Life Time Group (NYSE:LTH) reported fourth-quarter and full-year 2025 results that management said reflected continued execution inside its centers, improving unit-level trends, and strong cash generation. Executives also outlined an accelerated development pipeline, plans for significant growth capital spending, and a newly approved share repurchase authorization.
Fourth-quarter revenue growth, higher dues, and margin expansion
In the fourth quarter, total revenue rose 12.3% year over year to $745 million. CFO Erik Weaver attributed the increase to “continued execution in our centers,” including higher average dues and stronger utilization of in-center businesses.
The company ended 2025 with more than 822,000 center memberships, and approximately 873,000 total memberships including on-hold accounts.
Net income in the quarter was $123 million, up 231%. Weaver noted results benefited from roughly $45.6 million of net tax-affected items excluded from adjusted net income because they were “not reflective of our ongoing operations.” He said these primarily included proceeds received in partial satisfaction of legal claims and Employee Retention Credits, along with adjustments related to net gains on sale-leaseback transactions and share-based compensation.
Adjusted net income was $77 million, up 28.4%, while adjusted EBITDA increased 14.5% to $203 million. Adjusted EBITDA margin improved 50 basis points to 27.2%.
Net cash provided by operating activities rose to $240 million, about 47% higher than the prior-year quarter, including $59 million of non-recurring proceeds tied to legal claim satisfaction and Employee Retention Credits.
Full-year 2025: record revenue and EBITDA, leverage below target
For full-year 2025, revenue increased 14.3% to $2.995 billion. Membership dues and enrollment fees rose 13.9%, and in-center revenue increased 15.1%. Comparable center revenue grew 11.1%.
Weaver said the company’s outperformance versus its initial 2025 guidance was driven primarily by mature clubs reaching and exceeding expected performance levels faster than anticipated. He added that management believes this mature-club outperformance is “largely complete” entering 2026.
Average revenue per center membership was $3,531, up 11.7% year over year. Net income rose 139% to $374 million, while adjusted net income increased 62.3% to $326 million. Adjusted diluted EPS increased 51.6% to $1.44, up from $0.95 in the prior year.
Adjusted EBITDA rose 21.9% to $825 million, and adjusted EBITDA margin increased 170 basis points to 27.5%.
Operating cash flow was $871 million, up about 51% year over year, including $94 million of non-recurring proceeds from legal claims and Employee Retention Credits. Capital expenditures, net of construction reimbursements, were $892 million, including $657 million for growth.
Founder, Chairman, and CEO Bahram Akradi highlighted member engagement and balance sheet progress, noting 12.5 monthly visits per membership for the year (up 4.8% from 2024) and approximately 122 million total visits (up 7%). He also said the company ended 2025 at 1.6x net leverage, below its 2x target.
2026 outlook: slower comp trend, higher growth investment, sale-leaseback funding
For 2026, the company expects full-year comparable center revenue growth of approximately 6.3% to 7.3%, with quarterly growth starting higher and “gliding downward” over the year, consistent with patterns seen in 2025.
Weaver said Life Time expects to invest $875 million to $915 million of growth capital in 2026, emphasizing that more than half of that spending will support clubs opening in 2027 and beyond as the company accelerates new club development. He said the company is “nearly doubling” the square footage it expects to open in 2026 compared with 2025 and 2024.
Of the 2026 clubs, management said one has opened and the remaining 13 are under construction. As owned clubs open and ramp, the company expects to recycle invested capital through sale-leasebacks over time. Weaver said Life Time anticipates at least $300 million of sale-leasebacks in 2026 and expects to fund capital spending through cash from operations, sale-leaseback proceeds, and cash on hand.
Additional 2026 spending expectations include $140 million to $150 million of maintenance capex and $130 million to $140 million for modernization of existing clubs, technology, and corporate investments. Weaver also said a larger portion of interest expense will be capitalized in 2026 versus 2025, with $33 million to $35 million expected to be capitalized.
New share repurchase authorization and focus on member experience
Akradi announced a $500 million share repurchase program approved by the board. He said the company intends to use the authorization opportunistically while managing leverage to stay at or below its 2x net leverage target. Akradi described the authorization as a milestone reflecting confidence in the company’s “predictability” and ability to generate cash while investing for growth.
In the Q&A, management discussed efforts to modernize club offerings and optimize member mix. Akradi said Life Time continues updating facilities and programming across areas such as cafés, spa, personal training, and small group training, and cited pickleball strength and early traction in MIORA locations.
On new club economics, Akradi said newer clubs have no discounted programs, carry higher membership prices, and are designed for fewer members who use the club more and pay higher rates. Weaver added that existing clubs average roughly 4,500 to 4,600 memberships per club, while new clubs are planned at about 3,700 to 4,000 memberships due to an expected “better mix.”
Management also addressed pricing dynamics between rack rates and legacy pricing. Akradi described a club-by-club approach to raising prices to protect the member experience when utilization is high, and executives said the gap between rack rates and legacy rates has remained in a range of roughly $17 million to $20 million per month.
Additional commentary: training growth, digital members, MIORA, and supplements
Akradi said dynamic personal training (DPT) sessions have grown 18% over the last two years, and he said the company has a “very robust plan” to continue improving the program, including adding team members and leadership in certain markets.
On digital, Akradi said Life Time has roughly 3.3 million subscribers and that the company has adjusted its strategy to focus more on using its app to enhance the dues-paying member experience while giving subscribers access to a similar app experience without club entry. He said this is helping move subscribers “one step closer” to joining as full members.
Regarding MIORA, Weaver said the company had two locations open last year and now has seven or eight open. Akradi noted some openings faced construction or permitting “knick-knack” challenges, but said fully opened locations are ramping faster than original models and that the company is planning MIORA space in future club designs.
For Life Time’s supplement business, Akradi said 2026 growth strategy is focused primarily in clubs, with a longer-term goal of expanding outside the club walls in 2027 and beyond. He characterized performance in the digital space as “mediocre,” citing the need for more customer education, while saying in-club education through staff is driving strong year-over-year growth.
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.
