Earnings release
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July 30, 2026 Life Time Reports Second Quarter 2026 Financial Results Total revenue of $866.0 million increased 13.7% over the prior year quarter Net income of $101.4 million increased 40.6% over the prior year quarter Diluted EPS of $0.45 increased 40.6% over the prior year quarter Adjusted net income of $109.8 million increased 30.6% over the prior year quarter Adjusted EBITDA of $246.5 million increased 16.8% over the prior year quarter Adjusted diluted EPS of $0.48 increased 29.7% over the prior year quarter Raised 2026 outlook CHANHASSEN, Minn. , July 30, 2026 /PRNewswire/ -- Life Time Group Holdings, Inc. ("Life Time," "we," "our," "us," or the "Company") (NYSE: LTH) today announced its financial results for the fiscal second quarter ended June 30, 2026. Bahram Akradi, Founder, Chairman and CEO, stated: "We delivered strong second quarter results, driven by our continued focus on delivering exceptional member experiences across our clubs. That focus is translating into higher engagement, increased utilization of our in-center offerings and continued optimization of our membership mix. As a result, we are seeing strong comparable center revenue performance and growth in revenue per membership. We are on track to open 14 new clubs in 2026 and continue to see significant demand for our premium athletic country club model." Financial Summary Three Months Ended Six Months Ended ($ in millions, except for Average center revenue per center membership data) June 30, June 30, 2026 2025 Percent Change 2026 2025 Percent Change Total revenue $866.0 $761.5 13.7 % $1,654.7 $1,467.5 12.8 % Center operations expenses $453.7 $403.9 12.3 % $860.4 $774.9 11.0 % Rent $94.3 $83.2 13.3 % $184.2 $164.4 12.0 % General, administrative and marketing expenses (1) $66.0 $61.7 7.0 % $125.7 $119.5 5.2 % Net income $101.4 $72.1 40.6 % $189.5 $148.2 27.9 % Adjusted net income $109.8 $84.1 30.6 % $206.1 $159.8 29.0 % Adjusted EBITDA $246.5 $211.0 16.8 % $473.2 $402.6 17.5 % Comparable center revenue (2) 9.1 % 11.2 % 8.9 % 12.0 % Center memberships, end of period 860,041 849,643 1.2 % 860,041 849,643 1.2 % Average center revenue per center membership $993 $888 11.8 % $1,923 $1,733 11.0 %
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(1) The three months ended June 30, 2026 and 2025 included non-cash share-based compensation expense of $13.9 million and $14.2 million, respectively. The six months ended June 30, 2026 and 2025 included non-cash share-based compensation expense of $23.0 million and $24.5 million, respectively. (2) The Company includes 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. Second Quarter 2026 Information Revenue increased 13.7% to $866.0 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues including from improved membership mix, membership growth in our new and ramping centers and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training. Center memberships of 860,041 increased by 10,398, or 1.2%, when compared to June 30, 2025, and increased by 22,138, or 2.6%, from March 31, 2026, consistent with seasonality expectations and continued improvement in membership mix, including a significant reduction in qualified memberships administered through medical insurance providers, which have significantly lower average dues. Total subscriptions, which include center memberships and on-hold memberships, of 910,520 increased 1.3% compared to June 30, 2025. Center operations expenses increased 12.3% to $453.7 million primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth. General, administrative and marketing expenses increased 7.0% to $66.0 million primarily due to increases in incentive and benefit-related expenses. Net income increased 40.6% to $101.4 million primarily due to business performance, as well as tax-effected net cash proceeds of $3.7 million received in partial satisfaction of legal claims and tax-effected net gains of $1.5 million on sale-leaseback transactions. Net income in the prior year period included tax-effected net cash proceeds of $9.3 million received from employee retention credits under the CARES Act, partially offset by a tax-effected net loss of $9.0 million on a sale-leaseback transaction. Adjusted net income increased 30.6% to $109.8 million and Adjusted EBITDA increased 16.8% to $246.5 million as we experienced greater flow through of our increased revenue. Six-Month 2026 Information Revenue increased 12.8% to $1,654.7 million due to continued strong growth in membership dues and in-center revenue, driven by an increase in average dues including from improved membership mix, membership growth in our new and ramping centers and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training. Center operations expenses increased 11.0% to $860.4 million primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth. General, administrative and marketing expenses increased 5.2% to $125.7 million primarily due to increases in incentive and benefit-related expenses and increases in
