Life Time Fitness reported a strong 1Q25, opening one new club and continuing its strong operating performance, leading to management increasing its FY guidance. Sales advanced 18% to $706 million, driven by comps of 12.9% and eight new clubs in operation compared tothe prior year. Average center revenue per membership was $844 in 1Q, marking a 13.3% increase from the prior year; similarly, center memberships increased 3% to 826,374. As in previous quarters, management noted the Company exceeded every goal for 1Q, including membership growth and retention. EBITDA similarly advanced a robust 31% to $192 million and expanded 260 bps to 27.1% on a margin basis.
Leverage continued to improve with total debt decreasing 24% year over year to $1.52 billion, as the Company’s ability to produce strong operating cash flow for a fourth straight quarter allowed it to pay down debt. Additionally, management is guiding between $250 million and $350 million in proceeds from sale-leasebacks on an annual basis in future years; the Company currently has three letters of intent for the sale-leaseback of properties totaling roughly $150 million, which is expected to be completed during 2Q25. Riding the positive operating momentum, the Company has continued to invest significantly in new clubs, though a slowdown in construction and project delays has halted openings to just nine dating back to 1Q24. Perhaps for the same reason, Life Time acquired three new clubs in April 2025, its first acquisition in years; it plans to remodel before reopening the clubs sometime in late FY25 and FY26. Overall, leverage ratios continue to improve, with net debt-to-TTM EBITDA now at 2x, down from 3.5x in 1Q24. Looking ahead, due to the strong performance during the quarter, management has increased its FY25 guidance for revenue, net income and adjusted EBITDA (details below). Liquidity of $678 million is more than adequate for working capital and near-term capital requirements.
Highlights
Outlook
For FY25, the Company increased its guidance as follows:
- Revenue of $2.94 billion to $2.98 billion (up from prior guidance of $2.93 billion to $2.98 billion)
- Net income of $286 million to $293 million (up from prior guidance of $277 million to $284 million)
- Adjusted EBITDA to be between $792 million and $808 million (up from prior guidance of between $780 million and $800 million)
Management Comments
Commenting on 1Q25 results, Bahram Akradi, founder, chairman and CEO, stated, “We continue to see increased member engagement, with visits and revenue per membership at new highs. The desirability of the Life Time brand is evident in our ongoing success in attracting and retaining increasingly higher quality memberships to our centers. We are also excited to leverage the strength of our brand as we expand our LTH nutritional products and enhance our digital offering, including our L.AI.C companion. Our balance sheet is strong, positioning us well to capitalize on the opportunities ahead.”
View Full Report: Life Time Fitness 1Q 2025