Life Time Reports Third Quarter 2026 Financial Results

Life Time delivers strong Q3 growth, raises 2026 outlook, and accelerates club expansion.

What the company is saying

Life Time Group Holdings, led by Founder, Chairman and CEO Bahram Akradi, reports a 14.2% year-over-year revenue increase to $893.5 million for Q3 2026, highlighting robust membership growth and higher in-center spending. The company frames its narrative around exceptional member experiences, brand strength, and rising engagement, attributing revenue gains to improved membership mix, increased dues, and higher utilization of offerings like Dynamic Personal Training. Management emphasizes operational execution, noting 858,747 center memberships at quarter-end and progress toward opening all 14 new clubs planned for 2026, with nearly all 2027 clubs already under construction. The tone is confident, citing low leverage, strong cash flow, and a robust real estate pipeline as foundations for long-term growth. The company raises its full-year 2026 outlook, projecting revenue of $3.38–$3.39 billion, adjusted EBITDA of $958–$962 million, and adjusted net income of $408–$412 million. Explanations for improved results include a shift toward higher-value memberships, increased member utilization, and operational efficiencies.

What the data suggests

Q3 2026 revenue reached $893.5 million, up 14.2% year-over-year, with net income rising 4.0% to $106.5 million and adjusted EBITDA up 16.5% to $256.3 million. Adjusted net income jumped 24.6% to $115.9 million, and diluted EPS grew 2.2% to $0.46. For the first nine months of 2026, revenue totaled $2,548.2 million (up 13.2%), net income was $295.9 million (up 18.0%), and adjusted EBITDA was $729.4 million (up 17.2%). Memberships increased 2.2% to 858,747, with average center revenue per membership up 12.0% to $1,016. Comparable center revenue growth was 8.7% for the quarter. Operating expenses rose in line with revenue, with center operations costs up 14.5% to $474.5 million and general, administrative, and marketing expenses up 10.0% to $65.8 million. Capital expenditures for the quarter were $288.7 million (up 29.8%), reflecting aggressive expansion. Net cash from operations for the nine months was $670.5 million, and liquidity stood at $919.1 million with no outstanding revolver borrowings. The net debt leverage ratio improved to 1.3x from 1.6x a year earlier. The company’s forward guidance for 2026 calls for continued double-digit revenue growth, significant capital investment, and further club openings, supported by strong realized results to date.

Analysis

The announcement presents a positive tone, but this is well supported by realised, measurable progress: revenue, net income, adjusted EBITDA, and cash flow all show clear year-over-year growth, and profitability metrics are disclosed alongside operational figures. The company provides granular historical data and transparent forward guidance, with most forward-looking claims relating to the remainder of the current fiscal year (2026), which is near-term. While capital expenditures are high and growing, the company demonstrates strong liquidity, improved leverage, and ongoing cash generation, mitigating capital intensity concerns. The narrative does not overstate realised progress or inflate future expectations; forward-looking statements are specific, time-bound, and consistent with recent performance. There is no evidence of narrative inflation or a gap between investor perception and disclosed reality.

Risk flags

• ●High capital intensity remains a risk, with $812.0 million in capital expenditures year-to-date and full-year guidance of up to $910 million in growth capex, requiring continued strong cash generation and disciplined project execution.
• ●The company’s expansion strategy depends on successfully opening and ramping 14 new clubs in 2026, nearly doubling recent annual square footage; delays or underperformance in these new locations could pressure margins and returns.
• ●Membership growth is modest at 2.2% year-over-year, with much of revenue growth driven by higher dues and improved mix; if pricing power or premium membership demand weakens, top-line momentum could slow.
• ●Sale-leaseback transactions are a key source of liquidity, with $135 million targeted in Q4 and $400 million for the year; any disruption in real estate markets or transaction execution could impact cash flow and leverage targets.
• ●Operating expenses are rising nearly in line with revenue, and maintaining margin expansion will require ongoing cost control as the club base grows and matures.

Bottom line

Life Time Group Holdings is delivering on its growth strategy, with strong Q3 and year-to-date financial results, improved leverage, and substantial progress on new club openings. The company’s raised 2026 outlook is credible, supported by realized revenue, EBITDA, and cash flow gains, though much of the year’s expansion and sale-leaseback activity is still to be executed in the final quarter. High capital intensity and dependence on premium membership growth and real estate transactions introduce execution and market risks, but current liquidity and cash flow provide a solid buffer. Investors should focus on Q4 delivery of new clubs, completion of targeted sale-leasebacks, and the sustainability of margin and membership gains. The key takeaway is that Life Time is growing profitably, but the pace and quality of execution in the next several months will determine whether this momentum is sustained into 2027.

