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LT

Life Time Group Holdings, Inc. (LTH)·Q1 2025 Earnings Summary

Executive Summary

  • Beat across key lines: revenue $706.0M (+18.3% YoY) vs S&P Global consensus $683.0M*, Adjusted diluted EPS $0.39 vs $0.28*, and Adjusted EBITDA $191.6M vs $178.8M*; flow‑through driven by higher dues rates, mix shift to full‑dues members, and strong in‑center spend . S&P Global estimates marked with * (see disclaimer).
  • Raised FY25 outlook: revenue to $2.94–$2.98B (from $2.925–$2.975B), net income to $286–$293M (from $277–$284M), Adjusted EBITDA to $792–$808M (from $780–$800M); lifted comp center revenue growth to 8.5–9.5% (from 7–8%) and reduced interest expense/tax rate assumptions .
  • Balance sheet and cash: net debt leverage to 2.0x (from 2.28x in Q4), fourth consecutive quarter of positive FCF ($41.4M), and LOI for ~$150M sale‑leaseback expected in Q2; entire term loan fixed below 6% all‑in via swap (3.409% + 2.50% margin) .
  • Stock catalysts: outlook raise, accelerating margins (Adj. EBITDA margin 27.1%, +260 bps YoY), leverage at 2.0x, and visibility on lower interest expense may support multiple; capacity management (waitlists) and disciplined growth (10–12 annual club openings) frame execution narrative .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profitability: Revenue +18.3% YoY to $706.0M; Adjusted EBITDA +31.2% to $191.6M (27.1% margin, +260 bps YoY) on pricing, mix, and in‑center spend strength .
  • Membership quality and engagement: average revenue per center membership rose to $844 (+13.3% YoY), with visits per membership at new highs; retention running at record levels per management .
  • Balance sheet de‑risking and cash generation: net debt leverage improved to 2.0x; operating cash flow $183.9M (+103% YoY) and FCF $41.4M; fixed rate on entire term loan below 6% .

What Went Wrong

  • GAAP EPS aided by one‑time tax benefit: net income +205.6% YoY to $76.1M benefited from $14.6M tax benefit tied to CEO stock option exercise; underlying Adjusted EPS provides purer run‑rate view .
  • G&A inflation: G&A and marketing +18.2% YoY to $57.8M due to timing of stock‑based comp/benefits, center support overhead, IT costs, and costs tied to February secondary offering .
  • Early Q2 demand color cautious: management noted slightly softer new member sign‑ups in April/May at some clubs (de minimis to overall revenue), and comp outlook incorporates macro conservatism despite strong in‑center trends .

Financial Results

Headline results vs prior quarters and vs S&P Global consensus

MetricQ3 2024Q4 2024Q1 2025 ActualQ1 2025 Consensus*Surprise (Q1)
Revenue ($M)$693.234 $663.283 $706.041 $683.013*+$23.0M (Actual−Cons)
Diluted EPS ($)$0.19 $0.17 $0.34 $0.28*+$0.06 (GAAP vs Cons)
Adjusted Diluted EPS ($)$0.26 $0.27 $0.39 $0.28*+$0.11 (Adj vs Cons)
Adjusted EBITDA ($M)$180.293 $176.964 $191.588 $178.844*+$12.7M (Actual−Cons)
Adjusted EBITDA Margin (%)26.0% 26.7% 27.1% ——

Estimates marked with * are Values retrieved from S&P Global.

Segment revenue mix

MetricQ3 2024Q4 2024Q1 2025
Center revenue ($M)$674.775 $646.384 $685.654
Other revenue ($M)$18.459 $16.899 $20.387
Total revenue ($M)$693.234 $663.283 $706.041
In‑center revenue share27.7% 26.1% 26.8%

KPIs and operating metrics

KPIQ3 2024Q4 2024Q1 2025
Center memberships (end of period)826,502 812,062 826,374
On‑hold memberships50,007 54,023 53,377
Total memberships876,509 866,085 879,751
Average revenue per center membership ($)$815 $796 $844
Comparable center revenue growth12.1% 13.5% 12.9%
Adjusted EBITDA margin26.0% 26.7% 27.1%
Net cash from operations ($M)$151.146 $163.141 $183.856
Free cash flow ($M)$138.332 $26.526 $41.374
Net debt leverage ratio2.4x 2.28x 2.0x
Total centers177 179 180

Additional detail: CFO noted average monthly dues of ~$208 in Q1 (+11.8% YoY), reflecting limited legacy pricing in Q1 and mix shift to higher‑rate new joins .

