LTH Q3 2025: Dynamic Personal Training Drives 14% In-Center Revenue Surge, Fueling Premium Model Expansion
LTH’s premium club strategy is accelerating, with in-center revenue up 14.4% and a new baseline of 12-14 large-format club openings annually. The company’s focus on member mix optimization, high-engagement offerings like dynamic personal training, and disciplined capital allocation underpins robust margin and cash flow expansion. Guidance for comparable center revenue was raised, and management signaled confidence in sustaining growth through both new builds and high-value ancillary businesses into 2026.
Summary
- Premium Experience Strategy: LTH is doubling down on high-engagement, high-value offerings and optimizing member mix for revenue quality.
- Club Growth Visibility: Pipeline of 13 large-format clubs under construction locks in next year’s expansion baseline.
- Margin and Cash Flow Strength: Operating leverage and disciplined capital deployment support ongoing club growth and balance sheet flexibility.
Performance Analysis
LTH delivered broad-based growth, with total revenue up double digits and adjusted EBITDA margin expanding by over 200 basis points. The company’s core comparable center revenue grew at a healthy clip, anchored by both higher average dues and a substantial uptick in in-center business—most notably, dynamic personal training (DPT), which management highlighted as a standout driver. Member engagement metrics improved, with average monthly visits per membership rising nearly 6%, and total visits up 7% year over year.
Membership optimization remains a central lever, as LTH selectively limits discounted or third-party memberships in favor of higher-value couples and families. This shift is reflected in rising revenue per center membership and a willingness to let total membership count decline seasonally to preserve experience and pricing power. Cash flow from operations surged, supporting both new club construction and continued investment in ancillary businesses. Sale-leaseback activity remains a key capital recycling tool, with additional transactions expected by year-end.
- In-Center Revenue Momentum: Dynamic personal training and ancillary offerings like cafes and spas are outpacing overall growth, with DPT setting records in many clubs.
- Operational Efficiency: Club utilization is at all-time highs, allowing for fewer but higher-value memberships per club and improved per-member economics.
- Capital Flexibility: Net leverage below 2x and robust sale-leaseback proceeds provide ample runway for new club development and potential buybacks.
LTH’s performance reflects a maturing premium model, with growth increasingly driven by quality of membership, engagement, and in-center spend rather than sheer unit expansion.
Executive Commentary
"Our growth strategy is clear. First, accelerating new club growth. Second, continues our maniacal focus on member experiences, growing member engagement, and revenue per center membership."
Barah McCrotty, Founder, Chairman, and CEO
"Adjusted EBITDA was $220 million, an increase of 22%, and our adjusted EBITDA margin improved by 210 basis points to 28.1%. Net cash provided by operating activities rose approximately 66% to $251 million compared to the prior year quarter."
Eric Weaver, Executive Vice President and CFO
Strategic Positioning
1. Premium Club Model and Member Mix Optimization
LTH’s strategy centers on delivering a high-touch, premium experience—prioritizing revenue per member over total membership count. By focusing on attracting families and couples, and restricting lower-margin, third-party memberships, LTH is able to maximize utilization and maintain brand exclusivity. This shift is evident in the company’s willingness to accept seasonal declines in membership units to preserve pricing and experience.
2. In-Center Business Acceleration
Dynamic personal training, branded as DPT, is emerging as a structural growth engine, with many clubs setting all-time revenue records. Management noted significant upside remains, with ongoing investment in training, new concepts, and capacity expansion. Cafes, spas, and early-stage offerings like Miura (longevity clinics) and LTH Nutrition are positioned for incremental growth, with broader rollouts planned for 2026 as initial results validate demand.
3. Disciplined Capital Deployment and Club Pipeline
With net leverage below 2x and a robust sale-leaseback program, LTH is positioned to fund 12-14 large-format new clubs annually—establishing a new baseline for expansion. Thirteen of next year’s clubs are already under construction, providing high visibility. Management remains flexible on capital allocation, with buybacks under board consideration but not prioritized over growth investment. The company is also exploring asset-light models for Lifetime Living (residential) and Lifetime Work (co-working) to avoid diluting club IRR.
