Life Time Reports Third Quarter 2025 Financial Results

CHANHASSEN, Minn., Nov. 4, 2025 /PRNewswire/ -- Life Time Group Holdings, Inc. ("Life Time," "we," "our," "us," or the "Company") (NYSE: LTH) today announced its financial results for the fiscal third quarter ended September 30, 2025.

Bahram Akradi, Founder, Chairman and CEO, stated: "Our third quarter results reflect strong execution and continued momentum across the business. Our growth strategy remains on track. Nearly all of next year's planned 12 to 14 new clubs are currently under construction. Membership engagement continues to rise, and in-center performance remains robust. Supported by a solid balance sheet, low leverage, and strong cash generation, we are well positioned for continued growth."

Financial Summary

Three Months Ended

Nine Months Ended

($ in millions, except for Average center

revenue per center membership data)

September 30,

2025

2024

Percent

Change

2025

2024

Percent

Change

Total revenue

$782.6

$693.2

12.9 %

$2,250.2

$1,957.7

14.9 %

Center operations expenses

$414.3

$371.1

11.6 %

$1,189.2

$1,048.5

13.4 %

Rent

$87.5

$78.6

11.3 %

$251.9

$225.8

11.6 %

General, administrative and marketing expenses (1)

$59.8

$57.7

3.6 %

$179.4

$159.8

12.3 %

Net income

$102.4

$41.4

147.3 %

$250.7

$119.1

110.5 %

Adjusted net income

$93.0

$56.3

65.2 %

$263.8

$140.2

88.2 %

Adjusted EBITDA

$220.0

$180.3

22.0 %

$622.6

$499.8

24.6 %

Comparable center revenue (2)

10.6 %

12.1 %

11.5 %

11.8 %

Center memberships, end of period

840,622

826,502

1.7 %

840,622

826,502

1.7 %

Average center revenue per center membership

$907

$815

11.3 %

$2,638

$2,361

11.7 %

(1)

The three months ended September 30, 2025 and 2024 included non-cash share-based compensation expense of $14.9 million and $10.3 million, respectively. The nine months ended September 30, 2025 and 2024 included non-cash share-based compensation expense of $39.4 million and $27.1 million, respectively.

(2)

The Company includes a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center's operation, in order to assess the center's growth rate after one year of operation.

Third Quarter 2025 Information

Nine-Month 2025 Information

New Center Openings

Cash Flow Highlights

Three Months Ended

Nine Months Ended

($ in millions)

September 30,

2025

2024

Percent

Change

2025

2024

Percent

Change

Growth capital expenditures (1)

$156.0

$46.4

236.2 %

$416.4

$259.9

60.2 %

Maintenance capital expenditures (2)

$27.8

$21.6

28.7 %

$93.2

$70.0

33.1 %

Modernization and technology capital expenditures (3)

$38.7

$19.1

102.6 %

$77.4

$58.3

32.8 %

Total capital expenditures

$222.5

$87.1

155.5 %

$587.0

$388.2

51.2 %

(1)

Consist of new center land and construction, initial major remodels of acquired centers, major remodels of existing centers that expand existing square footage, asset acquisitions including the purchase of previously leased centers and other growth initiatives.

(2)

Consist of general maintenance of existing centers.

(3)

Consist of modernization of existing centers and technology.

Liquidity and Capital Resources

2025 Outlook

Full-Year 2025 Guidance

Percent

Year Ending

Year Ended

Change

December 31, 2025

December 31, 2024

(Using

(Guidance as of

($ in millions)

(Guidance)

(Actual)

Midpoints)

August 5, 2025)

Revenue

$2,978 – $2,988

$2,621.0

13.8 %

$2,955 – $2,985

Net Income

$304 – $306

$156.2

95.3 %

$290 – $293

Adjusted EBITDA

$820 – $824

$676.8

21.5 %

$805 – $815

Rent

$337 – $343

$304.9

11.5 %

$337 – $343

The Company is also reiterating or updating the following operational and financial guidance for full-year fiscal 2025:

Conference Call Details and Supplemental Material

A conference call to discuss our third quarter financial results is scheduled for today:

The Company has made available supplemental material regarding its new club pipeline and membership growth on its investor relations website at https://ir.lifetime.life.

