Greetings and welcome to the Life Time Group Holdings Q4 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If you require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Connor Wienberg, VP of Investor Relations and Capital Markets. Thank you, Connor. You may begin. Good morning, and thank you for joining us for the fourth quarter and full year 2024 Life Time Group Holdings earnings conference call. With me today are Bahram Akradi, Founder, Chairman, and CEO, and Erik Weaver, Executive Vice President and CFO. During the call, we will make forward-looking statements which involve a number of risks and uncertainties that may cause actual results that differ materially from those forward-looking statements made today. There is a comprehensive discussion of risk factors in the company's SEC filings, which you are encouraged to review. The company will also discuss certain non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, net debt to Adjusted EBITDA, or what we refer to as Net Debt Leverage Ratio, and free cash flow. This information, along with the reconciliations to the most directly comparable GAAP measures, are included, when applicable, in the company's earnings release issued this morning, our 8-K filed with the SEC, and on the investor relations section of our website. With that, I will turn the call over to Erik. Thank you, Connor, and good morning, everyone. As always, we appreciate you joining us for our business and financial update. 2024 was an exceptional year for our company. We achieved many significant milestones and exceeded our expectations with our strong financial results. Starting with our fourth quarter results, total revenue increased 18.7% to $663.3 million, driven by an 18% increase in our membership dues and enrollment fees, and a 19.4% increase in our in-center revenue. Our comparable center revenue of 13.5% was the largest of the year. This was a result of both membership dues and in-center revenue having the largest comparable center revenue growth of the year in Q4, which is a direct result of the significant engagement we are seeing from our members. Center memberships increased 6.4% compared to last year to end the quarter at more than 812,000 memberships. When combined with our digital on-hold memberships, total memberships ended the quarter at approximately 866,000. Average monthly dues were $201, up approximately 10% from the fourth quarter of last year, and average revenue per center membership was $796, up 12% from the prior year quarter. Net Income was $37.2 million, up 57%, and Adjusted Net Income was $60.3 million, up 59% from the prior year quarter. Adjusted EBITDA was $177 million, up 28.5%, and our Adjusted EBITDA margin of 26.7% increased 210 basis points versus the fourth quarter 2023, as we achieved leverage in both our center operations and general administrative and marketing expense from increased revenue. Net cash provided by operating activities increased approximately 24% to $163 million as compared to the fourth quarter 2023. For the third consecutive quarter, we achieved positive free cash flow. Free cash flow was approximately $27 million, and we had no sale-leaseback proceeds in the fourth quarter. For the full year, total revenue increased 18.2% to $2.621 billion, driven by a 19.1% increase in membership dues and enrollment fees, and a 16% increase in in-center revenue. Average revenue per center membership was $3,160, up 12.5% from the prior year. Net income increased 105% to $156.2 million, and Adjusted Net Income increased 55% to $200.5 million. Adjusted diluted earnings per share was $0.95 compared to $0.64 per share for the prior year. In addition to an increase in income from operations in 2025, we expect net income to benefit from reduced cash interest expense due to our reduced debt levels and the refinancing we completed in the fourth quarter. Based on recent SOFR rates, we expect net interest expense of $90-$94 million. Adjusted EBITDA increased 26.1% to $676.8 million, and our Adjusted EBITDA margin of 25.8% increased 160 basis points compared to the full year 2023. As a result of our intentional and strategic repositioning of the company in prior years, which included the rewiring of our operations, we have continued to expand our operating margins and now expect to achieve Adjusted EBITDA margins in excess of 26%. With that, I will now pass the call over to Bahram. Thank you, Erik. Based on the strength of what we have seen so far this year, we raised both our revenue and Adjusted EBITDA guidance for 2025 from what we had pre-announced in mid-January. Our revenue guidance is now $2.925-$2.975 billion, and Adjusted EBITDA guidance is now $780-$800 million. Our core business continues to deliver impressive results. The main driver of our success has been delivering on our incredible member experience. This has resulted in the best retention in our 32-year history, which is one of the most important key performance indicators. We continue to fine-tune our operations to improve the desirability of our places, programs, and performers, and therefore, we expect to exceed the 2024 retention levels in 2025. In connection with our record membership retention, we're seeing record levels of revenue per membership driven both from dues and in-center businesses. Additionally, our new club pipeline is as robust as it's ever been. We expect to open 10 to 12 clubs in 2025, with the ability to extend the number of openings for 2026 and 2027, given the depth of our pipeline. We intend to maintain our current debt levels of approximately $1.5 billion while we continue to grow revenue and EBITDA. This implies a net debt leverage ratio of less than 2x by the end of this year. As a reminder, that number was just 2.28 x at the end of 2024, as you saw in our press