Life Time Group Holdings Reports Strong Q2 2024 Financial Results
Krissy Vann | Host, All Things Fitness and Wellness
Life Time Group Holdings, Inc. has reported a robust financial performance for the second quarter of 2024, ending June 30. The company's total revenue reached $667.8 million, representing an impressive 18.9% increase over the same period last year. This growth is largely attributed to a rise in membership dues and in-center revenue, driven by higher average dues, increased membership in new and expanding centers, and greater member utilization of services.
Net income for the quarter surged to $52.8 million, a significant $35.8 million increase from the previous year. Adjusted EBITDA also saw a notable rise, growing by 27.6% to $173.5 million. Diluted earnings per share (EPS) improved to $0.26. Life Time achieved positive free cash flow and reduced its net debt leverage ratio to 3.0 times, ahead of schedule.
Bahram Akradi, Founder, Chairman, and CEO of Life Time, expressed his satisfaction with these results, stating, "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. 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. We are enthusiastic about the trajectory of our business and remain committed to funding our growth while generating positive free cash flow and further reducing our leverage."
During this period, Life Time saw center memberships increase by 42,398, or 5.4%, compared to June 30, 2023. This growth was partly due to typical seasonal trends. Total subscriptions, including center memberships and digital on-hold memberships, rose by 5.5% to 878,767.
The company's expenses also reflected its growth. Center operations expenses increased by 17.5% to $355.5 million, primarily due to the costs associated with new and expanding centers, as well as increased membership and in-center business activity. General, administrative, and marketing expenses saw a slight uptick of 0.8% to $53.2 million, driven by higher cash incentive compensation, IT costs, and center support overhead.
In terms of cash flow, Life Time reported net cash provided by operating activities of $170.4 million, a 20.1% increase compared to the prior year. Free cash flow reached $175.1 million, including $149.0 million from sale-leaseback transactions and land sales.
Looking ahead, Life Time remains committed to funding its growth while generating positive free cash flow and further reducing its leverage.
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