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]

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 [4] - 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 [5] - Adjusted net income, excluding gains and losses on sale leasebacks, was $84.1 million, up 60.5% year over year [6] - Adjusted EBITDA rose to $211 million, an increase of 21.6%, with an adjusted EBITDA margin improvement of 170 basis points to 27.7% [6] - Free cash flow was $112 million for the second quarter, marking the fifth consecutive quarter of positive free cash flow [6] Business Line Data and Key Metrics Changes - Memberships increased to over 849,000, with total memberships reaching approximately 899,000, including on-hold memberships [5] - Average monthly dues grew by 10.6% year over year to $219, while average revenue per center membership increased by 11.8% to $888 [5] Market Data and Key Metrics Changes - Lifetime Digital accounts reached 2.3 million, up 216% year over year [9] - The nutritional supplement line revenue grew by 31% compared to the prior year quarter [10] Company Strategy and Development Direction - The company is accelerating the development of new club openings, targeting 12 to 14 openings in 2026, with an average size of nearly 100,000 square feet [9] - The focus is on growth, with plans to capitalize on high-margin expansion opportunities and maintain positive free cash flow [10] - The company aims to strengthen its balance sheet and has achieved a BB credit rating, allowing for lower interest costs and increased earnings [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and record retention levels, with visits per membership up 5.7% year over year [7] - The company is cautious about macroeconomic conditions but believes it can thrive in both strong and challenging environments [20] - Management indicated that membership growth is expected to follow normal seasonality, with no signs of weakness observed [32] Other Important Information - The company closed on a sale leaseback of three properties, generating net proceeds of approximately $149 million [7] - The sale leaseback market remains open and attractive, with expectations to close another $100 million in transactions in the second half of the year [8] 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 finished strong, making up for the initial slowdown [17] Question: Any further commentary on monetizing membership? - Management stated that revenue per membership increased nearly 12%, indicating effective monetization strategies [22] Question: Clarification on unit guidance and timing shifts? - Management explained that the unit guidance was narrowed due to construction timelines and a focus on financial stability, with a target of 12 to 14 openings in the next year [28] Question: Expectations for membership in the back half of the year? - Management expects typical seasonality in Q3, with no signs of weakness, and noted that the first part of the current quarter is following strong trends [32][33] Question: How does the waitlist affect member growth? - Management clarified that waitlists are a tool for managing member experience and should not be considered a KPI [50][51] Question: Insights on average revenue per membership growth? - Management indicated that there are no signs of fatigue among demographics, and they are not seeing weakness in any part of the business [58] Question: Trends in in-center revenue and initiatives? - Management highlighted growth in the nutritional supplement line and the success of new initiatives like Lacey, the AI-powered health companion [66][68]

Financial Data and Key Metrics Changes - Total revenue increased by 18.3% to $706 million, driven by a 17.9% increase in membership dues and enrollment fees and an 18.7% increase in in-center revenue [5][10] - Net income rose by 206% to $76.1 million, while adjusted net income increased by 189% to $88.1 million [10] - Adjusted EBITDA grew by 31.2% to $191.6 million, with an adjusted EBITDA margin of 27.1%, up 260 basis points year-over-year [10][11] - Net cash provided by operating activities increased by approximately 103% to $184 million compared to the same quarter last year [11] Business Line Data and Key Metrics Changes - Comparable center revenue increased by 12.9%, up from 11.1% in the prior year period, attributed to higher membership dues and strong performance in in-center businesses [6][10] - Average monthly dues grew by 11.8% year-over-year to $208, with average revenue per center membership increasing by 13.3% to $844 [9][10] - Memberships increased by 3% year-over-year, ending the quarter with over 826,000 memberships, and total memberships, including on-hold memberships, reached approximately 880,000 [8][9] Market Data and Key Metrics Changes - The company continues to see strong revenue growth in clubs opened within the last twelve months, which are outperforming anticipated revenue plans [5] - Visits in comparable centers increased by 4.7% compared to the first quarter of last year, indicating higher member engagement [14] Company Strategy and Development Direction - The company raised its guidance for comparable center revenue growth to between 8.5% and 9.5% for the full year, reflecting confidence in long-term revenue growth targets [8][10] - The focus remains on maintaining a strong balance sheet and positive free cash flow while growing the business, with plans to open 10 to 12 clubs per year [14][15] - The company is also expanding into three additional growth areas, including LT Digital, which has over 2 million subscribers, and Miura [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance in the first quarter but acknowledged macroeconomic uncertainties, leading to a modest increase in revenue and adjusted EBITDA guidance [13][14] - The company is monitoring customer behavior closely, noting that while retention rates are high, new member sign-ups may be slightly softer due to economic conditions [41][62] Other Important Information - The company has signed a letter of intent for a sale-leaseback of three properties for approximately $150 million, expected to close in the second quarter [11] - Management indicated that tariff exposure is minimal, with no significant impact expected from current tariff policies [12][45] Q&A Session Summary Question: How broad now how many clubs have wait lists? - Management confirmed that many clubs are using waitlists to manage capacity and ensure member experience, focusing on full dues-paying customers [18][20] Question: What's the organization's capacity to open more clubs? - Management stated that while they plan to open 10 to 12 clubs, they have the capacity to do more if economic conditions allow [24][26] Question: How is pricing strategy evolving? - Management confirmed that no significant legacy price increases were taken in Q1, with plans to implement them in Q2 [31][34] Question: How is member activity as the pool season approaches? - Management indicated it is too early to assess member activity for the pool season, but in-center performance remains strong [37] Question: What is the impact of macroeconomic conditions on membership? - Management noted that while there is some customer hesitance in joining, it is a small part of the overall business and retention remains strong [42][64] Question: How is LT Health performing? - Management reported significant growth in LT Health, with a 40% month-over-month increase in March, and plans for continued expansion [87][90]

