Yet Another Value Podcast - Zack Buckley on Xponential Fitness $XPOF

Episode Date: October 6, 2022

Zack Buckley discusses his investment thesis for Xponential Fitness (XPOF), including why he thinks the company is set for continued rapid growth.Zack's twitter: https://twitter.com/AmarginofsafetyChapters0:00 Intro2:00 Zack's background5:15 XPOF overview8:20 Can XPOF buck the history of publicly traded fitness?12:10 Brand sustainability and the Curves comp15:15 XPOF's valuation and multiples17:50 XPOF management history20:55 How XPOF's partnerships can create value22:55 Does XPOF have too many brands?26:00 Can XPass drive customer acquisition?29:15 What is Zack seeing in XPOF that the market is missing?31:55 Why XPOF over other publicly traded franchises?35:00 Is XPOF riding a post-COVID tailwind?38:30 Franchisee unit economics41:50 Recession risk49:00 Has the competitive environment changed since the last recession?54:45 Insider buying57:00 Capital allocation and acquisitions going forward

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All right. Hello. Welcome to yet another value podcast. I'm your host, Andrew Walker. If you like this podcast, it would mean a lot. If you could rate, subscribe, review it wherever you're listening. With me today, I'm happy. to have Zach Buckley. Zach is the founder, portfolio manager, and maybe a couple of other titles at Buckley Capital Partners. Zach, how's it going? Good. How are you? Thanks for having me. Hey, thanks for coming on. Really happy to have you on. Let me start this podcast the way I start every podcast. First, the disclaimers remind everyone, nothing on this podcast is investing advice. Please consult a financial advisor, do your own diligence, all that type of stuff. And then the

second way I start every podcast with the pitch for you, my guest, we've been talking for several months. I wish I, you're a super sharp analyst. I wish I had listened to you a little bit more seriously because we were in a name and you called me up and you're like, I'm having a lot of worries. I think we're missing the story. I think the company's going to be a lot weaker than and sure enough stocks down about 50%. But we've been talking for much. You do great work on, especially retail and consumer focus names. I'd say at least that's what we mainly talk about. But do fantastic work. I really enjoy talking to you and really happy to have you on the podcast. today. You know, I think we're going to talk about a stock in death today, but I don't know if

you wanted to go a little bit deeper into your background and kind of your unique approach to everything. Yeah, definitely. So, yeah, I started getting interested in investing when I was 16. My dad was a doctor. My mom was a psychologist. And my dad, unfortunately, very smart guy, but was a horrible investor. So he was investing in stocks in the late 90s, sold out in the early 2000s. you know, started investing in real estate around 2002, you know, through 2007. So just couldn't really time a worse investment approach than what my dad had. And so my parents were always stressed about money. And I wanted to be a doctor at the time, but I didn't want to stress about money the way that they did. And so I started getting interested in investing.

So I was a voracious reader, always have been, certainly was in high school. You know, I was reading 30 to 40 books a year. And I just came across Benjamin Graham, Warren Buffett, and was just, totally obsessed with, with value stuff, really since I was 17 or 18. My dad gave me 100,000 to manage in November of 2007. So I was 19 at the time. You want to talk about times where it would have been pretty easy to blow 100,000. Yep, yeah. So it was a great time to learn.

You know, I was kind of down with the market in 2008. I had a really good year in 2009, it was up triple digits in 2009. And I was trying to figure out a way to keep. get into the hedge fund industry. I went to University in Miami. And so it wasn't obviously a feeder school for the hedge fund industry, but I wanted to manage a hedge fund ultimately. And so I actually taught myself to play poker. So I was playing poker professionally to pay bills. And then that allowed me to not immediately have to get a job. And basically, I filed the formation documents for the fund my second semester senior year and launched with half a million dollars, basically six months after

I graduated in January 2011. So I had a really good year in 2020. 2011 and was able to get to about $25 million in assets at the beginning of 2012. And then, you know, we've grown it from $25 million in 2012 to just under $100 million today. That's awesome, man. That's really cool. You know, I didn't know you had that poker background. You and Evan Tyndale, y'all came out at the same time, poker background. It's funny how many investors have that poker overlap.

Yeah, no, there's a ton of overlap, which I'm sure we could spend an entire episode just talking about. But definitely a lot about expected value and how to think about probabilistic range of outcomes and, you know, bet sizing. And so it's definitely, there's a lot of parallels between the two. There is a monthly finance poker gathering, which I just got an invite to you the first time. I know you're in Chicago, but next time you're through New York, maybe we'll see if you can come through and probably take all of our money. I'm actually Miami-based. Oh, I think you're Chicago for some reason. No, my phone number, because I grew up in Chicago, so my phone number is a 630.

And I play in that New York finance poker game, I believe. Okay. We'll talk about that offline. But great, that's a great background. So I guess next thing to turn to is just the company we're going to talk about today. The company is Exponential Fitness. The ticker is XPOF. And I'll pause there and just ask, you know, what's exponential fitness and why is it so interesting?

Yeah. So Exponential Fitness is a boutique provider of fitness. So they have 10 different brands in total. And so, you know, they, people are essentially, you know, it's been a huge trend recently where there's been huge growth across their different locations. So they have 2,300 plus locations at this point. And their primary brands are Club Pilates, which has 750 studios, Pure Bar, which has about 620, and then their third largest is cycle bar, which is just over 250. So, you know, out of those three, you have about, you know, 1,600 of the, you know, 2,300 plus total. And so, you know, those three are the majority of the business, but you still have 10 brands in total.

You know, they've been growing extremely well. They IPOed last year, so July 2021. And we just think that it's a perfect business to own in this environment because it's inflation resistant because, you know, they're a franchisee's or. And so they're basically getting, you know, the top line revenue of all their franchisees payments. So it's very inflation resistant. It's recession resistant because their customer is an affluent enough customer base where, you know, they're not really being impacted significantly. You know, if they're paying $130 a month, you know, for their fitness and they're making an average of $130,000 a year,

you know, they're not going to change their fitness or, you know, they're not going to decide to stop going to the gym just because. because, you know, things have gotten a little bit tougher in a recession. They can handle a recession and fitness is a priority for their customer base. And so, yeah, we think they're really perfectly positioned and we don't think it's been fully recognized yet by the investment community. So I think people are worried about the typical things that people worry about when business is first IPO, you know, Planet Fitness had a lot of the same concerns. And, you know, we actually think that exponential fitness and Planet Fitness will kind of have

a similar path where Planet Fitness was trading in a pretty low multiple in the first 15 months after it IPO. And then in months 16 through 38, the multiple, you know, more than doubled and the stock was up over 200% in that time frame. And look, that's a really interesting comp because, as you said, Planet Fitness, there were lots of doubts about it. It's fitness. There were lots of fat claims. I'm looking at it right now. Obviously, it's got a much bigger EBITDA number, but, you know, it used to trade for pretty small, And now it's trading for well over 20 times EBDA, I would say, which would be a nice path for exponential, same franchise model at all that sort of stuff. So lots of stuff I want to pull on there.

