Fitness club giant Life Time Group Holdings, Inc. lifted its guidance for the year after reporting adjusted earnings in the first quarter grew 23.5 percent on an 11.7 percent revenue gain.

Bahram Akradi, founder, chairman and CEO, stated: “Our first quarter results reflect strong execution and continued momentum across our business. Our growth strategy remains on track. We are on schedule to open this year’s planned 12 to 14 new clubs, which are predominantly large-format, ground-up athletic country clubs. Membership engagement continues to rise, our membership mix is improving, and in-center performance remains robust. Supported by a solid balance sheet, low leverage, and strong cash generation, we are well positioned for continued growth.”

First Quarter 2026 Information

Revenue increased 11.7 percent to $788.7 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 its new and ramping centers and higher member utilization of its in-center offerings, particularly in Dynamic Personal Training.

Center memberships of 837,903 increased by 11,529, or 1.4 percent, when compared to March 31, 2025, and increased by 15,523, or 1.9 percent, from December 31, 2025, 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 888,050 increased 0.9 percent compared to March 31, 2025.

Center operations expenses increased 9.6 percent to $406.7 million primarily due to operating costs related to its new and ramping centers, additional center operating expenses related to increased club utilization in its mature centers, as well as costs to support in-center business revenue growth.

General, administrative and marketing expenses increased 3.1 percent to $59.6 million primarily due to increases in center support overhead to enhance and broaden its member services and experiences.

Net income increased 15.8 percent to $88.1 million primarily due to business performance, slightly offset by $12.6 million of income tax benefits in the prior period due to a significant exercise of stock options by its chief executive officer that were set to expire in 2025.

Adjusted net income increased 27.4 percent to $96.2 million and Adjusted EBITDA increased 18.3 percent to $226.7 million as Life Time experienced greater flow through of its increased revenue.

New Center Openings

Life Time opened one new center during the first quarter of 2026. As of March 31, 2026, Life Time operated a total of 190 centers.

Cash Flow Highlights

Net cash provided by operating activities for the three months ended March 31, 2026 was $198.8 million, an increase of 8.1 percent compared to the prior year period.

On April 29 and April 30, 2026, Life Time completed two sale-leaseback transactions for five properties and net proceeds of approximately $200 million.

Capital expenditures by type of expenditure were as follows:

Liquidity and Capital Resources

Net debt leverage ratio improved to 1.6 times as of March 31, 2026, from 2.0 times as of March 31, 2025.

As of March 31, 2026, Life Time’s total available liquidity was $736.9 million, which included $616.9 million of availability on its $650.0 million revolving credit facility and $120.0 million of cash and cash equivalents. At March 31, 2026, there were no outstanding borrowings under its revolving credit facility and there were $33.1 million of outstanding letters of credit.

2026 Outlook

Full-Year 2026 Guidance

The company is reiterating the following expectations for fiscal 2026 as outlined in its fourth quarter and full-year 2025 results announced on February 24, 2026:

  • Open 12 to 14 new clubs, most of which will be large-format, ground-up construction clubs. We expect the total square footage of its 2026 class of clubs to be approximately 1.2 million square feet, nearly double the square footage of each of its 2024 class and 2025 class of clubs. We expect the majority of its 2026 class of clubs to open in the back half of the year, including six to seven in the fourth quarter of 2026.
  • Maintenance capital expenditures of $140 to $150 million, modernization and technology capital expenditures of $130 to $140 million, and growth capital expenditures of $875 to $915 million.
  • Manage its net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times.
  • Provision for income tax rate estimate of 28 percent.

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

  • Complete approximately $400 million of sale-leaseback transactions, increased from $300 million.
  • Comparable center revenue growth of 6.9 percent to 7.5 percent, which includes its ramping and mature centers, increased from 6.3 percent to 7.3 percent.
  • Rent to include non-cash rent expense of $31 million to $34 million, increased from $24 million to $27 million.
  • Cash income tax expense of $80 million to $83 million, increased from $57 million to $59 million, reflecting the normalization of cash taxes following the utilization of net operating loss carryforwards in the prior year and lower tax depreciation.
  • 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. This is an increase from $56 million to $60 million, net of $33 million to $35 million of capitalized interest expense related to construction in progress.
  • Year-end weighted-average diluted common shares outstanding of approximately 228 million to 230 million, not including any incremental impact that may occur as a result of its $500 million share buyback program, decreased from 229 million to 231 million.

Charts and Image courtesy Life Time