Q2 2025 Life Time Group Holdings Inc Earnings Call
Star Zero on your telephone keypad as a reminder, this conference is being recorded it is now my pleasure to introduce Conor Weinberg Vice President of capital markets and Investor Relations. Thank you you may begin.
Good morning, and thank you for joining us for the second quarter 2025 Lifetime Group Holdings earnings Conference call.
With me today are <unk>, founder, Chairman and CEO, and Eric <unk> Executive Vice President and CFO during.
During the call we will make forward looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from those forward looking statements made today.
There is a comprehensive discussion of risk factors in the company's SEC filings, which you are encouraged to review.
The company will also discuss certain non-GAAP financial measures, including adjusted net income adjusted EBITDA adjusted diluted EPS net debt to adjusted EBITDA or what we referred to as net debt leverage ratio and free cash flow.
This information along with the reconciliations to the most directly comparable GAAP measures are included when applicable in the company's earnings release issued this morning, our 8-K filed with the SEC and on the Investor Relations section of our website with that I will turn the call over to Eric.
Thank you Connor and thank you all for joining us this morning.
Let me begin with our second quarter results.
Total revenue increased 14% to $761 million.
Driven by a 14% increase in membership dues enrollment fees and a 14, 4% increase in in center revenue.
Comparable center revenue grew 11, 2% given continued strong performance in both <unk> and in center businesses.
We are raising our full year comparable center revenue guidance to be between nine five and 10%.
We ended the quarter with more than 849000 and center memberships, including envelope memberships total memberships reached approximately 899000.
Average monthly dues grew 10, 6% year over year to $219 <unk>.
Average revenue per center membership was $888 an increase of 11, 8% from the prior year quarter.
Net income for the quarter was $72 1 million an increase of 36, 5% and includes approximately $9 million of tax effected losses on sale leaseback.
This compares to a $6 million tax affected gain in the prior year quarter.
More importantly, adjusted net income, which excludes the impact of gains and losses on sale leasebacks was $84 1 million up 65% year over year.
Adjusted EBITDA was $211 million, an increase of 21, 6% and our adjusted EBITDA margin improved by 170 basis points to 27, 7%.
Net cash provided by operating activities rose approximately 15% to $196 million compared to the prior year quarter.
Free cash flow was $112 million for the second quarter, marking our fifth consecutive quarter of delivering positive free cash flow. We remain committed to funding our growth through net cash from operations and sale leasebacks with a target of sustaining annual positive free cash flow.
In Q2, we closed on the sale leaseback of three properties generating net proceeds of approximately $149 million.
$139 million of these proceeds were reporting reported in the investing section of our cash flow statement and the remaining $10 million was reported in the financing section with that I will now turn the call over to Bryan Bryan.
Eric we had a great quarter, thanks to the efforts of our entire team and.
And as a result of that we are once again in a position to raise our full year revenue and adjusted EBITDA guidance.
Visits remain at all time high with visits for membership up five 7%.
Versus the same quarter last year.
<unk> continues to stay at record levels as well with Q2, improving over the prior year quarter.
We accomplished all of this.
While the strengthening our balance sheet and achieving a double b credit rating at <unk>.
Critical milestone that provides us the opportunity to lower interest costs and increased earnings.
As to liquidity at the end of the Q2, we had no balance on our revolver and more than $175 million in cash on hand, following our most recent sale leaseback.
The sale leaseback market remains open and attractive and we expect to close another $100 million in transactions in the second half of the year.
With the methodical and sequential progress we have made over the past 40 years, we're now perfectly positioned to shift our focus of beds.
Growth is now our top priority.
To that end, we're modestly accelerating the development of a new club openings from our robust pipeline and are now targeting 12% to 14 club openings in 2026.
These new clubs will averaged nearly 100000 square feet and will primarily be ground up developments compared to the 78000 square feet average of clubs opened in 'twenty four and 'twenty five.
We're excited about our continued strong performance.
And the significant growth opportunities ahead, including several high potential accelerators.
<unk> digital now has $2 3 million of talent up 216% year over year.
We recently launched Lacy, our AI powered personal health companion to digital and center access members.
Our LTE Asian additional supplement line continues to grow with revenues up 31% versus the prior year quarter.
Our first two <unk> locations continue to perform well with subscription and revenues growing month over month.
Several additional locations.
Is it to open in the second half of the year in short.
We are pleased with our current momentum.
We are laser focused on accelerating club growth and capitalizing on our asset light high margin expansion opportunities to drive sustained revenue and adjusted EBITDA growth with that we will open the call for questions.
Thank you if you would like to ask a question. Please press star one on your telephone keypad.
Formation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your headset.
Pressing the star keys, one moment, while we poll for questions.
Our first question is from Brian Nagel with Oppenheimer <unk> Company. Please proceed.
Hey, guys good morning.
Good morning.
Very nice quarter congratulations thank.
Thank you.
So the question I wanted to ask I know, it's been it's been a topic that a lot.
We've been discussing here.
Going back to the first quarter conference call, where we discuss with you today a bit.
Softer initial trends and new member sign ups as we headed into the summer fall season.
We obviously got the numbers today.
The question I'd ask is how from your perspective did memberships.
Membership sign ups tracked through the quarter.
They perform in line with your expectations did you see some type of recovery as the quarter progressed.
Yes, Brian good to hear from you.
As I mentioned during the last call a single month is really no indication of anything.
Just had to emphasize that.
I covered that with you guys the back half of the core there.
Basically it was just timing the members that planet to come.
If your headset before pressing the star keys, one moment, while we poll for questions.
Maybe a slightly slower.
The first half of the quarter, there to come in and but they came back in.
Our first question is from Brian Nagel with Oppenheimer <unk> Company. Please proceed.
So we were able to finish the month the quarter, they're super strong.
Hey, guys good morning.
And make up for the little snow.
Good morning, very nice quarter congratulations.
Sure.
That our membership sign ups in the first.
Okay.
The question I wanted to ask.
40 days of the core there and just all made it up and naturally we didn't have to do anything in particular to do that.
I know, it's been it's been a topic that we hear a lot about.
We've been discussing here for a bit now, but youre going back to the first quarter conference call, we discussed would be a bit.
That's very helpful. Thank you and then my follow up question.
Softer initial trends and new member sign ups as we headed into the summer fall season.
Again, we're seeing the numbers today, but just any further commentary on your efforts here Youre agility further monetize that membership and we talk.
We got the numbers today.
I guess one of the question I'm asking is how from your perspective did memberships new membership sign ups track through the quarter did they perform in line with your expectations did you see some type of recovery.
Kind of quarter in quarter out about you selectively lifting dues versus graduations guys. Thank you.
Are you seeing anything changed in that dynamic whatsoever.
No I think.
Sort of progressed.
Businesses.
Yeah, Brian good to hear from you this from.
We both have mentioned this.
It is very very solid memberships are strong.
As I mentioned during the last call.
The customers are using the club a lot.
Single month is really no indication of.
They are engaging in all in centers.
If anything.
Just have to emphasize that.
Yes.
We're just at this point.
I've covered that with you guys the back half of the core there.
We were.
We're cautious the first half of the year as I mentioned to you guys.
Basically it was just timing the members the planet to come in at maybe a slightly slower.
Because of the macro picture not because of tariffs or anything like that and we just wanted to know.
First half of the quarter, there to come in and but they came back in.
And there isn't going to be a sort of a meltdown.
And so we were able to finish the month the quarter there.
We also were focused on getting our double b rating.
Uh huh.
In makeup.
And getting a strong balance sheet. So the company that can really be.
Oh.
Good.
Oh.
That.
Our membership sign ups in the face.
Membership sign ups.
Okay.
