Provide details on the unit economics of new, larger clubs, including revenue per member trends and member mix. Are there expected changes to typical seasonality of member growth?

New clubs have no discounted programs, higher membership prices, and target fewer members (3,700-4,000 vs. 4,500-4,600 average) for a more efficient, engaged model. Seasonality expectations remain unchanged. The delta between rack rate and average dues is currently around $19.5 million per month, maintained by raising rack rates and legacy price increases. “When you look at our kind of existing clubs, if you just take an average membership per club it's $4,500, $4,600. So when you talk about our new clubs that we're planning those at membership levels, $3,700 to $4,000.”

How sustainable is the 18% DPT growth over the last two years, and what is the outlook for CapEx, particularly for ground-up clubs in 2027 and beyond, and the role of sale-leasebacks?

DPT is expected to continue growing with a robust plan, showing strong revenues and margins in some clubs. The company has a significant number of ground-up clubs in 2026 and 2027, with CapEx for 2027 and beyond. Sale-leasebacks are expected to be robust, recycling capital from new clubs and adjusting older clubs for tax efficiency. “We have a very, very robust plan for DPT this year as well, there are plans that they presented to us is very, very robust. Yes, we expect DPT to continue to grow.”

What are the expectations for labor and healthcare costs in 2026, and how will the company continue to manage these expenses?

The company is fully aware of payroll and supply increases and has factored them into the 2026 guidance. Labor increases are consistent with 2.5%-3%. Supply increases are mitigated by procurement efforts. Healthcare costs are managed well through their captive and a healthy employee base. “We are fully aware of the headwinds that it comes from payroll increases and supply increases. And we have had those completely in mind and in our plan in a very comfortable fashion in the numbers that we put forward for the guidance of this year.”

LTH

Life Time Group Holdings (LTH) Q4 FY25 earnings call: guidance and Q&A

Q: 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.”

Earnings call· Dec 2025 (Q4 FY25)· Consumer Discretionary· Feb 24, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Full-year 2026 comparable center revenue growth	approximately 6.3% to 7.3% high materiality	FY26	High
Full-year 2026 growth capital expenditures	$875 million to $915 million high materiality	FY26	High
Full-year 2026 maintenance capital expenditures	$140 million to $150 million medium materiality	FY26	High
Full-year 2026 modernization, technology and corporate investments	$130 million to $140 million medium materiality	FY26	High
Full-year 2026 sale-leaseback proceeds	minimum of $300 million high materiality	FY26	High
Full-year 2026 capitalized interest expense	between $33 million and $35 million low materiality	FY26	High
Number of club openings	up to 28 clubs high materiality	2026 and 2027	High
Net leverage target	at or below our 2x net leverage target high materiality	Ongoing	High

LTH operating KPIs by quarter

LTH operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Dec 2025 Q4 FY25	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.

Risks & headwinds

Comparable center revenue growth trajectory FY26

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

Payroll and supply cost increases FY26

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 performance Ongoing

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

Comparable Center Revenue Growth

Q1 FY26 and subsequent quarters

Current 9.9% (Q4 FY25)

Target Higher 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.

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

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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