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center support overhead to enhance and broaden our member services and experiences. Net income increased 27.9% to $189.5 million primarily due to business performance, as well as tax-effected net cash proceeds of $3.7 million received in partial satisfaction of legal claims and tax-effected net gains of $1.5 million on sale-leaseback transactions. Net income in the prior year period included $12.6 million of income tax benefits due to a significant exercise of stock options by our Chief Executive Officer that were set to expire in 2025, and tax-effected net cash proceeds of $10.5 million received from employee retention credits under the CARES Act, partially offset by a tax-effected net loss of $10.2 million on a sale-leaseback transaction. Adjusted net income increased 29.0% to $206.1 million and Adjusted EBITDA increased 17.5% to $473.2 million as we experienced greater flow through of our increased revenue. New Center Openings We opened five new centers during the second quarter of 2026. As of June 30, 2026, we operated a total of 195 centers. Cash Flow Highlights Net cash provided by operating activities for the six months ended June 30, 2026 was $408.4 million, an increase of 7.6% compared to the prior year period. Our capital expenditures by type of expenditure were as follows: Three Months Ended Six Months Ended ($ in millions) June 30, June 30, 2026 2025 Percent Change 2026 2025 Percent Change Growth capital expenditures (1) $190.1 $167.0 13.8 % $395.3 $260.5 51.7 % Maintenance capital expenditures (2) $40.7 $35.9 13.4 % $72.1 $65.4 10.2 % Modernization and technology capital expenditures (3) $32.5 $19.1 70.2 % $55.8 $38.7 44.2 % Total capital expenditures $263.3 $222.0 18.6 % $523.2 $364.6 43.5 % (1) Consist of new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives. (2) Consist of capital expenditures required to maintain the operating condition of our existing centers. (3) Consist of capital expenditures related to updates and enhancements to our existing centers, technology investments, and corporate infrastructure. Liquidity and Capital Resources Our net debt leverage ratio improved to 1.4 times as of June 30, 2026, from 1.8 times as of June 30, 2025. As of June 30, 2026, our total available liquidity was $855.7 million, which included $632.1 million of availability on our $650.0 million revolving credit facility and $223.6 million of cash and cash equivalents. At June 30, 2026, there were no outstanding borrowings under our revolving credit facility and there were $17.9 million of outstanding letters of credit. On April 21, 2026, Fitch Ratings upgraded our issuer credit rating to 'BB' from 'BB-' and on June 25, 2026, S&P Global Ratings upgraded our issuer credit rating to 'BB' from 'BB-'. During the three months ended June 30, 2026, we repurchased approximately 2.2
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million shares of our common stock under our share repurchase program approved by our board of directors on February 24, 2026, for total consideration of approximately $62.7 million at an average price per share of $28.59. 2026 Outlook Full-Year 2026 Guidance Percent Year Ending Year Ending Year Ended Change December 31, 2026 December 31, 2026 December 31, 2025 (Using (Guidance as of ($ in millions) (Guidance) (Actual) Midpoints) May 5, 2026) Total revenue $3,350 – $3,375 $2,995.3 12.3 % $3,320 – $3,350 Rent $378 – $384 $339.2 12.3 % $378 – $386 Net Income $358 – $363 $373.7 (3.5) % $340 – $345 Adjusted net income $394 – $402 $325.5 22.3 % $378 – $386 Adjusted EBITDA $940 – $955 $825.2 14.8 % $925 – $940 The Company is reiterating the following expectations for fiscal 2026 as outlined in its first quarter 2026 results announced on May 5, 2026: Complete approximately $200 million in additional sale-leaseback transactions during the second half of fiscal year 2026 for a total of $400 million during the fiscal year. Interest expense, net of interest income, of approximately $59 million to $63 million, and net of $28 million to $30 million of capitalized interest expense related to construction in progress. Manage our net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times. The Company is also updating the following operational and financial expectations for fiscal 2026: Comparable center revenue growth of 7.9% to 8.3%, which includes our ramping and mature centers, increased from 6.9% to 7.5%. Open 14 new clubs, tightened from 12 to 14, most of which will be large-format, ground-up construction clubs. We expect the total square footage of our 2026 class of clubs to be approximately 1.3 million square feet, nearly double the square footage of each of our 2024 class and 2025 class of clubs. We have opened six new clubs as of June 30, 2026, and we opened one additional new club in July 2026. We expect to open the remaining seven in the fourth quarter of 2026. Maintenance capital expenditures of $140 million to $150 million, modernization and technology capital expenditures of $140 million to $150 million, increased from $130 million to $140 million as we accelerate the deployment of our CTR and Hybrid XT group training classes, and growth capital expenditures of $885 million to $910 million, tightened from $875 million to $915 million. Rent to include non-cash rent expense of $32 million to $35 million, increased from $31 million to $34 million. Cash income tax expense of $103 million to $105 million, increased from $80 million to $83 million due to taxable gains on sale-leaseback transactions closed in the second quarter and higher estimated earnings before tax for the full year. Provision for income tax rate estimate of 27%, decreased from 28%. Year-end weighted-average diluted common shares outstanding of approximately 227 million to 229 million, not including any incremental impact that may occur as a result
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of our $500 million share buyback program, decreased from 228 million to 230 million. Conference Call Details A conference call to discuss our second quarter financial results is scheduled for today: Date: Thursday, July 30, 2026 Time: 10:00 a.m. ET (9:00 a.m. CT) U.S. dial-in number: 1-877-451-6152 International dial-in number: 1-201-389-0879 Webcast: Life Time Group Holdings 2Q Earnings A link to the live audio webcast of the conference call will be available at https://ir.lifetime.life . Replay Information Webcast – A recorded replay of the webcast will be available within approximately three hours of the call's conclusion and may be accessed at: https://ir.lifetime.life . Conference Call – A replay of the conference call will be available after 1:00 p.m. ET the same day through August 13, 2026: U.S. replay number: 1-844-512-2921 International replay number: 1-412-317-6671 Replay ID: 1375 6339 Earnings Supplement Presentation The Company has made available supplemental material regarding its revenue growth strategy and memberships on its investor relations website at https://ir.lifetime.life . About Life Time Life Time (NYSE: LTH) empowers people to live healthy, happy lives through its 195 athletic country clubs across the U.S. and Canada, the complementary and comprehensive Life Time app featuring its L•AI•C™ AI-powered health companion, and more than 25 iconic athletic events. Serving people ages 90 days to 90+ years, the Life Time ecosystem uniquely delivers healthy living, healthy aging, and healthy entertainment experiences, a range of unique healthy way of life programs, highly trusted LTH nutritional supplements and more. Recognized as a Great Place to Work®, the Company is committed to upholding an exceptional culture for its over 52,000 team members. Use of Non-GAAP Financial Measures and Key Performance Indicators This press release includes certain financial measures that are not presented in accordance with GAAP, including Adjusted net income, Adjusted net income per common share, Adjusted EBITDA, free cash flow and net debt and ratios and calculations with respect thereto. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should be considered in addition to, and not as a substitute for or superior to, net income, net income per common share, net cash provided by operating activities or total debt (defined as long-term debt, net of current portion, plus current maturities of debt) as a measure of financial performance or liquidity or any other performance measure derived in accordance with GAAP, and should not be construed as an inference that the Company's future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with
