Franchise revenue - other
884 241 
Equipment revenue - interim CEO
1,012 5 
Equipment revenue - other
2,990  
Total revenue from related parties$6,166 $1,252 
The Company had $5,247 and $2,916 of accounts receivable attributable to a related party as of March 31, 2024 and December 31, 2023, respectively.
Additionally, the Company had deferred ADA and franchise agreement revenue from related parties of $695 and $719 as of March 31, 2024 and December 31, 2023, respectively, of which $140 and $142 is from a franchisee in which the Company’s interim CEO has a financial interest.
As of March 31, 2024 and December 31, 2023, the Company had $81,474 and $98,494, respectively, payable to related parties pursuant to tax benefit arrangements. See Note 12 for further discussion of these arrangements.
The Company provides administrative services to the NAF and typically charges the NAF a fee for providing these services. The services provided, which include accounting, information technology, data processing, product development, legal and administrative support, and other operating expenses, amounted to $1,461 and $917 for the three months ended March 31, 2024 and 2023, respectively.
The Company incurred approximately $181 for the three months ended March 31, 2023 for corporate travel to a third-party company which is affiliated with our former Chief Executive Officer, which is included within selling, general and administrative expense on the condensed consolidated statements of operations.
A member of the Company’s board of directors, who is also the Company’s interim Chief Executive Officer and a franchisee, holds an approximate 10.5% ownership of a company that sells amenity tracking compliance software to Planet Fitness stores to which the Company made payments of approximately $65 and $91 during the three months ended March 31, 2024 and 2023, respectively.
(10) Stockholders’ equity
Pursuant to the exchange agreement between the Company and the Continuing LLC Owners, the Continuing LLC Owners (or certain permitted transferees thereof) have the right, from time to time and subject to the terms of the exchange agreement, to exchange their Holdings Units, along with a corresponding number of shares of Class B common stock, for shares of Class A common stock (or cash at the option of the Company) on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and similar transactions. In connection with any exchange of Holdings Units for shares of Class A common stock by a Continuing LLC Owner, the number of Holdings Units held by the Company is correspondingly increased as it acquires the exchanged Holdings Units, and a corresponding number of shares of Class B common stock are canceled.
During the three months ended March 31, 2024, certain existing holders of Holdings Units exercised their exchange rights and exchanged 326,073 Holdings Units for 326,073 newly-issued shares of Class A common stock. Simultaneously, and in connection with these exchanges, 326,073 shares of Class B common stock were surrendered by the holders of Holdings Units that exercised their exchange rights and canceled. Additionally, in connection with these exchanges, Planet Fitness, Inc. received 326,073 Holdings Units, increasing its total ownership interest in Pla-Fit Holdings.
As a result of the above transactions, as of March 31, 2024:
Holders of Class A common stock owned 86,831,728 shares of Class A common stock, representing 98.8% of the voting power in the Company and, through the Company, 86,831,728 Holdings Units representing 98.8% of the economic interest in Pla-Fit Holdings; and
21

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
the Continuing LLC Owners collectively owned 1,071,094 Holdings Units, representing 1.2% of the economic interest in Pla-Fit Holdings, and 1,071,094 shares of Class B common stock, representing 1.2% of the voting power in the Company.
Share repurchase program
On November 4, 2022, the Company’s board of directors approved a share repurchase program of up to $500,000, which replaced the 2019 share repurchase program. During the three months ended March 31, 2024, the Company repurchased and retired 313,834 shares of Class A common stock for a total cost of $20,005. A share repurchase excise tax of $163 was also incurred. As of March 31, 2024, there is $354,965 remaining under the 2022 share repurchase program.
The timing of purchases and amount of stock repurchased are subject to the Company’s discretion and dependent upon market and business conditions, the Company’s general working capital needs, stock price, applicable legal requirements and other factors. The ability to repurchase shares at any particular time is also subject to the terms of the Indenture governing the Securitized Senior Notes. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing.