But I guess I'll just start with one thing. You know, I think a lot of people when you say, oh, I'm investing, you know, I was very skeptical until I started reading it last night. And, you know, these are real brands. They've got real history. The management seems real. But even some analysts I saw at conferences would say, hey, if we invest in exponential fitness, you know, history is kind of against us. There are not a lot of publicly, there are not a history of a lot of successful publicly traded fitness companies. Like kind of the only one

that I can think of is Planet Fitness actually. You know, like at this point, Eliton's a disaster. But even before that, there were histories of New York sports clubs, all these other things. They'd come out, they'd be public. And then, you know, after a year or two, Churn would start to work against them, all the stuff, and the stock would just kind of crash and eventually bankruptcy or restructuring, all that sort of stuff. So why do you think, like, with exponential fitness, history is different this time? Yeah, I think there are a few things. So, you know, definitely a fair point. You know, I would point out F-45 is one of their main competitors or perceived competitors. And, you know, F-45 came public almost the exact same time that they did.

And, you know, it was done horribly. So I tweeted out yesterday. I was looking at F-45 to prep for this podcast. And I think they had the worst miss I've ever seen a company do where, you know, at the start of this year, they were saying, I think it's, we're going to grow store based by 1,500. And I'm trying to find the exact number that they said. But now it, yeah, at the start of this year, they said they were going to do 1,500, maybe bigger before that. And now it's like under 400. I mean, it's, it's unbelievable how bad the miss was. Sure. Yeah. And I guess this is probably a good time for me to talk about, you know, we use alternative data. sources in a lot of the analysis that we do. And so, you know, with exponential fitness,

we're definitely following the data on a week-to-week basis to make sure that we understand what the trends are and how the business is doing. You know, we have no expectation. And I think there are good reasons to believe why they should grow well over a long period of time and why they won't be like F-45 is and like other failed fitness brands are. But, you know, we are very careful and basically following the short-term results to make sure that our long-term thesis ends up playing out. So the reason why I think the long-term thesis will play out. So the first thing is there's a diversified portfolio of very successful brands. So, you know, Club Pilates is nine times larger than its nearest competitor. Pure bars, eight times larger. You know, cycle bars,

three times larger. So they're buying the dominant players in their various verticals. You know, BFT was their most recent acquisition. That was, that's one of the most dominant fitness basically boutique fitness concepts in australia and southeast asia so they're buying the best concepts in various areas and then they're managing them and growing them extremely well um but it's also a diversified portfolio of brands i'm sure not every concept is going to be perfect but they have ten concepts and so um you know their main concepts are doing extremely well so i think that's the first thing um i think just looking at their track records so club palates had you know 12 studios seven years ago. It has 750 studios today. It had a UV of 250,000 in 2015. It has a UV of 750,000 today.

So they have done an exceptional job in managing these brands. You know, I think management's really important. Tony Geistler's been doing this since 2001. You know, he's been very successful in the industry. He's probably the only person that's been in the industry for over 20 years. So I think we're betting on the right person, the right management team, and the right brands within Boutique Fitness. I think the other thing is just the industry in general. It's been growing at a 6% Kager since 1999. So the boutique fitness industry itself is growing very rapidly

and is projected to grow to 6% Kager for the next four or five years. So the industry itself, I think, is very strong. And I think they're very strong within it. That's perfect. I just want to, I think it did a nice time addressing it, but I just want to go back one thing to the sustainability of the brands because I did some work on it. I am a little concerned there.

You mentioned Club Pilates. I mean, that's been tremendous, right? I believe it was 12 units, it was 12 units five years ago, and that's when they acquired it, right? And now we're five years later. It's 750 units. AUV has absolutely exploded all that sort of stuff. But I did just, maybe it's because Club Pilates, but I remember my mom 10 or 15 years ago, loved to go to this brand Curves, right?

And Curves had similar exponential growth. You know, it went from under 100 units. to at its peak in 2009, I think it was approaching. It was getting up to eight or nine thousand units. And then seven years later, the thing is approaching a thousand units, right? It was just exponential up and exponential down. And I was just wondering, like, is that the history of these types of new things? Like, I think CrossFit has had some legs, cycling.

I don't know if that's a new form of exercise. But, you know, the brands have coming gone. And I just worry, hey, great, you did club Pilates. but it's not like there aren't other Pilates competitors out there. So why do you think like these brands in particular are kind of sustainable? Yeah, I mean, I think it's really just based off the history and track record that they've had so far. And of course, there's no guarantee that they couldn't have trouble in the future. But I think all investing we have to look at is what's happened historically and is that reasonable that it should persist.

You know, Club Pilates has resonated extremely well with consumers. you know, that is, you know, by far the best brand that they have and probably the strongest that they have. It's obviously experienced exceptional growth in the past, you know, seven years. So is it possible that it flares out over some period of time? I think it's very unlikely. But that is why we follow the data so closely because we're always seeing if we could be making a mistake. We're always second guessing and trying to be as critical of our positions as possible. But I would say, you know, there are flare-ups. There are blow-ups in every business. And, you know, I think you mentioned a few in the fitness space, but there's nothing that makes

me think that their brands should experience that. Let's quickly talk valuation. And I think there are actually more things, more interesting things to the story, but valuation can always serve as a baseline, right? Like, as I look at it, they've got a little bit of a complex cap structure, which we can talk about if we want to. But I've got them kind of at like a 1.3 billion enterprise value. They're guiding midpoint of guidance is about 70 million of EBDA this year. So you're talking about 19 times EV to EBDA with this, again, this is a franchise model, right? So they don't own the units. I mean, this is very cash rich. EBITDA is going to track really well into cash flow and all that type of stuff. So when I say 19 times EBDA, like that seems

reasonable for a franchisor. I think like QSR and a lot of other people who are much more mature and dot come in a second. Probably trade a slightly cheaper multiple, but nothing crazy. As we said, playing it probably trades around 20. So when I say those multiples, is there anything you would push back there? Or is that kind of good for just an overview of the two-day 2022 valuation? Nope, you got it right. And I would point out the self-side gets it wrong and other places get it wrong. So nice job. What do they get wrong about it? A lot of times they'll leave out the preferred or they'll give the share account wrong. So a lot of the sell side has the enterprise value closer to a billion. And that's, you know, that's not correct.

