Smart Fit reports robust financial results for the first quarter of 2026, achieving 25% year-over-year revenue growth despite a slight miss on earnings per share and revenue forecasts. The company posted an EPS of 0.3225, below the expected 0.3326, and revenue of 2.1 billion BRL, just under the anticipated 2.11 billion BRL. Shares surged 14.75% in after-hours trading to 20.3 BRL from 17.69 BRL, signaling strong investor confidence in the fitness chain’s expansion and efficiency.
Key Financial Highlights
Revenue climbed to 2.1 billion BRL, marking the 19th consecutive quarter of growth. Gross cash margin hit a record 51.8%, up 1.1 percentage points year-over-year. Adjusted EBITDA reached a peak of 672 million BRL, reflecting 29% growth. Recurring net income rose 47% to 207 million BRL. Membership base expanded to over 5.6 million, a 6% increase from Q1 2025.
Operational Expansion
The company operates 2,013 gyms after adding 29 net new units in the quarter and 354 over the past 12 months, a 20% rise. Brazil accounts for 47% of recent openings, Mexico 21%, and other countries 31%. Mature units in the Smart Fit concept stand at 68% of the 1,668 total. Average annualized net revenue per gym reached 4.4 million BRL, up 3% from Q4 2025.
Operations outside Brazil contributed 63% of owned gym revenue, up 1 percentage point. The TotalPass platform drove growth, accounting for 9% of net revenue and 15% of gross cash profit, with 2.1 million B2C customers, up 25% from Q4 2025.
Market Reaction and Valuation
Investors reacted positively to the results, pushing the stock from a 52-week low of 16.62 BRL toward its high of 27.52 BRL. The P/E ratio stands at 17.76 with a PEG ratio of 0.41, suggesting attractive valuation amid growth prospects.
Executive Insights
CEO Diogo Corona highlighted network expansion and brand building, noting leadership in Mexico with 81% active user market share. “We continue to invest in brand building, advancing B2B expansion, increasing capillarity and diversity of the network,” Corona stated.
CFO José Luís Rizzardo Pereira emphasized operational resilience: “We ended Q1 2026 with a membership in gyms of more than 5.6 million members, a growth of 6% compared to Q1 2025.” Founder and Chairman Edgard Corona added, “Our consistent execution and strategic expansion have positioned us well for sustained growth.”
Forward Guidance
Smart Fit forecasts Q3 2026 EPS at 0.07 USD and revenue at 435.22 million USD, with Q4 EPS at 0.08 USD and revenue at 449.41 million USD. Focus remains on network growth and product enhancements.
Q&A Highlights
Analysts probed TotalPass evolution and competition. Executives stressed scale benefits, product innovation, and long-term strategy over short-term pricing. Diogo Corona noted, “Scale is very favorable. What makes it better is scale.” On competition, Edgard Corona observed, “There are lots of people that were highly leveraged… We forecast that, and we could have a reduction.”
CFO Rizzardo addressed CapEx, expecting stability per unit despite Q1 spikes from prior-quarter openings. Leverage ended at 1.71x adjusted net debt to EBITDA (LTM, ex-IFRS 16), down from 1.78x.
Risks Ahead
Challenges include intense competition in Brazil, macroeconomic pressures in Mexico, potential delays in openings, and rising costs for labor and utilities. Executives countered with diversification and efficiency gains.
