Life Time Group Holdings (LTH) Q2 FY26 earnings call: guidance and Q&A

Asked about the 55% flow-through of guidance upside to EBITDA, the impact of 14 club openings, and revenue per member dynamics for next year's ramp.

Management confirmed the 14 club openings have a greater impact on next year's numbers due to late 2026 openings. They expressed confidence in continued strong growth and a robust pipeline, but declined to provide specific 2027 guidance, stating everything is trending positively.

“The impact of this certainty of the 14 clubs is actually more on the next year than this year because they're opening so late into 2026 that they really don't have material impact on our numbers for this year.”

asked by Arpine Kocharyan · answered by Bahram Akradi

Inquired about the penetration and awareness of in-center services like DPT and spa, and what factors might limit expansion beyond 14 clubs per year.

Management clarified that DPT penetration is consistent and effective, with high trainer productivity. They noted significant real estate opportunities, including large projects and office buildings, but stated 14 clubs per year is the current limit, while exploring ways for bigger development rollouts.

“We have tremendous amount of opportunity more than -- like I said earlier, more than I have ever seen before. There is more developers, more large projects, more office buildings that they're reaching to us and they want to have the Life Time brand, not just the fitness center, the Life Time Athletic Country Club, coupled with Life Time Living or their development.”

asked by John Heinbockel · answered by Bahram Akradi

Asked about the margin impact of Q4 club openings, potential changes in opening cadence for next year, and how the company plans to utilize increasing cash flow (self-funding, buybacks, M&A) in the next 3-5 years.

Erik confirmed a small margin impact from Q4 openings but noted overall margin increase. Bahram stated commitment to current sale-leaseback targets and evaluating options for future cash flow, focusing on WACC and ROIC, but not changing strategy for now.

“We are going to stay disciplined to deliver what we say we do. We've committed to doing $400 million of sale leaseback this year. So we're going to first and foremost deliver that.”

asked by Randal Konik · answered by Bahram Akradi

Inquired about the white space opportunity and financial contribution of MIORA, and the strategy for qualified medical membership contract renewals at the end of 2026.

Bahram stated MIORA is in incubation, focusing on perfecting the customer journey before a rapid rollout, as current locations are not material. For qualified medical memberships, discussions are ongoing with partners to gradually reduce their percentage of total membership, making them less significant over time.

“Our full intention is to roll out MIORA extremely robustly. But what I believe we need to do is we need to perfect the model and then roll out extremely fast and aggressively once we have a model that doesn't -- our clubs when we open, they open right now with a wait list, they open contribution margin positive in the second month, the third month.”

asked by Molly Baum · answered by Bahram Akradi

Asked about the cadence of the 9% comp center revenue growth, assumptions for back-half deceleration, and the growth prospects and margins of LT Games and other events.

Erik explained that while Q2 saw acceleration, some deceleration is normal due to seasonality, and the updated full-year guidance midpoint of 8.1% is still strong. Bahram highlighted LT Games and Hybrid XT as complementary drivers, with LT Games having long-term spectator potential, and noted additional capital deployment for these growth initiatives.

“The big thing to keep in mind is a lot of this is in-center business growth, right? And so as we're projecting the year, if you look at the midpoint of our updated guidance, that's still 8.1%.”

asked by Anthony Bonadio · answered by Erik Weaver

Inquired about the company's perspective on the broader supplement space, particularly peptides, and any near-term plans for app monetization.

Bahram confirmed active study and testing of peptides, seeing it as a substantial growth area to be integrated through MIORA, but cautioned on its newness. He stated app monetization is not a current focus; technology efforts are directed at enhancing in-club member experience, as digital subscriptions have high attrition.

“It's definitely -- most definitely a space that is going to continue to grow. It's going to grow substantially. We're going to play a big role in it within our facilities through MIORA and different forms to rolling that out.”

asked by Chris Woronka · answered by Bahram Akradi

Asked about the current penetration of CTR and Hybrid XT across centers and the remaining room for additional club rollout.

Bahram stated Hybrid XT is very new, in under 20 clubs, while CTR aims for 60 locations by year-end. He expects CTR to eventually be in 80-90% of clubs, with additional growth capital allocated for its rollout, noting high demand and waitlists.

“Hybrid XT is extremely new. It's just rolling out. It's in really -- I mean, it's being executed to some level, but not to the way that we actually want to call it branded programming, maybe about under 20. And I think the -- our goal is to get to about 60 locations on CTR by the end of the year.”

asked by Owen Rickert · answered by Bahram Akradi