Life Time Group (LTH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 18.5% to $693.2 million, driven by strong membership dues and in-center revenue growth, with net income increasing to $41.4 million from $7.9 million year-over-year.

• Adjusted net income was $56.3 million, up 110.9% year-over-year; adjusted EBITDA reached $180.3 million, up 26.1%.

• Memberships grew 5.4% to 826,502, with total memberships (including digital) at approximately 877,000 and average revenue per center membership up 12.9% to $815.

• The company opened six new centers year-to-date, operating 177 centers as of September 30, 2024, and continues to expand its asset-light model in affluent markets.

• Strategic initiatives in personal training, digital offerings, and wellness concepts contributed to higher member engagement and revenue.

Financial highlights

• Adjusted EBITDA for Q3 2024 was $180.3 million (26.0% margin), up from $143.0 million (24.4%) in Q3 2023.

• Diluted EPS was $0.19, up from $0.04; adjusted EPS was $0.26, up from $0.13 year-over-year.

• Net cash from operating activities increased 31.8% to $151.1 million in Q3; free cash flow was $138.3 million, including $65 million from sale-leaseback transactions.

• Operating expenses as a percentage of revenue decreased to 86.4% in Q3 2024 from 92.0% in Q3 2023, reflecting improved operating leverage.

• Center revenue for Q3 2024 was $674.8 million, up 18.7% year-over-year, with 75.4% of the increase from membership dues and 24.6% from in-center revenue.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $2.595–$2.605 billion; adjusted EBITDA guidance raised to $658–$662 million.

• Q4 implied guidance: ~15% revenue growth and ~16% adjusted EBITDA growth year-over-year.

• Long-term same-store sales growth expected to normalize to 4–5% as pricing benefits moderate.

• Targeting double-digit annual revenue and adjusted EBITDA growth, with 10–12 new openings per year focused on asset-light expansion.

• Guidance includes ~$15 million of one-time interest expense related to refinancing.