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the Company's 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 is defined 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 is defined 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 the Company's ongoing operations. Free cash flow is defined as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. Net debt is defined as long-term debt, net of current portion, plus current maturities of debt, excluding fair value adjustments, unamortized debt discounts and issuance costs, minus cash and cash equivalents. Net debt is as of the last day of the respective quarter or year. Our leverage ratio is calculated as our net debt divided by our trailing twelve months of Adjusted EBITDA. The Company presents these non-GAAP financial measures because management believes that these measures assist investors and analysts in comparing the Company's operating performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of the Company's ongoing operating performance, and management believes that 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. Investors are encouraged to evaluate these adjustments and the reasons the Company considers them appropriate for supplemental analysis. In evaluating the non-GAAP financial measures, investors should be aware that, in the future, the Company may incur expenses that are the same as or similar to some of the adjustments in the Company's presentation of its non-GAAP financial measures. There can be no assurance that the Company will not modify the presentation of non-GAAP financial measures in future periods, and any such modification may be material. In addition, the Company's non-GAAP financial measures may not be comparable to similarly titled measures used by other companies in the Company's industry or across different industries. The non-GAAP financial measures have limitations as analytical tools, and investors should not consider these measures in isolation or as substitutes for analysis of the Company's results as reported under GAAP. Forward-Looking Statements This press release includes "forward-looking statements" within the meaning of federal securities regulations. Forward-looking statements in this press release include, but are not limited to, the Company's plans, strategies and prospects, both business and financial, including its financial outlook for fiscal year 2026, growth, strength of its balance sheet, net debt and leverage, capital expenditures, interest expense, consumer demand, industry and economic trends, member engagement and mix, tax rates and expense, rent expense, expected number of diluted common shares outstanding, expected number, size and timing
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of new center openings, successful signings and closings of sale-leaseback transactions (including the amount, pricing and timing thereof) and the timing, amount and price of any share repurchase. These statements are based on the beliefs and assumptions of the Company's management. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning the Company's possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. 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. Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, but are not limited to, risks relating to our business operations and the growth of our business including the competitive and economic environment, 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") on February 24, 2026 (File No. 001-40887), as such factors may be updated from time to time in the Company's other filings with the SEC, which are accessible on the SEC's website at www.sec.gov . These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise. LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Center revenue $ 837,402 $ 735,865 $ 1,604,968 $ 1,421,519 Other revenue 28,594 25,604 49,728 45,991 Total revenue 865,996 761,469 1,654,696 1,467,510 Operating expenses: Center operations 453,732 403,925 860,436 774,912 Rent 94,339 83,190 184,230 164,355 General, administrative and marketing 66,028 61,674 125,659 119,521 Depreciation and amortization 83,352 72,988 164,045 143,907 Other operating expense 18,840 31,243 35,783 48,696 Total operating expenses 716,291 653,020 1,370,153 1,251,391 Income from operations 149,705 108,449 284,543 216,119 Other income (expense): Interest expense, net of interest income (17,406) (21,784) (33,103) (46,891) Equity in (loss) earnings of affiliates (2,703) 37 (2,577) 21 Other income 4,937 12,873 4,937 12,873
