Life Time Group Holdings, Inc.
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Item 1. BUSINESS
Life Time Group Holdings, Inc. (collectively with its direct and indirect subsidiaries, “Life Time,” “we,” “our,” “us,” or the “Company”) is a holding company incorporated in the state of Delaware. Life Time Group Holdings, Inc. completed its initial public offering (“IPO”) in October 2021 and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “LTH.”
Who We Are
Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of nearly 1.6 million individual members, who together comprise nearly 873,000 memberships, as of December 31, 2025. We are a leading innovator in the industry having successfully created a leisure model that incorporates the country club wellness lifestyle within a fitness and active living community. We have earned the trust of our members for over 30 years to make their lives healthier and happier by offering them the best places, programs and performers. We believe that consumers equate our brand with the uncompromising quality, luxury and “Healthy Way of Life” experiences that Life Time offers. We have built our reputation and robust brand equity through our continuous focus on delivering high-quality experiences through our omni-channel physical and digital ecosystem that includes more than 185 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada. Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance.
Our centers serve communities in both suburban and urban markets across North America. Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, recovery spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces. Our premium service offerings are delivered by over 44,000 Life Time team members, including over 11,100 certified fitness professionals, ranging from personal trainers to studio performers.
We have a model and scale that would be difficult to replicate. Our premium real estate portfolio of owned and leased athletic country clubs spans over 18 million of indoor square feet and over seven million of outdoor square feet in the aggregate. Our footprint of athletic country clubs as of December 31, 2025:
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Our Membership Offering
We offer a variety of convenient month-to-month memberships with no long-term contracts, including:
•base memberships that provide general access (with some amenities excluded) to a selected home center and all centers with the same or lower base monthly dues rate, with the option for a junior membership as an add-on. The junior membership add-on for children 13 years old and younger currently costs $30-$100 per month. We do not count junior memberships as incremental in our membership count since they are already part of our base membership;
•signature memberships that are base memberships plus access to certain products, services or spaces that would otherwise be accessible only upon payment of additional dues or fees such as small group training and court time for certain racquet sports at certain centers;
•qualified base memberships that can be purchased at a reduced rate and which may be subsidized through partnerships with third party administrators including certain medical insurance providers and which may have limited hours and have limited locations at which they are offered; and
•on-hold memberships for members who do not currently wish to access our centers, but still want to maintain certain member benefits, including the right to convert back to a Center membership without paying an enrollment fee. The majority of our on-hold memberships cost $15 per month.
Our membership mix is notably shifting with couples and families comprising increasingly larger portions of total memberships. These memberships have historically been more engaged with higher retention and higher average monthly dues. With these membership dynamics and our premium, high-use model, our newer centers are typically reaching their desired utilization and revenue with fewer memberships and in certain centers we are limiting qualified memberships, which have significantly lower average membership dues.
Our Highly Predictable Subscription-Based Revenue Model
Our subscription-based membership model creates highly predictable and recurring revenue that has proven to be resilient for over 30 years and across economic cycles. Membership dues and enrollment fees comprise our largest source of revenue, representing over 70% of our total Center revenue. Our strategic shift to a more robust subscription offering coming out of the pandemic has resulted in our membership dues and enrollment fees now representing over 72% of our total Center revenue for the year ended December 31, 2025. We believe this recurring revenue stream, the strength of our brand and the effective execution of our operating and new center growth strategy have driven our long-term track record of growth. Except in 2020 due to the impact of COVID-19, we have grown our revenue each year since 2000 and, in 2025, we recognized the highest revenue in our history, as shown below.
Revenue ($ in millions)
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Our Engaged Members
The power of our lifestyle brand, attractive member demographics, breadth and desirability of amenities and services and high utilization of our centers allow us to build deeply meaningful connections with our members, which we believe are difficult for others in our industry to replicate fully.
Our members are highly engaged and draw inspiration from the experiences and community we have created. The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits per membership to our athletic country clubs. Our average revenue per center membership increased to $3,531 in 2025 as compared to $3,160 and $2,810 in 2024 and 2023, respectively. Total visits to our clubs were over 122 million in 2025 as compared to over 114 million and over 103 million in 2024 and 2023, respectively. Average visits per membership to our centers remained strong at 149 for 2025.
