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LT

Life Time Group Holdings, Inc. (LTH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered broad-based strength: revenue rose 14.0% to $761.5M, adjusted EBITDA increased 21.6% to $211.0M with margin expanding 170 bps to 27.7% . Membership engagement remained at all-time highs; average revenue per membership climbed 11.8% to $888 and comps were +11.2% .
  • Against S&P Global consensus, Life Time modestly beat on revenue (+$8.9M, ~1.2%) and “Primary EPS” (+$0.012), with EBITDA below SPGI’s consensus definition; company-reported adjusted EBITDA was $211.0M. Values retrieved from S&P Global*.
  • Guidance raised: FY25 revenue to $2.955–$2.985B, adjusted EBITDA to $805–$815M, comps to 9.5–10.0%; tax rate lifted to 24% and cash taxes cut to $25–$27M (OBBB Act) .
  • Balance sheet/financing catalysts: S&P upgraded issuer rating to BB- (June 18); term loan effectively fixed at ~5.659%; closed $150M sale‑leaseback and plan another $100M in 2H25 . Management now prioritizes accelerating club development (targeting 12–14 new clubs in 2026) and scaling asset-light, high-margin growth (digital, LTH supplements, Miora) .

What Went Well and What Went Wrong

What Went Well

  • Pricing and monetization: Average monthly dues +10.6% YoY to $219; revenue per membership +11.8% to $888. “Our ability to monetize has been very effective,” per CFO (revenue/member +~12%) .
  • Margin expansion and cash generation: Adjusted EBITDA margin +170 bps to 27.7%; fifth consecutive quarter of positive free cash flow ($112.5M) despite elevated capex .
  • Strategic financing and rating upgrade: BB- credit rating achieved; revolver undrawn; $175.5M cash on hand post Q2 sale-leaseback; interest costs reduced via swaps/ratings step-downs .

Quotes:

  • “We are once again in a position to raise our full year revenue and adjusted EBITDA guidance.” – CEO
  • “Visits per membership, 12.7… highest it’s been… total swipes up 7.9% YoY.” – CFO

What Went Wrong

  • EBITDA vs SPGI consensus: Company-reported adjusted EBITDA ($211.0M) exceeded SPGI’s “actual” definition used in estimates, but sat below SPGI EBITDA consensus; highlights definitional variance and the need to anchor to company’s non‑GAAP reconciliation . Values retrieved from S&P Global*.
  • Seasonality and unit timing: Management reiterated Q3 membership seasonality (expected sequential decline) and narrowed 2025 opens to ~10 with some timing shifts; larger-box cadence moves to 2026 (12–14) .
  • Elevated operating costs: Center operations +13.6% (new/ramping centers, higher utilization support) and G&A/marketing +16.0% (share-based comp, IT, overhead, and secondary offering costs) .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$663.3 $706.0 $761.5
Diluted EPS (GAAP)$0.17 $0.34 $0.32
Adjusted Diluted EPS$0.27 $0.39 $0.37
Adjusted EBITDA ($USD Millions)$177.0 $191.6 $211.0
Adjusted EBITDA Margin %26.7% 27.1% 27.7%
Comparable Center Revenue Growth %13.5% 12.9% 11.2%
Center Memberships (End of Period)812,062 826,374 849,643

Segment revenue and mix

MetricQ4 2024Q1 2025Q2 2025
Membership Dues & Enrollment Fees ($M)$477.8 $501.7 $527.3
In‑Center Revenue ($M)$168.6 $184.0 $208.6
Mix: Dues/Enrollment (%)73.9% 73.2% 71.7%
Mix: In‑Center (%)26.1% 26.8% 28.3%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Avg Center Revenue per Membership ($)$796 $844 $888
On‑Hold Memberships54,023 53,377 49,207
Total Memberships (Center + On‑Hold)866,085 879,751 898,850
Net New Center Openings (Quarter)2 1 4
Total Centers (End of Period)179 180 184

Estimate comparison (S&P Global)

MetricQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 Actual
Revenue ($USD)$683,013,430*$706,041,000 $752,613,740*$761,469,000
Primary EPS (USD)$0.28*$0.39 $0.358*$0.37
EBITDA ($USD)$178,844,260*$191,588,000 $199,847,760*$211,000,000

Values retrieved from S&P Global*. Note: Company-reported adjusted EBITDA and adjusted EPS reflect non-GAAP definitions with reconciliations provided in the release .

