Life Time Group 2025 Q2 Earnings Strong Performance as Net Income Surges 36.5%

Life Time Group (LTH) reported fiscal 2025 Q2 earnings on Aug 5, 2025, exceeding expectations with robust revenue and earnings growth. The company raised its 2025 guidance and outlined ambitious expansion plans, while the CEO emphasized strong member retention and a strengthened balance sheet.

Revenue for the quarter reached $761.47 million, a 14.0% increase from $667.76 million in the prior year. Center revenue, the largest segment, totaled $735.87 million, with membership dues and enrollment fees contributing $527.31 million. In-center revenue added $208.56 million, and other revenue amounted to $25.60 million, highlighting steady diversification of income streams.

Earnings showed even stronger momentum. Earnings per share (EPS) surged 22.2% to $0.33 from $0.27 a year ago, while net income rose 36.5% to $72.10 million, reflecting a record high for Q2. These gains were driven by increased membership engagement, higher dues, and improved cost management.

Life Time’s stock price has faced a recent downturn, falling 9.40% on the latest trading day, 9.87% during the week, and 11.63% month-to-date. However, historical data suggests a buy-and-hold strategy after the earnings report could be profitable. A 30-day strategy executed after the Q2 report yielded a 134.48% return over three years, vastly outperforming the 0.00% benchmark.

CEO Bahram Akradi praised the company’s performance, noting a 5.7% increase in visits per membership and record retention rates. He highlighted the strengthened balance sheet and a new BB credit rating, which support growth and reduce interest costs. Looking ahead, Akradi emphasized monetizing memberships, with revenue per membership up nearly 12% year-over-year. The company also plans to open 12–14 new clubs in 2026, focus on larger ground-up developments, and expand digital initiatives like Life Time Digital and the L.AI.C AI health companion.

The company raised its full-year comparable center revenue guidance to 9.5%–10% growth and reaffirmed 12–14 new club openings for 2026. Life Time expects to complete $100 million in additional sale-leaseback transactions in the second half of 2025, maintaining low leverage while pursuing strategic growth.

In the broader "Additional News" section, Life Time Group reported significant operational and financial progress in its fiscal 2025 Q2. The company reported revenue of $761.5 million, up 14.0% year-over-year, with net income of $72.1 million, up 36.6% from the prior year. Adjusted EBITDA increased 21.6% to $211.0 million, and the company achieved positive free cash flow for the fifth consecutive quarter. Additionally, the company reduced its net debt leverage ratio to 1.8 times and received a credit rating upgrade from S&P Global Ratings, from 'B+' to 'BB-'. These developments indicate strong financial health and growth potential for the company.

Revenue
Total revenue for Life Time Group in the second quarter of 2025 reached $761.5 million, reflecting a 14.0% increase compared to the same period in the previous year. This growth was primarily driven by a continued surge in membership dues and in-center revenue, with membership growth at new and ramping centers contributing significantly. Center revenue totaled $735.87 million, with membership dues and enrollment fees accounting for the largest portion at $527.31 million. In-center revenue amounted to $208.56 million, underscoring higher member utilization of services such as Dynamic Personal Training. Other revenue sources added $25.60 million to the total. The company also reported a 11.8% year-over-year increase in average center revenue per membership, demonstrating strong monetization capabilities and member satisfaction.

Earnings/Net Income
Life Time Group’s earnings demonstrated remarkable strength, with net income surging 36.6% to $72.10 million in 2025 Q2, up from $52.80 million in the same period the previous year. Earnings per share (EPS) also saw a significant increase of 22.2% to $0.33 from $0.27, reflecting improved business performance and cost management. Adjusted net income rose 60.5% to $84.10 million, and Adjusted EBITDA increased 21.6% to $211.0 million, indicating strong operational efficiency and profitability. These robust earnings results highlight the company's ability to convert revenue growth into higher profit margins. The impressive earnings growth underscores Life Time Group's strong financial health and its ability to deliver value to shareholders.

Post Earnings Price Action Review
The post-earnings performance of Life Time Group’s stock has historically shown strong potential for investors who adopt a buy-and-hold strategy. Over the past three years, a strategy of purchasing shares after the company’s revenue increase was announced and holding for 30 days achieved an impressive 134.48% return, far outpacing the 0.00% benchmark. This strategy delivered a compound annual growth rate (CAGR) of 34.20%, reflecting consistent and strong returns over the period. The maximum drawdown for the strategy was 0.00%, indicating no significant losses, while the volatility was measured at 50.12% and a Sharpe ratio of 0.68. These metrics suggest that while the strategy carried some level of risk, the substantial returns made it an attractive investment option. The high returns highlight the effectiveness of timing purchases around earnings reports and the company's strong market performance following revenue increases.

CEO Commentary
CEO Bahram Akradi expressed optimism about Life Time Group's performance, noting that total visits and visits per membership continue to set records while retention rates remain at their highest levels. He emphasized the company’s strengthened balance sheet and improved credit rating, which support continued growth and reduce interest costs. Akradi highlighted the potential for monetizing memberships, with revenue per membership up nearly 12% year-over-year. Looking forward, he outlined key strategic priorities, including accelerating new club development with a target of 12–14 openings in 2026 and focusing on larger ground-up developments. Additionally, Akradi mentioned the growth of Life Time Digital, which has 2.3 million accounts, the L.AI.C AI health companion, and the expansion of nutritional supplements and MIORA locations. He expressed confidence in the company’s ability to execute on its strategic initiatives and create long-term value through disciplined growth and an enhanced member experience.

Guidance
Life Time Group raised its full-year comparable center revenue guidance for 2025, increasing the range from 8.5%–9.5% to 9.5%–10%. The company also reaffirmed its plan to open 12–14 new clubs in 2026, with a focus on larger, ground-up developments. Additionally, Life Time expects to complete $100 million in additional sale-leaseback transactions in the second half of 2025, contributing to a total of approximately $250 million in gross proceeds for the year. The company aims to maintain a net debt leverage ratio of or below 2.00 times and has updated its expectations for adjusted EBITDA growth, driven by dues revenue expansion and improved operating leverage. These strategic moves reflect the company's confidence in its financial strength and growth potential.

Additional News
In the broader financial context, Life Time Group reported significant operational and financial progress in its fiscal 2025 Q2. The company reported revenue of $761.5 million, up 14.0% year-over-year, with net income of $72.1 million, up 36.6% from the prior year. Adjusted EBITDA increased 21.6% to $211.0 million, and the company achieved positive free cash flow for the fifth consecutive quarter. Additionally, the company reduced its net debt leverage ratio to 1.8 times and received a credit rating upgrade from S&P Global Ratings, from 'B+' to 'BB-'. These developments indicate strong financial health and growth potential for the company.