release. We plan to use our operating cash flow and any proceeds from sale-leasebacks to accelerate the number of new club openings in the future, taking advantage of our robust pipeline. Our Life Time brand is providing significant additional asset-like growth opportunities. First, LT Digital, our free digital subscription, which we launched last February, now has more than 1.7 million subscribers and is growing more than 100,000 subscribers per month, naturally and without any marketing effort. LTH Nutritional Supplements are seeing strong growth month after month, and MIORA, our health optimization and longevity offering, is progressing forward as planned, and we are about to open our second location next week. With that, we're ready to answer your questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation to indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Brian Nagel with Oppenheimer. Please proceed. Hey, guys. Good morning. Good morning, Brian. Congratulations on a fantastic quarter, fantastic year. Thank you. I have a couple of questions. First, I guess this is just more of a maybe a growth question, Bahram, but in your outlook here, you're talking about 10 to 12 new centers for 2025. With the balance sheet where it is now, you've done a great job of getting the debt ratios down to, I mean, frankly, below what you initially even targeted. But I guess, how are you thinking about the funding of that expansion? And particularly, I guess the question I'm asking is, with regard to the sale-leaseback market, which you've been more active in lately? Yeah. Thank you so much, Brian. I just had a conversation with the CEO of the largest partner of ours on sale-leaseback a couple of days ago. We have agreement for them to step in. They want about $240-$250 million worth of sale-leaseback from us for this year. And they're just phenomenal partners. We have an incredible trust relationship. And so that is just one of the incoming demands for our buildings. As I've mentioned before, Brian, there aren't that many opportunities to lease large square footage from singular tenants, net lease where you have had a tenant who has basically continually paid rent even through the COVID period. So we have a significant amount of demand for our real estate. I think the $250 - $300, $350 million sale-leaseback is sort of easily in the expectation for this year on the low end. We expect to sort of spread that out so that we take the money, the net proceeds from the sale-leaseback, and basically apply it to additional growth. The pipeline, as I mentioned in my remarks, it has never been as strong as it is today. We literally have opportunities coming everywhere: urban, suburban, semi-urban, buildings with apartments, buildings with office. They need Life Time's traffic and brand to sort of improve the returns on those. We have just the traditional suburban sites in incredibly robust demographics. So we just basically are balancing. As I mentioned, our expectation is to—we have about $1.5 billion of debt as we expect sometime this year to actually receive our double- B rating for at least one more agency. We have positive conversations with them. With that and with where the SOFR will be, our expectation is the cost of that debt is roughly 6%. It's a really, really great debt. With having $3.5 billion worth of owned market value real estate, $1.5 billion of debt virtually could either apply that way or less than 2x debt- to- EBITDA. So we don't need to reduce that debt at this point. With the potential we have in our pipeline, we would like to just use all the free cash flow we generate after interest payments and modernization and maintenance capital, take all of that, plus any proceeds from sale-leasebacks, and just continue to grow the business. We are having amazing results on our same stores. We have amazing results on all of our new clubs. So we're really, really happy with the way the business is functioning, and it's just really pacing correctly and managing the growth of the business correctly, but we have plenty of opportunity there. That's very helpful, Bahram. Before I jump to my follow-up question, just quickly on that, and I know this is a big focus for investors broadly, but I mean, how do you think about the sale-leasebacks? While the market's clearly wide open to you and there's a lot of demand, how do you think about the rates? Rates are, It's actually crazy to me. Since we went private, the blended average of everything we've done is somewhere like 6.5%- 6.7%, 6.8%, and I expect everything will happen in that same, like a 6.5%- 7%. It won't touch 7%, but in that same range. And frankly, if it was 25 basis points higher or lower, it virtually has zero impact on the total economic of the business. The EBITDA margin for the business right now is so strong relative to our banner year of 2019. It's 600 basis points better, so you're paying a quarter more on rent or something, and a 25 basis point more on rent. It's irrelevant, so we really aren't hindered by that. We can just take these sale- lease backs with the right partners, so long-term right partners, and just pace them in as we want to bring that cash. There's no reason to do them too fast. If we can deploy that capital back into the market, there's really no value in doing it. There is zero concern from my side that we would want to do a sale-leaseback. Then there wouldn't be somebody taking it in the cap rate range that is acceptable to us. That's very, very helpful. And then so my second question, maybe more for Erik, but you look at that. So you pre-announced positive Q4 results in maybe basically mid-January. So here we are a month later, a little bit more than a month later, and you're lifting guidance again, or you're lifting guidance, I guess, for 