Replay Information

Webcast – A recorded replay of the webcast will be available within approximately three hours of the call's conclusion and may be accessed at: https://ir.lifetime.life.

Conference Call – A replay of the conference call will be available within approximately three hours of the call's conclusion through November 18, 2025:

About Life Time

Life Time (NYSE: LTH) empowers people to live healthy, happy lives through its more than 185 athletic country clubs across the U.S. and Canada, the complimentary and comprehensive Life Time app featuring its L•AI•C™ AI-powered health companion, and more than 30 iconic athletic events. Serving people ages 90 days to 90+ years, 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. Recognized as a Great Place to Work®, the company is committed to upholding an exceptional culture for its 43,000 team members.

Use of Non-GAAP Financial Measures and Key Performance Indicators

This press release includes certain financial measures that are not presented in accordance with GAAP, including Adjusted net income, Adjusted net income per common share, Adjusted EBITDA, free cash flow and net debt and ratios and calculations with respect thereto. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should be considered in addition to, and not as a substitute for or superior to, net income, net income per common share, net cash provided by operating activities or total debt (defined as long-term debt, net of current portion, plus current maturities of debt) as a measure of financial performance or liquidity or any other performance measure derived in accordance with GAAP, and should not be construed as an inference that the Company's future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures should be read in conjunction with the Company's financial statements prepared in accordance with GAAP. The reconciliations of the Company's non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.

Adjusted net income is defined as net income excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, less the tax effect of these adjustments. Adjusted EBITDA is defined as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of the Company's ongoing operations. Free cash flow is defined as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales. Net debt is defined as long-term debt, net of current portion, plus current maturities of debt, excluding fair value adjustments, unamortized debt discounts and issuance costs, minus cash and cash equivalents. Net debt is as of the last day of the respective quarter or year. Our net debt leverage ratio is calculated as our net debt divided by our trailing twelve months of Adjusted EBITDA.

The Company presents these non-GAAP financial measures because management believes that these measures assist investors and analysts in comparing the Company's operating performance across reporting periods on a consistent basis by excluding items that management does not believe are indicative of the Company's ongoing operating performance, and management believes that free cash flow assists investors and analysts in evaluating our liquidity and cash flows, including our ability to make principal payments on our indebtedness and to fund our capital expenditures and working capital requirements. Investors are encouraged to evaluate these adjustments and the reasons the Company considers them appropriate for supplemental analysis. In evaluating the non-GAAP financial measures, investors should be aware that, in the future, the Company may incur expenses that are the same as or similar to some of the adjustments in the Company's presentation of its non-GAAP financial measures. There can be no assurance that the Company will not modify the presentation of non-GAAP financial measures in future periods, and any such modification may be material. In addition, the Company's non-GAAP financial measures may not be comparable to similarly titled measures used by other companies in the Company's industry or across different industries.

The non-GAAP financial measures have limitations as analytical tools, and investors should not consider these measures in isolation or as substitutes for analysis of the Company's results as reported under GAAP.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of federal securities regulations. Forward-looking statements in this press release include, but are not limited to, the Company's plans, strategies and prospects, both business and financial, including its financial outlook for fiscal year 2025, growth, business initiatives, cost efficiencies and margin expansion, capital expenditures and free cash flow, improvements to its balance sheet, net debt and leverage, interest expense, consumer demand, industry and economic trends, tax rates and expense, rent expense, expected number and timing of new center openings and successful signings and closings of center takeovers and sale-leaseback transactions (including the amount, pricing and timing thereof). These statements are based on the beliefs and assumptions of the Company's management. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning the Company's possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

Factors that could cause actual results to differ materially from those forward-looking statements included in this press release include, but are not limited to, risks relating to our business operations and competitive and economic environment, risks relating to our brand, risks relating to the growth of our business, risks relating to our technological operations, risks relating to our capital structure and lease obligations, risks relating to our human capital, risks relating to legal compliance and risk management and risks relating to ownership of our common stock and the other important factors discussed under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on February 27, 2025 (File No. 001-40887), as such factors may be updated from time to time in the Company's other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise.