Guidance Changes

MetricPeriodPrevious Guidance (May 8, 2025)Current Guidance (Aug 5, 2025)Change
Revenue ($B)FY 2025$2.940 – $2.980 $2.955 – $2.985 Raised
Net Income ($M)FY 2025$286 – $293 $290 – $293 Raised (midpoint)
Adjusted EBITDA ($M)FY 2025$792 – $808 $805 – $815 Raised
Rent ($M)FY 2025$337 – $347 $337 – $343 Tightened lower
Comparable Center Revenue Growth (%)FY 20258.5% – 9.5% 9.5% – 10.0% Raised
Interest Expense, net ($M)FY 2025$80 – $84 $80 – $84 Maintained
Provision for Income Tax Rate (%)FY 202523% 24% Raised
Cash Income Tax Expense ($M)FY 2025$39 – $41 $25 – $27 Lowered
D&A ($M)FY 2025$286 – $294 $288 – $294 Tightened
Sale-Leaseback Gross Proceeds ($M)FY 2025LOI for ~$150M in Q2 +$100M in 2H (total ~$250M FY) Updated execution cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024; Q1 2025)Current Period (Q2 2025)Trend
AI/Technology initiativesBuilding L.AI.C; strong digital engagement noted in Q1 prepared remarks Launch of “Lacey” AI health companion; LT Digital 2.3M accounts (+216% YoY) ; public launch 7/29 Accelerating rollout; growing digital ecosystem
Supply chain/tariffsTariff exposure assessed; minimal expected impact across construction/equipment/retail; equipment sourced from Italy/Sweden No new tariff concerns; macro monitored, focus on balance sheet strength Stable; continued monitoring
Macro/seasonalityCautious stance on legacy price actions in Q1; seasonality noted Q3 expected seasonal membership dip; strong early-quarter trends; guidance conservatism retained Seasonality reiterated; conservative planning
Product performance (In‑center/PT)Dynamic Personal Training driving in‑center growth PT strong; spa/F&B improvements underway; LTH supplements +31% YoY Continued momentum; targeted ops improvements
Regional trendsNot highlighted“Nothing really regional”; broad-based gains across PT, aquatics, spa, kids System‑wide consistency
Regulatory/tax—Cash tax lowered (OBBB Act); tax rate moved to 24% Beneficial cash tax outlook
Health featuresCold plunge rollout, recovery additions, modernization capex Continued center upgrades; high utilization underpinning retention/engagement Ongoing enhancements

Management Commentary

  • Strategic posture: “Growth is now our top priority… targeting 12 to 14 club openings in 2026,” with larger average square footage and pipeline depth of 85–100 deals managed actively .
  • Balance sheet and liquidity: “We had no balance on our revolver and more than $175 million in cash,” BB- credit rating achieved; swap plus margin reductions lower interest costs .
  • Asset-light expansion: “LTH nutritional supplement line revenue up 31% YoY”; Miora locations growing MoM with 4–6 additional openings in 2H25; LT Digital/Lacey scaling .
  • Member experience: Waitlists viewed as a tool, not KPI; record visits per membership (12.7) and swipes +7.9% YoY highlight vibrant club activity .

Q&A Highlights

  • Membership flow/seasonality: Early-quarter trends strong; back-half of Q2 recovered from a slower first ~40 days; Q3 expected seasonal decline without weakness in demand .
  • Pricing/monetization: Legacy pricing typically actioned Q2 and Q4; embedded pricing remains; revenue per membership +~12% illustrates effective monetization .
  • Unit timing and pipeline: 2025 narrowed to ~10 opens due to construction timing and financial discipline; 2026 accelerated to 12–14 larger clubs; steady pipeline with 85–100 deals .
  • In‑center initiatives: Strength in PT and engagement events; LTH supplements and Miora expanding; spa/F&B targeted for further execution uplift .
  • Guidance tone: Conservatism embedded in comps; management raised comps to 9.5–10% but remains cautious amid macro .

Estimates Context

  • Q2 beats vs SPGI: Revenue $761.469M vs $752.614M estimate; Primary EPS $0.37 vs $0.358 estimate; EBITDA company-reported adjusted $211.0M vs SPGI consensus $199.8M. Values retrieved from S&P Global*.
  • Q1 similarly beat: Revenue $706.041M vs $683.013M; Primary EPS $0.39 vs $0.28. Values retrieved from S&P Global*.
  • Implication: Modest top-line/earnings beat alongside margin expansion supports raised FY guidance; note definitional differences for EBITDA between SPGI “actual” and company-reported adjusted.

Key Takeaways for Investors

  • Revenue/engagement momentum and margin expansion continue; monetization lever (pricing, in‑center mix) is working while retention and usage are at records .
  • Guidance raised across revenue, adjusted EBITDA, and comps; lower cash tax and improved interest profile add to EPS/FCF visibility .
  • Balance sheet strengthens (BB- rating, undrawn revolver, swaps, sale‑leasebacks), enabling disciplined acceleration to 12–14 new clubs in 2026 and expanded asset‑light initiatives .
  • Asset‑light growth vectors (Digital/Lacey, LTH supplements +31% YoY, Miora) can drive incremental, higher‑margin revenue with limited capital intensity .
  • Near-term trading: Seasonality may temper Q3 membership sequentially; any evidence of sustained comps ≥10% or accelerated unit cadence could be positive catalysts; watch in‑center mix and pricing actions in Q4 .
  • Medium-term thesis: Club size mix shifting larger, pricing power intact, and digital/supplement ecosystem broadening should support double-digit top-line and margin durability; capex elevated near term but funded with FCF and sale‑leasebacks .
  • Risk watch: Macro sensitivity to joins, timing of unit openings, and operating cost inflation; continue to anchor EBITDA/EPS analysis on company reconciliations vs third-party definitions .

Citations: Q2 press release and 8-K ; Q2 earnings call ; Q1 press release and call ; Q4 press release ; Sale‑leaseback & rating upgrade ; L.AI.C launch .

Values retrieved from S&P Global*: Primary EPS Consensus Mean, Revenue Consensus Mean, EBITDA Consensus Mean, Primary EPS – # of Estimates, Revenue – # of Estimates, and associated “actuals” in the estimates table.