Viva Leisure FY2026 slides: profits surge on operating leverage

Viva Leisure, an Australian fitness operator, announced its FY2026 full-year results on August 19, 2026, highlighting a notable surge in profits propelled by operating leverage instead of aggressive expansion. The company declared its first-ever dividend and saw its shares rise 10.25%, reaching $1.56, nearing the top of its 52-week range of $1.305 to $1.875.

Viva shifted its focus from rapid growth to network optimization, adding just three net new corporate locations while still increasing membership by over 17,000 members. This strategic move allowed the company to generate substantial profit growth with minimal capital investment. Viva surpassed all five guidance metrics in FY2026, with remarkable profit growth outpacing revenue gains.

Revenue increased by 12.2% to $237.1 million from $211.3 million in FY2025, marking the seventh consecutive year of growth. However, the bottom line was where Viva excelled, with underlying net profit after tax increasing by 46.4% to $18.9 million and statutory net profit after tax rising 144.5% to $12.8 million. The company's EBITDA grew by 13.3% to $112.3 million, and the EBITDA margin expanded by 50 basis points to 47.4%, demonstrating that cost growth remained below revenue growth.

The company generated $35.1 million in adjusted free cash flow, fully funding its $31.3 million growth investment program while reducing net leverage from 2.04 times to 1.77 times. CEO Harry Konstantinou emphasized the company's dynamic, stating that revenue grew 12.2%, costs grew by 10.2%, EBITDA expanded by 32.0%, underlying NPAT grew by 46%, adjusted free cash flow reached $35.1 million, and leverage decreased to 1.77 times.

The company's core story for FY2026 was operating leverage, with earnings growing much faster than revenue. Revenue increased by 12.2%, costs grew by 10.2%, EBITDA margin expanded by 50 basis points, underlying NPAT grew by 46%, and EPS surged by 150.6%. The company's operational improvements allowed for significant headroom in its existing estate, with 51 cents of every incremental revenue dollar becoming EBITDA.