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Revenue:

Center revenue

$ 760,897

$ 674,775

$ 2,182,416

$ 1,900,267

Other revenue

21,752

18,459

67,743

57,445

Total revenue

782,649

693,234

2,250,159

1,957,712

Operating expenses:

Center operations

414,328

371,134

1,189,240

1,048,544

Rent

87,511

78,575

251,866

225,804

General, administrative and marketing

59,840

57,737

179,361

159,836

Depreciation and amortization

75,094

69,451

219,001

205,068

Other operating expense

10,231

22,642

58,927

47,952

Total operating expenses

647,004

599,539

1,898,395

1,687,204

Income from operations

135,645

93,695

351,764

270,508

Other income (expense):

Interest expense, net of interest income

(18,440)

(36,011)

(65,331)

(111,083)

Equity in earnings (loss) of affiliates

149

(116)

170

(403)

Other income

21,994

—

34,867

—

Total other income (expense)

3,703

(36,127)

(30,294)

(111,486)

Income before income taxes

139,348

57,568

321,470

159,022

Provision for income taxes

36,921

16,213

70,799

39,945

Net income

$ 102,427

$ 41,355

$ 250,671

$ 119,077

Income per common share:

Basic

$ 0.47

$ 0.20

$ 1.15

$ 0.60

Diluted

$ 0.45

$ 0.19

$ 1.11

$ 0.57

Weighted-average common shares outstanding:

Basic

220,063

202,945

217,132

199,793

Diluted

226,007

214,633

225,075

207,841

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

September 30,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

$ 218,897

$ 10,879

Restricted cash and cash equivalents

22,541

16,999

Accounts receivable, net

24,370

25,087

Center operating supplies and inventories

70,666

60,266

Prepaid expenses and other current assets

53,630

52,826

Income tax receivable

20,162

4,918

Total current assets

410,266

170,975

Property and equipment, net

3,456,519

3,193,671

Goodwill

1,235,359

Operating lease right-of-use assets

2,449,274

2,313,311

Intangible assets, net

181,088

171,643

Other assets

94,369

67,578

Total assets

$ 7,826,875

$ 7,152,537

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 91,758

$ 87,810

Construction accounts payable

134,485

101,551

Deferred revenue

55,782

58,252

Accrued expenses and other current liabilities

229,153

179,444

Current maturities of debt

22,965

22,584

Current maturities of operating lease liabilities

79,252

70,462

Total current liabilities

613,395

520,103

Long-term debt, net of current portion

1,489,908

1,513,157

Operating lease liabilities, net of current portion

2,532,962

2,381,094

Deferred income taxes, net

146,055

85,255

Other liabilities

59,203

42,578

Total liabilities

4,841,523

4,542,187

Stockholders' equity:

Common stock, $0.01 par value per share; 500,000 shares authorized; 220,262 and 207,495 shares issued and outstanding, respectively

2,203

2,075

Additional paid-in capital

3,164,932

3,041,645

Accumulated deficit

(169,902)

(420,573)

Accumulated other comprehensive loss

(11,881)

(12,797)

Total stockholders' equity

2,985,352

2,610,350

Total liabilities and stockholders' equity

$ 7,826,875

$ 7,152,537

LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended

September 30,

2025

2024

Cash flows from operating activities:

Net income

$ 250,671

$ 119,077

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

219,001

205,068

Deferred income taxes

60,918

21,693

Share-based compensation

45,179

30,450

Non-cash rent expense

28,876

25,181

Impairment charges associated with long-lived assets

1,293

2,941

Loss (gain) on disposal of property and equipment, net

4,953

(6,548)

Write-off of debt discounts and issuance costs

—

3,510

Amortization of debt discounts and issuance costs

2,729

5,891

Changes in operating assets and liabilities

18,576

1,794

Other

(1,530)

2,919

Net cash provided by operating activities

630,666

411,976

Cash flows from investing activities:

Capital expenditures

(586,980)

(388,213)

Proceeds from sale-leaseback transactions

172,683

207,714

Proceeds from the sale of land

—

15,577

Other

(21,786)

2,819

Net cash used in investing activities

(436,083)

(162,103)

Cash flows from financing activities:

Repayments of debt

(14,292)

(408,612)