Well, I'm glad I could get that right. It is complicated, though, right? Like you mentioned they've got Class A, Class B. There are some Rumble payout units you have to decide if you want to put in there or not. But yeah. So we've got the baseline established. I think the thing you're tracking, obviously 18 times, 19 times for a franchise are not cheap, not expensive. I think the thing you're really talking about here is the growth, right? So why don't we talk about the growth. Like they talk about how they've got a lot of growth in the backlog. A lot of this growth is like absolutely baked in. So I'll just turn to review. What's the growth then? You know, why do you think this is not 18 times, but you know, 10 times two years out or something?

Sure. Yeah. No, I think, you know, next year they'll probably do in the ballpark of them $100 million for just EBITA. So I think it's probably 13 times on the next year's numbers, you know, and that could and probably should flow into over a dollar or share in free cash flow. So we think it's trading it, you know, somewhere in the ballpark of them 19 times next year's free cash flow. which for a, you know, recurring revenue franchise business that is, you know, inflation and recession resistant, we think it's really attractive. You know, plan on its closest peer trades at 33 times. And to your point, sort of the other dominant, you know, franchise businesses typically trade at 25 or 30 times. So that's kind of our near term view, you know,

longer term, you know, looking out five years, we think they'll earn between $250 and $3 a share an EPS or free cash flow per share. And, you know, we think that should trade it. I mean, the peers today trade at, you know, 25 to 30 times earnings. Planet Fitness trades at 33 times earnings. So you can kind of pick what you think is a fair multiple. You know, I think everyone has differing views on valuation. But you can easily see how this could be a $75 to $100 stock in five years. Yeah. Yeah. I mean, the very, a conservative math, 20 times 250, right, which is low into what you said 20 times again for a franchise very it should be very inflation resistant you just take that franchise feed up and actually your margins go up because you're leveraging your GNA a little bit more

I don't think anybody would argue with 20 times if you've got that stability that's 50 that's more than a double from a $19 stock price today okay so that's great let's talk about management here right so you mentioned and the CEO likes to tell everyone hey I'm the only person in the boutique industry, the boutique fitness industry, who's been here for over 20 years. We'll probably talk recession a bit, but every time people talk recession, he says exactly what you said, right? Like, hey, I had L.A. boxing in 2008 and people were worried about this, and people will go, I think one of his quotes was people will go on welfare before they'll give up their boutique fitness, which, anyway, I'm rambling a little bit, but let's talk about

the management team because it's important for any franchise story. Management is the one shaping the brands, management the ones driving it. There's probably going to be more acquisitions to come. So I'll kind of pause there. Yeah. Yeah. In general, we love to find obsessed and hungry owner operators. And we think Tony fits that really well. You know, he's been in the business forever. I think he knows it as good or better than anyone. And I think he's done a phenomenal job in assembling, you know, a portfolio of really high quality brands and monetizing that brand portfolio. So I think, you know, they've done a lot of smart things that I think we're creative. You know, the B2B partnerships that they're exploring are really interesting.

So, you know, they just signed with Princess Cruises, which is basically, you know, 23,000 state rooms that will get, you know, over a million views a year now. So, you know, that's, that's a million incremental people in their customer funnel that they're essentially getting paid for. You know, they partner with Lulu Lemon with Mirror. So they have four of their brands now that are going to be on Mirror. You know, they partner with Alley Fitness. They have over 500 studios that are going to open within L.A. Fitness. So they're doing all of these creative and intelligent things that I think, you know, I'm hoping and sort of expecting that they'll be able to actually beat the guidance that they've laid out. And I think they're very thoughtful

about understanding that, you know, it's, it's always better to be in a position where you can beat and raise over time. So I think even though the growth that has been set out is significant over the next three or four years, I actually think they intend to beat and raise across that guidance over time and that it's pretty conservative relative to their expectations. And the B-to-B partnerships is part of it. So, but going back to the management team themselves, yeah, I think, you know, I wouldn't want anyone else running this company besides Tony. I think he has a great team around him. I think, you know, Sarah, the president, and John, the CFO are also really strong. So we've spent time with, with all of them, you know, been to the offices in Irvine.

So, yeah, I've been really impressed with the team and think they're kind of the right group to to take this to the size that they wanted to. And he's super ambitious, like his aspirations. You know, he talks about $100 stock price. Like, that's his expectation. That's what he wants to happen. You know, he wants this to be a much larger business than this today. And I expect it will be.

And I think he owns a ton of stock here, too, if I remember correctly from reading the proxy. I think some of its class B and stuff, but he certainly incentivized to get out there. It's confusing, but he owns about 20 percent. And the other insiders on about 5. So they're about 45% of the ownership of the company. So you mentioned the partnerships. And I guess let's quickly talk to partnerships. I was going to say for later, but I didn't think they were interesting.

So they've got the partnership with Princess, you mentioned. They're partnering on mirror. And I thought they were interesting because as you said, that's like, that's a lot of, it seems like a free, not just free. They're getting paid for these things, a way to drive traffic. But then I could see the pushback like, hey, people going on Princess Cruises isn't exactly the most targeted traffic. maybe there's a little bit of management headache.

Like, I haven't really seen, there's another publicly traded company that does Medi spas on cruises. Like, it's kind of tough to make good economics on cruise partnerships. So I could see it going both ways. But you think the partnerships, the mirror all this, you think they are smart, they are going to add value over time? Yeah, definitely. And I mean, they're getting paid for them.

So at worst, they get extra money in their pocket. At best, they get, you know, extra customers in their acquisition. funnel. You know, I think Celsius and C4 is another partnership where, you know, they're paying people to have access. I mean, what would you pay to advertise in 2300 studios, right? Like, that's a huge customer base that you get to have access to. And so they actually hired, uh, the former brand partner of, of the chargers. So they basically have, you know, because having access to a football team is a huge value as well. And so, you know, they wanted to bring someone in that understood how to work with partners and basically grow that business.

So I think they're just getting started there. And I think they really expect to significantly ramp the B2B partnerships that they have. And what they've done so far, I think it's really impressive. Let me ask something on structure here. So XPOF owns, I think it's up to 12 franchises, right? And you mentioned the big one. There's Rumble, which there's a couple classes. I always focus on that one because there's a couple boxes right by my house.

And I've been to a couple classes. I have one friend who's obsessed with them. But, you know, 12 franchises under an umbrella does strike me as strange, right? Like I think about QSR, which owns Burger King, Popeyes, Firehouse Subs, Tim Hortons, right? So that's four brands. I think about Yum. That's Pizza Hut, KFC, and Taco Bell. Most franchises that I've seen, like, have kind of max out at three to four brands.

And these guys are already up to 12, and they clearly want to go do more. So my first question there, we'll talk. synergies between the brands and X-Pass in a second. But my first question there is just like 12 brands underneath one umbrella that does seem like a lot. It seems like there'd be like kind of a lot of management distractions. Like, is that just too many brands? Are they actually going to be able to go buy more and kind of focus and grow all of these

brands? Yeah, they have, you know, management teams for each one of those brands, right? So they have a precedent and CMO, you know, under them for each one of those brands. And so far I haven't really seen it as being an issue. So, you know, I think the other thing that's important to consider is, is the, you know, the top three are the vast majority of the business. So it really is still focused primarily on those three brands, although I do expect them to expand to more brands over time. The other thing I would say is there's plenty of conglomer structures that work really well, right? Berkshire Hathaway is an easy example of, you know, having a very decentralized management structure where you have a portfolio of businesses that works really well over time.

obviously private equity firms own, you know, more than 10 brands over time. So I think while I agree that it's somewhat unique in a public company structure, I think there's plenty of examples. No, look, I hear you. Nobody's going to say Berkshire Hathaway hasn't worked out well for people. But it does strike me like Berkshire warns just kind of capital allocating. And here, I do think you have a CEO whose his skills are brand building and building companies and stuff. And that's a little bit more hands on than the Berkshire model where you just have the CEO capital allocating. Yeah, I think in some of the models, he's not that hands-on. I think that's kind of the idea.

I think he is really focusing on the high-level stuff, which is like, you know, new brand partnerships, stuff like X-Pass and X-plus. But I don't think he's thinking about like the day-to-day operations of Cyclebar, you know, or Rumble. I think that's really the job of the president of Cyclebar or the president of Rumble. Makes total sense. Let's talk synergies, right? So you've got 12 brands underneath this umbrella.

And I think the argument for having this many brands would be there's something. types of synergies. And you can think of a couple right off the top of your head, right? Like increasingly it's important for any boutique to have their own app, their own technology and stuff. And yes, you can license it. Like I go to a one shop boutique. They've got the same app that basically Barry's does, right? So you can license this stuff and everything. But there's other synergies there too. So you can get lots of synergies on the G&A, all that type of stuff. But I think the real synergy would come from something like X-Pass, right, which is this thing, is their thing where you sign up, you can pay a certain amount per month, and then you can use

those credits to go to all of their studios, right? So instead of just having a 10-pack to go to Rumble, you'd have a 10-pack, and one day you could go to Rumble, one day you could go to Stretch Lab, one day you could go to their peer class and everything. So you could see how there could be synergies by giving you access to all the brands. So I want to pause there and say, just synergies overall on the cost side, do you think that's one of the drivers for XPOF? and then B, X-Pass, which is pretty unique to me, do you think that's a value driver long-term? Yeah, definitely. No, I think, I mean, so X-Pass right now is about 15% of their new lead generation.

So I think, you know, they're definitely driving a ton of new traffic and new leads from X-Pass. So there's clearly going to be synergies on the customer acquisition funnel. And obviously, getting AUVs up is a huge part of the story over time. So, you know, their expectation is AUVs should go from the above. about 500,000, you know, roughly where they are now, to about 600,000 over the next few years. And I'm sure part of that is going to be X-PAS. So I think there's, I think there are synergies on the revenue side with X-PAS, with certainly the B-to-B partnerships that they're doing.

And then I think there's obviously synergies on the cost side, right? The back office and being able to have shared services. And we're going to see that the adjust the EBITDA margin is going to scale from, you know, roughly 30% to, you know, about 45% over the next few years. So you're going to see, you know, a very high margin business emerge over the next few years as this business grows. How does the economics of X-PAS work, right? So I sign up for X-PACs.

I pay, I think there's $250 a month would get me 15 classes. If I book one class at Rumble and one class at Stretch Labs through that, like how much is the, how much is corporate taking versus how much is the company, the franchisee taking? Because if I go buy a Rumble 10-pack, Rumble keeps all that money outside of whatever they say it, send upstairs and the kind of franchise royalty, right? But if I buy it through X-Pax, is there different? So do you have this thing where Rumble's trying to encourage people, hey, don't buy X-Pax, buy directly from us or something? No, you don't. And they haven't disclosed exactly what the economics are between them and between the franchisees.

But I'm sure you can assume that they're essentially figuring out a way to incentivize all the franchisees to sell the X-Pass. And I think at the end of the day, you know, the franchisees are going. to want, you know, just more volume coming to their business. And I'm sure, you know, X-Pass is incentivizing that. Okay. Yeah, I thought I saw somewhere that they were doing a 70-30 split, but I could have been mistaken. But it just strikes me as something, you know, I, again, I love going to gyms and I've seen these before. And it strikes me as something where you could have this really weird thing where, like, there's class pass in New York. I'm not sure if you're familiar with this, but you buy class pass like ghost gyms and basically says, hey, we'll send you

flex capacity. every gym you go to, they like class pass because it gets new members in there. But once you're there, obviously, that's not a corporate offering. That's a third party. But once you're in there, they're like, hey, buy from us. Don't buy from class pass. Please, please, please. Like, we need, we don't want to get fast pass all that margin and stuff.

Sure. No, and that makes sense that class. You know, there would be sort of a disincentive between, you know, just because class pass is third party versus this is all in one ecosystem. Yep. Okay. Let's talk. I should have, I normally do this upfront, but I was so excited, like,

reading into the story and stuff yesterday that I kind of just wanted to dive right into the story itself. But let me back up a bit. My first question is generally, the market's a really competitive place. We started diving into it, but you've got to kind of have something differentiated in the market to generate risk-adjusted alpha going forward. So I guess my question you would be like, what is the thing that you think you see with XPOF that the market's missing that will make this a risk-adjusted alpha generator going forward? I just think that the market is not expecting the EBITs on multiple to expand over time. So I think it's a combination of things.