Those are through any condition. If it's great. We'll go faster if it's tough conditions that we're going to do great in that condition as well thats been the strategy now.
40%.
Or they're just all made it up match for me if we didn't have to do anything in particular.
Yeah.
Okay.
Okay.
Thing.
What are you doing.
That's very helpful. Thank you and then my follow up question.
Thank you.
A follow up question.
Now.
Sure.
You bet.
We have the.
Further commentary.
Strengthen the balance sheet, we have the double b leverage is low.
Good morning.
Okay.
Okay.
I think we talked about.
Okay.
We can see continued opportunity to grow.
During the quarter.
Yes.
Right.
So we're just not quite as great.
The business faster and faster, while we maintain the leverage or even have it go lower so really don't have anything to.
Have you seen a substantive.
Look at them to be concerned about just day to day operation and take advantage of all the growth opportunities ahead, and then just to kind of maybe put a quantitative point on that Brian I mean, if you look at our revenue per membership for Q2, it's up nearly 12%. So I think our ability to monetize that has been very effective.
We're just at this point.
We.
We're cautious the first half of the year as I mentioned you guys.
Great very helpful. Thanks for all the color and congrats again.
Because of the macro picture not because of tariffs or anything like that we just wanted to know.
Thank you.
Our next question is from Alex Perry with Bank of America. Please proceed.
And are there isn't going to be a sort of a meltdown.
We also were focused on getting our double b rating.
Hi, Thanks for taking my questions here and congrats on a strong quarter.
And getting a strong balance sheet.
I just wanted to talk a little bit more about the unit guide commentary I think you sort of narrowed the unit guide from 10 to 12 units this year to 10.
The.
Was there a timing shift sort of into next year that sort of leads you to accelerate the growth next year.
Bahram Akradi: It's been the strategy. Now we have the, you know, strength in the balance sheet. We have the double B. Leverage is low. and we can see continued opportunity to grow, the business faster and faster while we maintain the leverage or even have it go lower. So we really don't have anything to, look at and be concerned about, just day-to-day operation and take advantage of all the growth opportunities ahead.
<unk> line of opening sort of get elongated based on build schedules, just trying to sort of square up.
Strengthen the balance sheet, we have the double b leverage is low and.
Unit Guide this year versus next year, Yeah. So I think as we mentioned the two 'twenty four 'twenty five.
And we can see continued opportunity to grow.
Of the business.
Oster and faster, while we maintain the leverage or even have it go lower.
But it is more of a collection of some of the clubs that theyre going into existing spaces.
So really don't have anything to.
Look at them to be concerned about just day to day operation and take advantage of all the growth opportunities ahead, and then just kind of maybe put a quantitative point on that Brian I mean, if you look at our revenue per membership for Q2, it's up nearly 12%. So I think our ability to monetize that has been very effective.
Great locations opportunistic, but I know sometimes in there in a in a market like New York.
Conor Wienberg: And just to kind of maybe put a quantitative point on that, Brian, I mean, if you look at our revenue per membership, for Q2, it's up nearly 12%. So I think our ability, you know, to monetize that has been, very effective.
Florida is a little smaller than 100000 square feet, because theyre more urban.
And then some conversion clubs.
We were also focused on really watching the spend and the balance sheet to make sure.
Brian Nagel: Great, guys. Very helpful. Thanks for all the color. Congrats again.
Great guys Thats very helpful. Thanks for all the color and congrats again thank.
Unknown: Thank you.
Thank you.
We sort of get to that.
Operator: Our next question is from Alex Perry with Bank of America. Please proceed.
Our next question is from Alex Perry with Bank of America. Please proceed.
Exact level that we wanted to make sure the company financially.
Alex Perry: Hi. Thanks for taking my questions here and congrats on a strong quarter. I just wanted to talk a little bit more about the unit guide commentary. I think you sort of narrowed the unit guide, from 10 to 12 units this year to 10. was there a timing shift sort of into next year that sort of leads you to accelerate the growth next year? Did the timeline of opening sort of get elongated based on build schedules? Just trying to sort of square up the unit guide this year versus next year. Thanks.
Hi, Thanks for taking my questions here and congrats on a strong quarter.
So all of those resulted in.
The number of clubs that theyre coming up being closer to that 10 number.
I just wanted to talk a little bit more about the unit guide commentary I think you sort of narrowed the unit guide from 10 to 12 units this year to 10.
And sometimes they just shifted a little bit construction takes a longer now. We also have spent quite a bit of time over the past four five months on.
Was there a timing shift sort of into next year that sort of leads you to accelerate the growth next year to the timeline of opening sort of get elongated based on build schedules just trying to sort of square up.
Construction to make sure we get better bids.
Construction numbers, which we have been getting them now super important.
And so and then with all of those things set.
Unit guide this year versus next year. Thanks.
Bahram Akradi: Yeah. So I think, as we mentioned, the '24 to '25 was more of a collection of, you know, some of the clubs that they're going into existing spaces. Great locations, opportunistic, but not, you know, sometimes in their markets like New York, Florida, that they're a little smaller than 100,000 square feet because they're more urban, and then some conversion clubs. We were also focused on, you know, really watching the spend and the balance sheet to make sure, we sort of get to that exact level that we wanted to make sure the company sits financially. So all of those were secondary resulted in, the number of clubs that they're coming up being closer to that 10 number. and sometimes they just, you know, shift a little bit. Construction takes a longer.
Our aiming to deliver.
So I think as we mentioned the two 'twenty four 'twenty five.
Like I said, 12% to 14.
Obviously, we're hoping to get this 14 clubs open for the next year.
But as more of a collection of some of the clubs that are going into existing spaces.
So I think thats really the key and we have a huge pipeline there's more deals coming in.
Great locations opportunistic, but not I know, sometimes in there in our markets.
So we should be able to continue to grow.
As I mentioned earlier the balance sheets also.
A market like New York.
Florida is smaller than 100000 square feet, because theyre more urban.
<unk> sorry to the fact that we can do this growth.
And then some conversion clubs.
And continue keep.
We were also focused on really watching the spend and the balance sheet to make sure.
Keeping this low leverage point that we have achieved now.
That's really helpful. And then just my follow up is on memberships.
We sort of get to that.
Exact level that we wanted to make sure the company financially.
What is sort of the expectation for the back half in terms of membership should it sort of follow the normal seasonality curve that we see.
So all of those resulted in.
The number of clubs that theyre coming up being closer to the 10 number and sometimes they just shifted a little bit construction takes a longer now. We also have spent quite a bit of time over the past four or five months on.
Have you seen there really strong what it sounds like good strong exit rate out of the quarter in terms of gross ads sort of continue here.
Bahram Akradi: Now, we also have spent quite a bit of time over this past four or five months on, construction to make sure we get better bids, better construction numbers, which we have been getting them now. It's super important. And so, and then with all of those things set, you know, we are aiming to deliver, you know, like I said, 12 to 14, and obviously we're hoping to get the 14 clubs open for the next year. so I think that's really the key. And we have a huge pipeline. There's more deals coming in. so we should be able to continue to grow. as I mentioned earlier, the balance sheet also points out to the fact that we can do this growth, and continue keeping this low leverage point that we have achieved now.
As we move through July.
Yes, we were going to continue obviously in Q3, we've got our typical seasonality if you look back at last year.
Structure to make sure we get better bids.
Construction numbers, which we have been getting them now.
Memberships went down 6000, but I will say.
<unk> important.
And so and then with all of those things set.
If you look at last year.
There was a little bit of some of our our newbuild kind of masking, maybe a little bit of that seasonality. So.
Our aiming to deliver.
Like I said, 12% to 14.
So in 2023, we had seven clubs 600000 square feet. So they would've been in year two of their ramp last year and last year, we opened up four clubs with about 300000 square feet. So so youre going to last year was maybe a little bit light because we had more clubs in their second year of ramp.
Obviously, we're hoping to get this 14 clubs open for the next year.
So I think that's really the key and we have a huge pipeline that is more deals coming in.
So we should be able to continue to grow.
As I mentioned earlier the balance sheets also.
So the expectation is that yes, Q3 will come down we won't have the benefit of having as many clubs in.
Sorry to the fact that we can do this growth.
And continue.
Keeping this low leverage point that we have achieved now.
In Q3, this year, maybe 50% less square feet. So you need to take that into account.
Alex Perry: That's really helpful. And then just my follow-up is on memberships. what is sort of the expectation for the back half in terms of membership? Should it sort of follow, you know, the normal seasonality curve that we we see? have you seen the really strong, what it sounds like, good strong exit rate out of the quarter in terms of gross ads, you know, sort of continue here, you know, as we move through July? Thanks.
That's really helpful. And then just my follow up is on memberships.
To respond.
Clearly as that.
What is sort of the expectation for the back half in terms of membership should it sort of follow the normal seasonality curve that we see.
We're not seeing anything that shows any sign of weakness.
All we see is the seasonality of execution. It's just just a normal seasonal ups and downs in fact things are going extremely well.
Have you seen there really strong what it sounds like good strong exit rate out of the quarter in terms of gross ads sort of continue here.
In.
You'd asked about this quarter there.
As we move through July thanks.
Conor Wienberg: Yeah. We're going to continue, obviously, at Q3. We've got our typical seasonality. If you look back at last year, you know, memberships went down 6,000. But I will say, if you look at last year, there was a little bit of some of our our new builds kind of masking maybe a little bit of that seasonality. So in 2023, we had seven clubs, 600,000 square feet. So they would have been in year two of their ramp last year. And last year, we opened up four clubs with about 300,000 square feet. So, so you're going to, you know, last year was maybe a little bit light because we had more clubs in their second year of ramp. So the expectation is that, yes, Q3 will come down.
I want to make it.
Yes.
Clear that we do not want to make a practice of commenting on mid core there things going forward.
We're going to continue obviously Q3, we've got our typical seasonality if you look back at last year.
Memberships went down 6000, but I will say if you look at last year.
I did last quarter there.
<unk>.
There was a little bit of some of our our new builds kind of masking, maybe a little bit of that seasonality.
I am going to make a comment now, but I hope that in the future Nobody asks mid core their questions.
So in 2023, we had seven clubs 600000 square feet. So they would've been in year two of their ramp last year.
But the first the first half that's the first part of this quarter. There is following the same trends of the last.
Last year, we opened up four clubs with about 300000 square feet. So so youre going to last year was maybe a little bit light because we had more clubs in their second year of ramp.
Half of the quarter there before so things are very very good.
But I want to make sure we're very clear, we don't want to get into the Q&A about the mid quarter Theres stuff if its okay with you guys.
So the expectation is that yes, Q3 will come down we won't have the benefit of having as many clubs in.
Conor Wienberg: we won't have the benefit of having as many clubs in, you know, in Q3 this year, maybe, you know, 50% less square feet. So you need to take that into account.
Perfect No that's fair.
Incredibly helpful and makes a lot of sense. So thanks for that best of luck going forward.
In Q3, this year, maybe 50% less square feet. So you need to take that into account.
Bahram Akradi: Yeah. The to respond clearly is that we're not seeing anything that shows any sign of weakness. All we see is the seasonality of execution. It's just just a normal seasonal ups and downs. In fact, things are going extremely well. and you asked about this quarter. I want to make it clear that we do not want to make a practice of commenting on mid-quarter things going forward, like I did last quarter. I'm going to make a comment now, but I hope that in the future nobody asks mid-quarter questions. but the first the first half, the first part of this quarter is following the same trends of the last, half of the, quarter before. So things are very, very good. but I want to make sure we are very clear. We don't want to get into Q&A about the mid-quarter stuff, if it's okay with you guys.
Thank you Alex.
Good.
To respond.
Our next question is from John <unk> with Guggenheim Securities. Please proceed.
Clearly as that.
We're not seeing anything.
Is there any sign of weakness.
Hey, Bob I wanted to start off with.
All we see is the seasonality of execution.
How you think about managing the pipeline right.
Just just a normal seasonal ups and downs in fact things are going extremely well.
Alright, I think that would be helpful for everybody right. When you look out 26, or even maybe thinking about 'twenty seven.
In.
You'd asked about the score there.
How many <unk>.
Projects are kind of in the pipeline do you think about doing 12% to 14.
I want to make it.
Clear that we do not want to make a practice of.
There are sort of <unk>.
Of commenting on mid quarter, there things going forward.
<unk> to 'twenty or 'twenty plus candidates.
Or maybe more than that.
Like I did last quarter there.
Kind of floating around case, some slipped and then when you think about the timing of that what you can do with let's say.
I'm going to make a comment now, but I hope that in the future Nobody asks mid core their questions.
Takeovers malls Reits stuff that has a shorter time horizon.
But the first the first half that's the first part of this quarter. There is following the same trends of the last.
How quickly can you move on that if you wanted to move up a couple of projects.
Half of the.
I Love this John.
Quarter, there before so things are very very good.
I think this is the.
But I want to make sure we're very clear, we don't want to get into the Q&A about the mid core to their stuff if its okay with you guys.
Constant.
<unk> that you have in a public world.
Is getting chasing your tail.
Alex Perry: Perfect. No, that's incredibly helpful and makes a lot of sense. So thanks for that. best luck going forward.
Perfect No that's it.
We have always done the right thing for the company the right thing for this company is use the strong.
Incredibly helpful and makes a lot of sense. So thanks for that best of luck going forward.
Bahram Akradi: Thank you, Alex.
Cash flow that we're generating and put it to work we have.
Thank you Alex.
Operator: Our next question is from John Heimbacher with Guggenheim Securities. Please proceed.
Our next question is from John <unk> with Guggenheim Securities. Please proceed.
At all times the real estate team is working to have between 85 to 100 deals in the pipeline.
Brian Nagel: Hey, Bram, I want to I want to start off with, how you how you think about managing the pipeline, right? I think that would be helpful, for everybody, right? When you look out '26 or even now, maybe thinking about '27, you know, how many, projects are kind of in the pipeline? You think about doing 12 to 14, you know, there's sort of 15 to 20 or 20-plus candidates or maybe more than that, you know, kind of floating around in case some slip. And then when you when you think about the timing of that, what you can do with, let's say, takeovers, malls, right, stuff that has a shorter time horizon, you know, how quickly can you move on that, if you wanted to, you know, move up a couple of projects?
Hey, Brian.
Want to start off with.
Then that's the number that we are managing.
How you how you think about managing the pipeline.
And I think that would be helpful for everybody right. When you look out 26, or even maybe thinking about 'twenty seven.
We can step on the gas try to expedite.
Start offs in constructions.
How many projects are kind of in the pipeline do you think about doing 12% to 14.
All things makes sense, then just like right now the business is strong in centers strong due to the strong ramp is strong and the new clubs and then the balance sheet is strong. So now is the time used basically say, okay. Now can we expedite.
There are sort of.
15% to 20 or 20 plus candidates were.
Or maybe more than that.
Floating around case some slipped.
And then when you think about the timing of that what you can do with let's say.
Some of these deals in the pipeline.
Takeovers malls Reits stuff that has a shorter time horizon.
But at no time, John we're going to risk.
Quickly can you move on that if you wanted to move up a couple of projects.
Just trying to push a number out.
Just because then you end up doing things.
Bahram Akradi: I love this, John. I think this is the constant challenge that you have in a public world is getting chasing your tail. We have always done the right thing for the company. The right thing for this company is use a strong cash flow that we're generating and put it to work. we have at all times, the real estate team is working to have between 85 to 100 deals in the pipeline. then that's the number that we are managing. We can step on the gas, try to expedite, startups and constructions when all things make sense, when just like right now, you know, the business is strong, incentive is strong, dues is strong, ramp is strong in the new clubs, and then the balance sheet is strong.
I Love this John.
Are not long term benefit of the company, but I do not see.
I think this is the.
Constant.
Challenge that you have in a public world.
The reason why we can continue to deliver.
Is getting chasing your tail we.
The growth.
Growth numbers that we have guided.
<unk> always done the right thing for the company the right thing for this company is use of strong <unk>.
<unk> you guys too.
That.
Light double digit topline revenue is what our target is.
Cash flow that we're generating and put it to work we have.
At all times the real estate team is working to have between 85 to 100 deals in the pipeline.
And we see a clear path to delivering that.
Maybe as a follow up right.
When you think about the maturation.
Then that's the number that we are managing.
I know what every club is different but a maturation.
We can step on the gas try to expedite.
Sort of process here.
I think the idea right wasn't it.
Started off some constructions when all things makes sense when just like right now.
Wanted to sort of start out with I don't know 2200 2300 members right. So the staff is new the members are new they got a kind of feel it out and then and then you grow from there pretty rapidly over a couple year period is that still the idea.
Business is strong in centers strong dues as strong ramp is strong and the new clubs.
And then the balance sheet is strong. So now is the time used basically say, okay. Now can we expedite.
Bahram Akradi: So now is the time you basically say, "Okay, now can we expedite, you know, some of these deals in the pipeline?" but at no time, John, we're going to risk, just trying to push a number out, just because then you end up doing things that are not long-term benefit of the company. But I do not see, a reason why we can't continue to deliver the growth, you know, growth year numbers that we have guided you guys to, that, you know, light double-digit top-line revenue is what our target is, and we see a clear path to delivering that.
Brand awareness is larger but wait lists are bigger.
You could certainly open up stronger than that but you're sort of still.
Some of these deals in the pipeline.
But at.
At no time, John we're going to risk.
Significantly restraining.
Your membership acquisition for the sake of experience.
Just trying to push a number out.
Well as you have to because it's.
Just because then you end up doing things.
When you open a brand new club with 50%.
Are not long term benefit of the company, but I do not see.
Our memberships and that first let's call it three to six months.
The reason why we can continue to deliver.
As the natural capacity of the club just with 50% more membership the club feels as busy as a couple of years down the road. When you have twice as many members now why is that because the members are all new they are using the club.
The growth.
Growth year numbers that we have.
Guidance you guys too.
That.
Light double digit topline revenue is what our target is.
And we see a clear path to delivering that.
Not as efficiently for themselves as time goes on the members dissipate themselves. Accordingly, so I'd like to go into the busy times that club they liked that busy they like the social aspects of the club being busy they come at that time and they are okay with the club being busy some don't like it they starts fine.
Brian Nagel: Maybe as a follow-up, right? when you think about, the maturation, and I know every club is different, but a maturation, sort of process here, I think the idea, right, wasn't it, you know, you want to sort of start out with, I don't know, 2,200, 2,300 members, right? so, you know, the staff is new, the members are new, they got to kind of feel it out. And then, and then you grow from there pretty rapidly over a couple-year period. Is that still the idea? Because, you know, the brand awareness is is larger, the wait lists are bigger. You could certainly, open up stronger than that. But are you are you sort of, you know, still, significantly restraining, your membership acquisition for the for the sake of experience?
Maybe as a follow up right.
When you think about the maturation.
And I know every club is different but a maturation.
Sort of process here.
I think the idea right wasn't it you wanted to sort of start out with I don't know 2200 2300 members.
Ending shoulder times, where the club is less busy so it just a natural process that will take place in a club.
So the staff is new the members are new they got a kind of feel it out.
And then and then you grow from there pretty rapidly over a couple year period is that still the idea.
But once the worst thing you can do is.
<unk> awareness is larger but wait lists are bigger.
Just get greedy and try to open a club with too many members and make that initial experience b.
You could certainly open up stronger than that.
You're sort of still.
Be awkward and strange we don't want to do that we don't need to we are delivering the numbers that we're telling you what we're going to guide you guys guided to by just managing the experience at all times.
Significantly restraining.
Your membership acquisition for the sake of experience.
Bahram Akradi: Well, you have to because it's when you open a brand new club with 50% memberships on that first call it three to six months, as the natural capacity of the club, just with 50% more membership, the club feels as busy as a couple of years down the road when you have twice as many members. Now, why is that? Because the members are all new. They are using the club, not as efficiently for themselves. I mean, as time goes on, the members dissipate themselves accordingly. Some like to go in the busy times of the club. They like that busy. They like the social aspects of the club being busy. They come at that time and they're okay with the club being busy. Some don't like it. They start finding shoulder times where the club is less busy.
Well as you have to because it's.
When you open a brand new club.
Okay. Thank you.
50%.
Mhm.
Our memberships and that first call it three to six months.
Our next question is from Chris <unk> with Deutsche Bank. Please proceed.
As the natural capacity of the club just with 50% more membership club feels as busy as a couple of years down the road. When you have twice as many members now why is that because the members are all new they are using the club.
Hey, guys. Good morning, Thanks for taking the question.
Bob maybe you can add some color here.
Somewhat of a follow on to the last question I mean, I think one of the things that sometimes folks get confused about or lose sight of is.
Not as efficiently for themselves as time goes on the members dissipate themselves Accordingly sounds like to go into the busy times that club they liked that busy they like the social aspects of the club being busy they come at that time and they are okay with the club being busy some don't like it they started.
The effect that the waitlist have on your member growth. So maybe you can add a little color on that if you want to give us a number what what you would look at it.
I guess number growth outside of clubs, a waitlist or how that impacts things, but I think that would be super helpful to put things in perspective. Thanks.
Yes.
Finding shoulder times, where the club is less busy so it just a natural process that will take place in a club.
I can take that and Brian can add to it but again.
Bahram Akradi: So it's just a natural process that will take place in a club, with the, you know, with one the worst thing you can do is just get greedy and try to open a club with, you know, too many members and make that initial experience, be awkward and strange. And we don't want to do that. We don't need to. We're delivering the numbers that we're telling you we're going to guide you to by just managing the experience at all times.
Look at Waitlist similar to how we look at enrollment fees waitlist is just to be clear, it's not intended to be really a kpis. It is it is one of the tools that we use to manage the member experience and we do that well.
The worst thing you can do is.
Just get greedy and tried to open a club with too many members and make that initial experience.
Look at traffic, we look at hours of the day for a particular clubs. So a club may come on a wait list that may come off a waitlist again, it's a means for us to be able to manage that member experience and so.
Be awkward and strange and we don't want to do that we don't need to we are delivering the numbers that we're telling you. We're going to guide you guys guided to buy just managing the experience at all times.
Look at it more that way as opposed in casino again, similar to <unk> and even in some way similar to price just one of the tools that we leverage if that's helpful.
Brian Nagel: Okay. Thank you.
Okay. Thank you.
Yeah.
Operator: Our next question is from Chris Woronka with Deutsche Bank. Please proceed.
Our next question is from Chris <unk> with Deutsche Bank. Please proceed.
Yes.
We don't want that to become.
Brian Nagel: Hey, guys. Morning. Thanks for taking the question. Baram, maybe you can add a little bit of color here. This is somewhat of a follow-on to the last question. I mean, I think one of the things that sometimes folks get confused about or lose sight of is the effect that the wait lists have on your member growth. So maybe you can add a little bit of color on, you know, if you want to give us a number, what, you know, what you would look at on a, I guess, member growth outside of clubs with wait lists or how that impacts things. But I think that would be super helpful to put things in perspective. Thanks.
Hey, guys. Good morning, Thanks for taking the question.
<unk> for you guys I think it's a mistake to chase that.
Bob maybe you can add some color here.
<unk>.
What about follow on to the last question I mean, I think one of the things that sometimes folks.
I have been probably redundant and maybe they.
You used about or lose sight of.
I don't want to sound disrespectful in any shape or form, but I do want to be clear.
Is the effect that the waitlist have on your member growth. So maybe you can add color on that or if you want to give us a number what what you would look at it.
The reason we have built such a strong brand over 30. Some years is because we have focused on the customer experience.
I guess number growth outside of clubs as waitlist or how that impacts things, but I think that would be super helpful to put things in perspective.
At all times right.
So our focus is to create a brand that is cool a brand that is the place you will want to go to the.
Conor Wienberg: Yeah. I mean, I can take that and Bram can add to it. But, you know, again, I, you know, we look at wait lists similar to, you know, how we we look at enrollment fees. Wait list is, you know, just to be clear, is not intended to be, you know, really a KPI. It is it is one of the tools that we use to manage the member experience. And we do that, you know, we look at traffic. We look at, you know, hours of the day for a particular club. So a a club may come on a wait list. It may come off a wait list. Again, it's it's a means for us to to be able to manage that member experience.
Yes, I can take that and Brian can add to it but again, we look at waitlist similar to how we look at enrollment fees waitlist is just to be clear.
A brand that the experience is coveted.
And that is our key.
Focus on execution, and sometimes we need to implement a waitlist to make sure that doesn't get out of control, sometimes we need to pull it off the wait list not because of the demand is different.
Not intended to be really a kpis. It is it is one of the tools that we use to manage the member experience and we do that.
We look at traffic, we look at hours of the day for a particular clubs. So a club may come on a wait list that may come off a waitlist again, it's a means for us to be able to manage that member experience and so.
But.
We may have execution issues on responding to the people and the experience actually gets worse because the club particular club as an executing on addressing that people tend to wait. This correctly. So we are managing a lot of things and if you the analysts buy side or sell side is trying to take Qs are.
Conor Wienberg: And so, again, look at it more that way as opposed, and it's, you know, again, similar to IF and even in some ways similar to price. just one of the tools that we leverage. That's helpful.
Again look at it more that way as opposed and again similar to <unk> and even in some way similar to price just one of the tools that we leverage if that's helpful.
Bahram Akradi: Yeah. And we don't want that. We don't want that to become a KPI for you guys. I think it's a it's a mistake to chase that. And we I I I have been probably redundant, and maybe I hope I don't want to sound disrespectful in any shape or form, but I do want to be clear. The reason we have built such a strong brand over 30-some years is because we have focused on the customer experience at all times, right? So our focus is to create a brand that is cool, a brand that is the place people want to go to, a brand that the experience is coveted. And that is our key focus on execution. And sometimes we need to implement a wait list to make sure that it doesn't get out of control.
No we don't.
We don't want that to become.
<unk> for you guys I think it's a mistake to chase that.
To that.
Honestly can just mislead the group and so we are focused on being cautious right now with you guys is not giving you.
We.
I have been probably redundant and maybe they.
Responses that creates.
I don't want to sound disrespectful in any shape or form, but I do want to be clear.
Unwanted kpis. This is not it should not be a kpis and what I would point you back to is two things. We said visits per membership 12, seven that's the highest it's been and if you look at just total swipes across the system.
The reason we have built such a strong brand over 30. Some years is because we have focused on the customer experience.
At all times right.
We're up seven 9% versus prior year quarter. So the clubs are busy now.
So our focus is to create a brand that is cool a brand that is depletion will want to go to <unk>.
And really feel right that's the most important thing.
A brand that the experience is coveted.
And that is our key.
Yes understood Super helpful. Thanks, guys.
Focus on execution, and sometimes we need to implement a waitlist to make sure that doesn't get out of control, sometimes we need to pull it off the wait list not because of the demand is different.
No.
Our next question is from Eric <unk> with Craig Hallum Capital Group. Please proceed.
Bahram Akradi: Sometimes we need to pull it off the wait list, not because of the demand is different, but, you know, we may have execution issues on responding to the people, and the experience actually gets worse because the club, particular club, isn't executing on addressing the people on the wait list correctly. So we are managing a lot of things. And if you, the analyst, buy side or sell side, is trying to take cues out of that, it honestly can just mislead the the group. And so we are focused on being cautious right now with you guys, is not giving you, responses that create, you know, unwanted KPIs. This is not, it should not be a KPI.
Great. Thanks for taking my question and congrats on a very strong quarter here.
But.
We may have execution issues on responding to the people and the experience actually gets worse because the club particular club as an executing on addressing that people tend to wait. This correctly. So we are managing a lot of things and if you the analysts buy side or sell side is trying to take Qs are.
First one from me just on the average revenue per membership obviously continues to demonstrate very robust growth approaching $900 a quarter just.
Just curious how much room you see for this figure to continue increasing without materially impacting retention you guys seeing any signs of fatigue, among any demographics or geographies and just overall, how do you assess whether youre kind of approaching a wallet share limit with members.
To that.
Honestly can just mislead the group and so we are focused on being cautious right now with you guys is not giving you responses that creates.
I mean based on the results that we just posted.
Both.
In <unk> <unk>.
Unwanted kpis. This is not it should not be a kpis and what I would point you back to is two things. We said visits per membership 12, seven that's the highest it's been and if you look at just total swipes across the system.
Eric just mentioned.
Conor Wienberg: Yeah. And what I would point you back to is is two things. You know, we said, visits per membership 12.7. That's the highest it's been. And if you look at just total swipes across the system, they're up 7.9% versus prior quarter. So the clubs are busy.
Dues revenue and in center execution.
We are not seeing any weakness in any part of our business and anything with the customer at this point.
They're up seven 9% versus prior year quarter. So the clubs are busy.
That's great.
Bahram Akradi: Yeah. And and and really feel right. That's the most important thing.
And I guess, just kind of as a follow up there so.
And really feel right that's the most important thing.
You called out in center personnel training, obviously cited as one of the drivers of that growth. Just curious if this is sort of typical seasonality where personal personal training kind of picks up heading into summer or is there something structurally.
Brian Nagel: Yeah. Understood. That's super helpful. Thanks, guys.
Yeah understood Super helpful. Thanks, guys.
Okay.
Operator: Our next question is from Erik DeLorius with Craig Hallam Capital Group. Please proceed.
Our next question is from Eric <unk> with Craig Hallum Capital Group. Please proceed.
Something structural that you see kind of causing the increased utilization of <unk>.
Alex Perry: Great. Thank you for taking my questions. And congrats on a very strong quarter here. First one for me, just on the average revenue per membership, you know, obviously continues to demonstrate very robust growth, approaching $900 a quarter. Just curious how much room you see for this figure to continue increasing without, you know, materially impacting retention. You guys seeing any signs of fatigue among any, you know, demographics or geographies? And just overall, how do you assess whether you're kind of approaching a wall of share limit with members?
Great. Thanks for taking my question and congrats on a very strong quarter here.
Personal training or perhaps other et cetera offerings.
First one for me just on the average.
It's the fundamental of the programming and the creation of dynamic personal training and the execution of our team.
Revenue per membership obviously continues to demonstrate very robust growth.
Approaching $900 a quarter.
I'm just curious how much room you see for this figure to continue increasing without materially impacting retention you guys seeing any signs of fatigue, among any demographics or geographies and just overall, how do you assess whether youre kind of approaching a wallet share limit with members.
There is.
Constant methodical planning of programs.
And it is not a seasonal thing in fact.
The summer months.
Typically are in necessarily the big months for for people coming inside our swipes are strong which is <unk>.
Bahram Akradi: Yeah. I mean, based on the results that we just posted, both in swipes, as Erik just mentioned, dues revenue, and incentive execution, we are not seeing any weakness in any part of our business and anything with the customer at this point.
No.
Based on the results that we just posted.
Both in.
Really indication of the clubs.
As Eric just mentioned.
Working the way we want it to work.
Dues revenue and in center execution.
And then the.
We are not seeing any weakness in any part of our business and anything with the customer at this point.
Personal training is strong and thats due to the programs that our team are executing.
It's not seasonal saw great to hear.
Alex Perry: All right. That's great. And I guess just kind of as a follow-up there, so you know, you called out incentive, personal training, obviously cited as, you know, one of the drivers of that growth. Just curious if this is sort of typical seasonality where, you know, personal training kind of picks up heading into summer, or is there something structurally, you know, something structural that you see kind of causing the increased utilization of personal training or perhaps other incentive offerings?
Alright, that's great.
Thanks, Greg. Thank you for taking my question and congrats again.
And I guess, just kind of as a follow up there so.
Yeah.
Our next question is from Richard with Northland Securities. Please proceed.
You called out in center personal training, obviously cited as one of the drivers of that growth. Just curious if this is sort of typical seasonality where personal personal training kind of picks up heading into summer or is there something structurally.
Hey, Brian Hey, Eric Thanks for taking my question.
Okay.
Kind of building off the last question, but can you comment on some of the in center revenue trends and initiatives that are going on I know dept, and some other membership engagement events like the pool party are crushing it but what else is working well and then are there. Some areas you can see some improvement with going forward.
Something structural that you see kind of causing the increased utilization of.
Personal training or perhaps other et cetera offerings.
Bahram Akradi: It's the fundamental of the programming and the creation of dynamic personal training and the execution of our team. There is constant methodical old planning of programs, and it is not a seasonal thing. In fact, summer months typically aren't necessarily the big months for for people coming inside. Our swipes are strong, which is really an indication of the clubs working the way we want it to to work. and then the the personal training is strong, and that's due to the programs that our team are executing. It's not seasonal.
The fundamental of the programming and the creation of dynamic personal training and the execution of our team.
Look there are a couple of areas that we have.
There is <unk>.
Constant methodical planning of programs.
<unk> been working on is LTE H clearly we are focused on building.
And it is not a seasonal thing in fact.
The absolute best.
Summer months.
Nutritional lines.
Typically arent necessarily the big months for four people come in inside our swipes are strong which is really indication of the clubs.
On a product for everything from.
<unk> men women Multivitamins performance vitamins too.
To everything that has to do with high duration or sleep or proteins different carrier protein isolates et cetera, we're working on that.
Working the way we want it to work.
And then the.
Personal training is strong and thats due to the programs that our team are executing.
We have always been focused on building the best product as you guys know, we don't cut corners, we don't.
Alex Perry: It's all great to hear.
It's not seasonal saw great to hear.
Bahram Akradi: Thanks.
Alex Perry: That's great. Thank you for taking my question. Congrats again.
Great. Thanks for taking my question and congrats again.
Deliver second best we are making sure the product is.
Yeah.
Operator: Our next question is from Owen Rickert with Northland Securities. Please proceed.
Our next question is from Alan Richard with Northland Securities. Please proceed.
Sound from a science standpoint.
Owen Rickert: Hey, Bram. Hey, Erik. Thanks for taking my question. can you guys kind of building off the last question, but can you comment on some of the incentive revenue trends and initiatives that are going on? I know DPT and some other membership engagement events like the pool parties are crushing it. But what else is working well? And then are there some areas you can see some improvement with going forward?
Hey, Brian Hey, Eric Thanks for taking my question.
Is exactly what the people need there isn't anything that they don't need this.
Can you guys kind of building off the last question, but can you comment on some of the in center revenue trends and initiatives that are going on and our dept, and some other membership engagement events like the pool party are crushing it.
You didn't have in it.
And it tastes, good and performs well and all of our indication right now is that this ELD.
<unk> line can continue to grow and it has been growing in the clubs substantially as I mentioned in my remarks, the year on year.
What else is working well and then are there some areas you can see some improvement with going forward.
Bahram Akradi: Look, the couple of areas that we have been working on is LTH. Clearly, we are focused on building the absolute best nutritional lines, a line of products for everything from AM, PM, men, women, multivitamins, performance vitamins to everything that has to do with, you know, hydration or sleep or proteins, different kinds of protein isolates, etc. We're working on that. We have always been focused on building the best product. As you guys know, we don't cut corners. We don't deliver second best. We are making sure the product is sound from a science standpoint. It is exactly what the people need. It doesn't have anything that they don't need they shouldn't have in it. And it tastes good and performs well.
Look there are a couple of areas that we have.
<unk>.
Is one that.
<unk> been working on is LTE H clearly we are focused on building.
We have taken two locations, we have been seeing month over month sequential growth.
The absolute best.
We see that those that business model maturing to exactly what we hoped it to be and therefore right now.
Nutritional lines line.
Our lineup of products for everything from.
A&P men women Multivitamins performance vitamins too.
We are.
Hustling to get at least four to six additional neuro locations launched this year and then gradually grow that business, so thats going well.
To everything that has to do with high duration or sleep or.
Proteins different cater protein isolates et cetera, we're working on that.
A spa and the <unk>.
We have always been focused on building the best product as you guys know, we don't cut corners, we don't.
And F&B, both have quite a bit of additional opportunities and we're working on execution on both of those to make sure that we continue to get the extra growth that we can get out of those businesses and deliver the right experiences for our customers.
Deliver second best we are making sure the product.
As.
Sound from a science standpoint is exactly what the people need there isn't anything that they don't need this shouldnt having it.
So when they come to clubs they get what they want.
And it tastes, good and performs well and all of our indication right now is that this.
We are working on.
Bahram Akradi: And all of our indication right now is that this LTH line can continue to grow, and it has been growing in the clubs substantially, as I mentioned in my remarks year on year. Miura is one that, you know, we have taken two locations. We've been seeing month over month sequential growth. We see that those that business model maturing to exactly what we hoped it to be. And therefore, right now, we are hustling to get at least four to six additional Miura locations launched this year and then gradually grow that business. So that's going well.
The Lacey.
<unk> really.
L. P. H line can continue to grow and it has been growing in the clubs substantially as I mentioned in my remarks year on year.
A big vision is the vision of bringing to the customer.
A whole picture of their health, rather than just work out or just nutrition or just sleep.
<unk>.
Is one that.
We have taken two locations, we have been seeing month over month sequential growth.
Vision of AC is to bring gains just like a lifetime club is the whole ecosystem.
Health and well being rather than just a clubs.
We see that those that business model.
Clubs, we like our studio of some sort.
Sharing to exactly what we hoped it to be and therefore right now.
The latency is the AI companion for you.
We are.
The vision for it is to help you assist you with all aspects of your health and wellbeing, where we add with it we just launched Lacy.
Hustling to get at least four to six additional neuro locations launched this year and then gradually grow that business, so thats going well.
The first draw that would call.
Bahram Akradi: The spa and the, and and F&B both have quite a bit of additional opportunities, and we're working on execution on both of those to make sure that we continue to get the extra growth that we can get out of those businesses and deliver the right experiences for our customers so when they come to the clubs, they get what they want. We are working on Lacy. Lacy is really a big vision. It's a vision of bringing to the customer a whole picture of their health rather than just workout or just nutrition or just sleep. The vision of Lacy is to bring in, just like a lifetime club, is the whole ecosystem of health and well-being rather than just a like a club, like a studio of some sort.