Proceeds from revolving credit facility

220,000

1,045,000

Repayments of revolving credit facility

(230,000)

(925,000)

Repayments of finance lease liabilities

(1,604)

(626)

Proceeds from financing obligations

10,300

4,300

Payments of debt discounts and issuance costs

(628)

(1,873)

Proceeds from the issuance of common stock, net of issuance costs

—

124,357

Proceeds from stock option exercises

37,616

19,548

Proceeds from issuances of common stock in connection with the employee stock purchase plan

1,875

1,462

Other

(4,341)

(1,304)

Net cash provided by (used in) financing activities

18,926

(142,748)

Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents

(38)

Increase in cash and cash equivalents and restricted cash and cash equivalents

213,560

107,087

Cash and cash equivalents and restricted cash and cash equivalents—beginning of period

27,878

29,966

Cash and cash equivalents and restricted cash and cash equivalents—end of period

$ 241,438

$ 137,053

Non-GAAP Measurements and Key Performance Indicators

See "Use of Non-GAAP Financial Measures and Key Performance Indicators" for a discussion of the Non-GAAP financial measures reconciled below.

Key Performance Indicators

($ in thousands, except for Average Center revenue per center membership data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

2025

2024

2025

2024

Membership Data

Center memberships

840,622

826,502

840,622

826,502

On-hold memberships

50,603

50,007

50,603

50,007

Total memberships

891,225

876,509

891,225

876,509

Revenue Data

Membership dues and enrollment fees

71.9 %

72.3 %

72.2 %

72.4 %

In-center revenue

28.1 %

27.7 %

27.8 %

27.6 %

Total Center revenue

100.0 %

Membership dues and enrollment fees

$ 547,306

$ 488,105

$ 1,576,268

$ 1,376,212

In-center revenue

213,591

186,670

606,148

524,055

Total Center revenue

$ 760,897

$ 674,775

$ 2,182,416

$ 1,900,267

Average Center revenue per center membership (1)

$ 907

$ 815

$ 2,638

$ 2,361

Comparable center revenue (2)

10.6 %

12.1 %

11.5 %

11.8 %

Center Data

Net new center openings (3)

Total centers (end of period) (3)

185

177

185

177

Total center square footage (end of period) (4)

18,100,000

17,400,000

18,100,000

17,400,000

GAAP and Non-GAAP Financial Measures

Net income

$ 102,427

$ 41,355

$ 250,671

$ 119,077

Net income margin (5)

13.1 %

6.0 %

11.1 %

6.1 %

Adjusted net income (6)

$ 92,992

$ 56,278

$ 263,778

$ 140,158

Adjusted net income margin (6)

11.9 %

8.1 %

11.7 %

7.2 %

Adjusted EBITDA (7)

$ 220,046

$ 180,293

$ 622,611

$ 499,816

Adjusted EBITDA margin (7)

28.1 %

26.0 %

27.7 %

25.5 %

Center operations expense

$ 414,328

$ 371,134

$ 1,189,240

$ 1,048,544

Pre-opening expenses (8)

$ 1,050

$ 1,164

$ 3,489

$ 4,819

Rent

$ 87,511

$ 78,575

$ 251,866

$ 225,804

Non-cash rent expense (open properties) (9)

$ 10,216

$ 9,684

$ 18,275

$ 20,734

Non-cash rent expense (properties under development) (9)

$ 5,597

$ 1,847

$ 10,601

$ 4,447

Net cash provided by operating activities

$ 251,112

$ 151,146

$ 630,666

$ 411,976

Free cash flow (10)

$ 62,530

$ 138,332

$ 216,369

$ 247,054

(1)

We define Average Center revenue per center membership as Center revenue less On-hold revenue, divided by the average number of Center memberships for the period, where the average number of Center memberships for the period is an average derived from dividing the sum of the total Center memberships outstanding at the beginning of the period and at the end of each month during the period by one plus the number of months in each period.

(2)

We measure the results of our centers based on how long each center has been open as of the most recent measurement period. We include a center, for comparable center revenue purposes, beginning on the first day of the 13th full calendar month of the center's operation, in order to assess the center's growth rate after one year of operation.

