Life Time Group Holdings, Inc. raised its full-year guidance after reporting third-quarter adjusted earnings surged 65.2 percent on 12.9 percent revenue growth, underscoring strong performance.

Bahram Akradi, founder, chairman and CEO, stated: “Our third quarter results reflect strong execution and continued momentum across the business. Our growth strategy remains on track. Nearly all of next year’s planned 12 to 14 new clubs are currently under construction. Membership engagement continues to rise, 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.”

Third Quarter 2025 Information
Revenue increased 12.9 percent to $782.6 million, reflecting strong growth in membership dues and in-center revenue, mainly due to higher average dues, more memberships in new and ramping centers, and greater member utilization of offerings, particularly Dynamic Personal Training.

Center memberships of 840,622 increased by 14,120, or 1.7 percent, when compared to September 30, 2024, and decreased consistently with seasonality expectations by 9,021, or 1.1 percent, from June 30, 2025.

Total subscriptions, which include center memberships and on-hold memberships, increased to 891,225, a 1.7 percent rise compared to September 30, 2024.

Center operations expenses increased 11.6 percent to $414.3 million, primarily due to operating costs related to its new and ramping centers, additional center operating expenses resulting from increased club utilization in its mature centers, as well as costs to support in-center business revenue growth.

General, administrative, and marketing expenses increased 3.6 percent to $59.8 million, primarily due to increases in center support overhead to enhance and broaden member services and experiences, as well as general corporate overhead.

Net income increased 147.3 percent to $102.4 million primarily due to business performance, tax-effected net cash proceeds of $16.2 million received from employee retention credits under the CARES Act, and a tax-effected net gain of $5.7 million on a sale-leaseback transaction. Net income in the prior year period included a tax-effected net loss of $3.5 million on sale-leaseback transactions and $0.5 million from a gain on the sale of land.

Adjusted net income increased 65.2 percent to $93.0 million and adjusted EBITDA increased 22.0 percent to $220.0 million as Life Time experienced greater flow-through of its increased revenue.

Nine-Month 2025 Information
Revenue increased 14.9 percent to $2,250.2 million, driven by continued strong growth in membership dues and in-center revenue. This growth was fueled by an increase in average dues, membership growth in its new and ramping centers, and higher member utilization of in-center offerings, particularly in Dynamic Personal Training.

Center operations expenses increased 13.4 percent to $1,189.2 million, primarily due to operating costs related to its new and ramping centers, as well as additional center operating expenses resulting from increased club utilization in its mature centers, and costs to support in-center business revenue growth.

General, administrative and marketing expenses increased 12.3 percent to $179.4 million primarily due to the timing of share-based compensation and benefit-related expenses, increases in center support overhead to enhance and broaden its member services and experiences, general corporate overhead, information technology costs, and costs attributable to the secondary offerings of its common stock completed in February and June 2025.

Net income increased 110.5 percent to $250.7 million primarily due to improved business performance, a $15.2 million tax benefit as a result of an excess tax deduction associated with stock option exercises, and tax-effected net cash proceeds of $27.2 million received from employee retention credits under the CARES Act, partially offset by a tax-effected net loss of $3.8 million on sale-leaseback transactions. Net income in the prior year period included tax-effect net benefits of $5.7 million from a $2.0 million net gain on sale-leaseback transactions and $3.7 million from a gain on the sale of land.

Adjusted net income increased 88.2 percent to $263.8 million and adjusted EBITDA increased 24.6 percent to $622.6 million as Life Time experienced greater flow through of its increased revenue.

New Center Openings
Life Time opened one new center during the third quarter of 2025. As of September 30, 2025, Life Time operated a total of 185 centers.

Cash Flow Highlights
Net cash provided by operating activities for the nine months ended September 30, 2025, was $630.7 million, an increase of 53.1 percent compared to the prior year period.

Life Time achieved positive free cash flow of $62.5 million for the third quarter of 2025, including $33.9 million of net proceeds from a sale-leaseback transaction for one property. Life Time achieved positive free cash flow of $216.4 million for the nine months ended September 30, 2025, including $172.7 million of net proceeds from sale-leaseback transactions of four properties.

 Liquidity and Capital Resources
Net debt leverage ratio improved to 1.6 times as of September 30, 2025, from 2.4 times as of September 30, 2024.

As of September 30, 2025, the total available liquidity was $837.1 million, comprising $618.2 million of availability under its $650.0 million revolving credit facility and $218.9 million in cash and cash equivalents. At September 30, 2025, there were no outstanding borrowings under its revolving credit facility and there were $31.8 million of outstanding letters of credit. Life Time’s $218.9 million of cash and cash equivalents is higher than historical levels due to the sale-leaseback transactions completed during the year. Life Time expects to use this cash to fund growth initiatives.

Effective August 18, 2025, Life Time completed a repricing of its term loan facility, reducing the applicable interest rate margin by 0.25 percent to 2.00 percent.

2025 Outlook
The company also reiterated or updated the following operational and financial guidance for full-year fiscal 2025:

  • Open 10 new centers, seven of which are currently open as of November 4.
  • Manage its net debt leverage ratio to remain below 2.00 times.
  • The company expects comparable center revenue growth of 10.8 percent to 11.0 percent, increased from its previous expectations of 9.5 percent to 10.0 percent.
  • Adjusted EBITDA growth, driven primarily by dues revenue growth and expanded operating leverage.
  • Rent to include non-cash rent expense of $34 million to $36 million, tightened from its previous expectations of $34 million to $37 million.
  • Interest expense, net of interest income and capitalized interest, is expected to be approximately $81 million to $83 million, a tightening from its previous expectations of $80 million to $84 million.
  • Provision for income tax rate estimate of 24 percent.
  • Cash income tax expense of $27 million to $29 million, which compares to its previous expectation of $25 million to $27 million.
  • Depreciation and amortization expense of $296 million to $298 million, which compares to its previous expectation of $288 million to $294 million.
  • Complete at least $55 million to $65 million in additional sale-leaseback transactions in the fourth quarter.

Image courtesy LifeTime