Financial Data and Key Metrics Changes - Total revenue increased by 18.3% to $706 million, driven by a 17.9% increase in membership dues and enrollment fees and an 18.7% increase in in-center revenue [4][8] - Net income rose by 206% to $76.1 million, while adjusted net income increased by 189% to $88.1 million [8] - Adjusted EBITDA grew by 31.2% to $191.6 million, with an adjusted EBITDA margin of 27.1%, up 260 basis points year-over-year [9] - Net cash provided by operating activities increased approximately 103% to $184 million compared to the prior year [10] Business Line Data and Key Metrics Changes - Comparable center revenue increased by 12.9%, up from 11.1% in the prior year period, attributed to higher membership dues and strong performance in in-center businesses [5][6] - Average monthly dues grew by 11.8% year-over-year to $208, and average revenue per center membership increased by 13.3% to $844 [7][8] - Center memberships increased by 3% year-over-year, totaling over 826,000, with total memberships reaching approximately 880,000 when including on-hold memberships [6][7] Market Data and Key Metrics Changes - Visits in comparable centers increased by 4.7% compared to the first quarter of the previous year, indicating strong member engagement [12] - The company is focused on premium markets with strong demand and higher dues rates, which is reflected in the membership growth strategy [7][14] Company Strategy and Development Direction - The company aims to maintain a strong balance sheet and positive free cash flow while growing the business, with plans to open 10 to 12 clubs per year [12][13] - The strategy includes focusing on member experience and attracting higher revenue memberships, with a robust pipeline for club growth [13][14] - The company is also expanding into digital health and wellness through LT Digital and LT Health initiatives, with significant growth expected in these areas [14][88] Management's Comments on Operating Environment and Future Outlook - Management raised revenue and adjusted EBITDA guidance modestly due to macroeconomic uncertainties, emphasizing the importance of maintaining a strong balance sheet [12][14] - The company is monitoring customer behavior closely, noting that while retention rates are high, new member sign-ups may be slightly softer due to economic conditions [41][60] - Management expressed confidence in navigating both robust and challenging economic conditions, leveraging a strong financial position to capitalize on opportunities [25][56] Other Important Information - The company has signed a letter of intent for a sale-leaseback of three properties for approximately $150 million, expected to close in the second quarter [10] - The company does not anticipate significant impacts from tariffs on its operations, having assessed exposure in key areas [11][43] Q&A Session Summary Question: How many clubs have wait lists and what is the strategy around that? - Management indicated that many clubs are using waitlists to manage capacity and ensure a quality member experience, focusing on full dues-paying customers [20][21] Question: What is the capacity to open more clubs beyond the planned 10 to 12? - Management stated that while 10 to 12 clubs is the target for 2025, there is potential to exceed that number if economic conditions allow [25][26] Question: How does the company view pricing strategies for legacy members? - Management confirmed that no significant legacy price increases were implemented in Q1, with plans to roll out increases in the following quarters [31][33] Question: How is the company addressing potential impacts from tariffs? - Management noted minimal exposure to tariffs, with most equipment sourced from Italy and Sweden, and ongoing efforts to mitigate any potential impacts [48][49] Question: How is LT Health performing and what are the growth expectations? - Management reported significant month-over-month growth in LT Health and emphasized the goal of establishing it as a trusted nutritional brand [86][88]