2025 on the top line, but particularly on the EBITDA line. I mean, so I guess the question is, as you look at the business, is there anything particular that changed over the last several weeks? Yeah. I mean, actually, as we started 2025, we saw a couple of things. We saw very strong membership dues, and that's really a result of continued strong average dues. Retention has been incredibly strong. So for that to hit the top line has been better than our expectations. And we've also been very good on cost control. So. Apologies, we're experiencing some technical difficulties. Please hold. Again, sorry for the delays. Please hold. All right. Apologies for the technical difficulties. I believe, Brian, we weren't finished answering your question. He's still in queue. Okay. Brian, are you able to hear us okay? Brian? We may have lost Brian. Okay. All right. Let's go to the next question. Yep. All right. Our next question comes from the line of Megan Clapp with Morgan Stanley. Please proceed. Hi. Good morning. Can you guys hear me? We got you. Awesome. Okay. First question is just a little bit of a clarification to some of the comments, Bahram, you made on leverage expectations and sale- lease back. So I think in the release, the guide, you called out maintain leverage at or below 2.25 x. Bahram, I think you said in your prepared remarks it would imply less than 2x by the end of the year. So I just want to be clear on what exactly is your expectation as it relates to where leverage should end the year, presumably the level you're growing EBITDA at, unless there's some other cash flow dynamics going on. Leverage should come down to end the year, but just want to make sure that I'm totally clear on that, and is sale- lease back something you're embedding in your cash flow expectations today, or that would be incremental? Great question. So what I said was that our expectation is to make sure we keep our debt- to- EBITDA under 2.25 x. That's the goal, is to stay under 2.25 x. That's the number that we understand we need to be to make sure we stay in that double- B zone from the agencies. And that's the number that I believe would be perfectly fine for the company to maintain anything under 2.25x. In my remarks, I merely suggested that based on where we expect the EBITDA to finish end of the year, and if you maintain roughly that $1.5 billion of debt, you're going to end up naturally just under 2x debt- to- EBITDA. So the goal is to stay under 2.25x. And the forecast is going to be if we keep the $1.5 billion of debt, then we should be under 2x debt- to- EBITDA. That's the first part of your question for clarity. Is that helpful, Megan? Yep. Crystal clear for me. Thank you. So now, as far as the sale-leasebacks, so as we've run through the math, it looks like roughly around $500 million of cash flow generated, give or take $50 million, whatever. So you have that generated from the core business after debt and modernization and maintenance CapEx. So that $500 million plus any proceeds from sale-leasebacks allows us to just fund the continued growth of the build-out. When we lease things upfront, the capital to spend in those is not more than $25 million on average, like we've talked about before. When we build from scratch, ground up, those will cost more than that $25 million. But when you're recycling the sale-leaseback dollars, you could basically, for simplicity, take that $25-$30 million dollar per opening and just apply that to however many. Then if they cost more than that on the ground up, you can expect that piece of it that is more than $25-$30 million is coming from recycled capital from sale-leaseback. I am trying to make this as simple as possible for everyone to follow is how we think about staying cash. At this point, we don't need to be significantly free cash flow positive after growth, after all the growth, because the debt levels, as we mentioned, is in the right place. Now we want to have sort of a cash flow positive to neutrality, more or less, in that range for the debt standpoint, and then take all the rest of the opportunity and apply it to growth. Maybe if I could just follow up on EBITDA margin. So 26.7%, I think, for the year, and you're guiding to that again in 2025. So it was a couple of quarters ago, I think, where you were really sticking to 26%. And I think at the time, you commented on maybe not wanting to squeeze more and start hurting the member experience. So obviously, the business has performed well, and it's nice to see the leverage you've gotten as that's occurred. But how are you thinking about margins today, close to 27%? Does that comment still apply that you're not going to try and squeeze the business for more? Are there areas where you'd look to invest a bit more? Just how should we think about kind of how you're thinking about the EBITDA margin outlook broadly going forward? Once again, another great clarification question. I always said to you guys, "Here's what we would like you guys to sort of put in your models." I never said it can't be more. I did tell you guys, "It can be more. Just don't model more because we want to have the flexibility to invest in the quality of our offering." As the company is doing bigger dues, bigger revenues, bigger incentive, we are not compromising at all anything that is customer experience to generate more margins. The margins are beautiful. They're fantastic. I think I would be happy to have any business to generate north of 25% EBITDA margin. But it doesn't mean we can't do more. I just don't want to keep being pushed by the street to have to do more, more, more because eventually, you're going to hurt your business. We're not going to allow that to happen. So for right now, what we are telling you is the margin for 2025, I think, is a very