Life Time Group Holdings (LTH)·Q4 2025 Earnings Summary

Life Time Beats Across the Board, Announces $500M Buyback

February 24, 2026 · by Fintool AI Agent

Life Time Group Holdings (NYSE: LTH) delivered a strong Q4 2025, beating analyst expectations on both revenue and earnings while announcing a $500 million share repurchase program. The premium fitness operator reported adjusted EPS of $0.34, crushing the $0.27 consensus estimate by 25.9%, and revenue of $745.1 million, topping the $736.1 million estimate by 1.2%.

The results extend Life Time's beat streak to seven of the last eight quarters, with only Q3 2024 posting a miss. CEO Bahram Akradi highlighted record financial performance driven by "higher member engagement, increased dues per membership, and robust in-center revenue growth."

Did Life Time Beat Earnings?

Yes — and convincingly. Life Time beat on every major metric:

The outsized GAAP EPS beat (+218% YoY) reflects several one-time items: $27.7M in legal settlement proceeds from Zurich insurance claims, $14.1M in CARES Act employee retention credits, and $12.5M in gains on sale-leaseback transactions.

Beat/Miss History (Last 8 Quarters):

What Did Management Guide?

Life Time reiterated its FY 2026 guidance, which remains above prior consensus:

The net income decline reflects the absence of 2025's one-time items (legal settlements, ERC credits, CEO stock option tax benefits). Core operating performance remains strong with adjusted metrics showing double-digit growth.

Key 2026 Expectations:

• 12-14 new clubs with ~1.2 million square feet — nearly double the 2024 and 2025 club classes
• Comparable center revenue growth of 6.3% to 7.3%
• At least $300M in sale-leaseback transactions
• Net leverage maintained at or below 2.0x

What Changed From Last Quarter?

$500 Million Share Repurchase Program

The headline announcement: Life Time's board authorized a $500 million share repurchase program, the company's first significant capital return to shareholders.

CEO Akradi framed it as a reflection of balance sheet strength: "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."

At the current market cap of ~$6.3B, this represents roughly 8% of shares outstanding — a meaningful signal of management's confidence in the stock.

Accelerated Expansion

Life Time is doubling down on growth. The 2026 class of clubs will total approximately 1.2 million square feet — nearly double the square footage of each of the 2024 and 2025 classes. Most openings are back-half weighted, with 6-7 clubs expected in Q4 2026 alone.

Management confirmed the pipeline: up to 28 clubs across 2026 and 2027, with one 2026 club already open and the remaining 13 under construction.

Growth CapEx for 2026: $875-915M, with over half allocated to clubs opening in 2027 and beyond. Additional capex includes $140-150M for maintenance and $130-140M for modernization, technology, and corporate investments.

Balance Sheet Improvement

Net leverage ratio improved to 1.6x from 2.3x at year-end 2024, providing headroom for both growth investments and shareholder returns.

Total liquidity stands at $823M, including $205M cash and $618M revolver availability.

Key Operating Metrics

Center memberships declined sequentially from Q3 (down 18,242), but management attributed this to "seasonality expectations and continued shifts in membership mix."

The more important metric — revenue per membership — continues to climb, up 10.8% YoY as Life Time optimizes its member base toward higher-value segments. Engagement is also at record levels with 12.5 monthly visits per membership for the year, up 4.8% from 2024.

Margins and Profitability

Profitability continues to expand as Life Time scales. Center operations expenses grew 10.3% vs. revenue growth of 12.3%, demonstrating operating leverage.

Full-Year 2025 Performance

Free cash flow declined due to significantly higher growth capex ($656.5M vs. $334.5M in 2024), partially offset by $227.4M in sale-leaseback proceeds.

Capital Allocation Summary

Life Time's capital deployment priorities for 2026:

1. Growth capex — Fund 12-14 new large-format clubs
2. Share repurchases — $500M authorized, opportunistic execution
3. Maintain balance sheet strength — Target ≤2.0x net leverage
4. Sale-leasebacks — At least $300M to fund growth

No dividend was mentioned — the company is prioritizing reinvestment and buybacks over income distribution.

How Did the Stock React?

Life Time shares closed at $28.41, down 1.9% on earnings day despite the beat. The muted reaction likely reflects:

• Results were largely pre-announced in the January 22nd preliminary release
• GAAP net income guided down 11% for FY 2026 (though adjusted income growing 15%)
• Broader market volatility

The stock trades at ~17x FY 2026 adjusted EPS estimates, below the historical range. Analysts maintain a Strong Buy consensus with an average price target of ~$40, implying 40%+ upside.

Management Quotes

Bahram Akradi, Founder, Chairman & CEO:

"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 expect to add nearly as much new square footage in 2026 as we opened in the past two years combined."

"We believe we are now in a position to continue investing for long-term growth while further driving shareholder return."

"Our clubs are opening stronger than ever and ramping faster than ever. Some clubs reach literally contribution margin positive the first full month of club operation, which is pretty incredible."

