Subscription required
Buy this article
Unlock credits cost: 2
Available credits: N/A
The third quarter of 2025 shows that Soho House maintains sustainable growth, with revenues increasing by 11% and adjusted EBITDA of $53.8 million, thanks primarily to the strong performance of its premium membership and strategic investment in new clubs and experiences. At the same time, the net loss highlights the pressure from currency fluctuations and expansion-related costs, factors that will influence profitability in the coming quarters.
Soho House & Co Inc. (NYSE: SHCO) has released its financial results for the third quarter of fiscal year 2025, showing sustained growth in revenue and adjusted EBITDA, despite posting a net loss attributable to non-recurring factors. This analysis breaks down the main financial metrics, assessing the company’s health and highlighting areas of strength and potential risks.
1. Key results summary
Third-quarter results reflect solid revenue growth, driven primarily by the expansion of premium membership and increased revenue from leisure and hospitality experiences. The key data points are presented below:
| Item | Q3 2025 (USD M) | Q3 2024 (USD M) | Change % |
|---|---|---|---|
| Total revenue | 370.8 | 333.4 | +11.2% |
| Membership revenue | 122.7 | 107.4 | +14.3% |
| Hotel revenue | 126.1 | 120.7 | +4.5% |
| Other revenue | 122.0 | 105.3 | +15.8% |
| Adjusted EBITDA | 53.8 | 48.3 | +11.5% |
| Adjusted EBITDA margin | 15% | 14% | +1 pp |
| Net loss attributable | (18.7) | 0.2 | — |
Our Analysis:
- The company maintains solid revenue and adjusted EBITDA growth (+11%), indicating operational efficiency before non-recurring impacts and currency fluctuations.
- The net loss of USD 18.7 million primarily reflects non-cash foreign exchange losses of USD 14 million and other extraordinary expenses, rather than recurring operational weakness.
2. Membership and revenue generation trends
Membership remains at the core of Soho House’s business model. Growth in the premium segment offsets the decline in other segments such as Soho Friends and Soho Works.
| Segment | Members Q3 2025 | Members Q3 2024 | Change % |
|---|---|---|---|
| Soho House | 213,830 | 208,078 | +2.8% |
| Other (Soho Friends + Soho Works) | 55,776 | 59,416 | -6.1% |
| Total members | 269,606 | 267,494 | +0.8% |
My View Based on the Data:
- Soho House premium membership maintains sustained growth, correlated with the increase in membership revenue (+14.3%).
- The decline in membership in secondary segments could reflect a strategy prioritizing the core segment or lower retention in lower-margin segments.
- Hotel RevPAR is up 2% year-over-year, showing a moderate recovery in accommodations and good utilization of the hotel asset portfolio.
3. Operational efficiency and profitability
Operational efficiency is reflected in the growth of adjusted EBITDA, although operating expenses are increasing due to club expansion and renovations:
| Item | Q3 2025 (USD M) | Q3 2024 (USD M) | Change % |
|---|---|---|---|
| In-house operating expenses | 172.2 | 158.8 | +8.4% |
| Other operating expenses | 95.1 | 86.7 | +9.7% |
| G&A expenses | 48.2 | 39.7 | +21.5% |
| Depreciation & amortisation | 26.6 | 26.0 | +2.4% |
| Total expenses | 376.8 | 295.5 | +27.5% |
| Operating result | (6.0) | 37.9 | — |
What we can observe from this table:
- A notable increase in G&A and other operating expenses reflects investment in facility expansion, club improvements, and member experience enhancements.
- Despite the operating loss, the positive and growing adjusted EBITDA indicates that the company continues to generate cash before non-recurring items and currency fluctuations.
4. Balance sheet: Liquidity, assets, and leverage
Soho House demonstrates a strong asset position with strategic investments in properties and operating leases, while maintaining sufficient liquidity:
| Item | 28 Sept 2025 (USD M) | 29 Dec 2024 (USD M) | Change % |
|---|---|---|---|
| Current assets | 405.2 | 388.4 | +4.3% |
| Cash & equivalents | 142.5 | 152.7 | -6.7% |
| Property, plant & equipment (net) | 725.0 | 598.3 | +21.2% |
| Operating lease assets | 1,176.6 | 1,135.8 | +3.6% |
| Total assets | 2,684.2 | 2,443.5 | +9.8% |
| Current liabilities | 564.6 | 474.2 | +19.1% |
| Total net debt | 704.0 | 656.9 | +7.1% |
| Total liabilities | 3,033.1 | 2,773.0 | +9.4% |
My analysis based on the data:
- Stable liquidity, with cash close to USD 150 million, sufficient for operations and expansion.
- Growth in PPE and lease assets reflects investment in club expansion, renovations, and new concepts.
- Leverage is under control, although debt exceeds available cash, requiring attention to liability and cash flow management.
5. Cash flow and investment capacity
Operating cash flow generation remains strong, allowing for the financing of investments and strategic expansion:
| Item | 39 weeks 2025 (USD M) | 39 weeks 2024 (USD M) | Change % |
|---|---|---|---|
| Operating cash flow | 98.8 | 62.8 | +57% |
| CAPEX | (75.3) | (55.8) | +35% |
| Net investing cash flow | (101.9) | (57.4) | +77% |
My analysis:
- Operating cash flow generation is growing significantly, demonstrating operational efficiency and the ability to self-finance strategic investments.
- High CAPEX reflects the commitment to the premium experience, renovations, and international expansion, justifying the increase in operating expenses and debt.
6. My conclusions based on the financial analysis we have accessed at Discernin
Strengths:
- Consistent revenue and adjusted EBITDA growth.
- Strategic expansion and focus on Soho House premium membership, generating greater loyalty and margin.
- Solid operating cash flow generation, allowing for CAPEX financing without compromising immediate liquidity.
Areas for improvement:
- Net loss attributable to non-monetary foreign exchange losses and financial expenses, which should be monitored in the coming quarters.
- Decreased membership in secondary segments (Soho Friends and Soho Works) could affect future revenue if retention is not corrected or the strategy is not adjusted.
- Negative operating margin indicates pressure on operational efficiency in certain segments, despite positive EBITDA.
Outlook: Soho House continues its trajectory of sustainable growth, with strategic investment in high-value assets and a premium experience. The main challenge will be managing the financial risks arising from debt and currency fluctuations, while maintaining healthy operating margins in a context of international expansion.
