Life Time Reports Fourth Quarter and Full-Year 2025 Financial Results

Total revenue increased 12.3% to $745.1 million for the fourth quarter and 14.3% to $2,995.3 million for the yearNet income increased 230.6% to $123.0 million for the fourth quarter and 139.2% to $373.7 million for the yearDiluted EPS increased 217.6% to $0.54 for the fourth quarter and 124.3% to $1.66 for the yearAdjusted net income increased 28.4% to $77.4 million for the fourth quarter and 62.3% to $325.5 million for the yearAdjusted EBITDA increased 14.5% to $202.6 million for the fourth quarter and 21.9% to $825.2 million for the yearAdjusted diluted EPS increased 25.9% to $0.34 for the fourth quarter and 51.6% to $1.44 for the yearAnnounced $500 million share repurchase programCHANHASSEN, Minn., Feb. 24, 2026 /PRNewswire/ -- Life Time Group Holdings, Inc. ("Life Time," "we," "our," "us," or the "Company") (NYSE:LTH) today announced its financial results for the fiscal fourth quarter and full-year ended December 31, 2025.Bahram Akradi, Founder, Chairman and CEO, stated: "I am proud of how our team delivered throughout 2025. With higher member engagement, increased dues per membership, and robust in‐center revenue growth, we delivered another year of record financial performance. We enter 2026 with strong fundamentals and a clear plan to expand the number of our large‐format athletic country clubs. We expect to add nearly as much new square footage in 2026 as we opened in the past two years combined. We remain focused on growing revenue and adjusted EBITDA by further increasing member engagement, optimizing our membership mix, and growing revenue per center membership.I am also excited to announce a $500 million share repurchase program approved by our board of directors. Our strong cash generation and healthy balance sheet give us confidence in our ability to fund our accelerated club opening plan and implement our share repurchase program while remaining at or below our target 2.0x net leverage ratio. We believe we are now in a position to continue investing for long‐term growth while further driving shareholder return."Financial SummaryThree Months EndedYear Ended($ in millions, except for Average center revenue per center membership data)December 31,December 31,20252024Percent Change20252024Percent ChangeTotal revenue$745.1$663.312.3 %$2,995.3$2,621.014.3 %Center operations expenses$379.4$343.910.3 %$1,568.6$1,392.412.7 %Rent$87.3$79.110.4 %$339.2$304.911.2 %General, administrative and marketing expenses (1)$65.3$61.26.7 %$244.6$221.010.7 %Net income$123.0$37.2230.6 %$373.7$156.2139.2 %Adjusted net income$77.4$60.328.4 %$325.5$200.562.3 %Adjusted EBITDA$202.6$177.014.5 %$825.2$676.821.9 %Comparable center revenue (2)9.9 %13.5 %11.1 %12.2 %Center memberships, end of period822,380812,0621.3 %822,380812,0621.3 %Average center revenue per center membership$882$79610.8 %$3,531$3,16011.7 %(1)The three months ended December 31, 2025 and 2024 included non-cash share-based compensation expense of $5.1 million and $18.3 million, respectively. The years ended December 31, 2025 and 2024 included non-cash share-based compensation expense of $44.5 million and $45.4 million, respectively.(2)The Company includes a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center's operation, in order to assess the center's growth rate after one year of operation.Fourth Quarter 2025 InformationRevenue increased 12.3% to $745.1 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues, membership growth in our new and ramping centers, and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training.Center memberships of 822,380 increased by 10,318, or 1.3%, when compared to December 31, 2024, and decreased by 18,242 from the third quarter 2025, consistent with seasonality expectations and continued shifts in membership mix.Total subscriptions, which include center memberships and our on-hold memberships, increased 0.8% to 872,936 as compared to December 31, 2024.Center operations expenses increased 10.3% to $379.4 million primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth.General, administrative and marketing expenses increased 6.7% to $65.3 million primarily due to increased center support overhead to enhance and broaden our member services and experiences and for marketing.Net income increased 230.6% to $123.0 million due to improved business performance, tax-effected net cash proceeds of $27.7 million received in partial satisfaction of legal claims, tax-effected net cash proceeds of $14.1 million received from employee retention credits under the CARES Act, and tax-effected one-time gains of $12.5 million on sale-leaseback transactions. Net income in the prior year period included a tax-effected write-off of $7.7 million of unamortized debt discounts and issuance costs associated with the