Life Time (LTH) 25 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Ken Cooper	IR
Robert Houghton	EVP and CFO
Bahram Akradi	Founder, Chairman, and CEO
Chris Carril	RBC Capital Markets
John Heinbockel	Guggenheim Securities
Brian Nagel	Oppenheimer & Company
Brian Harbour	Morgan Stanley
Robbie Ohmes	Bank of America
Chris Woronka	Deutsche Bank
Dan Politzer	Wells Fargo
Simeon Siegel	BMO Capital Markets
John Baumgartner	Mizuho Securities

Call transcript

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Operator

Good morning and welcome to Life Time Group Holdings Second Quarter of 2023 Earnings Conference Call. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from the company.

As a reminder, this conference call is being recorded

I will now turn the call over to Ken Cooper with Investor Relations for Life Time.

Ken Cooper

Good morning and thank you for joining us for the Life Time second quarter of 2023 earnings conference call. Bahram Chairman, are Bob CEO, today CFO. Houghton, me Akradi, and Founder, and With

the make may company involve call, those this During will today. made of to materially and forward-looking results statements a forward-looking risks uncertainties actual that cause differ from number which statements,

or is discussion including discuss will EBITDA factors growth debt as to certain financial measures, of There EBITDA, to in filings, net SEC adjusted company company's expenditures. a capital the Also, we are you the comprehensive adjusted our debt ratio, which leverage before encouraged free risk refer the what to review. non-GAAP flow cash net and

X-K This Investor are information the issued our company's section the most with our SEC, to release of included with on and directly filed comparable Relations website. the the in reconciliations GAAP earnings measures morning, along this

call I'm to over Bob now Houghton. turn to pleased the Bob?

Robert Houghton

our us Thank appreciate you you, joining good We Ken, business update. morning. for and

continued results, flow, review briefly his our will working include cash our then the will growth. thoughts leverage. business, I and strategic XXXX on provide are our profitability, quarter improve second financial adjusted to which reduce all Bahram and increase EBITDA which strong and initiatives, quarter grow revenue

June to by increased revenue XX,XXX to quarter revenue. XX% from approximately a increased and first memberships. Our with second enrollment and XXX,XXX memberships increase $XXX the a and million XX% in driven XX% fees dues incentive ended we membership increase Center quarter in

at XXX,XXX. Total digital subscriptions are including memberships approximately on-hold now

income with prior million loss second of the quarter $X year up generated the to quarter. XX% the $XXX, center in quarter. from quarter membership net in per compared prior-year of a increased million Second $XXX We $XX net average revenue for

to $XXX Adjusted EBITDA increased XXX% million.

in second by adjusted XX% over points the of second XX.X% and XX% prior-year margin Rent EBITDA increased quarter. quarter versus the of in revenue XXXX XXXX. as XX.X% was percentage the of in XX quarter a to Our percentage

flow have Year-to-date million provided cash operating prior activities versus year-to-date net the by of with quarter. operating net million cash quarter $XX million of activities million another we improved cash $XXX generated versus in prior-year delivered We $XX the $XXX provided of period. by in

incredibly are of year. first this in performance half with the We our pleased

growth sustainably are profit driving margins. and adjusted EBITDA strategic Our in initiatives revenue successfully higher at

We are the seeing number asset-light deleveraging our we in sheet. rapidly our a to business. of significant grow increase are opportunities balance And

remain experience Club providing ability continue while Country we forward, delivering in athletic unique the confident Looking growth that in member our revenue and unrivaled Life Time. is to to earnings

call the Bahram. turn to now over will I

Bahram Akradi

morning everyone. Thanks, good Bob, and

very am towards our the in with quarter progress I pleased second our objectives. main

initiatives are strategic all and team Our our and excited. focused paying is off

programming experiences to We the members. and are best delivering quality our

We're and the to securing year. is the dropping at at second margins. And debt period are same are to same pace, of to to last EBITDA a adjusted grow of see at has times opportunities we time, at end asset-light fast quarter delivering Net times X.X the more the continuing we to company very opportunities. these operating great X and compared decreased it end

the in continue third to deleveraging rapid quarter. this expect We

We recessionary have guidance. potential our included some in headwinds

yet. not seeing impact However, we are that

we below XXXX. have our As June month first was mentioned that attrition rate before, the was

Time through member and reflects the August, these to sentiment July now seeing are which Life We trends strong Brand.

