Life Time CEO Touts ‘Over-Performance’ in Membership Growth
Even with an average monthly membership of almost $190, the luxury club operator is seeing waitlists and sky-high retention numbers
Life Time continues to see historic levels of member retention and engagement, and the company plans to raise its full-year revenue and Adjusted EBITDA guidance, although shares of LTH fell in response to Wednesday’s Q1 earnings call.
In Q1 2024, the athletic country club operator reported a 16.8% revenue increase to $596.7 million, driven by increased membership dues and in-center revenue. Life Time also opened one new center in the first quarter of the year, bringing its total number of athletic country clubs to 172.
Net income decreased $2.6 million to $24.9 million in the quarter, attributable primarily to tax-related circumstances such as sale-leasebacks and the sale of two triathlon events.
Shares of LTH dipped nearly 8% as of Wednesday afternoon following the earnings announcement.
Memberships, Engagement Remain High
Despite an inflationary environment, Life Time members clearly aren’t cutting back on their experience. Center memberships also trended upward by 5% when compared to the same period last year and luxury operator’s average monthly dues were $186, up 12.7% from the first quarter of 2023.
“Access membership at the end of Q1 2024 was 802,000, which is substantially above our expectations,” Life Time founder and CEO Bahram Akradi told investors on Wednesday’s earnings call. “This over-performance has been a direct result of the strategic initiatives we have previously discussed, which include pickleball, ARORA and small group training — and the improved member retention we are currently experiencing.”
The demand to become a Life Time member has led to waitlists, which Akradi says is a careful safeguard to ensure a high-quality experience that its members have come to expect.
“I have personally expected to see some weakness for the last 18 months, and I have been wrong,” he said about the continued interest. “I have been wrong and wrong and wrong…the most important KPI is the retention, and we are seeing the best retention we’ve ever seen.”
Dynamic personal training, in particular, said Akradi, has led to “amazing success.”
“The momentum is strong,” he said of the popular offering. “The execution is the best I’ve seen. We are seeing continued growth and engagement in personal training and the connectivity between the members and personal training is improving. That was the most important piece of our in-center.”
While Life Time has perfected its member programming, this year’s focus will be on improving the spa and café areas.
Gearing Up for Wellness & Longevity
As for Miora, Life Time’s recently added medical wellness and longevity clinics that offer popular therapies like infrared saunas, red light therapy, peptides, hormone replacement therapy, IV therapy, cryotherapy and GLP-1 weight loss drugs, Akradi said the brand is pleased with the demand and confirmed Life Time is working to increase Miora’s staff of doctors and physician assistants to handle the traffic.
The company just appointed James LaValle, a clinical pharmacist with nearly forty years of experience in metabolic health and anti-aging research, as its chief science officer to support Miora’s development.
Despite long-term projections of its success, Akradi noted that Miora won’t have a material impact this year but will likely have a small influence in 2025.
“I just don’t want to guide the financial community to try to get numbers put into this,” he said of Miora. “It’s not necessary. Our growth is pretty fantastic without it, and when we roll out Miora nationally, it will add to it.”
