Asked about the current penetration of DPT, future opportunities, and how CapEx for 2026 relates to clubs opening beyond the current year.

Bahram Akradi praised the DPT team and noted increased demand, especially from less price-sensitive members attracted by the brand's positioning. Erik Weaver clarified that roughly half of the growth CapEx is for clubs opening in 2026, and the other half is for clubs planned for 2027 and beyond, reflecting the long development cycle. “It's roughly half and half, about half of the capital that we are -- we launched this year as a new club growth CapEx, half of it was the clubs are opening in 2026 and half are the clubs that they're starting -- we have already started construction. We bought the land for -- mostly for '27 and some of the '28 even.”

Inquired about the drivers of the healthy flow-through from revenue upside and the company's updated views on member growth in light of revenue optimization versus volume chasing, and thoughts on opportunistic share buybacks.

Erik Weaver attributed flow-through to strong dues and DPT performance. Bahram Akradi emphasized prioritizing revenue quality, membership quality, and in-center business retention over raw volume. For buybacks, Bahram stated they would use the $500 million authorization opportunistically when the stock is below fair value. “We are really prioritizing revenue, quality of that revenue, quality of membership, the ability to do in-center business retention, we prioritize those, and of course, all of that results in the EBITDA pass-through.”

Asked about the importance of 'membership per club' in underwriting new clubs versus other metrics like dues, ancillary revenue, and engagement, and an update on app monetization initiatives.

Bahram Akradi clarified that 'members per club' is not the most important metric; rather, it's the rate of return on investment, revenue, and contribution margin. He explained that they intentionally target fewer members per club at higher price points to ensure a better experience and higher revenue/margin. App monetization is not a near-term focus, with the 'Lacy' AI companion focused on enhancing the in-club experience and navigation. “So what's happening is we are -- the way we have our position, the demand for our business and the amount of people in a wait list, we generally end up launching a club at a higher price than we had initially in the business plan. Therefore, it's just an easy mathematics. It's fewer memberships, but we end up with better revenue, better margin, better results, better experience.”

LTH

Life Time Group Holdings (LTH) Q1 FY26 earnings call: guidance and Q&A

Q: 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.”

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· May 5, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Qualified medical memberships as % of total dues revenue	approximately 3% medium materiality	FY26	High
Total center membership growth	0.5% to 1% medium materiality	Q2 · FY26	High
Total center membership growth	1% to 1.5% medium materiality	Q3 · FY26	High
Total center membership growth	2% to 3% medium materiality	Q4 · FY26	High
Membership growth excluding qualified medical memberships	3.5% to 3.8% high materiality	Q2 · FY26	High
Membership growth excluding qualified medical memberships	4% to 5% high materiality	Q3 · FY26	High
Membership growth excluding qualified medical memberships	4% to 5% high materiality	Q4 · FY26	High
Revenue growth	10% to 12% high materiality	Each quarter and full year FY26	High
Adjusted EBITDA margin	28% high materiality	Full year FY26	High
Sale-leaseback proceeds	approximately $400 million medium materiality	Full year FY26	High
Free cash flow	growing positive free cash flow each year high materiality	Annually, ongoing	High
Free cash flow	more than $400 million high materiality	FY30	High

LTH operating KPIs by quarter

LTH operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Average monthly dues	$223 Average monthly dues were $223, up approximately 10.8% from the fourth quarter of last year, and average revenue per center membership was $882, up 10.8% from the prior year quarter. Source: earnings call transcript	$230 Average monthly dues were $230, up approximately 10.5% year-over-year, and average revenue per center membership was $930, up 10.2% year-over-year. Source: earnings call transcript	$245 Average monthly dues were $245, up approximately 12.3% year-over-year, and average revenue per center membership was $993, up 11.8% year-over-year. Source: earnings call transcript	+6.5%
Paid subscription members Center memberships	822K+ We ended the year with over 822,000 center memberships. Source: earnings call transcript	<838K We ended the quarter with nearly 838,000 center memberships, which reflects 1.4% growth. Source: earnings call transcript	~860K We ended the quarter with approximately 860,000 center memberships, which reflects 1.2% year-over-year growth. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
CTR (Cycle, Tone, Restore)	expansion	ongoing rollout
Hybrid XT	launch	infancy
Dynamic Stretch	expansion	ongoing
Lifetime Health and Wellness Hub	roadmap	ongoing development
MIORA	roadmap	next 12 to 24 months for faster rollout

Risks & headwinds

Reduction in qualified medical memberships impacting total membership volume Q1 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 clubs Majority 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 spending Current

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

Total center membership growth

Q2 FY26

Current 1.4% growth (Q1 FY26)

Target 0.5% 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

Find out whether LTH delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.