Smart Fit’s Best Business Is the One Without Gyms
BRAZIL · COMPANIES
Key Facts
- —The growth TotalPass reached 2.2 million users across Brazil and Mexico in the second quarter, up 70 percent.
- —The revenue Segment revenue of 230 million reais, up 47 percent, with gross profit up 79 percent to 195 million.
- —The margin 84.7 percent gross margin, against a group that mostly runs gyms.
- —The weight Eleven percent of consolidated revenue but 17 percent of consolidated gross profit.
- —The share Thirty-five percent of active monthly users in Brazil, up eight points. Seventy-nine percent market share in Mexico.
- —The market reaction Smart Fit shares fell 7.82 percent on results day, the worst in the Ibovespa that session.
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- The second quarter confirmed the model. Smart Fit’s Q2 2026 net revenue reached R$2.18 billion (US$430 million), up 22% year-on-year. Recurring net income rose 8% to R$204 million (US$40 million).
- The network keeps growing. The group closed June with 2,170 clubs in 16 countries, having added 352 in twelve months. Guidance of 330 to 350 openings in 2026 stands.
- TotalPass is now 11% of revenue. The “Others” segment, led by TotalPass, grew 47% to R$230 million in Q2. Members can access about 44,000 gyms and studios across Brazil and Mexico.
- The quality signal. Cash gross margin hit a record 51.9%, and 70% of owned-club members are on the premium Black plan.
- The market’s verdict. Shares fell 8% on the Q2 release in August as profit missed some estimates; Mexico margins and expansion costs are the watch items. Our full take: Smart Fit Posts US$40m Q2 Profit; Shares Fall 8%.
Smart Fit’s fastest-growing business does not own a single treadmill. It is also the reason the shares fell.
TotalPass, Smart Fit’s corporate wellness platform, reached 2.2 million users in the second quarter, up 70 percent. It now supplies 17 percent of the group’s gross profit.
What TotalPass Is
TotalPass is a corporate benefits platform. Companies buy it for their employees, who then get access to a network of partner gyms rather than only to Smart Fit’s own.
It is the asset-light layer on top of a business that otherwise owns and operates gyms. It competes directly with Wellhub, formerly Gympass.
The partner network covers more than 34,000 gyms in Brazil across 2,000 cities, or about 44,000 establishments including Smart Fit’s own.
It sits inside the group’s Others reporting segment.
The Numbers
Second-quarter segment revenue reached 230 million reais, up 47 percent. Gross profit rose 79 percent to 195 million, at a gross margin of 84.7 percent.
That is 11 percent of consolidated revenue and 17 percent of consolidated gross profit.
Users reached 2.2 million across Brazil and Mexico, up 70 percent. In Brazil the platform holds 35 percent of active monthly users, eight points more than a year earlier. In Mexico it holds 79 percent market share.
Jose Luis Rizzardo, the group’s chief financial officer, said TotalPass is always a pleasant surprise, both in the speed at which things happen and in their magnitude.
A widely circulated report putting TotalPass at 15 percent of gross profit describes the first quarter. The second-quarter figure is 17 percent.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+0.47%
205,082.56
+0.47%
69,879.62
-0.01%
10,746.36
-0.31%
3,017,221
—
2,540.10
+0.46%
57,021.19
+0.13%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 205,082.56 | +0.47% | +21.85% | 204,120.12 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
Why the Shares Fell Anyway
Group revenue reached 2.18 billion reais in the quarter, up 22 percent, with earnings before interest, tax, depreciation and amortisation up 24 percent to 712 million.
Below that line it was weaker. Reported net profit was 156 million reais, about 30 percent below one bank’s estimate, and cash generation came in at 530 million against 694 million expected. Net debt stood at 4.6 billion reais and leverage at 1.20 times.
The shares fell 7.82 percent to 18.38 reais on 6 August, the largest drop in the Ibovespa that session and the second most traded stock on the exchange.
Morgan Stanley called it a good quarter, messy below the earnings line. João Pedro Soares of Citibank said results were mixed but that the bank remains constructive on the growth trajectory.
XP called it a strong positive surprise, with margin expansion beating forecasts in a seasonally weak quarter.
The Group Around It
Smart Fit ended the quarter with 2,170 gyms, up 19 percent, of which 1,746 are company-owned. Mature-unit gross margin was 51 percent.
Guidance is for 330 to 350 new gyms in 2026, with 98 opened by mid-year.
The company attributes revenue growth mainly to a 10 percent increase in the average ticket at company-owned gyms and an 8 percent rise in the average student base.
Edgard Gomes Corona, founder and chairman, has said the sector suffers oversupply, with many entrants extremely leveraged. He calls TotalPass a strategic lever and says Smart Fit pays partner gyms better than rivals do.
More: Brazil news in English, every day from The Rio Times.
Frequently Asked Questions
What is TotalPass?
Smart Fit’s corporate wellness platform. Companies buy it as an employee benefit and staff access a network of partner gyms, not only Smart Fit’s own.
How fast is it growing?
Users reached 2.2 million in the second quarter, up 70 percent, with segment revenue up 47 percent and gross profit up 79 percent.
Why did the shares fall?
Weak cash generation and below-the-line items. Reported net profit came in about 30 percent under one bank’s estimate, and the shares fell 7.82 percent on results day.
Who does it compete with?
Wellhub, formerly Gympass, in the corporate wellness benefits market.
Sources: Smart Fit second-quarter results, InfoMoney, CNN Brasil, NeoFeed, Estadao Conteudo via Diario do Comércio, Seu Dinheiro.
This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief