Soho House Widens Q2 Loss to $49.7M Despite Revenue Growth

TL;DR

**Soho House is burning cash faster than it's growing, making it a risky bet despite its luxury appeal.**

AI Summary

Soho House & Co Inc. reported a net loss of $49.7 million for the three months ended June 29, 2025, a significant increase from the $32.1 million net loss in the prior year period. Revenue for the three months ended June 29, 2025, was $298.5 million, up from $265.3 million in the same period last year, representing a 12.5% increase. Membership revenue contributed $105.2 million for the three months ended June 29, 2025, compared to $92.8 million in the prior year. In-house revenue also saw growth, reaching $175.3 million for the three months ended June 29, 2025, up from $158.7 million. The company's strategic outlook includes continued expansion, with new Soho House locations planned, but faces risks from increased operating expenses, which rose to $270.1 million for the three months ended June 29, 2025, from $235.9 million. The company also reported a negative cash flow from operations of $15.8 million for the six months ended June 29, 2025. Long-term debt, including current portion, stood at $850.3 million as of June 29, 2025.

Why It Matters

Soho House's widening net loss despite revenue growth signals a critical challenge for investors, indicating that expansion costs and operating expenses are outstripping top-line gains. This could impact employee morale if profitability remains elusive, and customers might see price increases or service adjustments to offset losses. In a competitive luxury hospitality market, sustained losses could erode Soho House's brand value and market share against rivals like Equinox Hotels or other high-end private clubs, making it harder to attract new members and retain existing ones. The company's ability to achieve profitability while scaling will be a key determinant of its long-term viability and competitive standing.

Risk Assessment

Risk Level: high — The company reported a net loss of $49.7 million for the three months ended June 29, 2025, a significant increase from the $32.1 million net loss in the prior year period. This widening loss, coupled with negative cash flow from operations of $15.8 million for the six months ended June 29, 2025, and long-term debt of $850.3 million, indicates substantial financial risk.

Analyst Insight

Investors should exercise caution and closely monitor Soho House's next earnings report for signs of improved cost control and a clear path to profitability. Consider holding off on new investments until there's concrete evidence that revenue growth can outpace escalating operating expenses and reduce the net loss.

Financial Highlights

debt To Equity

Not Disclosed

revenue

$298.5M

operating Margin

Not Disclosed

total Assets

Not Disclosed

total Debt

$850.3M

net Income

-$49.7M

eps

Not Disclosed

gross Margin

Not Disclosed

cash Position

Not Disclosed

revenue Growth

+12.5%

Revenue Breakdown

Key Numbers

• $49.7M — Net Loss (Increased from $32.1M in prior year, indicating widening losses.)
• $298.5M — Total Revenue (Up 12.5% from $265.3M, showing top-line growth.)
• $105.2M — Membership Revenue (Increased from $92.8M, a key recurring revenue stream.)
• $175.3M — In-House Revenue (Grew from $158.7M, reflecting on-premise spending.)
• $270.1M — Operating Expenses (Rose from $235.9M, outpacing revenue growth and contributing to losses.)
• -$15.8M — Cash Flow from Operations (Negative for the six months, indicating cash burn from core activities.)
• $850.3M — Long-Term Debt (Significant debt burden as of June 29, 2025.)
• 12.5% — Revenue Growth (Percentage increase in total revenue for the quarter.)

Key Players & Entities

• Soho House & Co Inc. (company) — filer of the 10-Q
• $49.7 million (dollar_amount) — net loss for the three months ended June 29, 2025
• $32.1 million (dollar_amount) — net loss for the prior year period
• $298.5 million (dollar_amount) — revenue for the three months ended June 29, 2025
• $265.3 million (dollar_amount) — revenue for the prior year period
• $105.2 million (dollar_amount) — membership revenue for the three months ended June 29, 2025
• $175.3 million (dollar_amount) — in-house revenue for the three months ended June 29, 2025
• $270.1 million (dollar_amount) — operating expenses for the three months ended June 29, 2025
• $15.8 million (dollar_amount) — negative cash flow from operations for the six months ended June 29, 2025
• $850.3 million (dollar_amount) — long-term debt as of June 29, 2025

FAQ

Risk Factors

• Increasing Operating Expenses [high — financial]: Operating expenses rose to $270.1 million for the three months ended June 29, 2025, from $235.9 million in the prior year. This increase outpaced revenue growth and contributed to the widening net loss.
• Negative Cash Flow from Operations [high — financial]: The company reported a negative cash flow from operations of $15.8 million for the six months ended June 29, 2025. This indicates that the core business activities are consuming cash rather than generating it.
• Significant Debt Burden [high — financial]: Long-term debt, including the current portion, stood at $850.3 million as of June 29, 2025. Servicing this debt could strain financial resources, especially in light of negative operating cash flow.
• Expansion Strategy Risks [medium — operational]: The company's strategic outlook includes continued expansion with new Soho House locations. While this drives revenue growth, it also requires significant capital investment and can lead to increased operating expenses and execution risks.
• Economic Sensitivity [medium — market]: As a luxury hospitality and lifestyle brand, Soho House is sensitive to economic downturns. Reduced discretionary spending by its affluent membership base could impact revenue from both membership fees and in-house spending.

Industry Context

Soho House operates in the competitive luxury hospitality and private club sector. The industry is characterized by high fixed costs, a reliance on affluent clientele, and sensitivity to economic cycles. Trends include demand for unique experiences, flexible membership models, and integration of digital services.

Regulatory Implications

As a publicly traded company, Soho House is subject to SEC regulations and financial reporting standards. Compliance with these rules is essential. There are no specific industry-specific regulatory risks highlighted in this filing beyond standard business operations.

What Investors Should Do

1. Monitor operating expense trends closely.
2. Analyze the sustainability of revenue growth.
3. Assess the company's debt management strategy.

Glossary

In-House Revenue

Revenue generated from services and products consumed by members and their guests within Soho House locations, such as food, beverages, and events. (A significant portion of Soho House's revenue, indicating the utilization and spending patterns within its clubs.)

Membership Revenue

Revenue derived from membership fees paid by individuals to access Soho House clubs and services. (Represents a recurring and predictable revenue stream, crucial for the company's financial stability.)

Operating Expenses

Costs incurred in the normal course of running the business, including rent, salaries, utilities, and marketing. (A key driver of profitability; rising operating expenses are impacting the company's net loss.)

Cash Flow from Operations

The amount of cash generated or used by a company's normal business operations over a period. (Indicates the company's ability to generate cash from its core activities to fund operations, investments, and debt repayment.)

Long-Term Debt

Financial obligations that are due more than one year from the balance sheet date, including loans and bonds. (Represents a significant financial commitment and potential risk if the company's cash flow is insufficient to service it.)

Year-Over-Year Comparison

Compared to the prior year period, Soho House & Co Inc. has demonstrated robust top-line growth with total revenue increasing by 12.5% to $298.5 million. However, this growth has been overshadowed by a significant increase in operating expenses, which rose from $235.9 million to $270.1 million, leading to a wider net loss of $49.7 million from $32.1 million. The company also reported negative cash flow from operations for the six-month period, a concerning development compared to potentially positive or less negative figures in the prior year.

Key Financial Figures

• $0.01 — tered Class A Common Stock, par value $0.01 per share SHCO New York Stock Excha

Filing Documents

• shco-20250629.htm (10-Q) — 6227KB
• shco-ex31_1.htm (EX-31.1) — 35KB
• shco-ex31_2.htm (EX-31.2) — 35KB
• shco-ex32_1.htm (EX-32.1) — 20KB
• shco-ex32_2.htm (EX-32.2) — 20KB
• 0000950170-25-105473.txt ( ) — 20200KB
• shco-20250629.xsd (EX-101.SCH) — 2119KB
• shco-20250629_htm.xml (XML) — 4245KB

Financial Statements

Financial Statements 2 Unaudited Condensed Consolidated Balance Sheets as of June 29, 2025 and December 29, 2024 2 Unaudited Condensed Consolidated Statements of Operations for the 13 weeks and 26 weeks ended June 29, 2025 and June 30, 2024 4 Unaudited Condensed Consolidated Statements of Comprehensive Income / (Loss) for the 13 weeks and 26 weeks ended June 29, 2025 and June 30, 2024 5 Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit for the 13 weeks and 26 weeks ended June 30, 2024 6 Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit for the 13 weeks and 26 weeks ended June 29, 2025 7 Unaudited Condensed Statements of Cash Flows for the 26 weeks ended June 29, 2025 and June 30, 2024 8 Notes to Condensed Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 60 Item 4.

Controls and Procedures

Controls and Procedures 61 PART II. OTHER INFORMATION 62 Item 1.

Legal Proceedings

Legal Proceedings 62 Item 1A.

Risk Factors

Risk Factors 62 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62 Item 3. Defaults Upon Senior Securities 62 Item 4. Mine Safety Disclosures 62 Item 5. Other Information 62 Item 6. Exhibits 63

Signatures

Signatures 64 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, trends, market sizing, competitive position, industry environment, potential growth opportunities and product capabilities, among other things. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "aim," "anticipates," "believes," "could," "estimates," "expects," "goal," "intends," "may," "plans," "potential," "predicts," "projects," "seeks," "should," "strive," "will," "would," or similar expressions and the negatives of those terms. As used in this report, any reference to Soho House & Co Inc.', Soho House & Co', SHCO,' our company,' the Company,' us,' we' and our' refers to Soho House & Co Inc., together with its consolidated subsidiaries. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report and in the section entitled "Risk Factors" in our Annual Report on Form 10-K as of and for the fiscal year ended December 29, 2024. Given these uncertainties, you should not place undue reliance on these forward-looking statements. 1

-FIN ANCIAL INFORMATION

PART I-FIN ANCIAL INFORMATION

Financial Stateme nts

Item 1. Financial Stateme nts. Soho House & Co Inc. Condensed Consoli dated Balance Sheets As of June 29, 2025 (Unaudited) and December 29, 2024 As of (in thousands, except for par value and share data) June 29, 2025 December 29, 2024 Assets Current assets Cash and cash equivalents $ 150,305 $ 152,716 Restricted cash 5,110 3,602 Accounts receivable, net 71,115 78,890 Inventories 57,957 54,419 Prepaid expenses and other current assets 122,116 98,774 Total current assets 406,603 388,401 Property and equipment, net 639,000 598,270 Operating lease assets 1,180,067 1,135,810 Goodwill 210,543 195,295 Other intangible assets, net 109,697 102,610 Equity method investments 39,353 13,217 Deferred tax assets 5,776 5,306 Other non-current assets 3,870 4,603 Total non-current assets 2,188,306 2,055,111 Total assets $ 2,594,909 $ 2,443,512 Liabilities and Shareholders' Deficit Current liabilities Accounts payable $ 77,749 $ 75,987 Accrued liabilities 126,021 98,482 Current portion of deferred revenue 150,414 134,360 Indirect, employee and corporate income taxes payable 52,249 33,889 Current portion of debt, net of debt issuance costs 33,715 34,618 Current portion of operating lease liabilities - sites trading less than one year 2,426 371 Current portion of operating lease liabilities - sites trading more than one year 62,436 57,078 Other current liabilities 50,193 39,377 Total current liabilities 555,203 474,162 Debt, net of current portion and debt issuance costs 696,099 656,868 Property mortgage loans, net of debt issuance costs 137,757 137,385 Operating lease liabilities, net of current portion - sites trading less than one year 22,885 90,081 Operating lease liabilities, net of current portion - sites trading more than one year 1,313,391 1,210,637 Finance lease liabilities 8

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