8-K: Life Time Reports Strong Q4, FY25 Results; Issues FY26 Guidance

Life Time Group Holdings, Inc. announced preliminary estimated financial results for the fourth quarter and full-year 2025, showing significant growth, and introduced select fiscal 2026 guidance.

Summary

• Preliminary estimated total revenue for Q4 2025 is $743-$745 million, an increase of 12.2% from Q4 2024.
• Preliminary estimated total revenue for FY 2025 is $2,993-$2,995 million, an increase of 14.2% from FY 2024.
• Preliminary estimated net income for Q4 2025 is $120-$123 million, a substantial increase of 226.6% from Q4 2024.
• Preliminary estimated net income for FY 2025 is $371-$374 million, an increase of 138.5% from FY 2024.
• Preliminary estimated diluted EPS for Q4 2025 is $0.52-$0.54, an increase of 211.8% from Q4 2024.
• Preliminary estimated diluted EPS for FY 2025 is $1.63-$1.66, an increase of 122.3% from FY 2024.
• Preliminary estimated Adjusted EBITDA for Q4 2025 is $200-$202 million, an increase of 13.6% from Q4 2024.
• Preliminary estimated Adjusted EBITDA for FY 2025 is $823-$825 million, an increase of 21.7% from FY 2024.
• The company introduced FY 2026 guidance, projecting total revenue of $3,300-$3,330 million, an increase of 10.7% from FY 2025 preliminary results.
• FY 2026 net income guidance is $330-$336 million, representing a 10.6% decrease from FY 2025 preliminary results, primarily due to non-recurring tax-effected income in 2025.
• FY 2026 Adjusted EBITDA guidance is $910-$925 million, an increase of 11.3% from FY 2025 preliminary results.
• The company plans to open 12 to 14 new clubs in FY 2026, mostly large-format, ground-up construction clubs, totaling approximately 1.2 million square feet, nearly double the square footage of 2024 and 2025 classes.
• Comparable center revenue growth for FY 2026 is guided to be 6.3% to 7.3%.

Sentiment

Score: 8

Explanation: The company reported strong preliminary financial results for 2025 with significant growth across key metrics and provided positive guidance for 2026 revenue and Adjusted EBITDA, coupled with aggressive expansion plans. The decrease in 2026 net income is explained by non-recurring items in 2025, indicating underlying operational strength.

Positives

• Significant increases in total revenue, net income, diluted EPS, and Adjusted EBITDA for both Q4 and full-year 2025, demonstrating strong operational performance.
• Robust growth in comparable center revenue, with 9.7%-9.9% for Q4 2025 and 11.0%-11.1% for FY 2025.
• Average center revenue per center membership increased by 10.7% for Q4 2025 and 11.7% for FY 2025, indicating strong member value and pricing power.
• Positive financial guidance for FY 2026, projecting continued growth in total revenue (10.7% increase) and Adjusted EBITDA (11.3% increase).
• Aggressive expansion plans for FY 2026, with 12-14 new large-format clubs expected to open, nearly doubling the square footage of previous classes.
• Successful partial settlement of legal claims against Zurich American Insurance Company for business interruption coverage, resulting in a nearly $40 million payment.
• Anticipated full-year benefits in 2026 from reduced interest expense on the term loan facility due to an interest rate swap and repricing executed in 2025.
• Commitment to manage net debt to Adjusted EBITDA leverage ratio at or below 2.00 times, indicating sound financial management.

Negatives

• FY 2026 Net Income guidance shows an estimated decrease of 10.6% compared to FY 2025 preliminary results, primarily due to non-recurring tax-effected income in 2025.
• The financial results are preliminary and unaudited, subject to revision upon completion of the year-end financial closing process and audit.

Risks

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

Future Outlook

The company projects continued strong growth in fiscal year 2026, with total revenue expected to increase by 10.7% to $3.30-$3.33 billion and Adjusted EBITDA by 11.3% to $910-$925 million. It plans to open 12 to 14 new large-format clubs, nearly doubling the square footage of previous classes, with most openings anticipated in the back half of the year. Comparable center revenue growth is guided to be 6.3% to 7.3%. The projected decrease in net income for 2026 is attributed to non-recurring tax-effected income recognized in 2025.

Management Comments

• Life Time empowers people to live healthy, happy lives through its more than 185 athletic country clubs across the U.S. and Canada.
• 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.
• The Company is committed to upholding an exceptional culture for its 44,000 team members.

Industry Context

The filing does not explicitly provide an analysis of how this announcement relates to broader industry trends or competitors. However, the strong growth in revenue and memberships suggests a robust demand in the health and fitness sector, aligning with a general trend towards wellness and active lifestyles.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry comparison.

Legal Proceedings

• Received payment of nearly $40 million from Zurich American Insurance Company in partial satisfaction of legal claims against Zurich for its failure to provide certain business interruption insurance coverage related to government-ordered suspensions of club operations in 2020 during the COVID-19 pandemic.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, significant growth in revenue and profitability, and positive future guidance, potentially leading to increased share value.
• Employees: Continued growth and expansion (opening 12-14 new clubs) suggest job stability and potential for new employment opportunities.
• Customers: Expansion of clubs and continued investment in the 'healthy way of life' ecosystem indicates enhanced service offerings and accessibility.
• Creditors: Commitment to maintaining net debt to Adjusted EBITDA leverage ratio at or below 2.00 times, along with reduced interest expense, indicates sound financial management and improved creditworthiness.

Next Steps

• Release full fourth quarter and fiscal year 2025 results on February 24, 2026.
• Open 12 to 14 new clubs in fiscal year 2026, with the majority opening in the back half of the year, including six to seven in the fourth quarter of 2026.
• Manage net debt to Adjusted EBITDA leverage ratio to maintain at or below 2.00 times.

Key Dates

Recommendation

The preliminary results for 2025 demonstrate exceptional growth in revenue, net income, and Adjusted EBITDA, significantly exceeding prior year figures. The 2026 guidance, while showing a temporary dip in reported net income due to non-recurring items in 2025, projects robust growth in core revenue and Adjusted EBITDA, alongside aggressive expansion plans. The company's strategic focus on large-format clubs and commitment to a healthy leverage ratio further strengthens its long-term outlook. This strong performance and clear growth trajectory make Life Time Group Holdings an attractive investment.

Keywords

Life Time Group Holdings, LTH, Financial Results, Q4 2025, FY 2025, FY 2026 Guidance, Revenue Growth, Net Income, Adjusted EBITDA, EPS, Club Expansion, Health and Fitness, Athletic Country Clubs, SEC Filing