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    LTH
    Earnings call· Dec 2025(Q4 FY25)

    Life Time Group Holdings Q4 FY25 earnings call LTH

    Feb 24, 2026 Source

    Executive summary

    Life Time Group Holdings Q4 FY25 — Record Revenue and Adjusted EBITDA, Strong Cash Flow, and Share Repurchase Program

    Life Time Group Holdings delivered a strong Q4 and full-year FY25, marked by record revenue and adjusted EBITDA, driven by robust center performance and increased membership utilization. The company exceeded its financial goals and balance sheet objectives, achieving a BB credit rating and a net leverage of 1.6x. With significant cash flow generation and a strong sale-leaseback market, Life Time announced a $500 million share repurchase program, reflecting confidence in its business model and future growth.

    Highlights

    5

    • Total revenue increased 12.3% to $745 million in Q4 FY25.

    • Adjusted EBITDA increased 14.5% to $203 million in Q4 FY25, with margin improving 50 bps to 27.2%.

    • Full-year FY25 adjusted EBITDA increased 21.9% to $825 million, with margin improving 170 bps to 27.5%.

    • Net leverage ended FY25 at 1.6x, well below the 2x target.

    • The Board approved a $500 million share repurchase program.

    Concerns

    3

    • Comparable center revenue growth is expected to glide downward as FY26 progresses, starting higher and ending lower.

    • Increased growth CapEx for 2026 ($875M-$915M) with over half allocated to clubs opening in 2027 and beyond.

    • Anticipated $140M-$150M for maintenance CapEx and $130M-$140M for modernization, technology, and corporate investments in 2026.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2026 comparable center revenue growth
    approximately 6.3% to 7.3%
    high materiality
    High
    Full-year 2026 growth capital expenditures
    $875 million to $915 million
    high materiality
    High
    Full-year 2026 maintenance capital expenditures
    $140 million to $150 million
    medium materiality
    High
    Full-year 2026 modernization, technology and corporate investments
    $130 million to $140 million
    medium materiality
    High
    Full-year 2026 sale-leaseback proceeds
    minimum of $300 million
    high materiality
    High
    Full-year 2026 capitalized interest expense
    between $33 million and $35 million
    low materiality
    High
    Number of club openings
    up to 28 clubs
    high materiality
    High
    Net leverage target
    at or below our 2x net leverage target
    high materiality
    High

    Operational metrics

    36
    Total revenue
    $745 millionup 12.3%
    Q4 FY25

    Driven by continued execution in centers, including higher average dues and utilization of in-center businesses.

    Average monthly dues
    $223up approximately 10.8%
    Q4 FY25

    Reflects strength in membership dues.

    Average revenue per center membership
    $882up 10.8%
    Q4 FY25

    Reflects strength in in-center business performance.

    Comparable center revenue growth
    9.9%
    Q4 FY25

    In line with expectations.

    Center memberships
    822,000
    Q4 FY25 end

    Total active center memberships.

    Total memberships (including on-hold)
    873,000
    Q4 FY25 end

    Includes active and on-hold memberships.

    Net income
    $123 millionincrease of 231%
    Q4 FY25

    Benefited from approximately $45.6 million of net tax affected items.

    Adjusted net income
    $77 millionup 28.4% year-over-year
    Q4 FY25

    Excludes tax-affected impact of non-recurring items.

    Adjusted EBITDA
    $203 millionincrease of 14.5%
    Q4 FY25

    Strong performance in the quarter.

    Adjusted EBITDA margin
    27.2%improved by 50 basis points
    Q4 FY25

    Margin improvement year-over-year.

    Net cash provided by operating activities
    $240 millionapproximately 47% higher
    Q4 FY25

    Includes $59 million of nonrecurring proceeds.

    Total revenue
    $2.995 billionincreased 14.3%
    FY25

    Record revenue for the full year.

    Membership dues and enrollment fees growth
    13.9%
    FY25

    Component of total revenue growth.

    In-center revenue growth
    15.1%
    FY25

    Component of total revenue growth.

    Comparable center revenue growth
    11.1%
    FY25

    Outperformance driven by mature clubs.

    Average revenue per center membership
    $3,531up 11.7%
    FY25

    Reflects strong in-center performance.

    Net income
    $374 millionincreased 139%
    FY25

    Full year GAAP net income.

    Adjusted net income
    $326 millionincreased 62.3%
    FY25

    Full year non-GAAP net income.

    Adjusted diluted earnings per share
    $1.44increased 51.6%
    FY25

    Compared to $0.95 per share in prior year.

    Adjusted EBITDA
    $825 millionincreased 21.9%
    FY25

    Record adjusted EBITDA for the full year.

    Adjusted EBITDA margin
    27.5%increased 170 basis points
    FY25

    Above the midpoint of initial guidance.

    Net cash provided by operating activities
    $871 millionapproximately 51% higher
    FY25

    Includes $94 million of nonrecurring proceeds.

    Total capital expenditures, net of construction reimbursements
    $892 million
    FY25

    Total CapEx for the full year.

    Growth capital expenditures
    $657 million
    FY25

    Portion of CapEx for growth initiatives.

    Net leverage
    1.6x
    FY25 end

    Well below the 2x target, contributing to BB credit rating.

