Skip to content
    LTH
    Earnings call· Jun 2026(Q2 FY26)

    Life Time Group Holdings Q2 FY26 earnings call LTH

    Jul 30, 2026 Source

    Executive summary

    Life Time Group Holdings, Inc. Q2 FY26 — Strong Revenue and Profit Growth Driven by Membership Mix and In-Center Businesses

    Life Time Group Holdings delivered a strong Q2 FY26, marked by robust revenue and profit growth, largely attributed to an improved membership mix and accelerated in-center business performance. The company is strategically managing its membership base and expanding its offerings with new programs like CTR and Hybrid XT, which are seeing high demand. A significant club expansion pipeline is underway, supported by strong cash flow and strategic sale-leaseback transactions, positioning the company for continued growth while maintaining financial discipline.

    Highlights

    5

    • Total revenue increased 13.7% to $866 million, driven by strong club performance.

    • Comparable center revenue grew 9.1%, exceeding expectations due to membership acquisition and in-center business performance.

    • Adjusted EBITDA increased 16.8% to $246.5 million, with adjusted EBITDA margin improving 80 basis points to 28.5%.

    • Adjusted net income was $109.8 million, up 30.6% year-over-year.

    • Full-year comparable center revenue guidance was raised to 7.9%-8.3% from 6.9%-7.5%.

    Concerns

    2

    • Qualified medical memberships declined by approximately 20,600, down 18.9% year-over-year, as part of a strategic shift.

    • The opening of 7 new clubs in Q4 is expected to have a small impact on margin due to preopening expenses and early operating ramp.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full year comparable center revenue growth
    7.9% to 8.3%
    high materiality
    High
    Full year revenue
    Increased
    high materiality
    High
    Full year net income
    Increased
    high materiality
    High
    Full year adjusted EBITDA
    Increased
    high materiality
    High
    Full year adjusted EBITDA margin
    28.2% (midpoint)
    high materiality
    High
    Total center membership growth
    1% to 1.5%
    medium materiality
    High
    Total center membership growth
    2% to 3%
    medium materiality
    High
    Center membership growth (excluding qualified medical)
    4% to 5%
    medium materiality
    High
    Center membership growth (excluding qualified medical)
    4% to 5%
    medium materiality
    High
    New club openings
    14 clubs
    high materiality
    High
    New club openings
    12 to 14 new clubs
    high materiality
    High
    Sale-leaseback proceeds
    $400 million
    medium materiality
    High

    Operational metrics

    33
    Total revenue
    $866 million13.7% higher YoY
    Q2 FY26

    Driven by continued strength in performance across clubs, including higher dues revenue and strong utilization of in-center businesses.

    Comparable center revenue growth
    9.1%
    Q2 FY26

    Above expectations, driven by outperformance in membership acquisition and in-center business performance.

    Comparable center revenue growth (membership mix contribution)
    3.1%
    Q2 FY26

    Component of total comparable center revenue growth.

    Comparable center revenue growth (price contribution)
    2.9%
    Q2 FY26

    Component of total comparable center revenue growth.

    Comparable center revenue growth (in-center businesses contribution)
    2.9%
    Q2 FY26

    Component of total comparable center revenue growth, largely driven by double-digit YoY growth in dynamic personal training and Life Spa.

    Comparable center revenue growth (volume contribution)
    0.2%
    Q2 FY26

    Component of total comparable center revenue growth.

    Average monthly dues
    $24512.3% YoY
    Q2 FY26

    Driven primarily by positive membership mix trends and execution of pricing strategy.

    Average revenue per center membership
    $99311.8% YoY
    Q2 FY26

    Reflects overall revenue generation per membership unit.

    Center memberships
    860,0001.2% YoY growth
    Q2 FY26

    Total center memberships at quarter end.

    Qualified medical memberships
    20,60018.9% YoY decline
    Q2 FY26

    Decline due to strategic management of membership mix, limiting third-party medical insurance providers.

    All other memberships
    30,9004.2% YoY growth
    Q2 FY26

    Growth in memberships excluding qualified medical memberships.

    Total dues revenue growth
    13.3%YoY
    Q2 FY26

    Reflects the success of the strategic membership mix management.

    Net income
    $101.4 million40.6% YoY increase
    Q2 FY26

    Includes $8.5 million of net tax-affected items excluded from adjusted net income.

    Net tax-affected items excluded from adjusted net income
    $8.5 million
    Q2 FY26

    Primarily consists of share-based compensation.

    Adjusted net income
    $109.8 million30.6% YoY increase
    Q2 FY26

    Excludes tax-affected impact of certain items.

    Adjusted EBITDA
    $246.5 million16.8% YoY increase
    Q2 FY26

    Strong growth over the prior year quarter.

    Adjusted EBITDA margin
    28.5%80 bps improvement YoY
    Q2 FY26

    Margin improvement reflects operational efficiencies.

    Net cash provided by operating activities
    $209.6 million7.1% higher YoY
    Q2 FY26

    Increased cash generation from operations.

    Total capital expenditures
    $263.3 million18.6% higher YoY
    Q2 FY26

    Reflecting construction activity for 2026 and 2027 club openings.