Announcement summary

(NYSE:LTH) Life Time Group Holdings, Inc. announced financial results for the fiscal third quarter ended September 30, 2026. Total revenue for the quarter was $893.5 million, representing a 14.2% increase over the prior year quarter. Net income for the quarter was $106.5 million, up 4.0% year-over-year. Diluted EPS for the quarter was $0.46, an increase of 2.2% over the prior year quarter. Adjusted net income for the quarter was $115.9 million, up 24.6% year-over-year. Adjusted EBITDA for the quarter was $256.3 million, a 16.5% increase over the prior year quarter. Adjusted diluted EPS for the quarter was $0.51, up 24.4% year-over-year. For the nine months ended September 30, 2026, total revenue was $2,548.2 million, up 13.2% from $2,250.2 million in the prior year period. Net income for the nine months was $295.9 million, up 18.0% from $250.7 million. Adjusted net income for the nine months was $321.9 million, up 28.1% from $251.2 million. Adjusted EBITDA for the nine months was $729.4 million, up 17.2% from $622.6 million. Center memberships at the end of the quarter were 858,747, a 2.2% increase from 840,622 at the end of the prior year quarter. Average center revenue per center membership for the quarter was $1,016, up 12.0% from $907 in the prior year quarter. Comparable center revenue growth for the quarter was 8.7%. Center operations expenses for the quarter were $474.5 million, up 14.5% from $414.3 million. Rent expense for the quarter was $96.1 million, up 9.8% from $87.5 million. General, administrative and marketing expenses for the quarter were $65.8 million, up 10.0% from $59.8 million. Non-cash share-based compensation expense for the quarter was $13.9 million, compared to $14.9 million in the prior year quarter. Total subscriptions, including center and on-hold memberships, were 908,454, up 1.9% year-over-year. The company opened one new center during the third quarter, bringing the total operated centers to 196 as of September 30, 2026. Net cash provided by operating activities for the nine months ended September 30, 2026 was $670.5 million, a 6.3% increase over the prior year period. The company completed one sale-leaseback transaction for one property with net proceeds of $62.3 million during the quarter, and three sale-leaseback transactions for six properties with total net proceeds of $262.5 million for the nine months. Total capital expenditures for the quarter were $288.7 million, up 29.8% from $222.5 million, and for the nine months were $812.0 million, up 38.3% from $587.0 million. Growth capital expenditures for the quarter were $216.5 million, maintenance capital expenditures were $35.5 million, and modernization and technology capital expenditures were $36.7 million. As of September 30, 2026, total available liquidity was $919.1 million, including $632.9 million of availability on the $650.0 million revolving credit facility and $286.2 million of cash and cash equivalents. There were no outstanding borrowings under the revolving credit facility and $17.1 million of outstanding letters of credit. The net debt leverage ratio improved to 1.3 times as of September 30, 2026, from 1.6 times as of September 30, 2025. For full-year 2026, the company expects total revenue of $3,380 million to $3,390 million, rent expense of $378 million to $382 million, net income of $358 million to $360 million, adjusted net income of $408 million to $412 million, and adjusted EBITDA of $958 million to $962 million. The company plans to open 14 new clubs in 2026, with total square footage of approximately 1.3 million square feet. Seven new clubs were opened as of September 30, 2026, with one additional club opened in October 2026, and six more expected in the fourth quarter. The company expects to complete approximately $135 million in additional sale-leaseback transactions in the fourth quarter, for a total of approximately $400 million in 2026. Maintenance capital expenditures are expected to be $140 million to $150 million, modernization and technology capital expenditures $140 million to $150 million, and growth capital expenditures $885 million to $910 million. The provision for income tax rate is estimated at 27%. The company aims to maintain its net debt to adjusted EBITDA leverage ratio at or below 2.00 times. Comparable center revenue growth for 2026 is expected to be 8.5% to 8.7%. Interest expense, net of interest income, is expected to be $59 million to $62 million, and net of $27 million to $29 million of capitalized interest expense. Rent is expected to include non-cash rent expense of $33 million to $35 million. Cash income tax expense is expected to be $82 million to $83 million. Year-end weighted-average diluted common shares outstanding are expected to be approximately 228 million to 229 million, not including any incremental impact from the $500 million share buyback program.

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