A spa and the <unk>.
Version is going to do maybe two or three of the third of these things extremely well.
And F&B, both have quite a bit of additional opportunities and we are working on execution on both of those to make sure that we continue to get the extra growth that we can get out of those businesses and deliver the right experiences for our customers.
And over the next couple of years, we continue to expand on what <unk> can do for you exceptionally well, but then ultimately it will deliver a hole.
Picture of health.
Viewpoint for you based that is personalized for you based on your past based on all of the reservoir of information that lifetime has.
So when they come to clubs they get what they want.
We are working on.
The Lacey.
Put together over the last 32 to 33 years and so it's something really special it takes a lot of work. It takes is a big vision. It takes a long time for it to get there, but we're making solid progress with that literally every 30 to 90 days.
Really.
A big vision is the vision of bringing to the customer.
A whole picture of their health, rather than just work out or just nutrition or just sleep.
The vision of <unk> is to bring gains just like a lifetime club is the whole ecosystem of health and well being rather than just a lucky clubs.
And then that will actually will help LTE age who will help me are Rob will take it will help the clubs.
It really will help the whole ecosystem.
Clubs like a studio of some sort.
Vision for that is millions and millions, it's not $2 million, but tens of millions of people using lifetime digital and they see whether if their members or just simply subscribers.
Bahram Akradi: The Lacy is the AI companion for you, with the vision for it is to help you, assist you with all aspects of your health and well-being. Where are we at with it? We just launched Lacy. You know, the first, what I would call, version is going to do maybe two or three of the 30 things extremely well. And over the next couple of years, we continue to expand on what Lacy can do for you exceptionally well. But then ultimately, it will deliver a whole picture of health viewpoint for you based it was personalized for you based on your past, based on all the reservoir of information that Lifetime has put together over the last 32, 33 years. And so it's something really special. It takes a lot of work. It takes it's a big vision.
The latency is the AI companion for you.
The vision for it is to help you assist you with all aspects of your health and wellbeing, where we add with it we just launched Lacy.
So those are all the extra things we're working on in addition to adding <unk>.
The first draw that would call.
Version is going to do maybe two or three of the third of these things extremely well.
Ramping up the club opening in square footage growth and so and lots lots at work and it's all working pretty well at this point.
Over the next couple of years, we continue to expand on what <unk> can do for you exceptionally well, but then ultimately it will deliver a hole.
Awesome, that's beyond helpful. Thanks, Brian and congrats on another excellent quarter.
So much.
Picture of health.
Our next question is from Logan re with RBC capital markets. Please proceed.
Viewpoint for you based that is personalized for you based on your past based on all of the reservoir of information that lifetime has.
Hey, good morning, guys. Thanks for taking the questions and congrats on the strong results.
Put together over the last 32 or 33 years and so it's something really special it takes a lot of work. It takes it's a big vision takes a long time for it to get there, but we're making solid progress with that literally every 30 to 90 days.
Just one on pricing.
Your retention is at all time highs swipes continues to improve.
And I know you sort of take that all into account. When you are looking at pricing, but can you just give any sort of color on what pricing you took out of legacy members in Q2, and then what sort of your outlook for the rest of the year I think both.
Bahram Akradi: It takes a long time for it to get there, but we're making solid progress with that literally every 30 to 90 days. And then that will actually help LTH, will help Miura, will help the clubs. It literally will help the whole ecosystem. You know, vision for that is millions and millions, not 2 million, but tens of millions of people using Lifetime Digital and Lacy, whether if they're members or just simply subscribers. And so those are all the extra things we're working on in addition to adding, you know, ramping up the club opening and square footage growth. And so, you know, lots lots of work, and it's all working pretty well at this point.
And then that will actually will help LTE age will help me are Rob will will help the clubs.
Implied same store sales for the second half of the year is around 350 bps deceleration. So I'm just wondering if theres anything specific we should be looking at.
It really will help the whole ecosystem.
Vision for that is millions and millions is not $2 million, but tens of millions of people using lifetime digital and they see whether if their members or just simply subscribers.
In terms of the deceleration or is there just some.
Service isn't baked into the guidance. Thanks.
Yes.
No.
We always have some level of conservatism baked into the guidance, but we did raise the comp sales from nine five to 10 it.
So those are all the extra things we're working on in addition to adding <unk>.
It certainly wouldn't be unrealistic for us to hit or go north of that but.
Ramping up the club opening in square footage growth and so and with lots and lots of work and it's all working pretty well at this point.
As it relates to pricing, we typically do take legacy pricing Q to Q4 and.
Owen Rickert: Awesome. That was beyond helpful. Thanks, Bram, and congrats on another excellent quarter.
So consistent with our strategy around pricing, we did do that in Q2.
Awesome that was beyond helpful. Thanks, Brian and congrats on another excellent quarter.
Brian Nagel: Thank you so much.
I would still point you to the fact that we still have quite a bit of embedded pricing right in our legacy we've talked about that before so nothing really I guess, what I would call different or unusual that wasn't really aligned with how we were thinking about our pricing strategy and then again related to comps we feel we feel great about the res end to end our.
So much.
Operator: Our next question is from Logan Reich with RBC Capital Markets. Please proceed.
Our next question is from Logan re with RBC capital markets. Please proceed.
Brian Nagel: Hey, morning, guys. Thanks for taking the question. Congrats on the strong result. I wanted to ask one on pricing. I mean, your retention is at all-time highs. Swipes continue to improve. And I know you sort of all take that all into account when you're looking at pricing. But can you just give any sort of color on what pricing you took on legacy members in Q2 and then what's sort of your outlook for the rest of the year? I think the implied same-source sales for the second half of the year is around a 350-bit deceleration. So I'm just wondering if there's anything specific we should be looking at, in terms of the deceleration, or is there just some, conservatism baked into the guidance? Thanks.
Hey, good morning, guys. Thanks for taking the questions and congrats on the strong results I wanted to ask one on pricing.
I mean your retention is at all time highs swipes continues to improve.
<unk> two.
To hit that so.
And I know you sort of take that all into account when you're looking at pricing, but can you just give any sort of color on what pricing you took out of legacy numbers in Q2, and then what sort of your outlook for the rest of the year I think the implied same store sales for the second half of the year is around 350 bps deceleration. So I'm just wondering if.
Yeah.
Great Super helpful. And then just a follow up sort of been asked a couple different ways, but it will take a different approach at it suddenly unit growth pipeline beyond 2006, I appreciate the color on the 12% to 14 for next year and I recognize you guys are very careful around.
Making sure the new centers opened successfully I guess, what are the sort of things you guys need to do to continue accelerating the pipeline maybe beyond the 12% to 14 range of 27% in the years beyond.
If there's anything specific we should be looking at.
In terms of the deceleration or is there just some.
Conservatism baked into the guidance. Thanks.
Conor Wienberg: Yeah. I mean, as you know, we, we always have some level of conservatism baked into the guidance. But, you know, we did raise the the comp sales from 9.5 to 10. you know, it certainly wouldn't be unrealistic for us to, hit or or go north of that. But, as it relates to pricing, you know, we typically do take legacy pricing Q2, Q4. And, you know, so consistent with, you know, our strategy around pricing, we did do that in Q2. I I would still point you to the fact that we still have, quite a bit of embedded pricing, right, in our legacy. We've talked about that, before. So nothing really, I guess, what I would call, different or unusual that wasn't really aligned with, you know, how we were thinking about our our pricing strategy.
Yes, I mean as you.
No.
I always have some level of conservatism baked into the guidance, but we.
Yes.
We did raise the comp sales from nine five to 10.
Look as the company gets bigger.
Certainly wouldn't be unrealistic for us to hit or go north of that but.
To maintain that 10% plus top line growth.
As it relates to pricing, we typically do take legacy pricing Q to Q4 and so.
We also need to continue to deliver more growth more new club growth.
So consistent with our strategy around pricing, we did do that in Q2.
There are many ways that that can manifest itself.
I would still point you to the fact that we still have quite a bit of embedded pricing right in our legacy we've talked about that.
We have a pipeline.
So solid right now and real estate debt team is just adding to it not losing.
Before so nothing really I guess, what I would call different or unusual that wasn't really aligned with how we were thinking about our pricing strategy and then again related to comps we feel we feel great about the raise and our ability to.
Losing any sort of a steam on that.
And so it's hard to just come and give you guys a number for 2007.
Conor Wienberg: And then again, you know, related to comps, we feel we feel great about the raise and and our ability to, you know, to to hit that, so.
But you got to expect that this at least 10 to 12 clubs of the years that we've said before and when we can deliver more will deliver more than that.
To hit that so.
Brian Nagel: Great. Super helpful. And then just to follow up, it's sort of been asked a couple of different ways. Maybe I'll take a different approach at it. Something unit growth pipeline beyond '26. I appreciate the the color on on the '12 to '14 for next year. And I recognize you guys are very careful around making sure the new centers open successfully. I guess, what are the sort of things you guys need to do to continue accelerating the pipeline maybe beyond the '12 to '14 range and '27 and the years beyond?
Great Super helpful. And then just a follow up it's sort of been asked a couple different ways, but it will take a different approach.
Suddenly unit growth pipeline beyond 2000, and I appreciate the color on the 12 to 14 for next year and I recognize you guys are very careful around.
Great. Thanks, guys.
Our next question is from Molly Baum with Morgan Stanley. Please proceed.
Making sure the new centers opened successfully I guess, what are the sort of things you guys need to do to continue accelerating the pipeline maybe beyond the 12 to 14 range.
Hi, Thanks for taking my question. This is Molly on for Steven and I, just want I know you talked a little bit about the maturation process of new stores, but I just wanted to ask a follow up to that one can you talk a little bit more about how the same store sales comparing your most mature markets versus those that have maybe been open for less than three years.
7% in the years beyond.
Bahram Akradi: Yeah. Look, as the company gets bigger, to maintain that 10% plus top-line growth, we also need to continue to deliver more growth, more new club growth. There are many ways that that can manifest itself. We have a pipeline so solid right now, and the real estate team is just adding to it, not losing, you know, losing any sort of esteem on that. And so it's hard to, you know, just come and give you guys a number for '27. But, you know, you got to expect that it's at least 10 to 12 clubs a year as we've said before. And when we can deliver more, we deliver more than that.
Yes.
Look as the company gets bigger.
To maintain that 10% plus top line growth.
And do you expect that new club waterfall to change at all given the opening of larger stores or just any detail about your expectations going forward. Thank you.
We also need to continue to deliver more growth more new club growth.
There are many ways that that can manifest itself.
The look.
We have a pipeline.
Once again.
<unk>.
So solid right now and real estate debt team is just adding to it not losing.
Are seeing growth across the board.
With our programming and with our dues growth, it's not isolated to.
Losing any sort of a steam on that.
And so it's hard to just come and give you guys a number for 2007.
Any group this across the board the over performance is across the board in the system.
But you got to expect that.
So that's pretty much the <unk>.
At least 10 to 12 clubs of the years that we've said before and when we can deliver more will deliver more than that.
Level of color that I'd like to provide we don't want to get into additional <unk>.
Metrics.
Brian Nagel: Great. Thanks, guys.
Great. Thanks, guys.
But what I can tell you its across this across the board is how the clubs that are performing and the older clubs they are doing extremely well.
Operator: Our next question is from Molly Baum with Morgan Stanley. Please proceed.
Our next question is from Molly Baum with Morgan Stanley. Please proceed.
New clubs are doing well and ramping clubs are doing well and just just to add that you guys kind of know our ramping profile in some of those markets and some of those clubs they do kind of ramp quicker than some of our historical build in.
Molly Baum: Hi. Yeah, thanks for taking my question. This is Molly for Steven. And I just want, I know you talked a little bit about the maturation process of new stores, but I just wanted to, you know, ask a follow-up to that one. Can you talk a little bit more about how the same-store sales compare in your most mature markets versus those that have maybe been open for less than three years? And, you know, do you expect that new club waterfall to change at all given, you know, the opening of larger stores or just any detail about your expectations going forward? Thank you.
Hi, yes. Thanks for taking my question. This is Molly on for Steven and I. Just wanted I know you talked a little bit about the maturation process of new stores, but I just wanted to ask a follow up to that one can you talk a little bit more about how the same store sales comparing your most mature markets versus those that may be been open for less than three years.
To <unk> point, there is nothing really regional as I look at the same store sales in our various businesses.
PT Aquatics.
And do you expect that new club waterfall the change at all given the opening of larger stores or just any detail about your expectations going forward. Thank you.
Spar kit, they're all up versus the prior quarter. So it's nothing really regional it's just everything across the system, that's driving that growth.
Bahram Akradi: Look, once again, we are seeing growth across the board with our programming and with our dues growth. It's not isolated to any group. It's across the board. The overperformance is across the board in the system. So that's pretty much the level of color that I like to provide. We don't want to get into additional metrics. Yeah. So, but I can tell you it's across the board is how the clubs are performing. It's in the older clubs. They're doing extremely well. New clubs are doing well, and ramping clubs are doing well.
Got it thanks, so much.
Look.
Yes.
Once again.
<unk>.
There are no further questions at this time I would like to turn the conference back over to Conor for closing remarks.
Are seeing growth across the board.
With our programming and with our dues growth, it's not isolated to.
Yes. Thank you operator, and thank you everyone for joining us. This morning, we look forward to the next call with you.
Any group this across the board the over performance is across the board in the system.
Thank you. This will conclude today's conference you may disconnect at this time and thank you for your participation.
So that's pretty much the <unk>.
Level of color that I would like to provide we don't want to get into additional <unk>.
Metrics.
So, but but I can tell you it's across the across the board.
Howard the clubs are performing and the older clubs, they're doing extremely well.
New clubs are doing well and ramping clubs are doing well and just just to add that you guys kind of know our ramping profile in some of those markets and some of those clubs. They do kind of ramp quicker than some of our historical builds and and to <unk> point. There is nothing really regional as I look at the same store sales in our various businesses.
Conor Wienberg: Yeah. And just to add that, you guys kind of know our ramping profile. And some of those markets and some of those clubs, they do, you know, kind of ramp quicker than, you know, some of our historical builds. And, you know, to Bram's point, there's nothing really regional. As I look at, you know, the same-store sales in our various businesses, I mean, you know, PT, Aquatics, you know, Spa, Kid, they're all up versus the prior quarter. So it's nothing really regional. It's just everything across the system that's driving that growth.
PT.
Aquatic.
Spock hit they are all up versus the prior quarter. So it's nothing really regional it's just everything across the system, that's driving that growth.
Molly Baum: Got it. Thanks so much.
Got it thanks, so much.
Yeah.
Operator: There are no further questions at this time. I would like to turn the conference back over to Conor for closing remarks.
There are no further questions at this time I would like to turn the conference back over to Conor for closing remarks.
Alex Perry: Yeah. Thank you, operator, and thank everyone for joining us this morning. We look forward to the next call with you.
Yes. Thank you operator, and thank you everyone for joining us. This morning, we look forward to the next call with you.
Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.
Thank you. This will conclude today's conference you may disconnect at this time and thank you for your participation.
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Okay.
Yes.
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