Revenue Growth
Total revenue increased 11.7% year-over-year to $789 million in Q1 2026.
Life Time Group Holdings
· LTH
May 5th, 2026
Summary
- Earnings Call Date:
- 2026-05-05
- Change Since:
- +32.30%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call presented strong operational and financial momentum: double‑digit revenue growth, expanding margins, rising average dues/ARPM, robust adjusted EBITDA growth, improving operating cash flow, and a clear plan to convert real estate sale‑leasebacks into visible positive free cash flow. Management framed sustained demand for new clubs, high ROIC on openings, successful ancillary offerings (notably dynamic personal training), and a large development pipeline. Near‑term challenges are manageable and mostly strategic: deliberate reduction of low‑dues qualified medical memberships (which compresses reported membership growth), elevated capex for new club construction, and preopening costs that modestly pressure near‑term margins. Overall the positives materially outweigh the issues.
Company Guidance
Management guided to 10–12% revenue growth for each quarter and the full year and updated the midpoint of full‑year adjusted EBITDA margin guidance to 28% (Q1 adj. EBITDA margin was 28.7%; adj. EBITDA $227M, +18.3% YoY). Membership guidance: total center membership growth of 0.5–1.0% in Q2, 1.0–1.5% in Q3 and 2.0–3.0% in Q4, and excluding qualified medicals: 3.5–3.8% in Q2 and 4–5% in Q3–Q4. Q1 operating metrics included ~838k center memberships (+1.4%), total revenue $789M (+11.7%), comparable center revenue +8.6% (membership mix +3.5%, price +3.0%, in‑center businesses +2.3%, volume ‑0.2%), average monthly dues $230 (+10.5% YoY), average revenue per center membership $930 (+10.2% YoY), qualified medicals at 3.4% of dues revenue (expected ~3% by year‑end) after a ~15k (‑14.9% YoY) decline, net income $88M (+15.8%), adjusted net income $96M (+27.4%), net cash from operations $199M (+~8%), and Q1 CapEx $260M (+82% YoY). They closed ~$200M of sale‑leasebacks in April, expect ~$400M for the year to support positive free cash flow in 2026 (and growing thereafter, with long‑range FCF >$400M by ~2030), and emphasized a strong balance sheet with very low leverage (well below 2.0x net debt/EBITDA), zero revolver balance and several hundred million of cash.
Comparable Center Revenue
Comparable center revenue grew 8.6% (slightly above expectations); contribution breakdown: membership mix +3.5%, price +3.0%, in-center businesses +2.3%, volume -0.2%.
Pricing and ARPM Expansion
Average monthly dues rose to $230, up ~10.5% year-over-year; average revenue per center membership increased to $930, up 10.2% year-over-year.
Membership and Mix Improvement
Total center memberships ended the quarter near 838,000, up 1.4% year-over-year; membership mix is shifting toward higher‑dues customers and more family/couple memberships, driving higher LTV per membership.
Profitability Expansion
Net income was $88 million, up 15.8% year-over-year; adjusted net income was $96 million, up 27.4% year-over-year.
Adjusted EBITDA Strength
Adjusted EBITDA totaled $227 million, up 18.3% year-over-year; adjusted EBITDA margin improved by ~160 basis points to 28.7%; updated full-year midpoint margin guidance to 28% (includes new-club preopening impact).
Operating Cash Flow and Free Cash Flow Plan
Net cash provided by operating activities increased to $199 million (approximately +8%); closed ~$200 million of sale-leaseback proceeds in April and expect ~$400 million for the full year to support delivering positive free cash flow in 2026 and growing free cash flow thereafter.
Capital Deployment and Low Leverage
Total CapEx was $260 million (up 82% YoY) to support new club construction; management highlights very low leverage (well below 2.0x net debt/EBITDA target), zero revolver balance and several hundred million of cash on hand.
New Club & Real Estate Pipeline
Opened 5 of 14 clubs scheduled for 2026, with strong early performance (including 4 clubs opened in last 30 days); management describes a robust real estate pipeline and high expected ROIC on new openings (north of ~30% cash-on-cash when including leasehold improvements).
In-center Revenue Drivers & Product Rollouts
Strong utilization of in-center businesses, notably dynamic personal training (trainers up low double digits and new business up more), and continued rollouts of programs (CTR, dynamic stretch, hybrid XT, MIORA and Lacy AI companion) supporting ancillary revenue and engagement.
Capital Return Optionality
Board authorized a $500 million buyback program; management intends to opportunistically repurchase shares below their view of fair value while also returning capital as free cash flow grows.
Operator
Greetings, and welcome to the Lifetime Group Holdings, Inc. Q1 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Connor Wienberg, Senior Vice President, Treasury and Investor Relations. You may begin.
Connor Wienberg
Good morning. Thank you for joining us for the First Quarter 2026 Lifetime Group Holdings Earnings Conference Call. With me today are Bahram Akradi, Founder, Chairman and CEO; and Eric Weaver, Executive Vice President and CFO. During the call, we will make forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from those forward-looking statements made today. There is a comprehensive discussion of risk factors in the company's SEC filings, which you are encouraged to review. The company will also discuss certain non-GAAP financial measures, including adjusted net income, adjusted EBITDA, net debt to adjusted EBITDA or what we refer to as net debt leverage ratio and free cash flow. This information, along with the reconciliations to the most directly comparable GAAP measures are included when applicable in the company's earnings release and earnings supplement issued this morning, our 8-K filed with the SEC and on the Investor Relations section of our website. With that, I will turn the call over to Erik.
Erik Weaver
Thank you, Connor, and good morning, everyone. We appreciate you joining us for our Q1 business and financial update. Please note that this morning, we posted an earnings supplement on our Inv...
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