Life Time Group NYSE: LTH reported third-quarter 2026 revenue growth of 14.2% to $893.5 million, supported by higher membership dues, growth in in-center businesses and continued expansion of its club network. Comparable center revenue increased 8.7%, exceeding the company’s expectations, according to Executive Vice President and CFO Erik Weaver.
Comparable center revenue growth included a 2.4% contribution from membership mix, 3.0% from pricing, 3.0% from in-center businesses and 0.3% from membership volume, Weaver said. The company raised its full-year comparable center revenue outlook to growth of 8.5% to 8.7%, from a previous range of 7.9% to 8.3%.
Membership mix and in-center businesses drive growth
Average monthly dues reached $244 in the quarter, up about 11.9% from a year earlier, while average revenue per center membership increased 12% to $1,016. Weaver attributed the gains primarily to favorable membership mix and the company’s pricing strategy.
Life Time ended the quarter with about 859,000 center memberships, up 2.2% year over year. The company has continued to limit certain memberships provided through third-party medical insurance programs, which it calls Qualified Medical memberships. Those memberships declined by about 21,500, or 19.6%, from a year ago, while all other memberships increased by approximately 39,600, or 5.4%.
Total dues revenue rose 13.7% year over year. For the fourth quarter, Life Time expects total center membership growth of 2.4% to 3.1%, or 4.8% to 5.2% excluding Qualified Medical memberships.
Weaver said membership growth excluding Qualified Medical memberships has accelerated as the company opens more and larger clubs. Life Time plans to open seven clubs during the fourth quarter, and said a growth rate above 5% excluding those memberships is sustainable over the long term as it continues its planned development pace.
In-center revenue was aided by double-digit growth in Dynamic Personal Training and LifeSpa. Founder, Chairman and CEO Bahram Akradi said the company sees substantial differences in performance across its roughly 200 locations and believes it can improve execution at clubs where in-center offerings have not reached their potential.
“We still feel very comfortable that we have significant opportunity within our capabilities and our execution,” Akradi said.
Life Time said it does not intend to use promotional bundling to increase member spending. Instead, executives said the company’s approach is to improve the customer experience and programming across personal training, spa, café, children’s offerings and other services.
Profitability, capital spending and sale-leasebacks
Third-quarter net income was $106.5 million, up 4% from a year earlier. Adjusted net income increased 24.6% to $115.9 million. The prior-year period included tax-affected net cash proceeds of $16.2 million from employee retention credits under the CARES Act and a tax-affected net gain of $5.7 million on a sale-leaseback transaction.
Adjusted EBITDA increased 16.5% to $256.3 million, while adjusted EBITDA margin expanded 60 basis points to 28.7%. The company raised its full-year revenue and adjusted EBITDA guidance and increased the midpoint of its full-year adjusted EBITDA margin outlook to 28.4%.
Net cash from operating activities totaled $262.1 million, up about 4.4% from the prior-year quarter. Capital expenditures rose 29.8% to $288.7 million as Life Time funded construction for clubs planned to open in 2026, 2027 and later years.
The company completed a sale-leaseback transaction in September that generated roughly $62 million in proceeds. It expects about $135 million of additional sale-leaseback transactions in the fourth quarter and maintained its full-year target of $400 million. Akradi said the company expects its need for sale-leaseback financing to decline in future years as cash flow grows, though it may continue to use the market when it represents efficient financing.
Life Time reported a net debt leverage ratio of 1.3 times and more than $900 million of liquidity. Akradi said the company expects another year of positive free cash flow.
Club development pipeline remains a priority
Life Time remains on track to open 14 clubs in 2026, at the high end of its initial range, and expects to open another 14 in 2027. Nearly all of the 2027 locations are already under construction, Akradi said. The company expects next year’s openings to be more evenly distributed through the year than in 2026, when seven locations are scheduled to open in the fourth quarter.
Management reiterated that it expects to deliver 12 to 14 new clubs annually for the foreseeable future. Akradi said the company is prioritizing locations, facility quality and staffing rather than setting a higher unit target, while Weaver said the current pace can support the company’s goal of 10% to 12% revenue growth.
The company also said it sees substantial development opportunities in the U.S. and has received inbound interest related to potential international expansion. Akradi said management is not currently concerned about a shortage of growth opportunities.
Engagement initiatives and longer-term opportunities
Average monthly visits per membership reached 13 during the third quarter, up 4% from a year earlier. Akradi cited member engagement with newer initiatives including CTR, HYBRID XT, LT Games and LT Social.
Management described LT Social as both a potential revenue opportunity and a tool to improve retention and the member experience. Akradi said its initial purpose is to promote social connection as part of health and well-being, with opportunities for additional monetization over time.
Life Time also continues to expand pickleball operations, with Akradi saying the company expects to operate more than 1,000 pickleball courts within the first few months of 2027. He said the company’s integrated club model has performed well despite difficulties reported by some standalone pickleball operators.
On MIORA, Life Time said it is taking a measured approach following issues with an administrative and software system selected earlier in the year. Akradi said the company has paused aspects of the rollout while changing systems, but remains confident in the long-term opportunity. He said Life Time ultimately expects MIORA locations in every market and potentially in a third to half of its clubs, alongside a broader Life Time Health and Wellness Hub offering focused on blood work, analysis and guidance.
Executives also said they are deploying artificial intelligence across member-facing and internal functions, including the company’s L•AI•C tool, club management, analytics, legal and finance operations.
About Life Time Group (NYSE:LTH)
Life Time Group Holdings, Inc NYSE: LTH operates a network of luxury athletic country clubs in the United States and Canada. The company's facilities combine fitness, sports, health, and wellness services in an integrated club environment designed for individuals and families.
Life Time clubs typically offer cardiovascular and strength-training equipment, group fitness classes, personal training, indoor and outdoor pools, tennis, pickleball, basketball, and other athletic programs. Many locations also provide childcare, spas, cafés, workspaces, recovery services, and specialized programs for children, older adults, and other member groups.
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