Life Time : Earnings Release Q1 2025 Results
LTH
Published on 05/08/2025 at 06:49
May 8, 2025
CHANHASSEN, Minn., May 8, 2025 /PRNewswire/ -- Life Time Group Holdings, Inc. ("Life Time," "we," "our," "us," or the "Company") (NYSE: LTH) today announced its financial results for the fiscal first quarter ended March 31, 2025.
Bahram Akradi, Founder, Chairman and CEO, stated: "We continue to see increased member engagement, with visits and revenue per membership at new highs. The desirability of the Life Time brand is evident in our ongoing success in attracting and retaining increasingly higher quality memberships to our centers. We are also excited to leverage the strength of our brand as we expand our LTH nutritional products and enhance our digital offering, including our L.AI.C companion. Our balance sheet is strong, positioning us well to capitalize on the opportunities ahead."
Financial Summary
($ in millions, except for Average center revenue per center membership
data)
2025
2024
Change
Total revenue
$706.0
$596.7
18.3 %
Center operations expenses
$371.0
$321.9
15.3 %
Rent
$81.2
$72.3
12.3 %
General, administrative and marketing expenses (1)
$57.8
$48.9
18.2 %
Net income
$76.1
$24.9
205.6 %
Adjusted net income
$88.1
$30.5
188.9 %
Adjusted EBITDA $191.6 $146.0 31.2 %
Comparable center revenue (2)
12.9 %
11.1 %
Center memberships, end of period
826,374
802,010
3.0 %
Average center revenue per center membership
$844
$745
13.3 %
The three months ended March 31, 2025 and 2024 included non-cash share-based compensation expense of $10.3 million and
$7.1 million, respectively.
The Company includes a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center's operation, in order to assess the center's growth rate after one year of operation.
First Quarter 2025 Information
New Center Openings
Cash Flow Highlights
($ in millions)
2025
2024
Change
Growth capital expenditures (1)
$93.5
$105.2
(11.1) %
Maintenance capital expenditures (2)
$29.4
$39.5
(25.6) %
Modernization and technology capital expenditures (3)
$19.6
$12.1
62.0 %
Total capital expenditures
$142.5
$156.8
(9.1) %
Consist of new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives.
Consist of general maintenance of existing centers.
Consist of modernization of existing centers and technology.
Liquidity and Capital Resources
2025 Outlook
Full-Year 2025 Guidance
Percent
Year Ending
Year Ending
Year Ended
Change
December 31, 2025
December 31, 2025
December 31, 2024
(Using
(Guidance as of
($ in millions)
(Guidance)
(Actual)
Midpoints)
February 27, 2025)
Revenue
$2,940 - $2,980
$2,621.0
12.9 %
$2,925 - $2,975
Net Income
$286 - $293
$156.2
85.3 %
$277 - $284
Adjusted EBITDA
$792 - $808
$676.8
18.2 %
$780 - $800
Rent
$337 - $347
$304.9
12.2 %
$337 - $347
The Company is also reiterating or updating the following operational and financial guidance for full-year fiscal 2025:
previous expectation of $58 million to $62 million and reflects the tax benefit discussed above.
Conference Call Details
A conference call to discuss our first quarter financial results is scheduled for today:
Replay Information
Webcast - 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 May 22, 2025:
About Life Time
Life Time (NYSE: LTH) empowers people to live healthy, happy lives through its portfolio of 180 athletic country clubs across the United States and Canada, the complimentary, comprehensive Life Time app and nearly 30 of the most iconic athletic events in the country. The health and wellness pioneer uniquely serves people 90 days to 90+ years old through its healthy living, healthy aging, healthy entertainment communities and ecosystem, along with a range of healthy way of life programs and information, and highly trusted LTH nutritional supplements and products. Life Time was recently certified as a Great Place to Work®, reinforcing its commitment to fostering an exceptional workplace culture on behalf of its more than 43,000 dedicated team members.
Use of Non-GAAP Financial Measures and Key Performance Indicators
This 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 net debt 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 Statements
This 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 2025, growth, business initiatives, cost efficiencies and margin expansion, capital expenditures and free cash flow, improvements to its balance sheet, net debt and leverage, interest expense, consumer demand, industry and economic trends, tax rates and expense, rent expense, expected number and timing of new center openings and successful signings and closings of center takeovers and sale-leaseback transactions (including the amount, pricing and timing thereof). 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 competitive and economic environment, risks relating to our brand, risks relating to the growth of our business, 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 https://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 of new information, future events or otherwise.