Guidance Changes

MetricPeriodPrevious Guidance (as of Feb 27, 2025)Current Guidance (as of May 8, 2025)Change
RevenueFY2025$2.925–$2.975B $2.94–$2.98B Raised
Net IncomeFY2025$277–$284M $286–$293M Raised
Adjusted EBITDAFY2025$780–$800M $792–$808M Raised
RentFY2025$337–$347M $337–$347M Maintained
Comparable center revenue growthFY20257–8% 8.5–9.5% Raised
Interest expense (net)FY2025~$90–$94M ~$80–$84M Lowered
Provision tax rateFY202527% 23% Lowered
Cash income taxesFY2025$58–$62M $39–$41M Lowered
D&AFY2025$265–$273M $286–$294M Raised
Non‑cash rent (included in Rent)FY2025$35–$38M $35–$38M Maintained
Net debt leverage targetFY2025≤2.25x ≤2.00x Tightened
New center openingsFY202510–12 10–12 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3–Q4 2024)Current Period (Q1 2025)Trend
AI/digital initiativesExpanded digital content footprint; groundwork for broader digital engagement Advancing LT Digital and “L.AI.C” AI companion; NYC digital studio opening; >2M digital subscribers Increasing focus/activation
Pricing/mixRevenue per membership trending higher; ARPCM $796 in Q4 Limited Q1 legacy price increases (planned for Q2), mix shift to higher‑rate new joins; ARPCM $844 Positive mix; disciplined pricing cadence
Supply chain/tariffsNot highlightedMinimal tariff exposure; equipment sourced from Italy/Sweden; monitoring policy evolution Low risk currently
Capacity managementStrong engagement; comps >12% Waitlists to protect member experience; emphasis on full‑dues customers; visits +4.7% YoY in comparable centers Tight capacity; quality over quantity
Macro/consumerDeleveraging; balance sheet strengthening Slightly softer new sign‑ups in April/May at some clubs (de minimis); guidance reflects macro caution Guarded stance
Product/in‑center spendIn‑center revenue strong; dynamic personal training growth Continued strength in dynamic personal training; cafes/spa improving with further opportunity Continued momentum
New concepts/amenitiesOngoing modernization capex Recovery/cold plunge rollouts; work lounges; steady program execution Expanding amenities
Brand extensions (LTH, MIORA)LTH supplement expansion announced (press cycle) [30]LTH ~40% MoM growth in March; MIORA on schedule; tariff risk for some ingredients manageable Early traction

References: .

Management Commentary

  • “We continue to see increased member engagement, with visits and revenue per membership at new highs… Our balance sheet is strong, positioning us well to capitalize on the opportunities ahead.” — CEO Bahram Akradi .
  • “Comparable center revenue was 12.9%… benefit from last year’s legacy price actions and mix shift to higher‑rate new members… Adjusted EBITDA margin of 27.1% increased 260 bps YoY.” — CFO Erik Weaver .
  • “We have raised our revenue and adjusted EBITDA guidance but only modestly in recognition of the uncertainty in the macroeconomic environment… focus is to maintain a very strong balance sheet and positive free cash flow.” — CEO .
  • “We have clear visibility into our cash interest expense for the next 3 years, having fixed the interest rate on our entire term loan to below 6%.” — CFO .

Q&A Highlights

  • Capacity and waitlists: Management is prioritizing experience, using waitlists (especially for third‑party payer channels) and focusing on full‑dues members; visits per club and in‑center revenue at records .
  • Unit pipeline: 10–12 clubs per year remains the right cadence; optionality to accelerate/decelerate based on macro while preserving balance sheet strength and targeting a BB rating .
  • Pricing/retention: Minimal Q1 legacy pricing (planned Q2 timing); retention at best levels in company history; average monthly dues ~$208 (+11.8% YoY) .
  • Macro tone: Slightly softer new sign‑ups in April/May at some clubs (small revenue impact), but in‑center spend strong; full‑year comp raised with conservatism .
  • Tariffs/sourcing: Minimal exposure; equipment sourced from Italy/Sweden; ongoing value engineering offsets construction cost variability .
  • Amenity/programming: Expanding recovery/cold plunge, work lounges; dynamic personal training remains a standout .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $706.0M vs $683.0M*; Adjusted diluted EPS $0.39 vs $0.28*; Adjusted EBITDA $191.6M vs $178.8M* — broad‑based beat. Number of estimates: revenue (10), EPS (5) for Q1 2025* .
  • Forward quarters: Street models continued growth through Q3–Q4 2025 and Q1 2026 (EPS and revenue trajectories positive). If management’s lowered interest and tax outlook holds, EPS revisions should bias upward .

Estimates marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality growth: Higher dues, favorable member mix, and strong in‑center spend are expanding margins (Adj. EBITDA margin 27.1%) while comps remain double‑digit .
  • Guidance momentum: FY25 revenue, net income, Adjusted EBITDA, and comp guidance raised; lower interest and tax assumptions provide incremental EPS leverage .
  • De‑risked capital structure: Net leverage at 2.0x with visibility on interest costs (term loan fully swapped below 6%) and incremental liquidity from ~$150M sale‑leaseback LOI .
  • Capacity discipline: Waitlists and emphasis on full‑dues members protect experience and monetization; near‑term sign‑up softness at some clubs is de minimis to revenue .
  • Multi‑pronged growth: 10–12 club openings, modernization (recovery/cold plunge), and asset‑light adjacencies (LT Digital/L.AI.C, LTH supplements, MIORA) broaden the revenue stack .
  • Watch items: G&A inflation (stock‑based comp, IT, support), and macro‑sensitive join trends; management is embedding conservatism into FY25 guide .
  • Trading setup: Estimate revisions skew positive post‑guide raise; catalysts include execution on summer seasonality, completion of the Q2 sale‑leaseback, and continued margin expansion .

Notes and sources:

  • Q1 2025 press release and 8‑K: ; .
  • Q1 2025 earnings call transcript: .
  • Prior quarter results (Q4 2024): .
  • Prior quarter results (Q3 2024): .
  • Estimates are Values retrieved from S&P Global.