We believe that no other company in the United States delivers the same quality and breadth of health, fitness and wellness experiences that we deliver, which has enabled us to consistently grow our annual membership dues and in-center revenue.
Our member engagement is driven by the vast array of amenities, services, products and activities that enable an entire family to grow and develop, regardless of where they are in their health and wellness journey. We support our existing and prospective members through a concierge service model that keeps our members’ interests first. We also recruit, hire and certify those whom we believe are the best professionals in our industry to empower, educate and entertain our members. We offer something for every generation, from young children attending our swim lessons and Kids Academy classes, teenagers and adults engaged in our state-of-the-art fitness equipment, Dynamic Personal Training and small group training and more senior adults engaged in our ARORA community, to members of all ages participating in pickleball, our iconic athletic events and a variety of our other in-center activities. The table below displays this wide assortment of physical and digital experiences:
| Amenities | Services | Activities, Products and Events | ||||||||||
Indoor and Outdoor Pools Group Fitness Studios Cycle Studios Yoga & Pilates Studios Indoor and Outdoor Tennis Courts Indoor and Outdoor Pickleball Courts LifeCafe with Poolside Service Bar and Lounge Free Weight and Resistance Equipment Cardiovascular Equipment Steam Room and Sauna Cold Plunges Racquetball and Squash Spaces Locker Rooms Child Center and Kids Academy Basketball/Volleyball Courts | Dynamic Personal Training Dynamic Stretch Small Group Training ARORA MIORA Weight Loss Coaching Nutrition Coaching LifeSpa and Medi-spa Physical Therapy and Chiropractic Assessments and Lab Testing Sport Specific Coaching Endurance Coaching Swim Lessons and Team Coaching Towel and Locker Service Experience Life | Athletic Leagues and Tournaments Kids’ Birthday Parties Parents Night Out Summer and Vacation Camps for Kids Sports Training Camps Athletic Events LT Games Social Events Outdoor Group Runs Outdoor Group Cycle Rides Swim Meets Charity Events LTH Nutritional Supplements Apparel | ||||||||||
During 2025, we also organized approximately 51,800 events and served as a social and community hub for our members.
Our member base is primarily made up of members in affluent suburban and urban locations. We believe our membership base has a discretionary spending level that, on average, is less susceptible to adverse economic conditions. As of December 31, 2025, our members had a median household income of $160,000, which is 1.4 times the median income in the respective trade areas, 73% owned a home, approximately 60% are part of a couples or family membership and these members typically engage more fully within our centers, and approximately 61% had at least a college education. Additionally, our gender mix is balanced and approximately 44% are under 35 years of age and approximately 77% are under 55 years of age.
Our Growth Strategies and Member Experience Initiatives
We have built a strong foundation with an engaged membership base in pursuit of a healthy way of living. We continue to build on that foundation by executing several strategies and initiatives to grow and expand our business, further engage our members, optimize our memberships and member experience, and increase revenue per center membership. We are expanding the number of our centers in an asset-light model that targets higher income members, higher average annual revenue per center membership and higher returns on invested capital. We are also elevating our member experiences through new and improved in-center service offerings, omni-channel offerings and wellness products.
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Expand National Footprint in Affluent Metropolitan Statistical Areas
We believe we have significant opportunities to continue expanding our portfolio of premium centers in an asset-light manner. We are now targeting 12 to 14 new locations on average per year starting in 2026. We also expect a larger percentage of our new centers will be large format ground up construction builds as compared to 2024 and 2025.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain statements in this discussion and analysis are forward-looking statements within the meaning of federal securities regulations. Forward-looking statements in this discussion and analysis include, but are not limited to, our plans, strategies and prospects, both business and financial, including our financial outlook, growth, business initiatives, membership count, engagement and mix, cost efficiencies and margin expansion, capital expenditures and free cash flow, improvements to our balance sheet, net debt and leverage, interest expense, consumer demand, industry and economic trends, tax rates and expense, rent expense, expected number, size 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), possible or assumed future actions, business strategies, events or results of operations. Generally, forward-looking statements are not based on historical facts but instead represent only our current beliefs and assumptions regarding future events. All forward-looking statements are, by nature, subject to risks, uncertainties and other factors. This discussion and analysis does not purport to identify factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “assumes,” “expects,” “anticipates,” “intends,” “continues,” “projects,” “predicts,” “estimates,” “plans,” “potential,” “may increase,” “may result,” “will result,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “foreseeable,” “may,” and “could” as well as the negative version of these words or similar terms and phrases are generally forward-looking in nature and not historical facts. 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.
