Financial Data and Key Metrics Changes - Total revenue increased by 14% to $761 million, driven by a 14% increase in membership dues and enrollment fees, and a 14.4% increase in in-center revenue [5][6] - Net income for the quarter was $72.1 million, an increase of 36.5%, including approximately $9 million of tax-effective losses on sale leaseback [6][7] - Adjusted net income was $84.1 million, up 60.5% year over year, while adjusted EBITDA increased by 21.6% to $211 million [7][8] - Free cash flow was $112 million for the second quarter, marking the fifth consecutive quarter of positive free cash flow [8] Business Line Data and Key Metrics Changes - Memberships reached over 849,000, with total memberships, including on-hold memberships, at approximately 899,000 [6] - Average monthly dues grew by 10.6% year over year to $219, and average revenue per center membership was $888, an increase of 11.8% from the prior year quarter [6][7] - Comparable center revenue grew by 11.2%, prompting an increase in full-year comparable center revenue guidance to between 9.5% and 10% [5][6] Market Data and Key Metrics Changes - Lifetime Digital accounts increased by 216% year over year to 2.3 million [11] - The nutritional supplement line saw revenue growth of 31% compared to the prior year quarter [12] Company Strategy and Development Direction - The company is focusing on growth, with plans to accelerate the development of new club openings, targeting 12 to 14 openings in 2026 [11] - The company aims to maintain a strong balance sheet and has achieved a BB credit rating, which will help lower interest costs and increase earnings [10] - The company is committed to an asset-light, high-margin expansion strategy to drive sustained revenue and adjusted EBITDA growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and growth opportunities ahead, noting that visits per membership are up 5.7% year over year [10] - The management team emphasized that they are not seeing any signs of weakness in membership or revenue growth, despite typical seasonal fluctuations [20][30] - The company is focused on maintaining a strong customer experience and is cautious about overextending membership growth to ensure quality [43][52] Other Important Information - The company closed on the sale leaseback of three properties, generating net proceeds of approximately $149 million [9] - The company plans to close another $100 million in sale leaseback transactions in the second half of the year [10] Q&A Session Summary Question: How did new membership sign-ups track through the quarter? - Management noted that membership sign-ups were slightly slower in the first half of the quarter but picked up significantly in the latter half, resulting in a strong finish [16][18] Question: Any further commentary on monetizing membership? - Management indicated that revenue per membership increased nearly 12%, reflecting effective monetization strategies [22] Question: Clarification on unit guidance and timing shifts? - Management explained that the narrowing of unit guidance was due to a focus on existing spaces and ensuring financial stability, with a robust pipeline for future growth [26][27] Question: Expectations for membership in the back half of the year? - Management expects typical seasonality to affect membership numbers, but they are not seeing any signs of weakness [30][32] Question: How does the waitlist affect member growth? - Management clarified that waitlists are a tool for managing member experience and should not be viewed as a KPI [50][52] Question: Insights on average revenue per membership growth? - Management reported no signs of fatigue among demographics and emphasized strong performance across all business areas [60] Question: Trends in in-center revenue and initiatives? - Management highlighted growth in personal training and nutritional products, with plans for further expansion in these areas [66][70] Question: Pricing strategies for legacy members? - Management confirmed that pricing adjustments for legacy members were consistent with their strategy and that they remain optimistic about comp sales growth [78] Question: Pipeline for new clubs beyond 2026? - Management indicated a solid pipeline and expects to maintain growth of at least 10 to 12 clubs per year [81][82]