8-K: Life Time Posts Strong Q4, Full-Year 2025 Results; Announces $500M Buyback

Life Time Group Holdings, Inc. reported robust financial performance for Q4 and full-year 2025, with significant revenue and net income growth, and announced a new $500 million share repurchase program.

Summary

• Total revenue increased 12.3% to $745.1 million for the fourth quarter and 14.3% to $2,995.3 million for the full year ended December 31, 2025.
• Net income surged 230.6% to $123.0 million for the fourth quarter and 139.2% to $373.7 million for the full year.
• Diluted EPS increased 217.6% to $0.54 for the fourth quarter and 124.3% to $1.66 for the full year.
• Adjusted EBITDA grew 14.5% to $202.6 million for the fourth quarter and 21.9% to $825.2 million for the full year.
• The company announced a $500 million share repurchase program authorized by its board of directors.
• Life Time opened 10 new centers during 2025, bringing the total to 189 centers as of December 31, 2025.
• Net cash provided by operating activities increased 51.4% to $870.5 million for the full year.
• The net debt leverage ratio improved to 1.6x as of December 31, 2025, down from 2.3x a year prior.
• Total available liquidity stood at $823.0 million, including $204.8 million in cash and cash equivalents, as of December 31, 2025.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a very positive report, driven by strong financial growth, improved leverage, and a significant share repurchase program, signaling management's confidence and commitment to shareholder returns. The only slight negative is the projected net income decrease for 2026, but this is offset by strong Adjusted Net Income and EBITDA growth and aggressive expansion plans.

Positives

• Total revenue increased significantly by 12.3% in Q4 2025 and 14.3% for the full year 2025, driven by strong membership dues and in-center revenue growth.
• Net income saw substantial growth of 230.6% in Q4 2025 and 139.2% for the full year 2025, benefiting from improved business performance, legal claim settlements, and employee retention credits.
• Adjusted EBITDA increased by 14.5% in Q4 2025 and 21.9% for the full year 2025, reflecting greater flow-through from increased revenue.
• The net debt leverage ratio improved to a healthy 1.6x as of December 31, 2025, from 2.3x a year prior, demonstrating a strengthened balance sheet.
• A $500 million share repurchase program was authorized, signaling management's confidence in the company's value and commitment to shareholder returns.
• Achieved positive free cash flow of $206.5 million for the full year 2025.
• Successfully executed interest rate swap agreements and repricing of the term loan facility, reducing the fixed interest rate and applicable interest rate margin.
• S&P Global Ratings upgraded the issuer credit rating to BBfrom B+ on June 18, 2025, reflecting improved financial health.
• Received $27.7 million in Q4 2025 and $29.2 million for the full year 2025 in partial satisfaction of legal claims related to business interruption insurance.
• Received $14.1 million in Q4 2025 and $41.3 million for the full year 2025 from employee retention credits under the CARES Act.
• Realized tax-effected one-time gains of $12.5 million in Q4 2025 and $9.7 million for the full year 2025 on sale-leaseback transactions.

Negatives

• Center memberships decreased by 18,242 from the third quarter 2025 to the fourth quarter 2025, although this was attributed to seasonality expectations and continued shifts in membership mix.
• The midpoint of the 2026 Net Income guidance ($333 million) is lower than the actual Net Income for 2025 ($373.7 million), representing a projected decrease of 10.9%.

Risks

• Risks relating to business operations and growth, including the competitive and economic environment.
• Risks relating to the brand.
• Risks relating to technological operations.
• Risks relating to capital structure and lease obligations.
• Risks relating to human capital.
• Risks relating to legal compliance and risk management.
• Risks relating to ownership of common stock.

