On August 1, 2024, Life Time Group Holdings Inc (LTH, Financial) released its 8-K filing for the second quarter of 2024, showcasing impressive financial results that surpassed analyst estimates. Life Time Group Holdings Inc is a lifestyle brand offering health, fitness, and wellness experiences to a community. It is engaged in designing, building, and operating distinctive and large, multi-use sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment, principally in residential locations of metropolitan areas in the United States and Canada.
Performance Highlights
Life Time Group Holdings Inc reported total revenue of $667.8 million for Q2 2024, an 18.9% increase over the prior year quarter. This figure significantly exceeded the analyst estimate of $634.92 million. The company also reported a net income of $52.8 million, a substantial increase of $35.8 million compared to the same period last year. Diluted earnings per share (EPS) rose to $0.26, surpassing the estimated EPS of $0.14.
Bahram Akradi, Founder, Chairman, and CEO, stated: “We are very pleased with our second quarter performance and the progress we have made toward achieving our financial objectives. Once again this quarter, our results demonstrate the momentum of our business as we continue to deliver strong revenue and adjusted EBITDA growth.”
Financial Achievements and Metrics
The company's adjusted EBITDA for the quarter was $173.5 million, a 27.6% increase over the prior year quarter. This growth is attributed to the continued strong performance in membership dues and in-center revenue, driven by an increase in average dues, membership growth in new and ramping centers, and higher member utilization of in-center offerings.
| Metric | Q2 2024 | Q2 2023 | Percent Change |
|---|---|---|---|
| Total Revenue | $667.8 million | $561.7 million | 18.9% |
| Net Income | $52.8 million | $17.0 million | 210.6% |
| Adjusted EBITDA | $173.5 million | $136.0 million | 27.6% |
| Diluted EPS | $0.26 | $0.08 | 225% |
Income Statement and Cash Flow Highlights
Life Time Group Holdings Inc's income from operations was $104.8 million, a significant increase from $52.4 million in the prior year quarter. The company achieved positive free cash flow and reduced its net debt leverage ratio to 3.0 times, two quarters earlier than planned. Net cash provided by operating activities was $170.4 million, a 20.1% increase compared to the prior year quarter.
Challenges and Future Outlook
Despite the strong performance, Life Time Group Holdings Inc faces challenges such as increased operating costs related to new and ramping centers and growth in memberships and in-center business revenue. General, administrative, and marketing expenses also saw a slight increase due to higher cash incentive compensation expenses and information technology costs.
Bahram Akradi further commented: “The second quarter also was an important inflection point for the Company as we achieved positive free cash flow as expected, and a net debt leverage ratio of 3.0 times, which was two quarters earlier than our plan. As a result of our strong performance, we are raising our full-year revenue and adjusted EBITDA guidance.”
Conclusion
Life Time Group Holdings Inc's robust financial performance in Q2 2024, marked by significant revenue and net income growth, underscores the company's strong market position and operational efficiency. The positive free cash flow and reduced net debt leverage ratio further highlight the company's financial health and strategic execution. Investors and stakeholders will be keenly watching how Life Time Group Holdings Inc continues to leverage its growth momentum in the coming quarters.
Explore the complete 8-K earnings release (here) from Life Time Group Holdings Inc for further details.
