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    LTH
    Earnings call· Mar 2026(Q1 FY26)

    Life Time Group Holdings Q1 FY26 earnings call LTH

    May 5, 2026 Source

    Executive summary

    Life Time Group Holdings, Inc. Q1 FY26 — Strong Revenue Growth and Margin Expansion Driven by Membership Mix Optimization

    Life Time Group Holdings delivered a strong Q1 FY26, driven by robust revenue growth and significant margin expansion. The company's strategic focus on optimizing membership mix, prioritizing higher-dues members, and enhancing in-center business utilization continues to yield positive financial results. Management remains confident in its ability to generate growing positive free cash flow and expand its real estate portfolio value, while also exploring capital return to shareholders.

    Highlights

    5

    • Total revenue increased 11.7% to $789 million in Q1 FY26.

    • Comparable center revenue grew 8.6% in Q1 FY26, slightly above expectations.

    • Adjusted EBITDA increased 18.3% to $227 million in Q1 FY26, with margin improving 160 basis points to 28.7%.

    • Adjusted net income was $96 million in Q1 FY26, up 27.4% year-over-year.

    • Net cash provided by operating activities increased 8% to $199 million in Q1 FY26.

    Concerns

    3

    • Volume contributed a negative 0.2% to comparable center growth in Q1 FY26 due to reduction in qualified medical memberships.

    • Qualified medical memberships declined by approximately 15,000, down 14.9% year-over-year in Q1 FY26.

    • Total center membership growth is expected to be 0.5% to 1% in Q2 FY26 due to continued reductions in qualified medical memberships.

    Guidance & targets

    12
    CategoryTargetConfidence
    Qualified medical memberships as % of total dues revenue
    approximately 3%
    medium materiality
    High
    Total center membership growth
    0.5% to 1%
    medium materiality
    High
    Total center membership growth
    1% to 1.5%
    medium materiality
    High
    Total center membership growth
    2% to 3%
    medium materiality
    High
    Membership growth excluding qualified medical memberships
    3.5% to 3.8%
    high materiality
    High
    Membership growth excluding qualified medical memberships
    4% to 5%
    high materiality
    High
    Membership growth excluding qualified medical memberships
    4% to 5%
    high materiality
    High
    Revenue growth
    10% to 12%
    high materiality
    High
    Adjusted EBITDA margin
    28%
    high materiality
    High
    Sale-leaseback proceeds
    approximately $400 million
    medium materiality
    High
    Free cash flow
    growing positive free cash flow each year
    high materiality
    High
    Free cash flow
    more than $400 million
    high materiality
    High

    Operational metrics

    28
    Total revenue
    $789 millionincreased 11.7%
    Q1 FY26

    Driven by continued strength and performance across the portfolio.

    Dues revenue growth
    11.9%
    Q1 FY26

    Resulting from strategic membership mix management.

    Adjusted EBITDA
    $227 millionincrease of 18.3%
    Q1 FY26

    Over the prior year quarter.

    Adjusted EBITDA margin
    28.7%improved by 160 basis points
    Q1 FY26

    Primary factors for margin expansion.

    Adjusted Net Income
    $96 millionup 27.4% year-over-year
    Q1 FY26

    Excludes tax-affected impact of items like share-based compensation.

    Net cash provided by operating activities
    $199 millionapproximately 8% higher
    Q1 FY26

    Compared to the prior year quarter.

    Total capital expenditures
    $260 millionup 82% from the prior year
    Q1 FY26

    Reflecting construction activity for 2026 and 2027 club openings.

    Sale-leaseback proceeds
    $200 million
    April 2026

    Closed in April 2026.

    Net income
    $88 millionincrease of 15.8% year-over-year
    Q1 FY26

    Includes approximately $8 million of net tax affected items excluded from adjusted net income.

    Average monthly dues
    $230up approximately 10.5% year-over-year
    Q1 FY26

    Driven primarily by positive membership mix trends and pricing strategy.

    Average revenue per center membership
    $930up 10.2% year-over-year
    Q1 FY26

    Reflects increased utilization and pricing.

    Center memberships
    838,0001.4% growth
    end of Q1 FY26

    Total center memberships at quarter end.

    Qualified medical memberships as % of total dues revenue
    3.4%
    Q1 FY26

    These memberships have significantly lower average dues.

    Qualified medical memberships
    15,000declined by approximately 15,000, down 14.9% year-over-year
    Q1 FY26

    Strategic reduction of these lower-dues memberships.

    Other memberships
    27,000grew by approximately $27,000, up 3.7% year-over-year
    Q1 FY26

    Growth in all memberships excluding qualified medical memberships.

    Net debt to adjusted EBITDA
    significantly below my maximum target of 2x debt to EBITDA
    Q1 FY26

    Indicates strong financial position and flexibility.

    Revolver balance
    zero
    Q1 FY26

    Indicates available liquidity.

    Fee-owned sellable assets built annually
    more than $400 million, $500 million, $600 million
    Annually

    Represents additional liquidity and value creation.

    Share buyback authorization
    $500 million
    Current

    Available for opportunistic share repurchases.

    Dynamic Personal Training (DPT) trainers growth
    up low double digits
    Q1 FY26

    Reflects increased demand and ability to serve it.

    Dynamic Personal Training (DPT) new business growth
    up even more
    Q1 FY26

    Indicates strong demand for DPT services.

    Memberships per club
    4,400
    Current

    Reflects intentional strategy of fewer members for better experience and higher revenue.

    On hold memberships
    declined 23%
    YoY

    Management noted the decline was small in absolute terms (approx. 3,000) and not indicative of a trend.