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Total other expense (15,172) (8,874) (30,743) (33,997) Income before income taxes 134,533 99,575 253,800 182,122 Provision for income taxes 33,175 27,473 64,344 33,878 Net income $ 101,358 $ 72,102 $ 189,456 $ 148,244 Income per common share: Basic $ 0.46 $ 0.33 $ 0.85 $ 0.69 Diluted $ 0.45 $ 0.32 $ 0.83 $ 0.66 Weighted-average common shares outstanding: Basic 222,626 219,286 222,242 215,642 Diluted 227,337 225,511 227,397 224,585 LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 223,647 $ 204,807 Restricted cash and cash equivalents 34,601 27,362 Accounts receivable, net 26,308 24,092 Center operating supplies and inventories 66,718 67,618 Prepaid expenses and other current assets 84,815 61,881 Total current assets 436,089 385,760 Property and equipment, net 3,811,994 3,633,229 Goodwill 1,235,359 1,235,359 Operating lease right-of-use assets 2,596,350 2,479,804 Intangible assets, net 180,726 180,810 Other assets 97,639 92,989 Total assets $ 8,358,157 $ 8,007,951 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 97,113 $ 90,249 Construction accounts payable 170,536 143,545 Deferred revenue 57,994 60,309 Accrued expenses and other current liabilities 222,896 214,351 Current maturities of debt 31,774 21,848 Current maturities of operating lease liabilities 83,247 79,208 Total current liabilities 663,560 609,510 Long-term debt, net of current portion 1,465,999 1,485,939 Operating lease liabilities, net of current portion 2,682,256 2,555,513 Deferred income taxes, net 186,671 172,217 Other liabilities 57,503 58,561 Total liabilities 5,055,989 4,881,740 Stockholders' equity: Common stock, $0.01 par value per share; 500,000 shares authorized; 223,217 and 221,077 shares issued and outstanding, respectively 2,232 2,211 Additional paid-in capital 3,163,624 3,183,032 Retained earnings (accumulated deficit) 142,554 (46,902) Accumulated other comprehensive loss (6,242) (12,130) Total stockholders' equity 3,302,168 3,126,211 Total liabilities and stockholders' equity $ 8,358,157 $ 8,007,951
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LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 189,456 $ 148,244 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 164,045 143,907 Deferred income taxes 11,536 19,493 Share-based compensation 25,959 28,288 Non-cash rent expense 10,629 13,063 Impairment charges associated with long-lived assets 282 1,177 (Gain) loss on disposal of property and equipment, net (1,185) 12,623 Amortization of debt discounts and issuance costs 1,860 1,812 Changes in operating assets and liabilities 18,007 12,100 Other (12,238) (1,153) Net cash provided by operating activities 408,351 379,554 Cash flows from investing activities: Capital expenditures (523,276) (364,486) Proceeds from sale-leaseback transactions 200,191 138,771 Other 1,944 (4,936) Net cash used in investing activities (321,141) (230,651) Cash flows from financing activities: Repayments of debt (11,419) (11,164) Proceeds from revolving credit facility — 220,000 Repayments of revolving credit facility — (230,000) Repayments of finance lease liabilities (848) (1,221) Proceeds from financing obligations — 10,300 Proceeds from stock option exercises 42,131 33,866 Common stock share repurchases (73,392) — Proceeds from issuances of common stock in connection with the employee stock purchase plan — 1,875 Employee tax withholding associated with net share-settled share-based awards (17,268) (4,334) Other (6) (31) Net cash (used in) provided by financing activities (60,802) 19,291 Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents (329) 177 Increase in cash and cash equivalents and restricted cash and cash equivalents 26,079 168,371 Cash and cash equivalents and restricted cash and cash equivalents – beginning of period 232,169 27,878 Cash and cash equivalents and restricted cash and cash equivalents – end of period $ 258,248 $ 196,249 Non-GAAP Measurements and Key Performance Indicators See "Use of Non-GAAP Financial Measures and Key Performance Indicators" for a discussion of the Non-GAAP financial measures reconciled below. Key Performance Indicators ($ in thousands, except for Average Center revenue per center membership data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Membership Data Center memberships 860,041 849,643 860,041 849,643 On-hold memberships 50,479 49,207 50,479 49,207 Total memberships 910,520 898,850 910,520 898,850