The forward-looking statements contained in this discussion and analysis are based on management’s current beliefs and assumptions and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to numerous factors, many of which are beyond our control, including risks relating to our business operations and the growth of our business, risks relating to our brand, 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, 2025 filed with the Securities and Exchange Commission (the “SEC”) and as such risk factors may be updated from time to time in our periodic filings with the SEC that are accessible on the SEC’s website at www.sec.gov. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive. Consequently, we caution investors not to place undue reliance on any forward-looking statements, as no forward-looking statement can be guaranteed, and actual results may vary materially. Additionally, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Forward-looking statements speak only as of the date of this report. We do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Overview
Business and Strategy
Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of more than 1.6 million individual members, who together comprise more than 908,000 memberships, as of September 30, 2026. We are a leading innovator in the industry having successfully created a leisure model that incorporates the country club wellness lifestyle within a fitness and active living community. We have earned the trust of our members for over 30 years to make their lives healthier and happier by offering them the best places, programs and performers. We deliver high-quality experiences through our omni-channel physical and digital ecosystem that includes 196 centers—distinctive, resort-like athletic country club destinations—across 32 states in the United States and one province in Canada. Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance.
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Our luxurious athletic country clubs total nearly 19 million of indoor square feet and over seven million of outdoor square feet in the aggregate. Our centers are located in affluent suburban and urban locations. Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, recovery spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces. Our premium service offerings are delivered by over 46,000 Life Time team members, including over 12,100 certified fitness professionals, ranging from personal trainers to studio performers. We believe that no other company in the United States delivers the same quality and breadth of health, fitness and wellness experiences that we deliver, which has enabled us to consistently grow our annual membership dues and in-center revenue.
Our members are highly engaged and draw inspiration from the experiences and community we have created. The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits to our athletic country clubs. Our average revenue per center membership, which includes membership dues and in-center revenue, increased to $2,914 for the nine months ended September 30, 2026 as compared to $2,638 for the nine months ended September 30, 2025. Total visits to our clubs were over 98 million for the nine months ended September 30, 2026 as compared to over 93 million for the nine months ended September 30, 2025, and average visits per membership to our centers remained strong at 116 for the nine months ended September 30, 2026.
We offer a variety of memberships, including singles, couples and families, with different levels of membership dues, which can vary significantly based on numerous factors, including number of members, membership type, usage patterns, location and membership tenure. Our membership mix has been improving with couples and families comprising increasingly larger portions of our total memberships and qualified memberships administered through medical insurance providers decreasing. Our couples and family memberships have historically been more engaged with higher retention and higher average monthly dues. Our qualified medical memberships have significantly lower average monthly dues and we are limiting their offering, along with certain of these third-party administrated programs having been terminated and more potentially terminating or expiring. We have been able to successfully convert many of these qualified medical memberships that have terminated to direct memberships with minimal impact on membership dues. With these membership dynamics and our premium, high-use model, our growth in the number of center memberships has been smaller than our total Center revenue growth and we expect that trend to continue, including because our clubs are typically reaching their desired utilization and revenue with fewer memberships.
Our total Center revenue increased to $2,476.1 million for the nine months ended September 30, 2026 as compared to $2,182.4 million for the nine months ended September 30, 2025. We believe it will continue to grow as we open new centers in desirable locations across the country, new members join at higher membership dues rates, our new centers ramp to expected performance and we continue to execute on our strategic initiatives discussed below. Our new centers on average have taken three to four years to ramp to expected performance; however, many of our newer centers are ramping faster than this historical average. As of September 30, 2026, we had 26 centers open for less than three years and 21 new centers under construction. We are expanding the number of our centers using an asset-light model that targets affluent markets with higher income members, higher average revenue per center membership and higher returns on invested capital. As we open these new centers in more affluent markets, our average revenue per center membership should naturally increase.