healthy EBITDA margin. It possibly could be slightly more as time goes on, but we just want to make sure we keep everybody's expectations in check. Understood. Thank you. Thank you. Our next question comes from the line of Alex Perry with Bank of America. Please proceed. Hi. Thanks for taking my questions here, and congrats on a really strong quarter. I guess just given some of the commentary in the press release, is it fair to say that the comps and ourselves are sort of running above the 7%-8% for the year in the first quarter, sort of given you lifted your guide versus the pre-announcement just over a month ago? And then I think you raised your sort of implied EBITDA guide by 60 basis points versus your pre-announcement. What is the key driver there? I think the EBITDA guide sort of came up a bit more than the revenue guide. Can you just talk about how you're thinking about that? Thanks. Yeah. I think you've got it right there, Alex. The 7%-8% is kind of the full year there, and we're lapping some of the strategic things that we did. So the expectation is that that would be a little bit higher in Q1. So that slope, you're thinking about that exactly right. So we would expect Q2, Q3, Q4. Again, in terms of how we started the year, just what we're seeing in the flow, the strong flow through from the revenue, we're seeing strong average dues. We're seeing strong retention in both January and February. So that's really part of that flow through directly attributable to the increased margin. Thank you. And then my follow-up question is maybe to piggyback on Megan's question from earlier. In managing the club experience, do you have a desired club capacity number for your large-format clubs? And then how do you think about sort of the pricing opportunity as you start to approach that, what you see as the desired club capacity? It looks like you're starting to implement enrollment fees in a lot of your clubs. Is there a lot of continued embedded pricing opportunity as we look into the business this year? Thanks. Alex, as always, you have great questions, great insight. So let me help out to everyone with your question here. Really, when you think about a club, there is a certain amount of visits you can generate within a particular club, not necessarily just based on square footage. It's based on all kinds of things, based on the flow of the club, the design of the club, the parking lot, and just basically whatever is your bottlenecks, your biggest bottlenecks in a particular location, basically creates a natural number of how many people can visit a club successfully to our sort of incredible experiential visit for that customer, and that becomes your limiting factor on how many visits you have. And then if you take that number and say, "Okay, it's 12 visits a month, 13 visits a month, right, per customer," it gives you a number for how many members you can have in that club and deliver the four-season, The Ritz-Carlton quality that Life Time always delivers. To To do that basically gives you that number. Now, your opportunities come very differently in different locations. If a particular club is significantly below that maximum comfort swipe number on a monthly basis, right, then you can work on your programming, on your talent that you bring in to try to have more visits in that particular club, which results in more members. If you have reached a point where your club is saturated from that number of swipes, number of visits per day, now you have pricing opportunity. You have your waitlist. Then you start adding enrollment fees, and you raise the dues to find the right equilibrium in that club. And then that will add more of that, what we have talked to you guys about. It's interesting to me. A year and a half ago, we were having these conversations, and we had about $17 million worth of dues per month if we had taken everybody who was not paying the rack rate to the rack rate. During this last 18 months, we have raised dues on those legacy customers, the people who are paying below. And now we're up to $20+ million of dues per month, which is the gap. Because as we've been managing the right value proposition in each club to make sure we give the right experience, those rack rates naturally have come up, which then has not basically expanded that difference between the differential between the non-rack paying customers to the rest. So now, when you look at our company and we look in the next several years, three years, four years, five years, we expect that just the natural flow of the dynamics of everything we told you is going to generate strong same-store growth on the dues side. And then very, very interestingly, as we are focusing on this more affluent, sophisticated customer who really is only interested in the best experiences, which is what we are just very strategically getting more and more of that type of customer in the club. We experienced the lowest attrition rates with this customer base, and we're experiencing the highest incentive spend on top of their dues. So right now, all the strategies we have implemented over the last five years, they are working individually and collectively. And so we have a strong momentum on the business, and we think we have so much momentum that even if there is some macroeconomic compression, which is likely to happen at some point, it wouldn't be felt through our numbers because of the backlog of opportunity, if that makes sense. Yep. That's very helpful. Best of luck going forward. Thank you so much, Alex. Thank you. Our next question comes from the line of John Heinbockel with Guggenheim Partners. Please proceed. Hey, Bahram, I wanted to start. You now have you don't lack for capital, right? So if you think about gating factor, which is people, so how do you think about