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Revenue Data Membership dues and enrollment fees 71.3 % 71.7 % 72.2 % 72.4 % In-center revenue 28.7 % 28.3 % 27.8 % 27.6 % Total Center revenue 100.0 % 100.0 % 100.0 % 100.0 % Membership dues and enrollment fees $ 597,244 $ 527,309 $ 1,158,698 $ 1,028,962 In-center revenue 240,158 208,556 446,270 392,557 Total Center revenue $ 837,402 $ 735,865 $ 1,604,968 $ 1,421,519 Average Center revenue per center membership (1) $ 993 $ 888 $ 1,923 $ 1,733 Comparable center revenue (2) 9.1 % 11.2 % 8.9 % 12.0 % Center Data Net new center openings (3) 5 4 6 5 Total centers (end of period) (3) 195 184 195 184 Total center square footage (end of period) (4) 18,800,000 18,000,000 18,800,000 18,000,000 GAAP and Non-GAAP Financial Measures Net income $ 101,358 $ 72,102 $ 189,456 $ 148,244 Net income margin (5) 11.7 % 9.5 % 11.4 % 10.1 % Adjusted net income (6) $ 109,827 $ 84,144 $ 206,057 $ 159,764 Adjusted net income margin (6) 12.7 % 11.1 % 12.5 % 10.9 % Adjusted EBITDA (7) $ 246,532 $ 210,978 $ 473,187 $ 402,565 Adjusted EBITDA margin (7) 28.5 % 27.7 % 28.6 % 27.4 % Center operations expense $ 453,732 $ 403,925 $ 860,436 $ 774,912 Pre-opening expenses (8) $ 1,911 $ 1,066 $ 4,123 $ 2,439 Rent $ 94,339 $ 83,190 $ 184,230 $ 164,355 Non-cash rent expense (open properties) (9) $ 7,672 $ 5,739 $ 9,423 $ 8,059 Non-cash rent expense (properties under development) (9) $ 603 $ 3,921 $ 1,206 $ 5,004 Net cash provided by operating activities $ 209,558 $ 195,698 $ 408,351 $ 379,554 Free cash flow (10) $ 146,489 $ 112,465 $ 85,266 $ 153,839 (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. (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 June 30, 2026, we opened five centers. (4) Total center square footage (end of period) reflects the aggregate square footage, excluding the 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.
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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 Six Months Ended June 30, June 30, ($ in thousands, except per share data) 2026 2025 2026 2025 Net income $ 101,358 $ 72,102 $ 189,456 $ 148,244 Share-based compensation expense (a) 15,411 16,380 25,959 28,288 (Gain) loss on sale-leaseback transactions (b) (2,035) 12,496 (2,035) 12,496 Capital transaction costs (c) — 611 — 1,531 Legal settlements (d) (4,882) 28 (4,867) 94 Employee retention credits (e) — (12,873) — (12,873) Other (f) 2,747 (11) 3,182 109 Taxes (g) (2,772) (4,589) (5,638) (18,125) Adjusted net income $ 109,827 $ 84,144 $ 206,057 $ 159,764 Income per common share: Basic $ 0.46 $ 0.33 $ 0.85 $ 0.69 Diluted $ 0.45 $ 0.32 $ 0.83 $ 0.66 Adjusted income per common share: Basic $ 0.49 $ 0.38 $ 0.93 $ 0.74 Diluted $ 0.48 $ 0.37 $ 0.91 $ 0.71 Weighted-average common shares outstanding: Basic 222,626 219,286 222,242 215,642 Diluted 227,337 225,511 227,397 224,585 (a) Share-based compensation expense recognized during the three and six months ended June 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 six months ended June 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. (c) Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature. (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 three and six months ended June 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 are offset by legal-related expenses in pursuit of our claim against Zurich of $0.1 million for the three months ended June 30, 2026, and $0.1 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively. (e) Represents refundable payroll tax credits for employee retention under the CARES Act. (f) Includes (i) a $2.9 million write-down of certain assets within a non-club joint venture resulting from its held-for-sale classification for the three and six months ended June 30, 2026, and (ii) other immaterial transactions or items that are unusual or non-recurring in nature of $(0.1) million for the three months ended June 30, 2026, and $0.3 million and $0.1 million for the six months ended June 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 six months ended June 30, 2025 to include $12.6 million in income tax benefits resulting from a significant exercise of stock options by our Chief Executive Officer that were set to expire in 2025. This change did not impact our condensed consolidated financial statements prepared in accordance with GAAP, but it did decrease our non-GAAP Adjusted net income and Adjusted income per common share for the six months ended June 30, 2025. (7) We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.
