Life Time Group NYSE: LTH reported double-digit revenue and adjusted EBITDA growth for the first quarter of 2026, with management pointing to stronger dues revenue, higher in-center spending and continued demand for new clubs.
Executive Vice President and Chief Financial Officer Erik Weaver said total revenue rose 11.7% year over year to $789 million. Comparable center revenue increased 8.6%, slightly above the company’s expectations, as Life Time benefited from a more favorable membership mix, pricing actions and higher utilization of in-center businesses.
Weaver said comparable center revenue growth included a 3.5% contribution from improved membership mix, a 3% contribution from price, and a 2.3% contribution from in-center businesses, “particularly Dynamic Personal Training.” Volume was a slight headwind, contributing negative 0.2%, which Weaver attributed to a reduction in qualified medical memberships administered by third-party medical insurance providers.
Membership Mix Remains a Focus
Life Time ended the quarter with nearly 838,000 center memberships, up 1.4% from a year earlier. Average monthly dues were $230, up about 10.5%, while average revenue per center membership rose 10.2% to $930.
Weaver said the company has been deliberately reducing certain lower-dues qualified medical memberships as part of its strategy to improve the quality of its membership base. In the first quarter, qualified medical memberships accounted for 3.44% of total dues revenue, and management expects that figure to decline to about 3% by year-end.
Qualified medical memberships declined by approximately 15,000, or 14.9% year over year, while all other memberships grew by about 27,000, or 3.7%. Total dues revenue rose 11.9%.
Weaver said Life Time expects total center membership growth of 0.5% to 1% in the second quarter, 1% to 1.5% in the third quarter and 2% to 3% in the fourth quarter due to further reductions in qualified medical memberships. Excluding those memberships, the company expects growth of 3.5% to 3.8% in the second quarter and 4% to 5% in both the third and fourth quarters.
Founder, Chairman and Chief Executive Officer Bahram Akradi said the company is prioritizing revenue quality, retention, in-center business engagement and the overall member experience rather than pursuing membership volume alone.
“We wanted to create a brand that the desirability brings the customer who is not price sensitive, is experience sensitive,” Akradi said.
Adjusted EBITDA Margin Expands
Net income for the quarter was $88 million, up 15.8% from the prior-year period. Adjusted net income, which excludes certain tax-affected items such as share-based compensation, increased 27.4% to $96 million.
Adjusted EBITDA rose 18.3% to $227 million, while adjusted EBITDA margin improved 160 basis points to 28.7%. Weaver said the margin expansion reflected leverage on center operating costs and corporate general and administrative expenses, stronger-than-expected dues revenue and the timing of sale-leaseback transactions.
The company updated the midpoint of its full-year adjusted EBITDA margin guidance to 28%. Weaver noted that the outlook includes the impact of clubs opening primarily in the second half of 2026, including pre-opening expenses and early operating ramp effects.
Akradi cautioned against assuming continued margin expansion at the expense of the customer or team member experience, but said execution across the company was strong.
“We are in a phenomenal place,” Akradi said. “We have some additional clubs opening, significantly more. We’ve got nine more clubs to open.”
Expansion Pipeline and Free Cash Flow Outlook
Life Time opened five of the 14 clubs scheduled for 2026 as of the call, with the remaining nine under construction. Weaver said capital expenditures totaled $260 million in the quarter, up 82% year over year, reflecting construction for 2026 openings as well as work on clubs planned for 2027.
Akradi said the company’s real estate pipeline remains robust across suburban, semi-urban and urban markets. He said recent new club openings have performed strongly and that demand for new locations remains high.
“The suburban clubs have never been better,” Akradi said. “What we are opening right now anywhere, suburban, semi-suburban, is the best results I have ever seen in 40 years.”
The company closed approximately $200 million of sale-leaseback transactions in April and expects about $400 million for the full year. Akradi said the transactions support Life Time’s goal of generating positive free cash flow in 2026 and growing positive free cash flow in subsequent years, while retaining a portfolio of fee-owned real estate assets that could serve as additional liquidity.
Net cash provided by operating activities was $199 million, approximately 8% higher than in the prior-year quarter. Akradi said Life Time has “very low leverage,” no balance on its revolver and several hundred million dollars of cash.
Management Says Demand Remains Strong
Akradi said Life Time is not seeing any impact from the broader macroeconomic environment. He said demand remains strong for both existing and new clubs, including four clubs opened in the prior 30 days.
“We’re not seeing any negative pressure,” Akradi said in response to a question about consumer demand. “The demand is strong for the clubs.”
Management also highlighted continued momentum in Dynamic Personal Training. Akradi credited the company’s DPT team and said higher-quality membership trends are supporting engagement with in-center businesses. Weaver added that the number of trainers is up in the low double digits and that new business is growing faster than that.
Executives discussed several initiatives intended to increase member engagement and ancillary revenue over time, including CTR, HYBRID XT, Dynamic Stretch, MIORA and a Life Time health and wellness hub. Akradi described MIORA, which includes medical and wellness services, as a long-term opportunity but said the company is still refining the customer journey and compliance framework before a faster rollout.
Capital Returns Remain Under Review
Asked about share repurchases, Akradi said Life Time expects to use its $500 million authorization opportunistically when management believes the stock is trading below fair value.
“As long as we see the stock below a fair value to us, we’re gonna be able to take advantage of that opportunity and buy some shares back,” Akradi said.
He added that as cash flow grows, the company and its board will continue evaluating ways to return capital to shareholders while investing in existing clubs and new locations.
About Life Time Group NYSE: LTH
Life Time Group NYSE: LTH is a premier operator of health, fitness and lifestyle centers across North America. The company's core business encompasses the development, ownership and management of premium athletic resorts that integrate state-of-the-art fitness facilities, group exercise studios, indoor and outdoor pools, running tracks, and spa and salon services. In addition to its brick-and-mortar clubs, Life Time offers a digital platform featuring on-demand and live-streamed workouts, personalized training programs and nutrition guidance, enabling members to pursue their wellness goals both at home and on the go.
Founded in 1992 and headquartered in Chanhassen, Minnesota, Life Time has grown from a single Minnesota health club into a network of more than 160 locations across the United States and Canada.
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