Preferred stock
The Company had 50,000,000 shares of preferred stock authorized and none issued or outstanding as of March 31, 2024 and December 31, 2023.
(11) Earnings per share
Basic earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Planet Fitness, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
Shares of the Company’s Class B common stock do not share in the earnings attributable to Planet Fitness, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Holdings Units, are exchangeable into shares of Class A common stock on a one-for-one basis.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:
 Three Months Ended March 31,
 20242023
Numerator  
Net income$34,973 $24,769 
Less: net income attributable to non-controlling interests664 2,064 
Net income attributable to Planet Fitness, Inc.$34,309 $22,705 
Denominator
Weighted-average shares of Class A common stock outstanding - basic86,909,383 84,444,003 
Effect of dilutive securities:
Stock options223,244 271,680 
Restricted stock units63,276 63,358 
Performance stock units26,178 7,654 
Weighted-average shares of Class A common stock outstanding - diluted87,222,081 84,786,695 
Earnings per share of Class A common stock - basic$0.39 $0.27 
Earnings per share of Class A common stock - diluted$0.39 $0.27 
The number of weighted-average common stock equivalents excluded from the computation of diluted net income per share because either the effect would have been anti-dilutive, or the performance criteria related to the units had not yet been met, were as follows:
22

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Three Months Ended March 31,
20242023
Class B common stock
1,176,568 5,007,448 
Stock options554 196,209 
Restricted stock units2  
Performance stock units 53 
Total
1,177,124 5,203,710 
(12) Income taxes
The Company is the sole managing member of Pla-Fit Holdings, which is treated as a partnership for U.S. federal and certain state and local income taxes. As a partnership, Pla-Fit Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pla-Fit Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro-rata basis.
Planet Fitness, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to the allocable share of any taxable income of Pla-Fit Holdings. The Company’s effective tax rate was 28.4% and 27.6% for the three months ended March 31, 2024 and 2023, respectively, which differed from the U.S. federal statutory rate of 21% primarily due to state and local taxes, partially offset by income attributable to non-controlling interests. The Company is also subject to taxes in foreign jurisdictions.
Net deferred tax assets of $498,173 and $502,544 as of March 31, 2024 and December 31, 2023, respectively, relate primarily to the tax effects of temporary differences in the book basis as compared to the tax basis of the investment in Pla-Fit Holdings as a result of the secondary offerings, other exchanges, recapitalization transactions and the IPO.
As of March 31, 2024 and December 31, 2023, the total liability related to uncertain tax positions was $242 and $273, respectively. The Company recognizes accrued interest and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the three months ended March 31, 2024 and 2023 were not material.
Tax benefit arrangements
The Company’s acquisition of Holdings Units in connection with the IPO and future and certain past exchanges of Holdings Units for shares of the Company’s Class A common stock (or cash at the option of the Company) are expected to produce and have produced favorable tax attributes. In connection with the IPO, the Company entered into two tax receivable agreements, pursuant to which, the Company is required to make payments to certain holders of equity interests or their successors-in-interest (“TRA Holders”). Under the first of those arrangements, the Company generally is required to pay certain existing and previous equity owners of Pla-Fit Holdings, LLC 85% of the applicable tax savings, if any, in U.S. federal and state income tax that the Company is deemed to realize as a result of certain tax attributes of their Holdings Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Holdings Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the tax receivable agreement (including imputed interest). Under the second tax receivable agreement, the Company generally is required to pay 85% of the amount of tax savings, if any, that the Company is deemed to realize as a result of the tax attributes of certain equity interests previously held by affiliates of TSG that resulted from TSG’s purchase of interests in Pla-Fit Holdings in 2012, and certain other tax benefits. Under both agreements, the Company generally retains the remaining 15% benefit of the applicable tax savings.