We believe we have significant opportunities to continue expanding our portfolio of premium centers in an asset-light manner. We have opened eight new centers in 2026 to date and expect to open 14 new centers in 2026. We are targeting 12 to 14 new centers on average per year. We also expect a larger percentage of our new centers will be large format ground up construction builds as compared to 2024 and 2025.
We also continue to execute several strategic initiatives on a club-by-club basis that are driving revenue, engagement, membership optimization and expansion as we elevate and broaden our member experiences and allow members to integrate health, fitness and wellness into their lives with greater ease and frequency. These strategic initiatives include pickleball, Dynamic Personal Training, Dynamic Stretch, small group training such as Alpha, GTX, Ultra Fit, MB360, CTR and Hybrid XT, our ARORA community focused on members aged 55 years and older, LT Social, a social club within our centers, and LT Games, a unique hybrid-athletic competition. We are refining our MIORA performance and longevity health offering, which has a total of eight locations.
We have also been executing on enhanced offerings to accelerate growth beyond our centers. Our digital platform is delivering a true omni-channel experience through our integrated digital app, including live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content. We are continuing to invest in our digital capabilities, including artificial intelligence to enhance services to our members such as
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L•AI•C, our artificial intelligence driven healthy way of life personal companion with personalized content and recommendations, to strengthen our relationships with our members, reach more people looking for a Healthy Way of Life and more comprehensively address their health, fitness and wellness needs so that they can engage and connect with Life Time at any time or place. Additionally, we are selling our LTH nutritional products more broadly on e-commerce platforms.
We also continue to expand our “Healthy Way of Life” ecosystem in response to the desire of our members to holistically integrate health and wellness into every aspect of their daily lives. In 2018, we launched Life Time Work, an asset-light branded co-working model that offers premium work spaces in close proximity to our athletic country clubs and integrates ergonomic furnishings and promotes a healthy working environment. Life Time Work members also have the ability to receive access to all of our resort-like athletic country club destinations across the United States and Canada. We have also begun to dedicate space within many of our athletic country clubs for work lounges that have a design aesthetic similar to our Life Time Work locations. Additionally, our Life Time Living locations, which are also an asset-light model, offer luxury wellness-oriented residences in close proximity to our athletic country clubs. As of September 30, 2026, we had 15 Life Time Work and four Life Time Living locations open and operating. Our Life Time Living concept is generating interest from new property developers and presenting opportunities for new center development and deal terms that were not previously available to us. Our omni-channel platform continues to grow as we expand our footprint with new centers and nearby work and living spaces, as well as strengthen our digital and artificial intelligence capabilities.
Macroeconomy, Geopolitical and Policy Environments
We continue to monitor the macroeconomic, geopolitical and policy environments and their impact on our business, including with respect to inflation, interest rates, the war in Iran, tariffs, taxes and labor, as well as a potential economic recession or low growth and general economic and political conditions. There continues to be macroeconomic and geopolitical uncertainty in many markets around the world, including as a result of higher interest rates and inflation, military operations in the Middle East, the international unrest, and new or elevated tariffs, which combined have increased certain of our expenses and capital expenditures, but have not had a material impact on our business. We continue to analyze the potential impact of these events and any resulting downstream impacts, including higher inflation and interest rates and any disruption to the supply chain. Despite these headwinds, we have experienced growth in our revenue and expanded our operating margins. We will continue to monitor the macroeconomic, geopolitical and policy environments and while any future uncertainty or volatility, a decline in the U.S. or global economy, or the public perception that any of these events may occur, could adversely affect our business and results of operations, we believe that our business is resilient and has performed well historically during different economic cycles including during a recession.
Non-GAAP Financial Measures
This discussion and analysis includes certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including Adjusted net income, Adjusted net income per common share, Adjusted EBITDA, free cash flow and ratios related thereto. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with our 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
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 EBITDA
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.
Management uses Adjusted net income and Adjusted EBITDA to evaluate the Company’s performance. We believe that Adjusted net income and Adjusted EBITDA are important metrics for management, investors and analysts as they remove the impact of items that we do not believe are indicative of our core operating performance and allows for consistent comparison of
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our operating results over time and relative to our peers. We use Adjusted net income and Adjusted EBITDA to supplement GAAP measures of performance in evaluating the effectiveness of our business strategies and to establish annual budgets and forecasts. We also use Adjusted EBITDA or variations thereof to establish incentive compensation for management.