managing that higher level and then at the club level? And then your thoughts on org structure, operational org structure, and if you may want to make some changes there such that you tighten up span of control, right, to safeguard the people aspect of growth? Yeah. It's an interesting question, John. Look, we have two elements that we have to be cognizant of. Number one, I don't think anybody's asking about our company. This is interesting because I'm sure you're not thinking this is a tech business. But I have been driving AI relentlessly for the last couple of years to our company. And my belief is if you are not implementing strong AI in every part of your business, you're going to fall behind miserably. So then that breaks down to two categories with AI. AI as it relates to efficiency of operations and executing what you do. And those all will have impact on cost of efficiencies. And then AI as it relates to the customer experience, which is our L•AI•C, which I simply cannot wait till sometime this summer should we hold the investor conference to basically unveil what our digital platform coupled with L•AI•C, our Life Time AI companion, can do for customers and how it can serve as a gateway to healthy living and healthy aging for all people. So we are in a moment in time, I believe it's revolutionary, not evolutionary, in the next decade in how we can think about everything we do. So I don't necessarily believe that you need to have more people or more layers to deliver the best experiences to the customer. And it's basically you have to have a vision for what that ultra high-end experiential delivery is and then figure out how you can deliver that most efficiently. Frankly, sometimes having significantly less layers actually improves the customer's experience, which is what has happened at Life Time over the last four years. We have, like I mentioned before, with only three. My expectation, there is only three people to any decision, no more than three layers. More than that, you're just slowing things down, and I don't think you get anything for it. We are, John, we're in a really, really great place. We have tons of initiatives internally on taking advantage of all that is happening with the technology, both on customer experience and efficiencies in the company. And then my follow-up is when you think about the 143 visits per year, I'm not sure what the best or the most loyal members where they're at. I don't know if they're at 160, 170, 180, but any thoughts on that? And then I sort of keep waiting, right, for the in-center revenue spend per month to start to accelerate, right? Because you've got all this traffic and you're improving DPT and other things, and the wallet is there. I know you've wanted to do that organically, right? Let them find these services. So do you think the potential is there, but it's going to be slow, or does anything accelerate that? John, if you look at the same store business of fourth quarter and why we are raising the guidance again just after five weeks, it's because of what you just said. We are seeing more throughput right now with our incentives as well as the dues. We have record numbers on PT. We have record numbers of dynamic personal trainers that they are super engaged. We have record amounts of applicants, high, high-end, best-performing talent in health and wellness wanting to come join Life Time because of the strength of our brand and our position. I expect we grow dues, and I expect we grow incentives. Yeah. And if I could just add to that, just to back up what Bahram said there, if I look at just PT, the comparable revenue for Q4 this year versus last year, this year, that metric is nearly triple. So it's not a small thing. And again, those are in our comparable store. So really, really large growth there. There are two things that I mentioned in my remarks that we aren't interested in hyping our business, as you guys know, and you call me a sandbagger. I appreciate that, John. But we don't want to give some sort of a hype to the investors or analysts about things that might happen. That's not an engineer's mind. We need to deliver results. When we have mathematical projections, then we can give you guys some. I expect by the summer, we can show you guys again, not only the growth of that digital. The digital has grown from zero. This is not existing members. So if you take our members using the app, that's probably 1.5 million, 1.6 million total members on that 800-something thousand memberships. Put that aside. In addition to that, within a year, we have acquired 1.7 million subscribers, free subscribers. We expect that number to get to 3-4 million by the end of this year. That foundationally is helping once again make the brand reach to a much broader number of eyeballs. Out of that comes some actual regular members who are coming out of that group naturally without spending any money, creating more demand for the Life Time membership. That's the biggest win. But what's yet to come is, as you see the MIORA rollout over the next two, three years in the clubs, in addition to LTH growth, these are additional opportunities that will continue to improve the opportunity to do more in-center, so in-center revenue. So we are, as you guys can imagine, we're not sitting on our rear end and thinking, "Oh, results are good, so they're going to stay good." We are thinking, "Okay, what else can we do for our customer to make their life better, to create more of a one-stop shop for all aspects of their healthy living, healthy aging, health tracking in and out of our clubs, even if when they're away from Life Time?" So all of that has incredible momentum. And again, we're super eager to find a day that makes sense sometime this early, sometimes early summer, to get everybody