    Average monthly visits per membership
    12.54.8% higher than in 2024
    FY25

    Reflects high member utilization.

    Total visits
    122 million7% higher than in 2024
    FY25

    Aggregate visits across all centers.

    Share repurchase program
    $500 million
    Authorized

    Approved by the Board of Directors, to be utilized opportunistically.

    Average membership per existing club
    $4,500-$4,600
    Current

    Average for existing clubs.

    Target membership per new club
    $3,700-$4,000
    New clubs

    New clubs are built with fewer memberships, assuming a better mix.

    DPT sessions growth
    18%
    last 2 years

    Expected to continue growing with a robust plan.

    Delta between rack rate and average dues
    $19.5 million
    per month

    Relatively consistent, maintained by raising rack rates and legacy price increases.

    Labor cost increases
    2.5% to 3%
    Current

    Consistent with industry trends, factored into 2026 guidance.

    MIORA locations open
    7-8
    Current

    Rolling out new locations, ramping at expectations.

    LT Digital subscribers
    3.3 million
    Current

    Continually growing, strategy adjusted to enhance dues-paying member experience.

    Adjusted EBITDA margin initial guidance
    23.5% to 24.5%
    Investor Day

    Original guidance from Investor Day, outperformed in FY25.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps9.9% (Q4 FY25), 11.1% (FY25)%
    Net unit growth development pipelineup to 28clubs

    Risks & headwinds

    3
    Comparable center revenue growth trajectoryFY26

    Expected to start FY26 at a higher growth rate and glide downward as the year progresses.

    Payroll and supply cost increasesFY26

    Labor cost increases of 2.5% to 3%.

    Mitigation: Factored into 2026 guidance; working with suppliers to mitigate and offset increases; managing healthcare costs through captive.

    Balancing member experience with financial performanceOngoing

    Unquantified, but a stated challenge to optimize revenue/EBITDA without deteriorating customer experience.

    Mitigation: Club-by-club strategy for pricing and membership optimization; conservative guidance to avoid disappointing stakeholders.

    What to watch in Q1 FY26

    5

    Comparable Center Revenue Growth

    Q1 FY26 and subsequent quarters
    Current9.9% (Q4 FY25)
    TargetHigher growth rate at the start of FY26, then gliding downward.

    Why it matters

    This metric indicates the underlying health of existing clubs and is a key driver of overall revenue. Its trajectory will confirm management's expectations for the year.

    In 2026, we expect full year comparable center revenue growth of approximately 6.3% to 7.3%. We expect a continuation of the quarterly trends we saw throughout 2025, starting the year at a higher comparable center growth rate and gliding downward as the year progresses.

    Q&A highlights

    5

    What are the biggest opportunities for in-center programming in 2026, and how are the new centers performing, especially those opened in late 2025 and planned for 2026?

    Bahram highlighted continuous evolution in facilities, new formats, and various in-center businesses like cafes, spa, personal training, pickleball, and MIORA. He stated that new clubs are opening stronger and ramping faster than ever, with some reaching contribution margin positive in their first full month.

    “All I can say to you is our clubs are now opening stronger than ever and ramping faster than ever. Some clubs reach literally contribution margin positive, the first full month of the club operation, which is pretty incredible.”

    asked by Brian Nagel · answered by Bahram Akradi

    2 min read5 chapters

    Detailed Narrative

    01

    Club Performance and Member Engagement

    Life Time's clubs are operating at optimal levels, with average monthly visits per membership up 4.8% to 12.5 for FY25, totaling 122 million visits, a 7% increase from FY24. Revenue per center membership increased 11.7% year-over-year. The company emphasizes optimizing member experience, revenue, and EBITDA on a club-by-club basis, noting that members are using clubs at the highest levels ever seen.

    02

    New Club Openings and Ramp-Up

    New clubs are opening stronger and ramping faster than ever, with some reaching contribution margin positive in their first full month. The company plans to open more square footage in 2026 than in 2024 and 2025, with 1 club already open and 13 under construction for 2026. The new clubs are designed with higher membership prices and fewer members, focusing on a "super engaged membership model" that is more efficient.

    03

    Capital Allocation and Share Repurchase

    The company announced a new $500 million share repurchase program, reflecting confidence in its cash generation and business model. This program will be utilized opportunistically while maintaining a net leverage ratio at or below 2x. Capital expenditures for 2026 include significant growth CapEx, with over half allocated to clubs opening in 2027 and beyond, funded by operating cash flow, sale-leaseback proceeds, and cash on hand.

    04

    MIORA and LT Health Initiatives

    MIORA, the company's health and wellness program, is expanding with 7-8 locations now open and ramping at or above expectations, with plans to integrate it into future club designs. LT Health, the supplement business, is focusing on in-club growth and visibility for 2026, with plans for external expansion in 2027 and beyond, leveraging professional guidance within the clubs to educate customers on product superiority.

    05

    Membership Optimization and Pricing Strategy

    Life Time is actively optimizing its membership mix by reducing discounted programs and focusing on direct memberships to enhance member experience and increase revenue/EBITDA. The company is implementing club-by-club and market-by-market price adjustments to protect customer experience at saturated clubs, leading to higher average dues and fewer members per club. The delta between rack rate and average dues is currently around $19.5 million per month.

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