(3)

Net new center openings is calculated as the number of centers that opened for the first time to members during the period, less any centers that closed during the period. Total centers (end of period) is the number of centers operational as of the last day of the period. During the three months ended September 30, 2025, we opened one center.

(4)

Total center square footage (end of period) reflects the aggregate square footage, excluding the areas used for tennis courts, outdoor swimming pools, outdoor play areas and stand-alone Work, Sport and Swim locations. We use this metric for evaluating the efficiencies of a center as of the end of the period. These figures are approximations.

(5)

Net income margin is calculated as net income divided by total revenue.

(6)

We present Adjusted net income as a supplemental measure of our performance. We define Adjusted net income as net income excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations, less the tax effect of these adjustments.

Adjusted net income margin is calculated as Adjusted net income divided by total revenue.

The following table provides a reconciliation of net income and income per common share, the most directly comparable GAAP measures, to Adjusted net income and Adjusted net income per common share:

Three Months Ended

Nine Months Ended

September 30,

($ in thousands)

2025

2024

2025

2024

Net income

$ 102,427

$ 41,355

$ 250,671

$ 119,077

Share-based compensation expense (a)

16,891

11,752

45,179

30,450

(Gain) loss on sale-leaseback transactions (b)

(7,732)

4,902

4,764

(2,620)

Capital transaction costs (c)

—

1,531

—

Legal settlements (d)

—

1,250

—

1,250

Employee retention credits (e)

(21,994)

—

(34,867)

—

Other (f)

(1)

2,869

202

(927)

Taxes (g)

3,401

(5,850)

(3,702)

(7,072)

Adjusted net income

$ 92,992

$ 56,278

$ 263,778

$ 140,158

Income per common share:

Basic

$ 0.47

$ 0.20

$ 1.15

$ 0.60

Diluted

$ 0.45

$ 0.19

$ 1.11

$ 0.57

Adjusted income per common share:

Basic

$ 0.42

$ 0.28

$ 1.21

$ 0.70

Diluted

$ 0.41

$ 0.26

$ 1.17

$ 0.67

Weighted-average common shares outstanding:

Basic

220,063

202,945

217,132

199,793

Diluted

226,007

214,633

225,075

207,841

(a)

Share-based compensation expense recognized during the three and nine months ended September 30, 2025, was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan ("ESPP"), and liability-classified awards related to our 2025 short-term incentive plan. Share-based compensation expense recognized during the three and nine months ended September 30, 2024, was associated with stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2024 short-term incentive plan.

(b)

We adjust for the impact of gains and losses on the sale-leaseback of our properties as they do not reflect costs associated with our ongoing operations.

(c)

Represents one-time costs related to capital transactions, including debt and equity offerings that are non-recurring in nature.

(d)

We adjust for the impact of unusual legal settlements as these costs are non-recurring in nature and do not reflect costs associated with our normal ongoing operations.

(e)

Represents refundable payroll tax credits for employee retention under the CARES Act.

(f)

Includes (i) legal-related expenses in pursuit of our claim against Zurich of $0.1 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, (ii) a $3.5 million write-off of the unamortized debt discounts and issuance costs associated with the extinguishment of our former term loan facility and construction loan for the three and nine months ended September 30, 2024, (iii) gain on sales of land of $0.6 million and $5.0 million for the three and nine months ended September 30, 2024, respectively, and (iv) other immaterial transactions that are unusual or non-recurring in nature of $0.1 million for the nine months ended September 30, 2025.

(g)

Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income using the effective income tax rates for the respective periods.

(7)

We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income before interest expense, net, provision for income taxes and depreciation and amortization, excluding the impact of share-based compensation expense as well as (gain) loss on sale-leaseback transactions, capital transaction costs, legal settlements, asset impairment, severance and other items that are not indicative of our ongoing operations.

Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenue.