extinguishment of our former term loan facility and construction loan and the loss on the satisfaction and discharge of our 5.750% Senior Secured Notes and 8.000% Senior Unsecured Notes.Adjusted net income increased 28.4% to $77.4 million and Adjusted EBITDA increased 14.5% to $202.6 million as we experienced greater flow through of our increased revenue.Full-Year 2025 InformationRevenue increased 14.3% to $2,995.3 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues, membership growth in our new and ramping centers, and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training.Center operations expenses increased 12.7% to $1,568.6 million primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth.General, administrative and marketing expenses increased 10.7% to $244.6 million primarily due to increased incentive and benefit-related expenses, center support overhead to enhance and broaden our member services and experiences, marketing, general corporate overhead, information technology costs and costs attributable to the secondary offering of our common stock completed in February and June 2025.Net income increased 139.2% to $373.7 million due to improved business performance, tax-effected net cash proceeds of $41.3 million received from employee retention credits under the CARES Act, tax-effected net cash proceeds of $29.2 million received in partial satisfaction of legal claims, $12.6 million of income tax benefits due to a significant exercise by our Chief Executive Officer of stock options that were set to expire in 2025, and tax-effected one-time gains of $9.7 million on sale-leaseback transactions. Net income in the prior year included tax-effected one-time net gains of $3.7 million on sales of land and $2.0 million on sale-leaseback transactions, partially offset by a tax-effected write-off of $10.4 million of unamortized debt discounts and issuance costs associated with the extinguishment of our former term loan facility and construction loan and the loss on the satisfaction and discharge of our 5.750% Senior Secured Notes and 8.000% Senior Unsecured Notes.Adjusted net income increased 62.3% to $325.5 million and Adjusted EBITDA increased 21.9% to $825.2 million as we experienced greater flow through of our increased revenue.New Center OpeningsWe opened four new centers during the fourth quarter and a total of 10 centers for the year.As of December 31, 2025, we operated a total of 189 centers.Cash Flow HighlightsNet cash provided by operating activities increased 47.0% to $239.9 million for the fourth quarter and 51.4% to $870.5 million for the year.We achieved positive free cash flow of $206.5 million for the year, including $227.4 million of net proceeds from sale-leaseback transactions. During the fourth quarter, we completed one sale-leaseback transaction for net proceeds of $54.7 million.Our capital expenditures by type of expenditure were as follows:Three Months EndedYear Ended($ in millions)December 31,December 31,20252024Percent Change20252024Percent ChangeGrowth capital expenditures (1)$240.1$74.6221.8 %$656.5$334.596.3 %Maintenance capital expenditures (2)32.638.6(15.5) %125.8108.615.8 %Modernization and technology capital expenditures (3)31.823.137.7 %109.281.434.2 %Total capital expenditures$304.5$136.3123.4 %$891.5$524.570.0 %(1)Consist of new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives.(2)Consist of capital expenditures required to maintain the operating condition of our existing centers.(3)Consist of capital expenditures related to updates and enhancements to our existing centers, technology investments, and corporate infrastructure.Liquidity and Capital ResourcesOur net debt leverage ratio declined to 1.6x as of December 31, 2025, from 2.3x as of December 31, 2024.As of December 31, 2025, our total available liquidity was $823.0 million, which included $204.8 million of cash and cash equivalents and $618.2 million of availability under our revolving credit facility. As of December 31, 2025, there were no outstanding borrowings under our revolving credit facility and there was $31.8 million of outstanding letters of credit.We consummated several transactions in 2025 that strengthened our financial position, including:Effective April 8, 2025, we entered into interest rate swap agreements for our entire term loan facility, which converted the variable interest rate of our term loan facility to a fixed interest rate of 3.409%, plus the applicable interest rate margin.On June 18, 2025, S&P Global Ratings upgraded our issuer credit rating to 'BB-' from 'B+', reducing the applicable interest rate margin of our term loan facility by 0.25% to 2.25% effective June 19, 2025.Effective August 18, 2025, we completed a repricing of our term loan facility, reducing the applicable interest rate margin by another 0.25% to 2.00%.Share Repurchase ProgramOur board of directors has authorized a share repurchase program of up to $500 million of the Company's common stock, subject to market conditions, contractual restrictions and other factors. Repurchases may be made from time to time through open market purchases, block trades, accelerated or other structured share repurchase programs, privately negotiated transactions, Rule 10b5-1 plans or other means, and may include purchases from affiliates. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The manner, timing, pricing and amount of any transactions will be subject to the discretion of management and may depend on a variety of factors, including business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. The repurchase program does not obligate the Company to acquire any particular amount of its common stock and may be suspended, modified or terminated at any time at the Company's discretion.2026 OutlookThe Company's 2026 guidance and expectations do not include any impact that may occur as a result of our $500 million share buyback program announced today, including our outstanding share count.Full-Year 2026 GuidancePercentYear EndingYear EndingYear EndedChangeDecember 31, 2026December 31, 2026December 31, 2025(Using(Guidance as of($ in millions)(Guidance)(Actual)Midpoints)January 22, 2026)Total revenue$3,300 – $3,330$2,995.310.7 %$3,300 – $3,330Rent$378 – $388$339.212.9 %$378 – $388Net Income$330 – $336$373.7(10.9) %$330 – $336Adjusted net income$369 – $378$325.514.7 %$369 – $378Adjusted EBITDA$910 – $925$825.211.2 %$910 – $925The Company is reiterating the following expectations for fiscal 2026 as outlined in its preliminary estimated results announced on January 22, 2026:Open 12 to 14 new clubs, most of which will be large-format, ground-up construction clubs. We expect the total square footage of our 2026 class of clubs to be approximately 1.2 million square feet, nearly double the square footage of each of our 2024 class and 2025 class of clubs. We expect the majority of our 2026 class of clubs to open in the back half of the year, including six to seven in the fourth quarter of 2026.Comparable center revenue growth of 6.3% to 7.3%, which includes our ramping and mature centers.Rent to include non-cash rent expense of $24 million to $27 million.Cash income tax expense of $57 million to $59 million.Interest expense, net of interest income, of approximately $56 million to $60 million, reflecting full year benefits of reduced interest expense on our term loan facility as a result of our execution of the interest rate swap and repricing during 2025 and greater capitalized interest expense due to increased construction activity related to clubs expected to open in 2026 and 2027.Manage our net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times.The Company is also introducing the following additional operational and financial expectations for fiscal 2026:Complete at least $300 million of sale-leaseback transactions.Year-end weighted-average diluted common shares outstanding of approximately 229 million to 231 million.Provision for income tax rate estimate of 28%.Conference Call DetailsA conference call to discuss our fourth quarter and full-year financial results is scheduled for today:Date: Tuesday, February 24, 2026Time: 10:00 a.m. ET (9:00 a.m. CT)U.S. dial-in number: 1-877-451-6152International dial-in number: 1-201-389-0879Webcast: Webcast | Life Time Group Holdings 4Q25 and FY 2025 EarningsA link to the live audio webcast of the conference call will be available at https://ir.lifetime.life.Replay InformationWebcast – A recorded replay of the webcast will be available within approximately three hours of the call's conclusion and may be accessed at: https://ir.lifetime.life.Conference Call – A replay of the conference call will be available after 1:00 p.m. ET the same day through March 13, 2026:U.S. replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 1375 1286About Life TimeLife Time (NYSE:LTH) empowers people to live healthy, happy lives through its more than 185 athletic country clubs across the U.S. and Canada, the complimentary and comprehensive Life Time app featuring its L•AI•CTM AI-powered health companion, and more than 25 iconic athletic events. Serving people ages 90 days to 90+ years, the Life Time ecosystem uniquely delivers healthy living, healthy aging, and healthy entertainment experiences, a range of unique healthy way of life programs, highly trusted LTH nutritional supplements and more. Recognized as a Great Place to Work®, the Company is committed to upholding an exceptional culture for its over 44,000 team members.Use of Non-GAAP Financial Measures and Key Performance IndicatorsThis press release includes certain financial measures that are not presented in accordance with GAAP, including Adjusted net income, Adjusted net income per common share, Adjusted EBITDA, free cash flow and net debt and ratios and calculations with respect thereto. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should be considered in addition to, and not as a substitute for or superior to, net income, net income per common share, net cash provided by operating activities or total debt (defined as long-term debt, net of current portion, plus current maturities of debt) as a measure of financial performance or liquidity or any other performance measure derived in accordance with GAAP, and should not be construed as an inference that the Company's future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with the Company's financial statements prepared in accordance with GAAP. The reconciliations of the Company's non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.Adjusted net income is defined as net income excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, less the tax effect of these adjustments. Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of the Company's ongoing operations. Free cash flow is defined as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. Net debt is defined as long-term debt, net of current portion, plus current maturities of debt, excluding fair value adjustments, unamortized debt discounts and issuance costs, minus cash and cash equivalents. Net debt is as of the last day of the respective quarter or year. Our leverage ratio is calculated as our net debt divided by our trailing twelve months of Adjusted EBITDA.The Company presents these non-GAAP financial measures because management believes that these measures assist investors and analysts in comparing the Company's operating performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of the Company's ongoing operating performance, and management believes that free cash flow assists investors and analysts in evaluating our liquidity and cash flows, including our ability to make principal payments on our indebtedness and to fund our capital expenditures and working capital requirements. Investors are encouraged to evaluate these adjustments and the reasons the Company considers them appropriate for supplemental analysis. In evaluating the non-GAAP financial measures, investors should be aware that, in the future, the Company may incur expenses that are the same as or similar to some of the adjustments in the Company's presentation of its non-GAAP financial measures. There can be no assurance that the Company will not modify the presentation of non-GAAP financial measures in future periods, and any such modification may be material. In addition, the Company's non-GAAP financial measures may not be comparable to similarly titled measures used by other companies in the Company's industry or across different industries.The non-GAAP financial measures have limitations as analytical tools, and investors should not consider these measures in isolation or as substitutes for analysis of the Company's results as reported under GAAP.Forward-Looking StatementsThis press release includes "forward-looking statements" within the meaning of federal securities regulations. Forward-looking statements in this press release include, but are not limited to, the Company's plans, strategies and prospects, both business and financial, including its financial outlook for fiscal year 2026, growth, strength of its balance sheet, net debt and leverage, interest expense, consumer demand, industry and economic trends, member engagement and mix, tax rates and expense, rent expense, expected number of diluted common shares outstanding, expected number, size and timing of new center openings, successful signings and closings of sale-leaseback transactions (including the amount, pricing and timing thereof) and the timing, amount and price of any share repurchase. These statements are based on the beliefs and assumptions of the Company's management. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning the Company's possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, but are not limited to, risks relating to our business operations and the growth of our business including the competitive and economic environment, risks relating to our brand, risks relating to our technological operations, risks relating to our capital structure and lease obligations, risks relating to our human capital, risks relating to legal compliance and risk management and risks relating to ownership of our common stock and the other important factors discussed under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on February 27, 2025 (File No. 001-40887), as such factors may be updated from time to time in the Company's other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result ...Full story available on Benzinga.com