Like many sectors, the fitness industry is undergoing change, dealing with issues like inflation, and focusing on bringing customers back after the pandemic-era at-home fitness boom. Orangetheory, which already provides a unique, heart rate monitor-based workout, is building out its tech focus with a proprietary Personalized Maximum Heart Rate algorithm, which provides customers with granular, second-by-second data points. Dave Long, Co-founder and CEO of Orangetheory, joins Closing Bell to discuss the company's new fitness tracking tech, current membership demand, and more. 

Closing Bell

Orangetheory CEO on New Health Tracking Tech, People Returning to Classes

Welcome back to closing bell on cheddar news as consumers spending habits change thanks to inflation and other post pandemic factors they want the most bang for their buck. And that includes fitness classes. Well, Orange theory is stepping up adding a proprietary personalized maximum heart rate formula to its heart monitors. The company says it helps members get the most out of their workouts with granular second by second data. That creates a personalized experience the next level in fitness coaching and cannot learn new customers to the studios. Well, joining me now is Dave Long co founder and Ceo of Orange Theory. Dave Hello, tell me more. I'm good. Thank you. Tell me more about the innovations with this new technology. Yeah. And you covered it so well already we're, you know, we're always been the world's best programming and very results based and so what you're looking at, we're doing with the max heart rate program is we can personally customize your heart rate zone second by second. What that really means for our members is that it's fine tuning their zone So they know exactly the effort to give minute by minute in the in the sessions with us in the studio to maximize their results. So it's really respecting them coming in and take a session and being able to maximize getting the best results every single workout they take with us and I know if anyone's ever taken an Orange Theory class before, that's the fun of it. Right? You can monitor your own performance by wearing one of these monitors on a large screen. Dave explained to me is this a new device that people will be wearing or some sort of software upgrade to current devices. So it's it's the devices is staying pretty consistent. The fidelity is so good. It gives us a second by second sampling that we need. So it's really software and real time update that allows a real 1 to 1 personalized experience for each member and it continues the tune. So as you continue to take workouts with us, it actually gets smarter and smarter and more specific around giving you the personal zones that you need. So do you recommend that people buy one of these monitors? I I assume you sell them at your studios or can they just rent one on a session by session basis. Is it going to give them the same access to data over time? So, you know, virtually all of our members end up buying their own We do you know, when you come in to try a class, we provide you a loner and and some members do choose to use loners when they come in, but most members want to have that that wearable for them that we offer every single time. And then many of our members actually use that same wearable when they do a workout outside the studio, they go for a bike or run. They can use that also aggregate that workout with what they're doing inside our studios. Is the data saved on an orange Theory app or how do you make sure that it is protected for your users? It's a great question. So we're we're using you know leading edge data protection to keep everything very safe. The members are the only access is at 1-1 primarily through our mobile app and that's how we interface with them. How is demand? Dave were 2.5 years into this pandemic. Are you back to pre pandemic levels? We're very close in aggregate. Some markets are actually have actually exceeded pre pandemic levels and other markets that you can imagine that that were closed or temporarily closed for a much longer period of time or a little bit behind. But we're actually really excited that the aggregate demand and as we finish out this year we're starting to feel our typical seasonality. So we're really thrilled about going into 23 and feeling that we're going to be kind of back to a normal year of just tremendous first quarter. Well speaking of normalcy, I'm just curious any extra safety precautions Dave as we get into these colder months. That might kick in at some of your studios to protect people against COVID and other viruses. Yeah, I think the benefit is that we were really about cleaning and safety and the protocols even before the pandemic. And then we we obviously level that up even during, throughout many of those things. Just just remained as a best practice when we think about how our operators are operating the studios, it's always providing the absolute safest environment environment. I think our members play a great role in that too, and that they're really respectful. Not just about covid, but if they have any type of sickness, a cold or during the flu season, our members typically steer clear of the studios to create a safer environment for everybody prices going up across the board. Dave. Have you risen prices so far on your studios just this year? And do you anticipate to raise them again before the end of the year? So yeah, as you know, inflation has impacted every industry, including ours, We have done some small price increases this year, but only in some markets and it hasn't, hasn't been all at once, you know, really dependent on the market place. So that's, that's fluid depending on what the marketplace demands, but it hasn't, hasn't been all markets. How do you view some of these at home fitness companies? I'm thinking of a peloton and echelon a nordic track of course stay at home stocks, some of them peloton, for instance, that's for sure. At the start of the pandemic, when people couldn't get outside, they had turned to some of these at home services. Is that something that you're competing with now 2.5 years into the pandemic. We really don't see it as competition when we understand our members really well. Most of them really prefer to have the core of their workouts be within our studios because of the motivation, accountability, but many love the hybrid approach and we support that. They're gonna do their classes with us and then they're gonna do their activities outside or at home piece of equipment and we, we, I think that's going to continue to live on and that actually provide a holistic experience we give and what they get outside the studio. We think it's the best for actually adherence long term, which is how fitness consumer is going to get the best results. Any other updates to the general class experience Dave that are coming this year we're gonna make, we're gonna be making continually every quarter. A lot of interactive updates through the mobile app so that members can see more progress, they can see the challenges they completed, competed. And then really as they set their goals and expectations going in the next year, we're going to help continue to curate a journey. So it's really about personalization, just like this Mark max heart rate program. Um, so that those are things coming. We've also added a class type called lift 45. So folks that want a class that specifically on functional strength training, that's a class that many of our studios are now offering in addition to the court. Orange Theory class, The playlists were always my favorite when I was hitting Orange Theory Dave, I gotta get back. There was one not too far from me. I'm just curious. I know you do have some diehard, very loyal fans. You mentioned a demand nearing close to those pre pandemic levels. What's the long term plan for the business? Any plans to I. P. O. In the near future? Really, we're focused on, you know, operational excellence right now and growth both domestically and internationally. You mentioned music, we've had steve Aoki as our chief music officer throughout this year and that's been a huge boost for our members to have curated playlist that he's produced for us that literally match the template minute by minute and get them fired up for those all at certain points in the workout. So again, we're really focused on hyper growth mode, again, adding more studios to many international markets as we go into next year and continuing to improve the member experience. All right, Dave Long, co founder and Ceo of Orange Theory. Dave Thanks so much for joining