I think the first thing is everything that you said about, you know, people are kind of doubting the model at this point. And so I think for a business that's going to grow as quickly as it is over the next five years, it's trading at a very well multiple, you know, because you can look out five years and say, you know, this business with a very high degree of probability, you know, was going to do 250 plus an EPS. And so if you could buy, you know, a highly recurring franchise revenue business at, you know, seven or eight times earnings, I mean, that's, that's an incredible purchase because those businesses typically trade, like we said, at 25 to 30 times. So I think that's the first

part. You know, I think there's skepticism around the model, and that's just creating a lower multiple than where it should trade. You know, I think, I think that's honestly most of what it comes down to. You know, I think there's just a very clear roadmap to this business being significantly larger over the next five years. It's very easy to model out. It's very consistent. And I think people just start trusting that.

And I think generally what happens is a company becomes public longer as it continues to be and raise over time. You know, people get more confidence in the model. And as people get more confidence, the multiple goes on. So do you think obviously they've done a lot of acquisitions club lot as we mentioned is just an absolute home run. They just did one, I believe it's Australia focused BFT. They acquired Rumble late last year.

Do you think there's more acquisitions going forward and that's kind of a driver of the story as well? Or do you think at 12 they're kind of focused on just growing the brands under their healths? Yeah. So they have 10 right now and they definitely expect to grow that over time. So I would expect to see more acquisitions in the future. Okay.

And I definitely think that will be a part of the growth over time. I wonder where I saw 12 from. Yeah, you're right. It's 10. I'm looking at the chart. I've got 12 up there. Bad me. Bad me.

Let's talk opportunity. My boss, right? So somebody treated out and asked, hey, why buy XPOF at 20 times EBITDA when there's oil and gas stocks trading at two times EBITA. So there is just the opportunity cost of the market as a whole, right? But I think the more relevant opportunity cost is, look, there are other franchise models out there, right? Like, Planet Fitness would be the most direct one. That is a franchise model of gyms. Now, those are lower costs, everyday gyms versus boutique. But, you know, why XPOF versus Planet, which is kind of trading at a similar multiple on the nearer term numbers, or if you want growth franchise stories, you know, joint J-Y-N-T is a very popular.

stock among value investors. That's franchise chiropractors. And I don't know if you've done work on joint or anything, but I would just say like, why XPOF over Planet joint, any of the other smaller pet franchisers? Yeah. I mean, so we're just always modeling out what we think earnings are going to look like in five years and what we think the appropriate multiple for the businesses and then looking at the IRA. So, you know, Planet is already trading it 33 times earnings and has, you know, probably high, single-digit, low, double-digit EPS growth. You know, that, to me, is not that exciting of an IRA. Like, I think Planet's probably like a, it's probably going to, the IRR will probably be

kind of what its EPS growth rate is, you know, so if maybe a 10% sort of base case IRA for planning, you know, my base case, XBOF IRR in the next, you know, five years is, it's 30 plus percent. So, you know, I think to be able to buy a business that's highly predictable, extremely stable, you know, again, inflation resistant, recession resistant with a 30% plus IRA. I think that's really attractive. I think the joints is probably an interesting investment. I haven't spent time on it myself. But actually, the CFO of XBOF, he was formerly CFO of the joint. So I actually, the only time I looked at the joint was after meeting him. So, But the joint could be interesting.

I just can't speak to it. But when I look at most other franchise concepts, you know, they're trading at 15 to 20 times EBITDA or 25 to 30 times earnings. And they're growing earnings in the, you know, low double digits for the most part. And so, you know, this is trading at lower multiples and growing three times faster. Yep. Let me ask you a strange question. So these guys are obviously growing really quickly.

And I was kind of wondering, are they riding? COVID tailwinds too hard, right? Like, not that they're intentionally to do it, but COVID has been, the COVID reopening has been such a tailwind for them. I've been wondering if their growth rate almost comes down as the world normalizes. And I mean it in this way, right? Like, I think they gave this that 30% of boxes went under during COVID. They didn't have a single box closed, but that creates a heck of a lot of real estate for them to, to kind of purchase, add locations, all that type of stuff. A lot of excess equipment, a lot of particularly excess labor, right? Like the sole cycle down the street closes, and they even gave this example.

Soul cycle closes. We go into that location. We split it into two boxes. Guess what? There are eight sole cycle instructors who are out of work who are probably fantastic, great trained, who we can go and add to one of the boxes. So no labor shortages facing them, no real estate shortages. It's almost like open space. And I wonder, as the world normalizes more, as kind of all that excess real estate is absorbed, is there almost like a brick wall coming in front of their growth where all of a sudden they say, oh, it's a lot harder to find instructors. Oh, all of the boxes that were empty have kind of been filled. So it's much more of a turf war to grow going forward. Does that make

sense? Yeah, it does. I guess let me address two things. First is kind of what they've guided to in terms of long-term growth, just so you have a sense of that. And then I also kind of just want to talk about the individual studio economics, just so you can kind of understand. Next question. So that's perfect. Yep. Yeah, like how profitable they are because they're, you know, the individual franchisees opening these up get a 40% cash on cash return. So, you know, labor could be a little bit tougher or rent could go up a little bit. And, you know, maybe the cash on cash return goes from 40 to 37, but it's not going from, you know, 40 to 10 or something. It's going to stay

very attractive. You know, in terms of their long-term guides, so they're saying 500 plus annual new studio openings. So on a 2,300 base, you know, they're talking about studio openings, you know, north of 20 percent. And so, you know, they're also talking about mid to high single digit same store sales growth. And if you look pre-COVID, that's what they were doing. They were doing, you know, most scores between 5 and 9 percent same-store sales growth. So if you sort of layer on the same store sales growth on top of the studio growth, you know, you're in the mid to high 20s already on a revenue basis. And then, like I said, adjusted even to margin, we're going to expand from 30 to 45% you know over the next few years so the adjusted

EBITDA growth is going to be well in excess of that revenue growth you know say in the you know 35% plus range um and so you know those all seem like very reasonable but goals to me just given what they've done historically right like looking at their historical growth looking at what they've done this year you know they're going to open 500 plus studios this year you know they have a pipeline already basically double what their studio basis. So I think they have another 2,600 studios that have already been contractually signed. So those are already guaranteed to roll out. So that's, I think, very predictable. And then you have the pre-COVID same source sales growth, which in my mind there's no reason why I would think they wouldn't be able to achieve that. So when I put all that

together, I just have a high degree of confidence in their ability to meet that. And I also think they've been kind of conservative, you know, they talk about their, you know, revenue growth rate as low to menteens sort of on a longer term basis, you know, and I think they're talking like five years from now, low to mid teens, because I think for the next five years, it's going to be, you know, 20% plus. Just on the, I think a lot of the pushback on the idea that I've seen, you know, particularly from the south side. I tend not to read a ton of sell side research, but you could kind it. XBOF does a lot of conferences so you could see what the south side was really targeting. A lot of the pushback has been on the franchisee's economics. And I mean that in two ways.

