Holmes Place: Icon Is Adding Volume, but Is It Yet Earning Like a Mature Chain?
Icon ended 2025 with more members, more clubs and higher revenue, but segment profit fell and margins compressed. This follow-up isolates the low-cost engine to ask whether Icon is already behaving like a mature chain, or still like a volume engine that needs more time and cost to mature.
What This Follow-Up Is Testing
The main article already established that Holmes Place cannot be read in 2025 through EBITDA alone. This follow-up isolates Icon, because that is where the sharpest gap sits between the growth narrative and the quality of earnings. On the surface, everything looks fine: more clubs, more members, more revenue, and even slightly better churn. But that is not the full story.
The real question is whether Icon has already crossed the line from a chain that adds volume into a chain that earns like a mature network. The 2025 answer is still no. The segment added members and lifted revenue, but segment operating profit fell sharply, and in the fourth quarter even segment EBITDA declined despite double-digit revenue growth.
That matters now for a simple reason: the company had 44 Icon clubs at the end of 2025, 46 by the report date, and says it intends to expand the network by at least 20 more clubs. Once the pipeline is still open, the question is no longer whether there is demand for low-cost fitness. The question is whether each new club is entering a network that already earns like a mature chain, or one that is still chasing maturity.
| Icon metric | 2024 | 2025 | Change | What it means |
|---|---|---|---|---|
| Average members | 79,617 | 84,970 | 6.7%+ | Volume is rising |
| Year-end club count | 38 | 44 | 15.8%+ | The network is expanding fast |
| Revenue | ILS 153.9 million | ILS 164.1 million | 6.7%+ | Top-line growth continues |
| Operating profit | ILS 31.2 million | ILS 24.2 million | 22.2%- | Earnings are weakening despite growth |
| Operating margin | 20.2% | 14.8% | down 5.5 points | The engine is getting less efficient |
| Average monthly revenue per member | ILS 161 | ILS 161 | unchanged | No real pricing improvement |
| Average monthly churn | 6.4% | 6.1% | slight improvement | The issue is not weak demand |
The Number That Does Not Fit
The cleanest way to see the problem is not through club count, but through the profit generated per average member. In 2024, Icon produced roughly ILS 32.6 per month of operating profit for each average member. In 2025, that figure fell to ILS 23.8. Even after the network got larger, each average member contributed less to segment earnings.
That is hard to explain away as just another growth year. If Icon were already operating like a mature chain, expansion should at least preserve profit per member, and maybe even improve it through broader scale, more efficient media buying and better absorption of fixed costs. The opposite happened.
Year-end data offer a two-sided clue. Icon ended 2025 with 93,917 members, 10.5% above the annual average base of 84,970. That means the business enters 2026 with a higher volume base than the one reflected in the 2025 average. That is the positive side. The other side is that this larger base still did not produce stronger earnings in 2025, so 2026 has to prove that it can mature, not merely register new members.
When the Commercial Model Drives Volume, Not Yet Mature Profit
The company describes Icon as a format built on low pricing, smaller footprints, lower staffing needs and heavier use of technology. That is exactly the formula that should allow a low-cost chain to scale without losing its economics. The fourth-quarter numbers show that in 2025 this has not happened yet.
In the fourth quarter, Icon revenue rose 11.0% to ILS 42.9 million. That is the easy part to read. But club operating costs excluding depreciation rose 17.5% to ILS 31.1 million, and segment EBITDA fell 3.3% to ILS 11.8 million. Put plainly, Icon sold more, but each extra shekel of revenue came with too much extra cost.
A per-member view tells the same story. In the fourth quarter, monthly revenue per average member improved to ILS 167.8 from ILS 160.4. That looks constructive. But monthly operating cost per average member climbed to ILS 121.8 from ILS 109.9, so monthly EBITDA per average member fell to ILS 46.0 from ILS 50.4. Even when the average customer brought in a bit more revenue, cost rose faster.
That is why it is not enough to say revenue is growing, so the openings must be working. They are working at the entry point into the system. They have not yet proven that they work at the level of earnings retained.