4. Digital and Brand Extension Initiatives
LTH’s digital ecosystem is scaling, with 2.75 million non-club LT digital accounts and an AI-powered health companion, Lacey, launching new features soon. These digital investments are designed to extend brand reach, drive engagement, and eventually monetize outside-club audiences. LTH Nutrition and Miura are being methodically developed, with an emphasis on quality, third-party testing, and internal validation before broader marketing spend in 2026.
5. Margin Management and New Club Economics
New clubs are larger (average 94,000 sq ft for 2026 vs. 66,000 in 2025) and are designed for higher revenue per club with fewer memberships required for optimal returns. Management is proactively communicating that ramping a record number of new clubs may create temporary margin drag, but long-term unit economics remain attractive, targeting 30%+ cash-on-cash returns post-sale-leaseback.
Key Considerations
LTH’s Q3 results highlight a business model increasingly focused on premiumization, operational leverage, and disciplined growth. Investors should weigh:
- Member Mix Shift: The deliberate move to higher-value, higher-engagement memberships supports revenue quality but may mute headline unit growth.
- In-Center Revenue Opportunity: Dynamic personal training and ancillary spend are still in early innings, with club-by-club upside as execution and capacity expand.
- Capital Allocation Optionality: Sale-leaseback proceeds and low leverage empower LTH to fund growth, consider buybacks, and adapt to changing market conditions.
- Digital and Brand Extensions: Early traction in digital accounts and nutrition points to future monetization levers outside the four walls.
- Inflation and Cost Management: Wage and utility inflation are being modeled into forecasts, with management leveraging hedging and operational discipline to offset pressures.
Risks
Key risks include potential macro-driven consumer pullback, especially in discretionary spend categories, and the challenge of sustaining high in-center engagement as club utilization peaks. Wage and utility inflation, while managed, remain a headwind. Execution risk exists as LTH ramps a record number of large clubs and expands into new ancillary businesses, where initial results may be uneven. Any missteps in member mix or pricing strategy could impact revenue growth and profitability.
Forward Outlook
For Q4, LTH guided to:
- Seasonal decline in membership units as member mix is further optimized for revenue per membership.
- Completion of $55-65 million in additional sale-leaseback transactions.
For full-year 2025, management raised guidance:
- Comparable center revenue growth to 10.8-11.0%.
Management highlighted several factors that shape the outlook:
- Visibility into 2026 new club openings, with 13 out of 14 already under construction.
- Continued focus on margin management as new clubs ramp and in-center business expands.
Takeaways
LTH’s Q3 demonstrates a business leveraging premium positioning, in-center revenue growth, and disciplined expansion to drive sustainable margin and cash flow gains.
- Premium Model Reinforced: The focus on member mix and high-value engagement is translating to higher revenue per membership and robust utilization.
- Expansion Visibility: With the club pipeline largely locked for 2026, growth is de-risked and capital allocation options remain open.
- Monitor Digital and Ancillary Ramp: Investors should watch the execution of digital, nutrition, and longevity initiatives for incremental upside and diversification.
Conclusion
LTH’s Q3 2025 results signal a maturing premium fitness platform, with in-center businesses and member optimization fueling both near-term margin expansion and long-term growth runway. The company’s strong balance sheet and disciplined capital deployment provide resilience and flexibility as it leans into new club growth and brand extensions.
Industry Read-Through
LTH’s success with dynamic personal training and premium member optimization signals a broader shift in the fitness industry toward high-value, experiential models over mass membership volume. The willingness to limit discounted memberships and prioritize revenue per member sets a template for other premium operators, while the company’s methodical approach to digital and nutrition extensions underscores the need for quality and trust as key differentiators. Operators across fitness, wellness, and hospitality should note the rising importance of in-center engagement, capital flexibility, and asset-light brand extensions in sustaining growth and margin in a maturing market.