In connection with the exchanges that occurred during the three months ended March 31, 2024 and 2023, 326,073 and 1,900,309 Holding Units, respectively, were redeemed by the Continuing LLC Owners for newly-issued shares of Class A common stock, resulting in an increase in the tax basis of the net assets of Pla-Fit Holdings. As a result of the change in the Company’s ownership percentage of Pla-Fit Holdings that occurred in conjunction with the exchanges and issuance of Holding Units, the Company recorded a decrease of $400 and $2,605 to net deferred tax assets, during the three months ended March 31, 2024 and 2023, respectively. As a result of these exchanges and other activity during the three months ended March 31, 2024 and 2023, the Company also recognized deferred tax assets in the amount of $7,519 and $50,823, respectively, and corresponding tax benefit arrangement liabilities of $2,694 and $2,315, respectively, representing approximately 85% of the tax benefits due to the TRA Holders for shares exchanged that were subject to tax benefit arrangements. The offset to the entries recorded in connection with exchanges was to additional paid in capital within stockholders’ deficit.
The Company had a liability of $497,994 and $495,662 as of March 31, 2024 and December 31, 2023, respectively, related to its projected obligations under the tax benefit arrangements.
23

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
Projected future payments under the tax benefit arrangements were as follows:
 Amount
Remainder of 2024$41,135 
202550,385 
202652,814 
202748,624 
202841,973 
Thereafter263,063 
Total$497,994 
(13) Commitments and contingencies
From time to time, and in the ordinary course of business, the Company is subject to various claims, charges, and litigation, such as employment-related claims and slip and fall cases.
Mexico Acquisition
On March 19, 2020, a franchisee in Mexico exercised a put option that required the Company to acquire their franchisee-owned stores in Mexico. In February 2023, the Company and the franchisee agreed on a summary of terms for a settlement agreement and a release of all claims by all parties. In connection with the settlement agreement, the Company recorded an update to its estimated liability for the legal settlement of $3,300, inclusive of legal fees paid, within other losses, net on the condensed consolidated statement of operations during the three months ended March 31, 2023. On October 20, 2023, the Company finalized its settlement with the franchisee in Mexico for $31,619, which included the acquisition by the Company of five stores in Mexico and the settlement of all claims.
The Company is not currently aware of any other legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the Company’s financial position or result of operations.
(14) Segments
The Company has three reportable segments: (i) Franchise; (ii) Corporate-owned stores; and (iii) Equipment.
The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its interim Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.
The Franchise segment includes operations related to the Company’s franchising business in the United States, Puerto Rico, Canada, Panama, Mexico and Australia. The Company records all revenues and expenses of the NAF within the franchise segment. The Corporate-owned stores segment includes operations with respect to all corporate-owned stores throughout the United States and Canada. The Equipment segment includes the sale of equipment to franchisee-owned stores.
The accounting policies of the reportable segments are the same as those described in Note 2. The Company evaluates the performance of its segments and allocates resources to them based on revenue and earnings before interest, taxes, depreciation, and amortization, referred to as Segment EBITDA. Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues.
The tables below summarize the financial information for the Company’s reportable segments.
24

Planet Fitness, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share and per share amounts)
 Three Months Ended March 31,
 20242023
Revenue
Franchise segment revenue - U.S.$100,528 $90,288 
Franchise segment revenue - International3,492 2,394 
Franchise segment total104,020 92,682 
Corporate-owned stores segment - U.S.121,158 104,808 
Corporate-owned stores segment - International1,220 1,074 
Corporate-owned stores segment total122,378 105,882 
Equipment segment - U.S.16,417 23,105 
Equipment segment - International5,202 556 
Equipment segment total21,619 23,661 
Total revenue$248,017 $222,225 
Franchise revenue includes revenue generated from placement services of $1,837 and $1,613 for the three months ended March 31, 2024 and 2023, respectively.
 Three Months Ended March 31,
 20242023
Segment EBITDA
Franchise$76,311 $64,735 
Corporate-owned stores