The Best Benchmark Sits Inside the Same Company
The best way to test whether Icon is already mature is not against outside peers, but against the mature network already sitting inside the same group. Here the gap is obvious.
The Holmes Place segment ended 2025 with ILS 424.4 million of revenue and ILS 74.0 million of operating profit, versus ILS 398.4 million and ILS 62.4 million in 2024. Segment profit in the mature network rose 18.7%, and its operating margin improved to 17.4% from 15.7%. In the same year, Icon went in the opposite direction: revenue rose, but segment profit fell and margin compressed to 14.8% from 20.2%.
That is an especially sharp point, because in 2024 Icon was still more profitable than the premium segment on an operating-margin basis. By 2025 it had dropped below it. The gap did not just fail to close. It reversed.
The segment bridge makes the same point. Holmes Place added roughly ILS 11.6 million of operating profit in 2025. Icon removed ILS 6.9 million. So the entire segment-level earnings improvement in the group came from premium, not from low cost. That is exactly why the market cannot stop at the headline that Icon opened more clubs.
Pricing, Contracts and Future Revenue Do Not Solve It
Commercially, Icon is doing many things right. Most plans are priced between ILS 99 and ILS 209 per month, there is a multi-club plan at ILS 459, and in 2024 the company also launched Pilates reformer plans at around ILS 300 and ILS 430 per month. That gives the chain a broader pricing ladder and lets it acquire a customer at a low price point and then widen the basket.
But there is also a built-in limitation. Roughly half of customer contracts run for five years, and yet all membership plans can be cancelled, some with notice and some with cancellation fees. So even when Icon shows ILS 56.7 million of future revenue from signed but not yet consumed contracts, the company itself says there is no binding backlog here.
The implication is clear: there is signed volume, but not hard certainty. That is not unusual for the fitness industry, but it is exactly why a mature chain has to prove maturity through margin and cost discipline, not through nominal contract numbers.
Openings and Acquisitions Expand the Perimeter, Not the Proof of Maturity
Another common mistake is to explain all of the margin pressure as simply the result of a younger network. It is a convenient explanation, but not a sufficient one. Icon had 6 ramp-up clubs at the end of 2024 and also 6 at the end of 2025, even though the network itself grew from 38 to 44 clubs. So the year-end network is bigger, but not necessarily younger in the same proportion. It is too easy to blame the entire margin decline only on a still-young estate.
At the same time, 2025 also included growth through acquisitions. The Pitland activity in Netivot was acquired for ILS 2.336 million, with around 1,000 members, and became Icon Netivot. In the Revo Fitness deal, the company agreed total consideration of up to ILS 15.3 million for 51% of a Pilates reformer operator with around 13 active branches, some franchised. That purchase created ILS 2.867 million of identifiable intangible assets and ILS 13.982 million of goodwill.
These transactions are not negative in themselves. They widen the platform and add new options. But they also mean that part of 2025 growth came with integration, assumptions about future earnings and accounting goodwill, not only with deeper monetization of a seasoned Icon network. They add scale, not proof that unit economics have already stabilized.
What Has to Change Next
First test: Icon has to show that segment revenue is growing faster than club operating costs excluding depreciation. More revenue on its own is not enough.
Second test: profit per member has to stop falling. As long as Icon generates less monthly profit from each average member, it is hard to call it a mature chain even if club count keeps rising.
Third test: the gap between 93,917 members at year-end and 84,970 average members during the year has to start working in favor of 2026. If that higher base does not convert into better profit, it will be harder to argue that the issue is only timing.
Fourth test: new openings and acquisitions need to start showing up as added profitability, not only as added volume. As long as Icon keeps expanding while premium is the segment carrying group earnings improvement, the maturity question remains open.
Conclusion
Icon is definitely adding volume. In 2025 it added members, added clubs, improved churn slightly and kept widening the offer. But the metric that matters most for this question went backward: profit generated per average member fell, and segment profitability weakened in exactly the year when the network was supposed to start benefiting from scale.
So the 2025 answer to the headline question is still no. Icon already looks like a large chain. It is not yet earning like a mature one.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.