Life Time Group Holdings, Inc. raised its outlook for the year as earnings for the upscale fitness club operator climbed 30.6 percent in the second quarter on a 13.7 percent revenue gain.

Bahram Akradi, founder, chairman and CEO, stated: “We delivered strong second quarter results, driven by our continued focus on delivering exceptional member experiences across our clubs. That focus is translating into higher engagement, increased utilization of our in-center offerings and continued optimization of our membership mix. As a result, we are seeing strong comparable center revenue performance and growth in revenue per membership. We are on track to open 14 new clubs in 2026 and continue to see significant demand for our premium athletic country club model.”(1) The three months ended June 30, 2026 and 2025 included non-cash share-based compensation expense of $13.9 million and $14.2 million, respectively. The six months ended June 30, 2026 and 2025 included non-cash share-based compensation expense of $23.0 million and $24.5 million, respectively.

(2) 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.

Second Quarter 2026 Information
Revenue increased 13.7 percent to $866.0 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues, including from improved membership mix, membership growth in new and ramping centers and higher member utilization of its in-center offerings, particularly in Dynamic Personal Training.

Center memberships of 860,041 increased by 10,398, or 1.2 percent, when compared to June 30, 2025, and increased by 22,138, or 2.6 percent, from March 31, 2026, consistent with seasonality expectations and continued improvement in membership mix, including a significant reduction in qualified memberships administered through medical insurance providers, which have significantly lower average dues.

Total subscriptions, which include center memberships and on-hold memberships, of 910,520 increased 1.3 percent compared to June 30, 2025.

Center operations expenses increased 12.3 percent to $453.7 million primarily due to operating costs related to new and ramping centers, additional center operating expenses related to increased club utilization in mature centers, as well as costs to support in-center business revenue growth.

General, administrative and marketing expenses increased 7.0 percent to $66.0 million primarily due to increases in incentive and benefit-related expenses.

Net income increased 40.6 percent to $101.4 million primarily due to business performance, as well as tax-effected net cash proceeds of $3.7 million received in partial satisfaction of legal claims and tax-effected net gains of $1.5 million on sale-leaseback transactions. Net income in the prior year period included tax-effected net cash proceeds of $9.3 million received from employee retention credits under the CARES Act, partially offset by a tax-effected net loss of $9.0 million on a sale-leaseback transaction.

Adjusted net income increased 30.6 percent to $109.8 million and Adjusted EBITDA increased 16.8 percent to $246.5 million as Life Time experienced greater flow through of increased revenue.

Six-Month 2026 Information
Revenue increased 12.8 percent to $1,654.7 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues including from improved membership mix, membership growth in new and ramping centers and higher member utilization of in-center offerings, particularly in Dynamic Personal Training.

Center operations expenses increased 11.0 percent to $860.4 million primarily due to operating costs related to new and ramping centers, additional center operating expenses related to increased club utilization in mature centers, as well as costs to support in-center business revenue growth.

General, administrative and marketing expenses increased 5.2 percent to $125.7 million primarily due to increases in incentive and benefit-related expenses and increases in center support overhead to enhance and broaden member services and experiences.

Net income increased 27.9 percent to $189.5 million primarily due to business performance, as well as tax-effected net cash proceeds of $3.7 million received in partial satisfaction of legal claims and tax-effected net gains of $1.5 million on sale-leaseback transactions. Net income in the prior year period included $12.6 million of income tax benefits due to a significant exercise of stock options by its chief executive ozfficer that were set to expire in 2025, and tax-effected net cash proceeds of $10.5 million received from employee retention credits under the CARES Act, partially offset by a tax-effected net loss of $10.2 million on a sale-leaseback transaction.

Adjusted net income increased 29.0 percent to $206.1 million and Adjusted EBITDA increased 17.5 percent to $473.2 million as Life Time experienced greater flow through of increased revenue.

New Center Openings
Life Time opened five new centers during the second quarter of 2026.

As of June 30, 2026, Life Time operated a total of 195 centers.

Cash Flow Highlights
Net cash provided by operating activities for the six months ended June 30, 2026 was $408.4 million, an increase of 7.6 percent compared to the prior year period.

Capital expenditures by type of expenditure were as follows:

 

Liquidity and Capital Resources
Net debt leverage ratio improved to 1.4 times as of June 30, 2026, from 1.8 times as of June 30, 2025.

As of June 30, 2026, total available liquidity was $855.7 million, which included $632.1 million of availability on its $650.0 million revolving credit facility and $223.6 million of cash and cash equivalents. At June 30, 2026, there were no outstanding borrowings under its revolving credit facility and there were $17.9 million of outstanding letters of credit.

On April 21, 2026, Fitch Ratings upgraded Life Time’s issuer credit rating to ‘BB’ from ‘BB-‘ and on June 25, 2026, S&P Global Ratings upgraded its issuer credit rating to ‘BB’ from ‘BB-‘

During the three months ended June 30, 2026, Life Time repurchased approximately 2.2 million shares of its common stock under a share repurchase program approved by its board of directors on February 24, 2026, for total consideration of approximately $62.7 million at an average price per share of $28.59.

2026 Outlook
Full-Year 2026 Guidance

Previously, guidance called for revenue between $3,320 and $3,350 million, net income between $340 and $345 million, adjusted income between $378 and $386 million, and adjusted EBTIDA between $925 and $940 million.

The company is reiterating the following expectations for fiscal 2026 as outlined in its first quarter 2026 results announced on May 5, 2026:

  • Complete approximately $200 million in additional sale-leaseback transactions during the second half of fiscal year 2026 for a total of $400 million during the fiscal year.
  • Interest expense, net of interest income, of approximately $59 million to $63 million, and net of $28 million to $30 million of capitalized interest expense related to construction in progress.
  • Manage net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times.

The company is also updating the following operational and financial expectations for fiscal 2026:

  • Comparable center revenue growth of 7.9 percent to 8.3 percent, which includes ramping and mature centers, increased from 6.9 percent to 7.5 percent.
  • Open 14 new clubs, tightened from 12 to 14, most of which will be large-format, ground-up construction clubs. Life Time expects the total square footage of its 2026 class of clubs to be approximately 1.3 million square feet, nearly double the square footage of each of its 2024 class and 2025 class of clubs. Six new clubs have opened this year as of June 30, 2026, and one additional club opened in July 2026. The remaining seven are expected to open in the fourth quarter of 2026.
  • Maintenance capital expenditures of $140 million to $150 million, modernization and technology capital expenditures of $140 million to $150 million, increased from $130 million to $140 million as Life Time accelerates the deployment of its CTR and Hybrid XT group training classes, and growth capital expenditures of $885 million to $910 million, tightened from $875 million to $915 million.
  • Rent to include non-cash rent expense of $32 million to $35 million, increased from $31 million to $34 million.
  • Cash income tax expense of $103 million to $105 million, increased from $80 million to $83 million due to taxable gains on sale-leaseback transactions closed in the second quarter and higher estimated earnings before tax for the full year.
  • Provision for income tax rate estimate of 27 percent, decreased from 28 percent.
  • Year-end weighted-average diluted common shares outstanding of approximately 227 million to 229 million, not including any incremental impact that may occur as a result of a $500 million share buyback program, decreased from 228 million to 230 million.

Image courtesy Life Time