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Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA: Three Months Ended Six Months Ended June 30, June 30, ($ in thousands) 2026 2025 2026 2025 Net income $ 101,358 $ 72,102 $ 189,456 $ 148,244 Interest expense, net of interest income 17,406 21,784 33,103 46,891 Provision for income taxes 33,175 27,473 64,344 33,878 Depreciation and amortization 83,352 72,988 164,045 143,907 Share-based compensation expense (a) 15,411 16,380 25,959 28,288 (Gain) loss on sale-leaseback transactions (b) (2,035) 12,496 (2,035) 12,496 Capital transaction costs (c) — 611 — 1,531 Legal settlements (d) (4,882) 28 (4,867) 94 Employee retention credits (e) — (12,873) — (12,873) Other (f) 2,747 (11) 3,182 109 Adjusted EBITDA $ 246,532 $ 210,978 $ 473,187 $ 402,565 (a) – (f) See the corresponding footnotes to the table in footnote 6 immediately above. (8) Represents non-capital expenditures associated with opening new centers that are incurred prior to the commencement of a new center opening. The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period. (9) Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non- cash expense associated with properties that are still under development at the end of each period presented. (10) Free cash flow, a non-GAAP financial measure, is calculated as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. The following table provides a reconciliation from net cash provided by operating activities to free cash flow: Three Months Ended Six Months Ended June 30, June 30, ($ in thousands) 2026 2025 2026 2025 Net cash provided by operating activities $ 209,558 $ 195,698 $ 408,351 $ 379,554 Capital expenditures, net of construction reimbursements (263,260) (222,004) (523,276) (364,486) Proceeds from sale-leaseback transactions 200,191 138,771 200,191 138,771 Free cash flow $ 146,489 $ 112,465 $ 85,266 $ 153,839 Reconciliation of Net Income to Adjusted EBITDA Trailing Twelve Months ($ in thousands) (Unaudited) Twelve Twelve Months Ended Months Ended June 30, 2026 June 30, 2025 Net income $ 414,883 $ 226,762 Interest expense, net of interest income 68,475 119,914 Provision for income taxes 150,298 62,674 Depreciation and amortization 316,483 282,971 Share-based compensation expense 49,421 60,625 (Gain) loss on sale-leaseback transactions (27,316) 17,400
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Capital transaction costs — 1,531 Legal settlements (43,590) 1,359 Asset impairments 5,791 — Employee retention credits (41,699) (12,873) Other 3,051 (540) Adjusted EBITDA $ 895,797 $ 759,823 Reconciliation of Net Debt and Leverage Calculation ($ in thousands) (Unaudited) Twelve Twelve Months Ended Months Ended June 30, 2026 June 30, 2025 Current maturities of debt $ 31,774 $ 22,873 Long-term debt, net of current portion 1,465,999 1,493,038 Total Debt $ 1,497,773 $ 1,515,911 Less: Fair value adjustment 53 207 Less: Unamortized debt discounts and issuance costs (16,094) (18,445) Less: Cash and cash equivalents 223,647 175,509 Net Debt $ 1,290,167 $ 1,358,640 Trailing twelve-month Adjusted EBITDA 895,797 759,823 Net Debt Leverage Ratio 1.4x 1.8x Reconciliation of Net Income to Adjusted Net Income Guidance for the Year Ending 2026 ($ in millions) (Unaudited) Year Ending December 31, 2026 Net income $358 – $363 Share-based compensation expense 54 – 58 (Gain) loss on sale-leaseback transactions (2) – (2) Other (2) – (2) Taxes (14) – (15) Adjusted net income $394 – $402 Reconciliation of Net Income to Adjusted EBITDA Guidance for the Year Ending 2026 ($ in millions) (Unaudited) Year Ending December 31, 2026 Net income $358 – $363 Interest expense, net of interest income 63 – 59 Provision for income taxes 132 – 134 Depreciation and amortization 337 – 345 Share-based compensation expense 54 – 58 (Gain) loss on sale-leaseback transactions (2) – (2) Other (2) – (2) Adjusted EBITDA $940 – $955 View original content to download multimedia: https://www.prnewswire.com/news-
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releases/life-time-reports-second-quarter-2026-financial-results-302838532.html SOURCE Life Time Group Holdings, Inc.