Number one, I think there's been a lot of pushback on the 40% cash on cash return number, which, you know, it does make sense to me. You say, hey, we're opening into gym. We're paying a six to eight percent royalty to the kind of corporate mothership. Plus, we're buying the equipment from them, all that sort of stuff. Like 40% cash on cash return sounds very high for a gym. you know, that can be easily copying everything. So that's one aspect, pushback on the 40%, and then the second aspect, and I think this bleeds into the 40%, is a lot of people have said, oh, the franchisee base here is mainly made up of people who own one to three units, not the McDonald's where, you know, everybody owns 20 or 30 units or something. And the pushback on that has been

along two lines. A, if the cash on cash returns are really 40% plus, why aren't people like going all out and getting up to 40 units in a market or something, right? Four rumbles, three cycles, whatever it is. And B, if everybody's at one to three, like, do you have an unsophisticated investor base that might think it's 40% cash on cash, but that's because they're not factoring in, you know, the value of their time. They're kind of getting paid, the classic, hey, I get paid 100,000 a year, but I work for owning a laundromat, but I work 100 hours a week or something.

So I basically make minimum wage, like that type of thing, or maybe they're not factoring in, depreciation of the equipment, all of that. So I'll pause there. I threw a lot out there. What do you think about that, how people talk about the franchise base? Yeah. So, you know, the initial investment in the average store is about $350K. You know, the average annual revenue in year two is about $500,000. You know, labor per month is about $10,000, so called $120,000 a year.

you know, rent per month is in sort of the 10,000 range, you know, so, and those are the two biggest expenses. So those combined are, say, about 250K per year. And so you have, you know, about 250K, you know, after those to work with. And they're kind of saying that most of the franchisees are making between 125 and 150K a year. So there's probably an additional, you know, 100 to 125K of cost below that, you know, which is going to be technology. It's going to be you know, electricity, you know, sort of all of the other expenses that we haven't described. You know, so I'm sure there's variability amounts of franchisees. I'm sure some franchisees do significantly better and some do significantly worse.

Certainly the Club Pilates franchisees have done exceptionally well, right? AUVs expanded from 250 to 750, you know, and that's why they're raising the royalty rate. So if the franchisees were not doing well, you know, they wouldn't be able to raise the royalty. rate and still have, you know, basically double the current base already sold, right? So they have more than 750 Club Pilates already sold. The other thing is, is they only accept about 2% of the franchisees who want to become franchisees, right? So if it really wasn't that attractive and if people really weren't doing well, I can't imagine that you'd have, you know, 50 people for every one person that they actually accept into the program.

you know, a 2% acceptance rate for franchisees doesn't imply to me that it's a bad business to get into. It actually, it strikes me as like a pretty great opportunity. It reminds me of Chick-Blay a little bit, right, where they've got the classic. I think they take less than one in a hundred or something, but they've got all sorts of things. And obviously, everybody loves to own a Chick-Play franchise because those things mint money despite being closed on Sundays. Let me turn to recession risk. We talked about recession a little bit, but just we'll talk about recession for the overall business, but just on the franchisee side, I was wondering, recessions, rising rates and stuff.

Obviously, a franchisee needs most of them get us with loans to buy the equipment to set up a box, you know, get the real estate, that type of stuff. It's operating leases, but you probably do need some type of business loans to get these set up. So does a recession, interest rates rising a lot, does that make capital harder to come by and maybe slows the unit growth in some way on that side? No, I don't think so. Most of the franchisees are not really using a significant amount of debt for, you know, for opening it.

So there might be some small amount of debt, but I don't think that's going to be changing that dramatically with the equipment financing. You know, if they were able to gross, you know, 350 studios during COVID, you know, which was arguably the worst period in history for their business, certainly the worst period in the last 25 years, then, you know, I'm not too worried about whatever recession might be coming for, 2022 or 2022, which, you know, we still haven't actually seen a true recession, right? I mean, the economy and the wage, you know, job market is still strong. So I think the stock market is obviously predicting a recession. And that very well could end up being true. But, you know, we haven't actually seen it physically in the economy yet. I was well saying September, definitely, the stock market was definitely predicting the recession in September. But totally. And the stock market's forward-looking. That's the stock market's job. So the stock market's not wrong in doing that necessarily.

but it's just the future is uncertain, and we'll see where the economy goes. One thing we should have mentioned earlier, I think, before we talk a recession, the company likes to say, hey, you know, you guys talk bad risks. I obviously was hitting on the curves parallels earlier. You guys talk about all this. We've never had a box closed in our history. I guess just to you, is that true? Because obviously that speaks to the strength of the model and stuff.

Still very young, but that's still pretty crazy. I was absolutely shocked when they told me that. I mean, I have no reason not to believe it, but that is, it is a shocking statistic. You know, I think they do take, obviously there is turnover, you know, someone unfortunately could die or there could be a reason why there might be turnover in, you know, the ownership of one of the fitness clubs. And so they might take it over temporarily, you know, while they're basically reassigning or reselling that license.

Yeah, but aside from that, it's a very, even that's a very small portion of the base. I think maybe they have like 50 or 49 that are corporate owned right now or corporate run. So it's, yeah, it's been very impressive. And I did talk to people that were skeptical of the model. I talked to, you know, a former employee who was, you know, very negative on the company, you know, a little bit critical of the management team. And, you know, everything that she said, I did channel checks on and just didn't pan out to be true. You know, she said, what were her main pushbacks? I'm just kind of thinking I want to be careful.

