Smart Fit delivered a complex financial performance in the fourth quarter of 2024, combining substantial revenue expansion with significantly reduced profitability. The Latin American fitness giant, led by Edgard Corona, reported earnings that illustrate both the opportunities and challenges facing rapidly expanding gym chains in emerging markets.
Revenue Surge Masks Profit Decline
The company generated R$1.54 billion in Q4 2024 revenue, representing a remarkable 36% increase compared to the same period in 2023, according to financial results released in March 2025. However, Smart Fit’s net income fell dramatically to R$196.5 million, a steep 71% decline from the previous year’s fourth quarter performance.
This divergence between revenue growth and profit reduction reflects the substantial costs associated with Smart Fit’s aggressive expansion approach. Edgard Corona has prioritized market penetration over short-term profitability, a decision that produced mixed reactions from investors and analysts monitoring the company’s performance.
The dono da Smart Fit maintained confidence in the business direction despite the profit decline. Operating cash flow increased 8% to R$462.1 million during the quarter, suggesting underlying business fundamentals remain sound even as expansion costs pressure bottom-line results.
Network Expansion Drives Customer Growth
Smart Fit’s physical footprint expanded by 21% to reach 1,743 locations across Latin America by December 2024. This network expansion directly contributed to customer base growth, with membership reaching 5.21 million active users by year-end, representing a 17% increase from 2023 levels.
The company described 2024 as a year of “solid execution” with “record expansion,” having surpassed original guidance by opening 305 new gyms throughout the year. Edgard Corona’s expansion methodology continues targeting underserved markets across Latin America, where gym membership penetration remains significantly below developed market levels.
Operational Metrics Show Underlying Strength
Despite profit pressures, several operational metrics demonstrated Smart Fit’s business model resilience. EBITDA jumped 47% to R$487.1 million, with margins improving by 2.3 percentage points to reach 31.6%. This margin expansion indicates the company’s ability to generate operational efficiency even while investing heavily in new locations.
Smart Fit maintained a healthy cash position of R$2.94 billion as of December 31, 2024, providing substantial resources for continued expansion. The company reported a negative working capital variation of R$34.2 million during the quarter, reflecting typical seasonal patterns and investment in inventory for new locations.
When excluding tax effects, the profit decrease measured just 6% on a recurring basis, suggesting the dramatic 71% headline decline primarily resulted from one-time expansion costs and tax impacts rather than fundamental business deterioration.
Investment in Long-Term Growth
Edgard Corona attributed the profit decline to expansion costs and higher financial expenses affecting overall profitability. This explanation aligns with the company’s stated approach of prioritizing market share gains over near-term profit maximization in growing Latin American fitness markets.
The results illustrate Smart Fit’s commitment to capturing market opportunities while they remain available. Management emphasized that expansion investments position the company for sustained long-term growth as Latin American consumers increasingly prioritize health and fitness services.
Smart Fit’s management remains confident about future growth prospects despite temporary profit decline pressures. The company’s statement noted that “the results achieved in 2024 reinforce our commitment to excellence and long-term vision,” indicating continued focus on expansion over short-term profit optimization.
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