Free Cash Flow
We define free cash flow as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. We believe 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. Our management considers free cash flow to be a key indicator of our liquidity and we present this metric to our board of directors. Additionally, we believe free cash flow is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry.
Adjusted net income, Adjusted EBITDA and free cash flow should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP. These are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities as a measure of our liquidity and may not be comparable to other similarly titled measures of other businesses. Adjusted net income, Adjusted EBITDA and free cash flow have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Furthermore, we compensate for the limitations described above by relying primarily on our GAAP results and using Adjusted net income, Adjusted EBITDA and free cash flow only for supplemental purposes. See our condensed consolidated financial statements included elsewhere in this report for our GAAP results.
Non-GAAP Measurements and Key Performance Indicators
We prepare and analyze various non-GAAP performance metrics and key performance indicators to assess the performance of our business and allocate resources. For more information regarding our non-GAAP performance metrics, see “—Non-GAAP Financial Measures” above. These are not measurements of our financial performance under GAAP and should not be considered as alternatives to any other performance measures derived in accordance with GAAP.
Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the three and nine months ended September 30, 2026 and 2025. The following information has been presented consistently for all periods presented.
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
($ in thousands, except for Average Center revenue per center membership data) | |||||||||||||||||||||||
Membership Data | |||||||||||||||||||||||
Center memberships | 858,747 | 840,622 | 858,747 | 840,622 | |||||||||||||||||||
On-hold memberships | 49,707 | 50,603 | 49,707 | 50,603 | |||||||||||||||||||
Total memberships | 908,454 | 891,225 | 908,454 | 891,225 | |||||||||||||||||||
Revenue Data | |||||||||||||||||||||||
Membership dues and enrollment fees | 71.4 | % | 71.9 | % | 71.9 | % | 72.2 | % | |||||||||||||||
In-center revenue | 28.6 | % | 28.1 | % | 28.1 | % | 27.8 | % | |||||||||||||||
Total Center revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Membership dues and enrollment fees | $ | 622,101 | $ | 547,306 | $ | 1,780,799 | $ | 1,576,268 | |||||||||||||||
In-center revenue | 249,026 | 213,591 | 695,296 | 606,148 | |||||||||||||||||||
Total Center revenue | $ | 871,127 | $ | 760,897 | $ | 2,476,095 | $ | 2,182,416 | |||||||||||||||
Average Center revenue per center membership (1) | $ | 1,016 | $ | 907 | $ | 2,914 | $ | 2,638 | |||||||||||||||
Comparable center revenue (2) | 8.7% | 10.6% | 8.8 | % | 11.5 | % | |||||||||||||||||
Center Data | |||||||||||||||||||||||
Net new center openings (3) | 1 | 1 | 7 | 6 | |||||||||||||||||||
Total centers (end of period) (3) | 196 | 185 | 196 | 185 | |||||||||||||||||||
Total center square footage (end of period) (4) | 18,900,000 | 18,100,000 | 18,900,000 | 18,100,000 | |||||||||||||||||||
GAAP and Non-GAAP Financial Measures | |||||||||||||||||||||||
Net income | $ | 106,493 | $ | 102,427 | $ | 295,949 | $ | 250,671 | |||||||||||||||
Net income margin (5) | 11.9 | % | 13.1 | % | 11.6 | % | 11.1 | % | |||||||||||||||
Adjusted net income (6) | $ | 115,865 | $ | 92,992 | $ | 321,922 | $ | 251,168 | |||||||||||||||
Adjusted net income margin (6) | 13.0 | % | 11.9 | % | 12.6 | % | 11.2 | % | |||||||||||||||
Adjusted EBITDA (7) | $ | 256,259 | $ | 220,046 | $ | 729,446 | $ | 622,611 | |||||||||||||||
Adjusted EBITDA margin (7) | 28.7 | % | 28.1 | % | 28.6 | % | 27.7 | % | |||||||||||||||
Center operations expense | $ | 474,518 | $ | 414,328 | $ | 1,334,954 | $ | 1,189,240 | |||||||||||||||
Pre-opening expenses (8) | $ | 2,907 | $ | 1,050 | $ | 7,030 | $ | 3,489 | |||||||||||||||
Rent | $ | 96,099 | $ | 87,511 | $ | 280,329 | $ | 251,866 | |||||||||||||||
Non-cash rent expense (open properties) (9) | $ | 12,846 | $ | 10,216 | $ | 23,475 | $ | 18,275 | |||||||||||||||
Non-cash rent expense (properties under development) (9) | $ | — | $ | 5,597 | $ | — | $ | 10,601 | |||||||||||||||
Net cash provided by operating activities | $ | 262,120 | $ | 251,112 | $ | 670,471 | $ | 630,666 | |||||||||||||||
Free cash flow (10) | $ | 35,651 | $ | 62,530 | $ | 120,917 | $ | 216,369 | |||||||||||||||
(1) 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.