Future Outlook

Life Time Group Holdings, Inc. reiterated its 2026 guidance, expecting total revenue between $3,300 million and $3,330 million and Adjusted EBITDA between $910 million and $925 million. The company plans to open 12 to 14 new large-format clubs in 2026, adding approximately 1.2 million square feet, nearly doubling the square footage of the 2024 and 2025 classes combined, with most openings in the latter half of the year. Comparable center revenue growth is projected at 6.3% to 7.3%. The company also aims to maintain its net debt to Adjusted EBITDA leverage ratio at or below 2.00 times and complete at least $300 million in sale-leaseback transactions in 2026.

Management Comments

• "I am proud of how our team delivered throughout 2025. With higher member engagement, increased dues per membership, and robust incenter revenue growth, we delivered another year of record financial performance." Bahram Akradi, Founder, Chairman and CEO.
• "We enter 2026 with strong fundamentals and a clear plan to expand the number of our largeformat athletic country clubs. We expect to add nearly as much new square footage in 2026 as we opened in the past two years combined." Bahram Akradi.
• "We remain focused on growing revenue and adjusted EBITDA by further increasing member engagement, optimizing our membership mix, and growing revenue per center membership." Bahram Akradi.
• "I am also excited to announce a $500 million share repurchase program approved by our board of directors. Our strong cash generation and healthy balance sheet give us confidence in our ability to fund our accelerated club opening plan and implement our share repurchase program while remaining at or below our target 2.0x net leverage ratio." Bahram Akradi.
• "We believe we are now in a position to continue investing for longterm growth while further driving shareholder return." Bahram Akradi.

Industry Context

StockSavvy.ai notes that Life Time's strong performance, particularly in membership engagement and in-center revenue, indicates a robust demand for premium health and wellness experiences. The accelerated club opening plan and significant square footage expansion in 2026 suggest confidence in market growth and a strategy to capture a larger share of the high-end fitness market, potentially outpacing competitors focused on more commoditized offerings. The focus on large-format athletic country clubs aligns with a trend towards comprehensive wellness destinations.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to benchmark against global industry standards.

Legal Proceedings

• Received $27.7 million in Q4 2025 and $29.2 million for the full year 2025 in partial satisfaction of legal claims against Zurich American Insurance Company for its failure to provide business interruption insurance coverage related to government-ordered club suspensions during the COVID-19 pandemic.
• This payment is related to an August 11, 2025, order by the Minnesota Court of Appeals.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, the announcement of a significant share repurchase program, and improved financial leverage, potentially leading to increased share value.
• Employees: Positive impact from continued company growth and aggressive expansion plans, which may lead to more job opportunities and career stability.
• Customers (Members): Positive impact from the planned opening of 12 to 14 new large-format clubs in 2026 and enhanced member services, improving access and experience.
• Creditors: Positive impact due to the improved net debt leverage ratio (1.6x) and strong cash generation, indicating reduced credit risk and enhanced ability to service debt.

Next Steps

• Open 12 to 14 new large-format clubs in 2026, with the majority expected to open in the back half of the year, including six to seven in the fourth quarter.
• Implement the $500 million share repurchase program, subject to market conditions and other factors.
• Complete at least $300 million of sale-leaseback transactions in 2026.
• Manage the net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times.

Key Dates

Recommendation

The company delivered exceptional financial results for 2025, demonstrating robust growth in revenue, net income, and Adjusted EBITDA. The significant improvement in the net debt leverage ratio to 1.6x, well below the target, indicates a strengthened balance sheet. The announcement of a $500 million share repurchase program underscores management's confidence in the company's valuation and commitment to returning capital to shareholders. While 2026 net income guidance is slightly lower, the strong Adjusted Net Income and Adjusted EBITDA guidance, coupled with aggressive expansion plans for new large-format clubs, suggests continued operational strength and future growth potential. These factors collectively present a compelling investment case.

Keywords

Fitness, Health Clubs, Wellness, Athletic Country Clubs, LTH, Financial Results, Earnings, Share Repurchase, SEC Filing, Capital Expenditures, Debt Leverage, Membership Growth, Sale-Leaseback