00:00 Jared
Philip, thanks for joining us here. Uh, this is a massive deal for you and you’ve uh made considerable inroads in M&A. What’s what’s your grand strategy here?
00:10 Philip
Thanks so much for having me, Jared. Yeah, um, we are building the world’s largest wellness operating system. We believe that the fitness and the wellness industry have an incredible opportunity to really drive more um, prevention into our society. The world’s largest market is healthcare and all of it is right now repair. We’re going to drive in sustainability here with like leaning more towards prevention. And what you need for that is a few things that we’re all building. You need to optimize how we run fitness operations with our mount mind body brand. We want to optimize the consumer experience inside fitness facilities, much more personalized, more AI through our EGYM brand. and then we want to um allow people to very easily have access to these facilities through our Mindbody marketplace, our class pass consumer app and then our wellpass corporate subsidized app.
01:22 Jared
All right, let’s talk about that seven and a half billion dollar valuation and the revenue mix. So we’ve got SAS software of a service, hardware, corporate wellness. Talk to us about the mix and what your goals are there.
01:35 Philip
Yeah, absolutely. Um so we believe these are all different puzzle pieces that are required to achieve um our transition from repair to prevention in the healthcare space. Um and we want to help employers to drive down their health care costs using all these different tools. Um you need to really um have these pieces in place to drive that change. It’s not enough to make the gym work for everyone. You also need to have the ability to bring people into the gym for which we have class pass and well pass. Um and then of course you need to run processes as efficiently as possible so we can serve much larger audiences for that we have my body.
02:27 Jared
Are there any puzzle piece pieces that you’re missing right now? What might those be?
02:33 Philip
Ah, yeah, I mean, we are in a lot of different countries. I think 31 countries right now. So, um, there is still um because we’re operating marketplaces, there should be um basically just a lot of view expansion. in all our existing markets, we grow very fast still. um, and um so basically there’s a lot of organic growth, but we definitely also see MNA opportunities for us on the horizon.
03:02 Jared
I want to ask you about two really big companies we talk about all the time on this show. That would be Apple and Google, both of them in the health fitness industry in different ways, to a limited extent, uh to some extent. Um, any way, is there any risk of them creating like a software layer that might compete with certain parts of your business?
03:37 Philip
Uh it’s right now hard to imagine and and there’s like a a number of reasons. One class pass and well pass is a marketplace. So there’s like tens of thousands of tenants, um that of course also create a defense ability. there’s millions of users and so on. But on the other hand also, um we are specifically focused on uh you know, what we call professionally managed training floors and not home fitness. You find those two companies mainly in home fitness. Um we go through the gym, we deeply know the gym, we deeply know fitness studios, um because one of the things we believe in is that inexperienced exercises can only find exercise success in a professionally managed training floor. And so therefore you need the gym.
04:37 Jared
And are there any concerns about the macro environment in which we find ourselves. I mean, we got war headlines every day. We got this K-shaped consumer and one of the first things that consumers pull back on when we get into a pinch is those discretionary purchases.
05:01 Philip
Yeah, you know, when somebody chooses to change their longevity and now become healthy, um they will maybe, you know, cut short on the most expensive car or the vacation, but what we have seen in the past is they don’t cut down their, you know, $30 or $50 or $100 gym membership that is meant to now have them lead a healthy lifestyle. And the best way I can explain you to that is basically since 2000, the fitness industry has outperformed GDP growth in every single year with the exception of the lockdown years 2020 and 2021.
05:47 Jared
You mentioned AI at the beginning of the interview. Uh how are you incorporating AI in your various products?
05:58 Philip
Yeah. So as you want to make the gym work for everyone, um one of the things we try to achieve is personalized user experiences. Think of how can we make sure that everyone works out safely and effectively as if they had the best possible personal trainer with all their knowledge uh next to them. And that’s why we’ve launched Em genius, which is the AI that connects to all the data we are collecting from you. So when you, for example, use our smart strength machines, we collect your strength for every single muscle group, and then it prescribes the perfect workout for you. So that’s for one, one of the many ways how we use AI. We also use AI to run, you know, the um operations or fitness operations more effectively. For example, we have the AI receptionist helping fitness operators to really focus on the core of their business.
07:12 Jared
And uh, we got a minute left. How about GLP, the weight loss drugs and do those affect your business in any way or is that just kind of a side note for you?
07:24 Philip
No, this is something that is a huge opportunity for us as an industry and specifically for us as a company. We actually have now uh commissioned a clinical study because we have created a specific workout protocol where we belief will have um GLP one users keep their muscles and we would be able to scale that with zero variance because it’s on connected equipment. Um, so GLP1 users, it works really well, they lose a lot of weight, but 30 to 40% of the weight loss is muscle. The problem with that is that it basically increases the muscle skeletal diseases, which is the number one cost factor in health care, but also people don’t get off the drug anymore because now with less muscles, uh they have basically a lower calorie consumption per day, and therefore when they get off the drug, they regain all the weight in fat, and that’s not what you want. So now these employers get stuck with these people, 13% of Americans keep costing them between 600 and 1,000 per employee and month, um, and we want to change that.
08:34 Jared
Well, I wish you luck with that. I’ll get you out on this. Any plans to take the company public? Are we going to talk about a playlist IPO anytime?
08:45 Philip
I would say we are extremely predictable. Many many years hit the budget. We’re growing fast, we’re very profitable. Um we are very well diversified over different segments and geographies. We are definitely like an asset that has the ability to go, but we haven’t made a decision on when.
09:05 Jared
All right, sounds like we’re going to be having you back on to perhaps to talk about a public company in your future. Thank you so much, Philip, great insights.
09:15 Philip
Thank you so much for having me on, Jared.