    Clubs opened YTD
    7
    YTD Q2 FY26

    Out of 14 scheduled for 2026.

    Clubs remaining to open
    7
    Q4 FY26

    Expected to open in the fourth quarter of 2026.

    Clubs under construction for 2027
    10
    FY27

    Out of 12-14 new clubs expected in 2027.

    Sale-leaseback proceeds
    $200 million
    Q2 FY26

    Generated from transactions closed in April.

    Prior year net cash proceeds from employee retention credits
    $9.3 million
    Q2 FY25

    Included in net income in the prior year, under the CARES Act.

    Prior year tax-affected net loss on sale-leaseback
    $9 million
    Q2 FY25

    Partially offset employee retention credits in prior year net income.

    Guidance upside flow-through (revenue to EBITDA)
    55%
    FY26

    Flow-through rate of raised revenue guidance to EBITDA guidance.

    Revenue guidance raise
    $28 million
    FY26

    Amount by which full year revenue guidance was raised.

    EBITDA guidance raise
    $15 million
    FY26

    Amount by which full year EBITDA guidance was raised.

    Qualified medical memberships as % of dues revenue
    3%
    FY26

    Expected percentage of total dues revenue by year-end.

    Qualified medical memberships as % of dues revenue (future)
    less than 2%
    future years

    Expected to continually go down as a percentage of total membership and become less significant.

    Hybrid XT penetration
    under 20
    current

    Extremely new, just rolling out.

    CTR penetration (target)
    60
    FY26

    Goal for CTR rollout by year-end.

    Rent percentages
    12%consistent
    long-term

    Expected to stay consistent with mapped out figures.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps9.1%%
    Net unit growth development pipeline14clubs

    Product announcements

    3
    ProductTypeDetails
    CTR (Pilates reformer class)launch
    Hybrid XTlaunch
    LT Gamesupdate

    Deals & partnerships

    1
    Phoenix 10-KAcquisition of an event

    The company announced the acquisition of the Phoenix 10-K event, expanding its portfolio of competitions.

    Risks & headwinds

    3
    Impact of Q4 club openings on marginQ4 FY26

    small impact

    Mitigation: Absorbed within increased full year adjusted EBITDA margin guidance.

    Challenges with MIORA technology and processesongoing incubation

    some challenges

    Mitigation: Focusing on perfecting the customer journey before robust rollout.

    Caution needed with peptidesongoing

    very very new

    Mitigation: Studying, testing, following science, and administering cautiously in MIORA locations.

    What to watch in Q3 FY26

    5

    Qualified medical membership percentage

    Next year (FY27)
    Current3% of dues revenue (end of FY26)
    TargetBelow 3%

    Why it matters

    Indicates success of strategic shift towards higher-value memberships and average dues growth.

    It will go from the 3% to below that.

    Q&A highlights

    7

    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

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Membership Mix

    Life Time is actively managing its membership mix, intentionally limiting certain qualified medical memberships administered by third-party medical insurance providers. This strategy resulted in a decline of approximately 20,600 qualified medical memberships (down 18.9% YoY) while all other memberships grew by 30,900 (up 4.2% YoY). This shift is aimed at improving average monthly dues and overall membership quality, contributing to a 13.3% growth in total dues revenue year-over-year.

    02

    In-Center Business Growth

    The company saw strong performance in its in-center businesses, contributing 2.9% to comparable center revenue growth. This was largely driven by double-digit year-over-year growth in dynamic personal training (DPT) and Life Spa. Management emphasized continued focus on delivering exceptional experiences and increasing trainer efficiency and revenue per trainer, with expectations for sustained financial performance in these areas.

    03

    New Program Rollouts

    Life Time is accelerating the rollout of two new group training formats: CTR (large group Pilates reformer class) and Hybrid XT (conditioning and strength training). Both programs are experiencing incredible demand, with CTR classes often waitlisted. The company is investing additional growth capital into these initiatives, aiming to have CTR in 80-90% of clubs eventually, with a target of 60 locations by year-end.

    04

    Real Estate Pipeline & Expansion

    The company has a robust pipeline of new club opportunities, with 14 new clubs scheduled to open in 2026 (the high end of their initial range) and 12-14 planned for 2027, with 10 already under construction. Management noted significant interest from developers for Life Time Athletic Country Clubs coupled with residential or commercial developments, indicating a strong long-term growth trajectory. The company aims to maintain attractive rent rates through strategic building and negotiation.

    05

    MIORA Incubation

    MIORA, the company's health and wellness offering, is currently in an incubation phase with 6-7 locations. Management is focused on perfecting the customer journey experience and addressing technology and process challenges before a robust and aggressive rollout. While not yet material to current financials, MIORA is viewed as a massive future growth opportunity once the model is refined.

    06

    Peptides and Wellness

    Life Time is actively studying and testing peptides, recognizing it as a substantial and growing space within wellness. The company plans to integrate peptide offerings within its facilities, particularly through MIORA locations. Management emphasized a cautious approach due to the newness of the field and variability among compound pharmacies, focusing on scientific validation and careful administration.

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