Xponential Fitness, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes and Tax Receivable Agreement (Tables)

Income Taxes and Tax Receivable Agreement (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Income (loss) Before Income Taxes

Income (loss) before income taxes is as follows for the years ended December 31:


	2023			2022			2021
U.S. income (loss) before income taxes	$	(736	)	$	3,421		$	(50,599	)
Foreign income (loss) before income taxes		94			(20	)		(58	)
Income (loss) before income taxes	$	(642	)	$	3,401		$	(50,657	)

Summary of Income Tax Expense (Benefit)

Income tax expense (benefit) consists of the following for the years ended December 31:


	2023		2022			2021
Current tax expense (benefit):
Federal	$	359	$	(142	)	$	322
State		509		450			274
Foreign		160		262			187
Total current tax expense (benefit)		1,028		570			783
Deferred tax expense (benefit):
Federal		30		(31	)		—
State		8		(8	)		—
Foreign		5		(5	)		—
Total deferred tax expense (benefit)		43		(44	)		—
Income tax expense	$	1,071	$	526		$	783

Summary of Reconciliation Between Company's Effective Tax Rate and Applicable U.S. federal Statutory Income Tax Rate

A reconciliation between the Company's effective tax rate and the applicable U.S. federal statutory income tax rate is as follows for the years ended December 31:


	2023			2022			2021
Tax computed at federal statutory rate		21.0	%		21.0	%		21.0	%
State tax, net of federal tax benefit		53.1	%		3.0	%		(0.1	)%
Non-controlling interests		(144.1	)%		(31.1	)%		(2.1	)%
Income (loss) from pass-through entities		—	%		—	%		(5.3	)%
Permanent items		13.3	%		—	%		(1.5	)%
TRA liability		(27.5	)%		(3.6	)%		—	%
Executive compensation		(148.3	)%		3.8	%		—	%
Contingent consideration		647.8	%		45.4	%		(10.4	)%
Preferred stock dividend		—	%		—	%		(1.5	)%
State rate differential		(186.2	)%		22.5	%		—	%
Other		21.1	%		5.7	%		(0.0	)%
Valuation allowance		(417.0	)%		(51.2	)%		(1.6	)%
Effective tax rate		(166.8	)%		15.5	%		(1.6	)%

Summary of Company's Net Deferred Tax Assets

The components that comprise the Company's net deferred tax assets consist of the following as of December 31:


	2023			2022
Deferred tax assets:
Investment in partnership	$	28,535		$	40,827
Net operating losses		23,056			26,361
Tax receivable agreement		930			332
Interest expense		7,681			3,265
Deferred revenue		1,443			1,383
Other		311			279
Total deferred tax assets		61,956			72,447
Valuation allowance for deferred tax assets		(61,924	)		(72,403	)
Total deferred tax assets, net of valuation allowance		32			44
Deferred tax liabilities:
Property and equipment and intangible assets		(12	)		—
Other		(20	)		—
Total deferred tax liabilities		(32	)		—
Net deferred tax assets (liabilities)	$	—		$	44