together and share the new things that are above and beyond the current business model. Thank you. Thank you. Our next question comes from the line of Michael Hirsch with Wells Fargo. Please proceed. Thank you for taking my questions. Just to touch on your last point there, you're hinting at an investor day or something like that in early summer. So I'm wondering, are you looking to talk about maybe updated long-term targets, or what are you hoping to accomplish with that? Yeah. What I'm hoping is to introduce the new opportunities that are asset light that we've been working on for the last several years. But we should be at a point there would be no point having an investor day unless we are not going to just have people coming here, analysts coming, investors coming in to give them that regular update on the business moving forward nicely. That we do just like we're doing right now is we would be unveiling new opportunities out of the Life Time brand that, as I mentioned to you, we expect to deliver the perfect gateway for all people on health and well-being. So that's what we are working on, and I hope that we are at a place that we can fully expecting that we would announce something for first week of August. That's my goal right now, but we have to fine-tune that and confirm it. But that's our expectation at this point. Okay. And then you've spoken about the LT Digital app quite a bit. So do you anticipate monetizing this app, or beyond getting some incremental members from it, how should we think about the opportunity from the app? That's exactly what we want to unveil to you in the summer timeframe. We are building the ecosystem for that. That digital platform, my expectation is that it will be able to help you register for any athletic events. It will allow you to track your health data. It will have knowledge of how you use the club if you're a member, if you're a non-member, and your other activities. And it basically will become your companion by guiding and helping you on your health and wellness journey with the expectation that we will deliver everything you would want from streaming to on-demand podcast education, a real, real companion to help you with all of your health and wellness journey. Well, then how do you monetize that? I mean, the objective is to have something that is a one-stop shop for all people. And then monetization will happen naturally. As you build the most, definitely most trusted nutritional products for me, which I take not 50, but 80-90 supplements a day, so I have energy for you, Michael, so I want to make sure what goes in my body has gone for the last 15-20 years. It's something that has no negatives. It has all the right stuff, so we have been relentless on quality of LTH products for 20 + years, but now it's under the LTH brand and the month-over-month growth we're seeing. We expect that business to be a billion-dollar revenue business in the years to come, and the LT Digital with tens of millions of subscribers on it over the next four, five, six years will become an easy, natural foundation for the people to find the LTH product and be able to just easily buy it. And Lacey will help them answer any question they have about any product coupled with understanding of who they are, how they're using their, how their activity levels. So all of this has been being built for the last several years quietly. We are at a point that I think we can demonstrate this and get you guys all super excited about it. Thank you. Thank you. Our next question comes from the line of Owen Rickert with Northland Securities. Please proceed. Hey, Bahram, Erik, once again, congrats on Q1 in 2025 looking to be pretty great. But can we just dive a little bit deeper into this 1.7 million app subscriptions? I guess, how do these figures compare to your club membership numbers? And are they separate or overlapping? What a great question. No, that's all incremental to the club members. Those are not any customer who is paying dues to use the club. So that's that question. That number is just free digital subscribers, non-members, non-access, free subscribers to the app. And it's just the platform to bring in people in and give them the best on-demand content, the best streaming content, the best educational content, information on their health and wellness and on their profile. It's basically all one-stop shop. Again, I call it my partner, John Donahoe, called it the gateway to healthy living, healthy aging. I like that. It's basically a gateway to everything for your health and wellness. Perfect. That's clarified a lot. And then on another note, our new center opening, the 10-12 this year, still skewed more towards those asset light opportunities versus ground-up builds. And then should we still expect that dynamic to shift more towards ground-up builds in 2026? Yeah. Our pipeline is so robust right now on both fronts. Literally, it's significant. We could do a lot more clubs in 2026 or 2027 if we didn't want to demonstrate the discipline of staying within that $1.5 billion of debt, right, and having the right experience to the customers, right? But we, again, as an investor, I think about it, do they have a chance that they can deliver enough growth? Of course, there is a chance. It's just not probable. We have such a pipeline, and we can mix and match between some of the ones that they're basically going into already existing spaces and the ones we build from ground up. Frankly, I don't think we should try to guide to so many of this and so many of that at any given time because it has no value in it. I think we really need to make sure we help the analysts to figure out a way that basically they think about the total square footage growth and then the relative membership growth to that square footage