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(2) 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.
(3) 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 September 30, 2026, we opened one center.
(4) Total center square footage (end of period) reflects the aggregate square footage excluding 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.
(5) Net income margin is calculated as net income divided by total revenue.
(6) 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:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
($ in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||
Net income | $ | 106,493 | $ | 102,427 | $ | 295,949 | $ | 250,671 | ||||||||||||||
Share-based compensation expense (a) | 15,774 | 16,891 | 41,733 | 45,179 | ||||||||||||||||||
(Gain) loss on sale-leaseback transactions (b) | (3,049) | (7,732) | (5,084) | 4,764 | ||||||||||||||||||
Capital transaction costs (c) | — | — | — | 1,531 | ||||||||||||||||||
Legal settlements (d) | 4 | — | (4,863) | 94 | ||||||||||||||||||
Employee retention credits (e) | — | (21,994) | — | (34,867) | ||||||||||||||||||
Other (f) | (66) | (1) | 3,116 | 108 | ||||||||||||||||||
Taxes (g) | (3,291) | 3,401 | (8,929) | (16,312) | ||||||||||||||||||
Adjusted net income | $ | 115,865 | $ | 92,992 | $ | 321,922 | $ | 251,168 | ||||||||||||||
Income per common share: | ||||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.47 | $ | 1.33 | $ | 1.15 | ||||||||||||||
Diluted | $ | 0.46 | $ | 0.45 | $ | 1.30 | $ | 1.11 | ||||||||||||||
Adjusted income per common share: | ||||||||||||||||||||||
Basic | $ | 0.52 | $ | 0.42 | $ | 1.44 | $ | 1.16 | ||||||||||||||
Diluted | $ | 0.51 | $ | 0.41 | $ | 1.41 | $ | 1.12 | ||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||||
Basic | 224,056 | 220,063 | 222,853 | 217,132 | ||||||||||||||||||
Diluted | 229,055 | 226,007 | 227,956 | 225,075 | ||||||||||||||||||
(a) Share-based compensation expense recognized during the three and nine months ended September 30, 2026 was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan (“ESPP”) and liability-classified awards related to our 2026 short-term incentive plan. Share-based compensation expense recognized during the three and nine months ended September 30, 2025 was associated with stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2025 short-term incentive plan.
(b) We adjust for the impact of gains and losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations. For details on the gain on the sale-leaseback transactions that we recognized during the three and nine months ended September 30, 2026, see Note 7, Leases, to our condensed consolidated financial statements in this report.
(c) Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature.
28
(d) We adjust for the impact of unusual legal settlements or judgments as these costs and proceeds are non-recurring in nature and do not reflect costs or proceeds associated with our normal ongoing operations. Nearly all of the adjustment for the nine months ended September 30, 2026 is the recognition of settlement proceeds from Zurich for the remaining occurrences of jurisdictions that issued closure orders affecting our club operations in 2020 during the COVID-19 pandemic. These proceeds were offset by legal-related expenses in pursuit of our claim against Zurich of $0.1 million and $0.1 million for the nine months ended September 30, 2026 and 2025, respectively.
(e) Represents refundable payroll tax credits for employee retention under the CARES Act.
(f) Includes (i) a $(0.3) million favorable revision to previously estimated closing costs and a $2.6 million loss associated with the sale of assets in a non-club joint venture for the three and nine months ended September 30, 2026, respectively, and (ii) other immaterial transactions or items that are unusual or non-recurring in nature of $0.2 million for the three months ended September 30, 2026, and $0.5 million and $0.1 million for the nine months ended September 30, 2026 and 2025, respectively.