She was arguing that the market potential of some of the smaller brands was not the same as some of the larger brands, which I think is true, you know, objective. You know, I don't think Yoga 6 is ever going to be the same size as, you know, club Pilates are pure bar. I think that's that's an absolute fact um you know she was she was critical you know somewhat of the management team but her main critique honestly was just that Tony really likes to make money and he drives a hard bargain and honestly like I'm okay with that like that's you know he sounds like a good business man to me so it wasn't it wasn't critiques that I was necessarily overly concerned about um so yeah nothing nothing and she basically was basically was

saying also that, you know, some of the franchisees were unhappy. But, you know, when I realized that no store had ever, or no club had ever really closed, I mean, that sort of negates them. So, so I did, I did look into a lot of sort of the bearish points on the name and, and just found them to be, you know, not consistent with the facts. It's one of the really tough things with talking to farmers, and I've made this point all the time, you know, a lot of the formers, they are formers, and some of them are very happy, right? They hit 65, they're ready to retire. The stock's gone up 10 times over the past 20 years. as they retire wealthy. Management gives them a watch as they retire, right? But a lot of the

former's are management gave them the acts and they have an axe to grind because maybe they had a better dispute with management. A lot of times it's, hey, it was me or that guy for the CEO job. He got promoted so I had to leave. Like there's, there can be a lot of bitterness. So it's one of the tough things with talking to former. And as you said, like to have zero boxes closed, especially through COVID at this point, we probably would have seen the results if like boxes were closing left or right, or they were just doing desperate Hail Marys to kind of bailout clubs during COVID. And it hasn't seen any of that. So that's interesting.

More on recessions, right? And just one of the ones on former employees is I think oftentimes they also just lack the perspective of being like, like they might be a regional manager or they might, you know, they might manage 30, you know, of the clubs within a network of 2300. Like they just might lack the perspective of being like the CEO. They might just be thinking too small and within the company and not thinking like the larger picture of the business. I know you and I connected on Party City before, but like a lot of times, I just remember I did one call with Party City, which it was someone who had managed like four Party City stores or something, right? And they had this list of complaints.

And some of them, you know, as an outsider, I would say some of them were valid. And then as an outsider, I would say some of them were like, oh, well, you're running this from the perspective of four stores. and Party City is running this from this perspective of 500 stores nationwide. And some of the stuff you wanted to do just wouldn't be doable when you're trying to manage hundreds of stores and a supply chain and everything. So I'm with you. It can 100% get. Yeah.

But that's our job as analysts is to filter out what's good, you know, former employee information versus not. You know, that's, it's investigative journalism style primary research. Like that's what you're trying to figure out is what's true and what's not. just on recession risk. So the CEO said, hey, I, we talked about earlier how the CEO said, look, I did LA boxing and I think UFC gyms in 2008. People were really worried about recession. And I think a lot of these people would, a lot of people like they love this so much that they would literally go on welfare before they gave up their their boutique gym membership. You know, these people, he's mentioned, hey, they make a lot of money. This is a drop in the bucket for them. They've talked about the community. You know, if you go to do a lot of problems, but you'll build community there. Rumble host single night. So you're going to rumble not just for the exercise, but to meet other people and stuff, right? So they've got all that going for them run recession. But I do wonder, like a recession in 2008 versus today. Like today, people have been

trained. If you can't go to the gym in person, you know, we can all remember COVID working out at your home and stuff. There are options today that there weren't back in kind of 2008, right? Like you could, a lot of people bought Pelotons. A lot of people have Peloton memberships. You can get boutique style classes for a lot cheaper with a Peloton app or any of the other apps that you can do. You know, that would be if you just did the Peloton app, that's $40 a month versus the in-person 200 or whatever it is per month, 150, 200.

A lot of gyms have started offering boutique classes. I don't remember lots of them in 2008. So you could maybe join a lower cost gym and get boutique classes. Not quite as good. But, you know, there's a lot of substitution that I don't think was around in kind of the 2008 era. So, again, I threw a lot at you. I'll just pause there to let you talk about recession risk. Yeah, I think, I guess the substitution, I think is tough, right?

Like, I think it's very difficult to find, like, high quality, you know, group fitness classes outside of something like Equinox, where, you know, Equinox is more expensive than... Equinox is more expensive as a Rumble membership, yeah. Yeah, so I think it's tough to find, like, the... quality that they provide at a similar price point. You know, I think, I think you're going to go down in quality a lot. And I think we definitely saw during the pandemic. I mean, people didn't like, I certainly didn't like working out at home. I mean, I think people worked out less. Obviously, people got in worse shape. I mean, people gained a lot of weight during the pandemic, right? And that was because we didn't have access to gyms. I mean, gyms are good for public health. And I think

that's really important. And I think people also really got a sense for how much they appreciated of gyms during the pandemic because once they were taken away, you know, people really wanted to go back to the gym. So I think certainly from my perspective, like, I hated not being able to go to the gym. And so, you know, that would be a huge priority for me. You know, if there was a big recession and I had to cut expenses, like a gym membership would certainly not be something I would cut. And I'm sure there's some percentage of people that would cut gym memberships. I'm not saying it's zero. But I don't think it's the vast majority of people. I think the vast majority of people are really happy to be back in the gyms and don't anticipate that changing.

I'm definitely with you there. My only worry on that side is, you know, I think of my own personal experience. At the height of COVID, I was pelotoning all the time. And I was like, I love Peloton. I'm going to do this six times a week for the rest of my life. And then once the gyms reopened, I started going. My CEO always loves to tease me. As soon as the gyms reopened, my Peloton went to like once a week as an alternative workout

and I'm at the gym every day. Like, look, you didn't even know your own behavior. during COVID. You couldn't predict your own behavior. Like, how are you supposed to predict other people's behavior going forward? The future is so unknowable. So I agree with your theory there. I just worry that maybe you and I are basing it too much on our own insights or just human nature is unknowable, you know? Yeah, they just got back to their pre-COVID AUs, right? So I think it's not like they vastly, you know, it's not like they had this massive burst, you know, as things reopened where they were like significantly in excess of their pre-COVID AAVs.