Revenue:
Center revenue
$ 685,654
$ 580,485
Other revenue
20,387
16,232
Total revenue
Operating expenses:
706,041
596,717
Center operations
370,987
321,900
Rent
81,165
72,282
General, administrative and marketing
57,847
48,853
Depreciation and amortization
70,919
65,903
Other operating expense
17,453
15,722
Total operating expenses
598,371
524,660
Income from operations
107,670
72,057
Other (expense) income:
Interest expense, net of interest income
(25,107)
(37,403)
Equity in (loss) earnings of affiliates
(16)
177
Total other expense
(25,123)
(37,226)
Income before income taxes
82,547
34,831
Provision for income taxes
6,405
9,914
Net income
$ 76,142
$ 24,917
Income per common share: Basic
$ 0.36
$ 0.13
Diluted
$ 0.34
$ 0.12
Weighted-average common shares outstanding:
Basic
211,958
197,498
Diluted
223,619
202,756
Current assets:
$
$
Cash and cash equivalents
59,001
10,879
Restricted cash and cash equivalents
18,470
16,999
Accounts receivable, net
24,672
25,087
Center operating supplies and inventories
62,484
60,266
Prepaid expenses and other current assets
57,991
52,826
Income tax receivable
1,190
4,918
Total current assets
223,808
170,975
Property and equipment, net
3,257,203
3,193,671
Goodwill
1,235,359
1,235,359
Operating lease right-of-use assets
2,347,941
2,313,311
Intangible assets, net
171,520
171,643
Other assets
77,253
67,578
Total assets
$ 7,313,084
$ 7,152,537
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
84,148
$
87,810
Construction accounts payable
95,310
101,551
Deferred revenue
63,005
58,252
Accrued expenses and other current liabilities
184,270
179,444
Current maturities of debt
22,732
22,584
Current maturities of operating lease liabilities
73,136
70,462
Total current liabilities
522,601
520,103
Long-term debt, net of current portion
1,498,106
1,513,157
Operating lease liabilities, net of current portion
2,418,758
2,381,094
Deferred income taxes, net
86,431
85,255
Other liabilities
52,717
42,578
Total liabilities
4,578,613
4,542,187
Stockholders' equity:
Common stock, $0.01 par value per share; 500,000 shares authorized; 217,899 and 207,495 shares issued and outstanding, respectively
2,179
2,075
Additional paid-in capital
3,089,455
3,041,645
Accumulated deficit
(344,431)
(420,573)
Accumulated other comprehensive loss
(12,732)
(12,797)
Total stockholders' equity
2,734,471
2,610,350
Total liabilities and stockholders' equity
$ 7,313,084
$ 7,152,537
2025
2024
Cash flows from operating activities:
Net income
$ 76,142
$ 24,917
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
70,919
65,903
Deferred income taxes
1,177
5,996
Share-based compensation
11,909
7,626
Non-cash rent expense
3,403
5,958
Impairment charges associated with long-lived assets
966
36
Loss on disposal of property and equipment, net
128
245
Amortization of debt discounts and issuance costs
906
2,003
Changes in operating assets and liabilities
17,926
(23,820)
Other
380
1,543
Net cash provided by operating activities
183,856
90,407
Cash flows from investing activities:
Capital expenditures
(142,482)
(156,801)
Other
839
(1,787)
Net cash used in investing activities
(141,643)
(158,588)
Cash flows from financing activities:
Repayments of debt
(5,559)
(54,117)
Proceeds from revolving credit facility
125,000
445,000
Repayments of revolving credit facility
(135,000)
(315,000)
Repayments of finance lease liabilities
(842)
(193)
Proceeds from stock option exercises
27,880
484
Other
(4,099)
(1,199)
Net cash provided by financing activities
7,380
74,975
Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents
-
(36)
Increase in cash and cash equivalents and restricted cash and cash equivalents
49,593
6,758
Cash and cash equivalents and restricted cash and cash equivalents-beginning of period
27,878
29,966
Cash and cash equivalents and restricted cash and cash equivalents-end of period
$ 77,471
$ 36,724
Non-GAAP Measurements and Key Performance Indicators
See "Use of Non-GAAP Financial Measures and Key Performance Indicators" for a discussion of the Non-GAAP financial measures reconciled below.
March 31,
Membership Data
2025
2024
Center memberships
826,374
802,010
On-hold memberships
53,377
51,062
Total memberships
879,751
853,072
Revenue Data
Membership dues and enrollment fees
73.2 %
73.3 %
In-center revenue
26.8 %
26.7 %
Total Center revenue
100.0 %
100.0 %
Membership dues and enrollment fees
$ 501,653
$ 425,411
In-center revenue
184,001
155,074
Total Center revenue
$ 685,654
$ 580,485
Average Center revenue per center membership (1)
$ 844
$ 745
Comparable center revenue (2)
12.9 %
11.1 %
Center Data
Net new center openings (3)
1
1
Total centers (end of period) (3)
180
172
Total center square footage (end of period) (4)
17,700,000
16,900,000
GAAP and Non-GAAP Financial Measures
Net income
$ 76,142
$ 24,917
Net income margin (5)
10.8 %
4.2 %
Adjusted net income (6)
$ 88,147
$ 30,525
Adjusted net income margin (6)
12.5 %
5.1 %
Adjusted EBITDA (7)
$ 191,588
$ 145,977
Adjusted EBITDA margin (7)
27.1 %
24.5 %
Center operations expense
$ 370,987
$ 321,900
Pre-opening expenses (8)
$ 1,373
$ 2,452
Rent
$ 81,165
$ 72,282
Non-cash rent expense (open properties) (9)
$ 2,295
$ 4,184
Non-cash rent expense (properties under development) (9)
$ 1,108
$ 1,774
Net cash provided by operating activities
$ 183,856
$ 90,407
Free cash flow (10)
$ 41,374
$ (66,394)
We define Average Center revenue per center membership as Center revenue less On-hold revenue, divided by the average number of Center memberships for the period, where the average number of Center memberships for the period is an average derived from dividing the sum of the total Center memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period.