and dues growth, etc. But we really have significant opportunity on all fronts. Awesome. Thanks so much for the color, guys. Thank you. Thank you. Thank you. Our next question comes from the line of Jesalyn Wong with Evercore ISI. Please proceed. Hey, thanks, guys. Congrats on the results. Just to follow up on Alex's questions on comps. I mean, we saw accelerating of comps each quarter into the fourth quarter there. Based on your comments, it seems to suggest that year-to-date trend has been strong. Just curious, has comps accelerated year-to-date there? And when I think about the bull case, what's stopping the company to deliver low double comparable growth in 2025? Or maybe just another way to think about it, what is baked in your assumptions for comps to slow down to 7%-8% in 2025? Yeah. So I could take that. Yeah. Our comps, to your point, have been accelerating as we talked about with Q4 obviously being the strongest. And we saw that really more strongly across our in-center businesses, but also with dues. So we're guiding, like we've said, to 7%-8%. And on the dues side, we're lapping some of the initiatives that we had done over the past year or two. So on the dues side, you would expect that to come down a little bit. But look, there's nothing to say that there's additional growth accelerators. Bahram's talked about them, things that we can do to increase those. But right now, where we're comfortable guiding is into that 7%-8% range. Sorry. And just. Sorry. And just. It doesn't mean there isn't more opportunities. Again, there's always balance between giving you guys a number that is certain and then beyond that, it's extra potential. And we are generally extremely conservative on what we commit to. Got it. Just a follow-up on other revenues. I know it's a really small part of the business there, but it grew really well this quarter, up 32% there. What's driving that, and how should we think about this line item in terms of growth into the next year? Yeah. I mean, that line's going to include things like our Life Time Living, our Life Time Work, and a lot of our athletic events. So that can be a little bit lumpy just given the timing of events. We've kind of just penciled in roughly 5%-6% growth. But again, that can be a little bit lumpy just given the time of year and the timing of those events. All right. Thank you, guys, and good luck. Thank you. Thank you. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed. Good morning. Thanks for the question. You bet. Maybe in terms of the next steps for growth, I'm wondering, Bahram, if you could discuss a bit of the opportunities for recovery, which seems to be a topic of increasing interest for folks in the wellness space. We've seen the news of the rollout of the cold plunge. I'm curious if you can discuss your vision for the recovery space overall, where you believe Life Time could take that, the intensity of CapEx required, and how do we think about recovery as a contributor to either in-center revenue or even a new driver for memberships growth going forward? Yeah. It's a great question. Look, it's really an interesting business we're in. The customer is in front of you going through their experiences. So you can actually just observe and watch and see what are the things the customers are really interested in. We have been rolling out all of the last couple of years in a recovery space. Every new club has recovery. All the old clubs have been getting the recovery space. We are systematically putting in cold plunges into the clubs as we can roll them out and pace them out correctly depending on the opportunity of each club. We are very, very optimistic on MIORA, our longevity business. It has literally been a very, very fast pace of my expectation. We opened MIORA last year, but we took till September to hire the physician assistants to actually have the teams and have them fully trained, then deliver that customer experience that was exceptional by September. We did that. By December, we were looking for a business that is generating substantial revenue and margins, and since then, still, January was a bigger month over December. February is growing over January despite lower number of days. That business is moving exactly as we had hoped, and it proves to be a business that can, long-term, if it doesn't do what our personal training business will do. I think long-term that business can do at least 50% of our revenue of our personal training incrementally in our clubs. So we are constantly digging to find out how else we can make the life of our member, their health and wellness journey, more complete so they can do more of the things they want to do related to health and wellness in one place with one trusted brand. So I fully expect we will continue to grow our in-center revenue from more nutritional products, more recovery, more dynamic stretch, more MIORA. But we're not going to bombard our customer by pushing promotional nonsense. We deliver the best experiences for them. We deliver the best programs. We deliver the best service. And they come to us naturally. There's tons of companies who are trying to do this longevity things remotely or whatever, but their attrition rate is ridiculous. And our attrition rate on our MIORA customer is substantially below the attrition rate of our customer right now, which is the best it's ever been in 32 years. So we are really, really encouraged with the strategy that my team has put together and the execution of that strategy. And it's 100% focused from the customer point of view. We've been committed to that for 30-some years. Customer point of view. So our inventions, our creations is how do we make your life as a member better? And then that's the results that you're receiving right now in dues growth and in-center