(g) 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 updated the Taxes amount used to arrive at Adjusted net income for the nine months ended September 30, 2025 to include $12.6 million in income tax benefits resulting from a significant exercise of stock options by our Chief Executive Officer that were set to expire in 2025. This change did not impact our condensed consolidated financial statements prepared in accordance with GAAP, but it did decrease our non-GAAP Adjusted net income and Adjusted income per common share for the nine months ended September 30, 2025.
(7) We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.
The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA:
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||
Net income | $ | 106,493 | $ | 102,427 | $ | 295,949 | $ | 250,671 | ||||||||||||||
Interest expense, net of interest income | 14,694 | 18,440 | 47,797 | 65,331 | ||||||||||||||||||
Provision for income taxes | 37,396 | 36,921 | 101,740 | 70,799 | ||||||||||||||||||
Depreciation and amortization | 85,013 | 75,094 | 249,058 | 219,001 | ||||||||||||||||||
Share-based compensation expense (a) | 15,774 | 16,891 | 41,733 | 45,179 | ||||||||||||||||||
(Gain) loss on sale-leaseback transactions (b) | (3,049) | (7,732) | (5,084) | 4,764 | ||||||||||||||||||
Capital transaction costs (c) | — | — | — | |||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-12 | Weaver Erik | EVP & Chief Financial Officer | Sell | -5,787 | $39.77 | -$230,149 |
| 2026-09-11 | Singh Ritadhwaja Jebens | EVP & CHIEF DIGITAL OFFICER | Sell | -154,912 | $42.00 | -$6,506,304 |
| 2026-09-09 | Singh Ritadhwaja Jebens | EVP & CHIEF DIGITAL OFFICER | Sell | -18,729 | $42.04 | -$787,358 |
| 2026-09-03 | Singh Ritadhwaja Jebens | EVP & CHIEF DIGITAL OFFICER | Sell | -5,666 | $44.00 | -$249,304 |
| 2026-08-26 | DANHAKL JOHN G indirect | Director | Sell | -2,879,154 | $43.80 | -$126,106,945 |
| 2026-08-26 | Galashan John Kristofer indirect | Director | Sell | -2,879,154 | $43.80 | -$126,106,945 |
| 2026-08-26 | Green LTF Holdings II LP | Director | Sell | -2,879,154 ×3 | $43.80 | -$126,106,945 |
| 2026-08-10 | Galashan John Kristofer indirect | Director | Sell | -5,119,099 | $43.16 | -$220,940,313 |
| 2026-08-10 | DANHAKL JOHN G indirect | Director | Sell | -5,119,099 | $43.16 | -$220,940,313 |
| 2026-08-10 | Green LTF Holdings II LP | Director | Sell | -5,119,099 ×3 | $43.16 | -$220,940,313 |
| 2026-07-31 | Akradi Bahram | FOUNDER & CEO | Sell | -438,257 ×2 | $45.03 | -$19,734,434 |
| 2026-07-31 | Javaheri Parham | EVP &PRESIDENT CLUB OPERATIONS | Sell | -63,203 | $45.09 | -$2,849,697 |
| 2026-07-31 | Weaver Erik | EVP & Chief Financial Officer | Sell | -47,748 | $44.80 | -$2,139,110 |
| 2026-07-31 | Buss Eric J | EVP & CHIEF ADMIN. OFFICER | Sell | -479,240 | $44.97 | -$21,552,429 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-02-21 10-K expected by 2027-02-22 (in 115 days)
- ~2027-05-06 10-Q expected by 2027-05-15 (in 189 days)
- ~2027-07-31 10-Q expected by 2027-08-09 (in 275 days)
- ~2027-10-30 10-Q expected by 2027-11-08 (in 366 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-10-29 10-Q Quarterly Report
- 2026-08-27 8-K Officer/Director Change
- 2026-08-13 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-07-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-30 10-Q Quarterly Report
- 2026-05-20 8-K Officer/Director Change
- 2026-05-07 8-K Material Agreement Entered; Financial Statements and Exhibits
- 2026-05-05 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-05 10-Q Quarterly Report
- 2026-03-11 8-K Officer/Director Change
- 2026-02-24 10-K Annual Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-22 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-04 10-Q Quarterly Report