Xponential Fitness, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Note 7 – Goodwill and Intangible Assets

Goodwill represents the excess of cost over the fair value of identifiable net assets acquired related to the original purchase of the various franchise businesses and acquisition of company-owned transition studios. Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist. During the three months ended March 31, 2024, there was an increase of $2,346 in previously reported goodwill due to the acquisition of Lindora as discussed in Note 3. The carrying value of goodwill at March 31, 2024 and December 31, 2023, totaled $173,947 and $171,601, respectively. Cumulative goodwill impairment was $10,113 at March 31, 2024 and December 31, 2023.

Intangible assets consisted of the following:


		March 31, 2024							December 31, 2023
	Amortization period (years)	Gross amount		Accumulated amortization			Net amount		Gross amount		Accumulated amortization			Net amount
Trademarks	10	$	23,410	$	(5,072	)	$	18,338	$	20,710	$	(4,487	)	$	16,223
Franchise agreements	7.5 – 10		61,600		(31,834	)		29,766		57,700		(29,990	)		27,710
Reacquired franchise rights	6.2		—		—			—		137		(13	)		124
Intellectual property	5		671		(34	)		637		671		—			671
Web design and domain	3 – 10		430		(335	)		95		430		(307	)		123
Deferred video production costs	3		6,111		(3,966	)		2,145		5,829		(3,698	)		2,131
Other intangible assets	1		560		(43	)		517		560		—			560
Total definite-lived intangible assets			92,782		(41,284	)		51,498		86,037		(38,495	)		47,542
Indefinite-lived intangible assets:
Trademarks	N/A		72,607		—			72,607		72,607		—			72,607
Total intangible assets		$	165,389	$	(41,284	)	$	124,105	$	158,644	$	(38,495	)	$	120,149

Amortization expense was $2,948 and $2,955, for the three months ended March 31, 2024 and 2023, respectively.

The anticipated future amortization expense of intangible assets is as follows:


	Amount
Remainder of 2024	$	8,982
2025		10,566
2026		7,419
2027		5,916
2028		5,750
Thereafter		12,865
Total	$	51,498