penetration is just because of our direct focus on making that experience more comprehensive and better for the customer. Thanks for that. And then as a follow-up, coming back to the digital investments, the Lacey, a lot of discussion this morning around the vision. But I'm curious what you're seeing already. The downloads have been very strong. At this point, can you parse anything out in terms of activity or engagement between members versus non-members? Maybe what features are seeing the most traffic, whether it's the online store, the health advice? Any takeaways thus far? Yeah. It's growing fast. We are adapting it fast, and we are learning in an incredible pace. We would love to take the next five or six months, continue to improve not only the number of subscribers. That's going to grow significantly. By the time we see you, we hope to be at 2.5 million, 3 million subscribers. Then we like to show you all the breakdown, what percentage of these people come in, how often they come in, what are they interested in, how do we incorporate Lacey for them to be completely and entirely customized to each individual subscriber with incredible AI attached to it. I am incredibly excited about it. We're working relentlessly on it. I don't want to speak out of turn. I think summer is when we will be able to really put on a demonstration that would be satisfactory to me. You will get all these great questions you're asking. We will be able to give you answers with enough data that data is meaningful. We just need a lot more engagement, a lot more data. We need a lot more so that those statistics are legitimately accurate. Does that make sense? It's a little early right now, but the early results are amazing. That's all I can say to you. Great. Thanks, Bahram. Thank you. Our next question comes from the line of Alex Fuhrman with Craig-Hallum Capital Group. Please proceed. Hi, everyone. Thanks for taking my question and congratulations on a really strong year. Wanted to ask about your kids' offering. You have a really unique offering in the marketplace for families. Curious if you could kind of help quantify for us how many of your members or how much of your business is associated with members who have a kids' membership associated with that member, and how much of an opportunity is that going forward? Yeah. Alex, that's a great observation. It's an incredible part of our business. It always has been a part of the strategy to create unmatchable environments for families with children. And our Kids' Camps, Summer Camps, Kids Academy, Parents' Night Out, all the different things we're doing there are humongous part of Life Time's overall success. We have never broken that information out to go ahead and pass it. We, of course, have it, but we do not share that information. We haven't. We've got to be conscientious of how many different information we share on a regular basis because it can honestly become confusing to the potential investors. The overall factor, things I can tell you, is that our family memberships have the highest utilization as a utilization per membership, obviously, and they have the highest retention. It's more or less part of the overall strategy that we laid out 30 years ago to create a facility that was the best experience for singles and the best experience for couples and even better experience for families with kids. It's part of the overall strategy of Life Time. Yeah, and if I could just add to that, I mean, it's a big differentiator for Life Time, but Bahram did mention we don't break out statistics, but what I can tell you is this year, from an engagement standpoint, a penetration standpoint, some of the camps and things we do around our kids' programming, we had some record participation, so it's just another component of the engagement we're seeing. Yeah. And most of the Summer Camps pretty much universally are sold out. We sell out long ahead of the season starting. So we are seeing a stronger trend right now than last year, and last year was an incredible year. So everything is looking great, Alex. That's great to hear. Really appreciate all the color. Thank you. Thank you. Our last question comes from the line of Chris Woronka with Deutsche Bank. Please proceed. Okay. Thanks. Hey, guys. T hanks for squeezing me in. So my question, I know there's been a lot covered, but I don't know that we talked a lot about the pretty recent launch of the online supplement sales and the in-center supplement sales. And Bahram, I think it was about three or four months ago that you expanded the launch. And I'm just curious as to how you look at it now, if it's going according to plan or better, and what kind of the next phases of growth are for that segment. Thanks. I believe it will be an incremental game changer for Life Time in the next two to three years. You're going to see explosive growth out of LTH. I would say we are in the super, super early stages of building the groundwork, basically the root system for all systems for LTH to go. But we're seeing strong 25% month over month. Right now, February is 25% more than it was February of 2024. But I expect that number to get to 100% by sometime this year versus what we were doing the same month the year before. So it's moving full system. All systems are going on that, and it will be a huge growth factor for Life Time in years to come. Great. Thanks, Bahram. Thank you so much. Thank you. There are no further questions at this time. I'd like to pass the floor back over to Connor for any closing remarks. Yeah. Thank you, everybody, for joining us today. We look forward to seeing you at the upcoming Bank of America and UBS consumer conferences. Otherwise, we'll see you at our next quarterly earnings call. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.