    Lacy subscribers growth
    100,000additional
    monthly

    Growth in subscribers for the AI companion app.

    Comparable center revenue growth from membership mix
    3.5%
    Q1 FY26

    Includes changes in membership types and replacement of lower dues memberships.

    Comparable center revenue growth from price
    3%
    Q1 FY26

    Includes legacy membership dues increases and new join price changes.

    Comparable center revenue growth from in-center businesses
    2.3%
    Q1 FY26

    Due to continued strength in utilization, particularly dynamic personal training.

    Comparable center revenue growth from volume
    negative 0.2%
    Q1 FY26

    Driven by a reduction in qualified medical memberships.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps8.6%%
    Net unit growth development pipeline5clubs

    Product announcements

    5
    ProductTypeDetails
    CTR (Cycle, Tone, Restore)expansion
    Hybrid XTlaunch
    Dynamic Stretchexpansion
    Lifetime Health and Wellness Hubroadmap
    MIORAroadmap

    Risks & headwinds

    3
    Reduction in qualified medical memberships impacting total membership volumeQ1 FY26, full year FY26

    Qualified medical memberships declined by approximately 15,000, down 14.9% YoY in Q1 FY26. Expected to be ~3% of total dues revenue by year-end.

    Mitigation: Strategic decision to limit these lower-dues memberships to optimize membership mix and focus on higher-value members, leading to higher average dues and revenue quality.

    Preopening expenses and early operating ramp impact on margin for new clubsMajority of clubs opening in H2 FY26

    Included in the updated full-year adjusted EBITDA margin guidance of 28%.

    Mitigation: Clubs are performing well, with many starting contribution margin positive in the second month, mitigating the overall margin impact.

    Broader macroeconomic environment impact on consumer spendingCurrent

    Zero impact seen as of Q1 FY26.

    Mitigation: Strong demand for clubs, high waitlists for new clubs, and robust in-center business performance, particularly from less price-sensitive customers.

    What to watch in Q2 FY26

    5

    Total center membership growth

    Q2 FY26
    Current1.4% growth (Q1 FY26)
    Target0.5% to 1% growth

    Why it matters

    Indicates the impact of the strategic reduction in qualified medical memberships on overall member count.

    Due to further year-over-year reductions in qualified medical memberships, we expect total center membership growth of 0.5% to 1% in the second quarter

    Q&A highlights

    5

    Inquiring about the outlook for club openings beyond 2027 and the potential for takeovers, as well as the overall whitespace opportunity for new clubs.

    Bahram Akradi stated that the market is incredibly exciting, with strong performance from both urban and suburban clubs. He emphasized that the company is not concerned about running out of opportunities, with the North American whitespace being enormous and potentially exceeding 450-500 locations. He also highlighted the strong cash-on-cash returns regardless of the development model (lease or sale-leaseback).

    “I don't think we are concerned about running even -- we do 14 clubs a year. I don't see when we're going to get to the point where we have a hard time. And we have been looking at so much opportunity in the United States that, that always makes us ponder taking the time to engage in all the requests to go 10 hours, 20 hours, 30 hours away on an airplane to get to the international demand that there is for our brand.”

    asked by John Heinbockel · answered by Bahram Akradi

    2 min read5 chapters

    Detailed Narrative

    01

    Membership Strategy & Mix Optimization

    Life Time is actively managing its membership mix, strategically limiting lower-dues qualified medical memberships in favor of higher-dues members. This strategy has resulted in a 3.5% contribution to comparable center revenue growth and a 10.5% increase in average monthly dues to $230. The company aims for qualified medical memberships to represent approximately 3% of total dues revenue by year-end, down from 3.4% in Q1 FY26, signaling a continued focus on revenue quality over raw volume.

    02

    Real Estate & Expansion Outlook

    The company maintains a robust real estate pipeline, with 5 of 14 planned clubs opened in 2026, and construction started for 2027 and some 2028 openings. Management sees enormous opportunity in North America, with no concerns about running out of sites for urban, semi-urban, or suburban clubs, and believes the total whitespace opportunity could exceed 450-500 locations. New clubs, particularly in suburban areas, are showing the best results in years, with strong cash-on-cash returns.

    03

    Capital Allocation & Free Cash Flow Generation

    Life Time closed $200 million in sale-leaseback transactions in April and raised its full-year target to $400 million, supporting its goal of generating annual positive free cash flow. The company expects to deliver growing positive free cash flow each year, reaching over $400 million by 2030, while maintaining a strong balance sheet with low leverage and a zero balance on its revolver. This strategy allows for continued investment in existing clubs, new club openings, and potential capital return to shareholders.

    04

    In-Center Business Performance & DPT Growth

    Dynamic Personal Training (DPT) continues to be a significant driver of in-center business growth, contributing 2.3% to comparable center revenue. The company is experiencing increased demand for DPT, with trainers up low double digits and new business up even more. This success is attributed to the brand's positioning as an 'acolyte country club,' attracting less price-sensitive customers who are more likely to engage with in-center services.

    05

    Innovation & Future Product Offerings

    Life Time is actively developing new programs and services, including CTR (currently in 30-50 locations), Hybrid XT, and Dynamic Stretch. The company is also building a 'Lifetime Health and Wellness Hub' to provide guidance from registered dietitians and is exploring the potential of MIORA (hormone replacement therapy) for broader rollout. These innovations aim to enhance member experience and adapt to evolving customer needs, with a focus on fine-tuning the customer journey before rapid expansion.

    AI-generated summary of the company’s earnings call. Not investment advice.