They actually just got back to pre-COVID AAVs. You know, inflation adjusted, they're still probably below their pre-COVID AEs. So I think, I don't think there was this pent-up demand where, you know, there was this explosion in their gym use that's going to revert. And I also, I think, yeah. So I think the other thing that's worth pointing out is that, you know, if the, you know, average person is paying, say, $1,500 a year for their gym memberships and makes, you know, $130,000 a year. Like, it's just over 1% of their overall expenses. So I just don't expect

that it's material enough where they're going to be changing that. They're going to need that extra 1%, you know, because of a recession. And again, like, I do think, I talked about how things are different today than the recession 10 or 15 years ago or whatever, but you know what else is different? a lot of people I don't I could be wrong I wasn't around you know going to boutique gyms in 2008 but I do think gyms have fostered more of a sense of community now where you know 20 years ago I think you just went to the gym did your own thing with these boutique gyms they generate a big sense of community like I know a ton of the people who go to my gym if you drop that yes you're saving the expense but you're also losing that community a little bit right and paying for community

is something that people will kind of again they'll stretch their budget to keep we've talked about a lot of stuff here. I'm cognizant in time. I want to ask two last questions, and then we can probably wrap this up unless there's anything. If I can just jump in on one thing just related to a recession, I think the other, a lot of the fitness concepts that have gone bankrupt or had trouble were over levered and they were, you know, own, they were smaller gym businesses that were over levered going into recession, right? So like, you know, town sports, which owned New York Sports Club, you know, that was like a few New York gyms and they were way too levered. You know, XBOF is a franchisee, you know, like they're the franchisor. You know,

they have some leverage, but it's a very appropriate amount of leverage. So I just think this is a different concept than other gym concepts that have really had trouble or struggled over time. I just laugh every time at New York Express Club because they went bankrupt before COVID. And I actually think that would have been a really successful equity play. I got burned on a little bit because then COVID came and destroyed them. But that was, I've never seen a company. they prove the value of subscriptions because I've never seen a company so difficult to cancel a membership from before. I don't know if you ever, you would literally like, signing up was easy, but if you wanted to cancel, you like had to send a certified letter to some office. And if it

didn't hit on the certain day or certain time, you just, oh, it was the worst. All right, two last questions. First, I always ask about share buybacks. This is a hyper growth story. You know, they're just kind of hitting the EBIT on cash flow inflection point. Obviously, they generate cash, but it's going to be a lot more as the growth comes in and kind of they do. So I don't think we need talk to your buybacks, but that does raise another question, right? Like management obviously sees the value here. They are huge believers in the story. It's firing on all cylinders.

You know, you've got this quote from a conference in September. This last quarter was the best quarter of the company has ever had in every KPI and every metric, right? So they see the value. It's firing on all cylinders. Yes, they're significant shareholders. But why aren't they buying shares on the open market? I think they're more focused on. on being inquisitive at this point.

So, you know, their main interest, I think, is building cash so they can, they can be acquisitive at this point in time. But I think we'll definitely see stock buybacks in the future. And I agree with you. I would love to see them buying back stock. So I wouldn't take the other side of that. I think buying back stock would be a great use of capital for them. It would be the rare franchise model at if at some point they didn't return capital shareholders,

right? Because that's the beauty of a franchise model. All this cash flow comes in. eventually you have no choice kind of but to return it to your shareholders or else you'll just become a cash bank basically. Last question here, look, I've thrown a lot of risk at you. I threw recession risk. I threw the curves history and the history of bad and all this other stuff here. But, you know, I guess you address them all, but just to wrap it up, like, what do you think kills the story or where do you think you could be wrong? And, you know,

if three years from now you and I are talking and we're pitching a new name, we say, oh, XBOF didn't do well. Like, what's the big thing that keeps you up at night here? I don't think there's anything specific, but I think you hit on all the right points, right? I think it's the sustainability of the brands at the end of the day. So I think, you know, we have to be tracking those brands and making sure that they continue to be successful and make sure that the KPIs, you know, continue to head in the right direction. I think the probability of that is extremely high, but that's definitely something we need to be monitoring is, is there are certainly brands, you know, that.

that fail ultimately. And so we just have to be making sure that their portfolio brands continues to do really well. I guess the other thing that could kill it is if they did kind of like transformative M&A. You know, there's both on M&A where you go acquire a business for 10 or 20 million. And there's transformative M&A, which is generally a bet the company or a bet the equity type story. Obviously, these guys are going to be acquisitive, but their acquisitions historically have been more along the Club Blotties line, right? Like buy something with 12 boxes and then grow up to 750. There are things they could do that are transformative. You know, they could go buy CrossFit or something, but it seems to me the acquisition

story is going to be more bolt-ons continued along that Club Flotties model. So is there a risk they burn $10 million on a bad acquisition? Yes, but I don't think we're talking like company-altering risk. Please feel free to tell me if I'm misinterpreted that. No, I totally agree with you. No, and they've stated that as their clear intention, too. They're not going to go out and do anything huge. You know, the chairman is very successful former private equity. You know, so there's not, yeah, there's smart financial thinking minds on the board. They're very careful. And so, yeah, we don't expect them to bet the farm on anything.

Cool. Hey, we've talked about a ton of stuff here, but just wanted to turn it over to you. Anything we didn't discuss that you think we should be thinking about or anything we kind of glanced over that you think we should be thinking about harder? No, I mean, I think you did a really good job. job of, you know, an overview of the business, I think, I think people should really just focus on, like, it's highly predictable. It takes some time to get an understanding of the business. Like, it definitely is worth the time, though, because once I studied it, I was very confident in just its ability to do extremely well in pretty much any environment. And I think from a

risk-adjusted perspective, like, you're getting an extremely high IRA. You know, there might be IRAs that could be potentially higher in this environment. But I think, you know, this is a pretty low risk investment. The probability of, of this outcome, I think, you know, a positive outcome is quite high. Look, I think I said it up front, but when you said you wanted, we talked about a bunch of names and when you said you want to do XBOF, I was like, oh, fitness. Like I initially had that thought that the sell side led off with, which, oh, the history of fitness companies in the public markets is really poor. And I thought I was going to get you with my curve thing. But when I was researching this last night. I was just, I was surprised by how bullish I was and how much I was

like, oh, I can see what Zach really sees in the story. And, you know, one day of research isn't enough for me, but it's a name. I love fitness. It's a name I'm going to be diving a lot deep on because I'm with you, 20 times, 20 times EBIT off or, as they said, if we never signed another deal, like we've got so many boxes coming online, like we've got so much growth in store, 20 becomes 10 real fast and 10 times is not the right multiple for a franchise or. Yeah, I totally agree. Cool. Well, hey, this has been great.

Zach Buckley, I'll include a link to your Twitter in the show notes. So if anybody wants to go find you on Twitter and kind of let you know their great experiences or how Rumble had a bad class and this structure was 15 minutes late in one time. They can slide on over to your DMs. But Zach, thanks so much for coming on and looking forward to having you again. All right. Thanks so much. Appreciate it.

A quick disclaimer, nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.