We measure the results of our centers based on how long each center has been open as of the most recent measurement period. We include 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.
Net new center openings is calculated as the number of centers that opened for the first time to members during the period, less any centers that closed during the period. Total centers (end of period) is the number of centers operational as of the last day of the period. During the three months ended March 31, 2025, we opened one center.
Total center square footage (end of period) reflects the aggregate square footage, excluding the areas used for tennis courts, outdoor swimming pools, outdoor play areas and stand-alone Work, Sport and Swim locations. We use this metric for evaluating the efficiencies of a center as of the end of the period. These figures are approximations.
Net income margin is calculated as net income divided by total revenue.
We present Adjusted net income as a supplemental measure of our performance. We define Adjusted net income 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 net income margin is calculated as Adjusted net income divided by total revenue.
The following table provides a reconciliation of net income and income per common share, the most directly comparable GAAP measures, to Adjusted net income and Adjusted net income per common share:
($ in thousands)
2025
2024
Net income
$ 76,142
$ 24,917
Share-based compensation expense (a)
11,909
7,626
Capital transaction costs (b)
920
-
Other (c)
186
214
Taxes (d)
(1,010)
(2,232)
Adjusted net income
$ 88,147
$ 30,525
Income per common share: Basic
$ 0.36
$ 0.13
Diluted
$ 0.34
$ 0.12
Adjusted income per common share:
Basic
$ 0.42
$ 0.15
Diluted
$ 0.39
$ 0.15
Weighted-average common shares outstanding:
Basic
211,958
197,498
Diluted
223,619
202,756
Share-based compensation expense recognized during the three months ended March 31, 2025, was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan ("ESPP"), and liability-classified awards related to our 2025 short-term incentive plan. Share-based compensation expense recognized during the three months ended March 31, 2024, was associated with stock options, restricted stock units, our ESPP and liability-classified awards related to our 2024 short-term incentive plan.
Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature.
Includes (i) legal-related expenses in pursuit of our claim against Zurich of $0.1 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively, and (ii) other immaterial transactions that are unusual or non-recurring in nature of $0.1 million for the three months ended March 31, 2025.
Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income using the effective income tax rates for the respective periods.
We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.
The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA:
($ in thousands)
2025
2024
Net income
$ 76,142 $
24,917
Interest expense, net of interest income
25,107
37,403
Provision for income taxes
6,405
9,914
Depreciation and amortization
70,919
65,903
Share-based compensation expense (a)
11,909
7,626
Capital transaction costs (b)
920
-
Other (c)
186
214
Adjusted EBITDA
$ 191,588 $
145,977
- (c) See the corresponding footnotes to the table in footnote 6 immediately above.
Represents non-capital expenditures associated with opening new centers that are incurred prior to the commencement of a new center opening. The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period.
Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.
Free cash flow, a non-GAAP financial measure, is calculated as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales.
The following table provides a reconciliation from net cash provided by operating activities to free cash flow:
($ in thousands)
2025
2024
Net cash provided by operating activities
$ 183,856
$ 90,407
Capital expenditures, net of construction reimbursements
(142,482)
(156,801)
Free cash flow
$ 41,374
$ (66,394)
Twelve
Months Ended
Twelve
Months Ended
March 31, 2025
March 31, 2024
Current maturities of debt
$ 22,732
$ 23,261
Long-term debt, net of current portion
1,498,106
1,987,180
Total Debt
$ 1,520,838
$ 2,010,441
Less: Fair value adjustment
246
400
Less: Unamortized debt discounts and issuance costs
(19,162)
(13,466)
Less: Cash and cash equivalents
59,001
18,598
Net Debt
$ 1,480,753
$ 2,004,909
Trailing twelve-month Adjusted EBITDA
722,391
562,705
Net Debt Leverage Ratio
2.0x
3.6x
Year Ending
December 31, 2025
Net income
$286 - $293
Interest expense, net of interest income
84 - 80
Provision for income taxes
86 - 87
Depreciation and amortization
286 - 294
Share-based compensation expense
49 - 53
Other
1 - 1
Adjusted EBITDA
$792 - $808
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SOURCE Life Time Group Holdings, Inc.
Disclaimer
Life Time Group Holdings Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 10:48 UTC.