The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA:

Three Months Ended

Nine Months Ended

September 30,

($ in thousands)

2025

2024

2025

2024

Net income

$ 102,427

$ 41,355

$ 250,671

$ 119,077

Interest expense, net of interest income

18,440

36,011

65,331

111,083

Provision for income taxes

36,921

16,213

70,799

39,945

Depreciation and amortization

75,094

69,451

219,001

205,068

Share-based compensation expense (a)

16,891

11,752

45,179

30,450

(Gain) loss on sale-leaseback transactions (b)

(7,732)

4,902

4,764

(2,620)

Capital transaction costs (c)

—

1,531

—

Legal settlements (d)

—

1,250

—

1,250

Employee retention credits (e)

(21,994)

—

(34,867)

—

Other (f)

(1)

(641)

202

(4,437)

Adjusted EBITDA

$ 220,046

$ 180,293

$ 622,611

$ 499,816

(a) – (e)

See the corresponding footnotes to the table in footnote 6 immediately above.

(f)

Includes (i) legal-related expenses in pursuit of our claim against Zurich of $0.1 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, (ii) gain on sales of land of $0.6 million and $5.0 million for the three and nine months ended September 30, 2024, respectively, and (iii) other immaterial transactions that are unusual or non-recurring in nature of $0.1 million for the nine months ended September 30, 2025.

(8)

Represents non-capital expenditures associated with opening new centers that are incurred prior to the commencement of a new center opening. The number of centers under construction or development, the types of centers and our costs associated with any particular center opening can vary significantly from period to period.

(9)

Reflects the non-cash portion of our annual GAAP operating lease expense that is greater or less than the cash operating lease payments. Non-cash rent expense for our open properties represents non-cash expense associated with properties that were operating at the end of each period presented. Non-cash rent expense for our properties under development represents non-cash expense associated with properties that are still under development at the end of each period presented.

(10)

Free cash flow, a non-GAAP financial measure, is calculated as net cash provided by operating activities less capital expenditures, net of construction reimbursements, plus net proceeds from sale-leaseback transactions and land sales.

The following table provides a reconciliation from net cash provided by operating activities to free cash flow:

Three Months Ended

Nine Months Ended

September 30,

($ in thousands)

2025

2024

2025

2024

Net cash provided by operating activities

$ 251,112

$ 151,146

$ 630,666

$ 411,976

Capital expenditures, net of construction reimbursements

(222,494)

(87,106)

(586,980)

(388,213)

Proceeds from sale-leaseback transactions

33,912

65,043

172,683

207,714

Proceeds from land sales

—

9,249

—

15,577

Free cash flow

$ 62,530

$ 138,332

$ 216,369

$ 247,054

Reconciliation of Net Income to Adjusted EBITDA Trailing Twelve Months

($ in thousands)

(Unaudited)

Twelve

Months Ended

September 30, 2025

September 30, 2024

Net income

$ 287,834

$ 142,761

Interest expense, net of interest income

102,343

145,631

Provision for income taxes

83,382

40,472

Depreciation and amortization

288,614

269,398

Share-based compensation expense

65,763

43,564

Loss (gain) on sale-leaseback transactions

4,766

(2,463)

Capital transaction costs

1,531

—

Legal settlements

—

1,250

Employee retention credits

(34,867)

—

Other

209

(3,090)

Adjusted EBITDA

$ 799,575

$ 637,523

Reconciliation of Net Debt and Leverage Calculation

($ in thousands)

(Unaudited)

Twelve

Months Ended

September 30, 2025

September 30, 2024

Current maturities of debt

$ 22,965

$ 12,439

Long-term debt, net of current portion

1,489,908

1,639,752

Total Debt

$ 1,512,873

$ 1,652,191

Less: Fair value adjustment

169

323

Less: Unamortized debt discounts and issuance costs

(18,317)

(6,462)

Less: Cash and cash equivalents

218,897

120,947

Net Debt

$ 1,312,124

$ 1,537,383

Trailing twelve-month Adjusted EBITDA

799,575

637,523

Net Debt Leverage Ratio

1.6x

2.4x

Reconciliation of Net Income to Adjusted EBITDA Guidance for the Year Ending 2025

($ in millions)

(Unaudited)

Year Ending

December 31, 2025

Net income

$304 – $306

Interest expense, net of interest income

83 – 81

Provision for income taxes

96 – 97

Depreciation and amortization

296 – 298

Share-based compensation expense

60 – 62

Loss on sale-leaseback transactions

11 – 11

Other

(30) – (31)

Adjusted EBITDA

$820 – $824

SOURCE Life Time Group Holdings, Inc.