"I have no qualms about guiding you guys again, that the EBITDA margin we're giving you is phenomenal... We have zero desire to disappoint you guys, or the street, or anybody else. Our goal is to also not disappoint our member at the expense of a shareholder or a shareholder at the expense of the members."

"We run into people who have been a member, they move, and all they say is how they miss their Life Time. They miss their Life Time. They wanna go somewhere near the Life Time."

Q&A Highlights

New Club Unit Economics

Analyst Arpine Kocharyan (UBS) asked about unit economics for the larger-format clubs opening in 2026. Management revealed a fundamentally different model for new clubs:

Akradi: "The model for the new clubs are significantly lower number of members, using the club significantly more, and they're paying a much higher rack rate. This model is actually way more efficient than what we used to do."

Some new clubs are reaching contribution margin positive in the first full month of operation — an unprecedented ramp speed.

Rack Rate vs. Legacy Dues Gap

The gap between rack rates and average dues in the system currently sits at $19.5 million per month — and has remained in the $17-20M range as both rack rates and legacy price increases move in tandem.

Akradi: "When the visits to the club are basically at the saturation level and the members you have are paying more... you can have fewer members for that optimal deal. The only way you can do that is really raise the membership prices. We are doing that really to protect the customer experience."

MIORA Expansion Update

Life Time's MIORA wellness concept (longevity-focused treatments) has expanded to 7-8 locations, up from 2 at the end of 2024.

Management confirmed MIORA is expected to be in every single market — not every club, but accessible to all members. Early locations that opened without construction delays are "ramping faster than original models."

DPT (Dynamic Personal Training) Momentum

John Heinbockel (Guggenheim) highlighted that DPT sessions grew 18% over the past 2 years. Akradi confirmed:

• Robust growth plan for 2026
• Some clubs generating "by far the biggest revenues and margins we have ever seen"
• Opportunity to add team members and leaders in markets that are still ramping

LT Digital & L•AI•C Strategy

Digital subscribers have grown to ~3.3 million (up from 3M target entering 2026). Management has pivoted the strategy:

• L•AI•C (Life Time's AI companion) now focused on enhancing the dues-paying member experience first
• Digital subscribers get a reduced version but can see club schedules, making guest visits and conversion easier
• Management confirmed "improvement in that strategy" for converting digital subscribers to full members

LT Health (Supplements)

The supplement business is performing well in-club but "mediocre" digitally:

• In-club strategy: Growing via education from PTs, group fitness instructors, and café staff
• Digital: Requires more consumer education on product quality and differentiation
• 2027 and beyond: Plans to expand outside Life Time walls once in-club penetration matures

Cost Management

Kate McShane (Goldman Sachs) asked about labor and healthcare cost pressures. Management response:

• Labor increases running 2.5%-3% — consistent with industry
• Healthcare costs "managed very well" through captive structure and healthy employee base
• Supply cost pressures being "mitigated and offset" through procurement team efforts
• All cost headwinds already built into 2026 guidance

Margin Philosophy — A Warning

Akradi was explicit about EBITDA margin expectations in response to John Baumgartner (Mizuho):

Akradi: "It may be a quarter we give you more than 27.5%. I just don't want that to become the standard or the model, because I do not wanna have the pressure on this company to do things that will damage the company on the long term."

He explicitly cautioned analysts not to model margins above 27.5%, prioritizing member experience over incremental margin expansion.

High-End "White Glove" Services

Chris Woronka (Deutsche Bank) asked about leaning further into the high-end market. Akradi confirmed:

• Working on bundled programming for the highest-end members
• Easier transactions, more programming, and "white glove" approach
• Certain members "wanting to spend more" — demand is there

2028+ Pipeline

Looking beyond 2027, Akradi outlined a shift in the development model:

• Many future locations in urban markets will be landlord-funded buildouts
• Life Time contributes leasehold improvements only
• "Big, beautiful clubs in high-rise buildings" coming as leases rather than owned assets
• Reduces capital intensity while maintaining growth pace

Forward Catalysts

1. New club openings — 6-7 large-format clubs in Q4 2026 alone; nearly double 2024/2025 square footage
2. Share repurchase execution — $500M authorized, opportunistic deployment
3. MIORA expansion — Scaling to every market; early locations ramping above model
4. Dynamic Personal Training — 18% session growth over 2 years with "robust" 2026 plan
5. New club ramp speed — First-month contribution margin positive in some openings
6. Membership pricing power — Revenue per membership up 11% YoY; rack rate optimization ongoing
7. High-end bundled services — White glove programming in development

Key Risks

• Execution risk on accelerated club openings — nearly doubling development pace
• Consumer spending — Economic slowdown could pressure premium fitness demand
• Competition — Boutique fitness and home workout alternatives
• Interest rate sensitivity — Construction financing costs for new clubs; $33-35M interest will be capitalized in 2026
• Seasonality — Q1 typically strongest, Q4 weakest for membership growth
• Margin expectations — Management explicitly capped EBITDA margin guidance at 27.5%, prioritizing member experience over margin expansion

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Data as of February 24, 2026. Analyst estimates from pre-earnings consensus. Values retrieved from S&P Global where not cited.