XX.X%. XX.X% our Nevertheless, $XXX our full-year million despite on reflects from million. we we're EBITDA an adjusted $XXX of our $XXX to results will conservatism, maintain $XXX and to margin to Based financial perspective. This to EBITDA first-half million guidance our conservative million adjusted raising still

later some despite year. openings We full-year the club are $X,XXX revenue to guidance to in maintaining also our midpoint shifts year $X,XXX million to million the and narrowing the for in same

like annually. to $XXX billion than Time For to brand $XXX $XXX impressions equity EBITDA be million. remarks and more emphasizing Life million my to million million be to XXX finish adjusted I'd revenue with by the quarter, the third value to we the expect in $XXX

increasing Our an of to brand stronger through is growth. asset-light providing opportunities and number become bigger

We future. the well expect that into continue this will

Q&A, people. allowed seeing. we a role moment team and brand of start take plays and our I strong a team of our extend like happier thank would of the more to the than lives. healthier, Each to fuel results members our our incredible we members are passionate This to Before helping in power enthusiastic vital XX,XXX has live us

questions. now We're your looking to forward

Operator

first Instructions] Please from Capital proceed. is Chris Markets. Our Carril with question [Operator RBC

Chris Carril

morning. good Hi,

maybe to and saw can the you're So that counts you bit own that's a about into XQ relative the in thinking came and membership XQ, how that forward XQ growth how how membership expectations guidance? and here your in your embedded you expand the in the going more on then

Robert Houghton

growing very exactly been to expectation, Chris. with It's happy growth. our We're the

memberships are the trends, any We seeing in as not they're of we weakness that the have in, told you any coming

Bahram Akradi

marketing, sell. zero efforts promotions, you to zero You and guys zero there is understand

makes on increase to been clubs. net it's where we're with happy much working. are very Our attrition obtain. memberships mean attrition as We're focus work drop, to in continuing in rates desirability has that the I and our rates our And at. dropping, easier

Chris Carril

Got previously full it. what's development the want think driving openings - increase I the just to And and here, that what's to Thank you. the XX year? openings XX And from for about then, update specifically, morning confidence ask there? driving this and guidance driving did I the in just

Bahram Akradi

great It's Yes. Chris. question, a

building for is looking battleships are opportunities our that see to that opportunities. almost out the our is ones, are number XXX then systematically there surprise, XX% of discussions. number big on done asset-light XX about are we those, is asset-light about nearly available we to what possible of us. This And not which there We the deals but have done hundred already XX another and already locations, in couple have is asset-light another of

to which revenue pace to at without or very, to the and legit can opportunity de-lever EBITDA next Actually, think years, amount allows continue very to are of be to to the continue add the harvest nice five this grow years having in they company. we in a basically should So I significant the leverage. company come four we and able

Chris Carril

so Thanks Okay. much. Great.

Operator

Our next Securities. Guggenheim question proceed. Please is John Heinbockel with from

John Heinbockel

that So me kind you capital-light follow in cadence think handle, guys, So on a think - right one Bahram, the we last if can the think of expansion one right? one nature, you I would the about in about that's let organization about then month, of way right? sort do down bring of settle X So to piece of experience? XX harming piece, of year. Or there that up And being, it the And maybe suburban without you guess the cost capital-light a is or think those a last the the that? is ends more I battleships, than the X XX? do openings

Bahram Akradi

starting costs of instead the starting being to in already up costs with Actually, the the sort of of in - see on next down coming get Yes. we're the contractors the to ground leveled sky. some off construction will start the feet

what choose so - grow is way business. - John, And which pick we're to to of is going this giving and to we and us sort ability the do, the

launch the With the if the grow we asset-light didn't boxes. of the digit opportunities, in we revenue big double easily can levels many EBITDA

and are those the to continuing we to huge company then continuing deploy on the the have designs get systematically construction to we'll de-lever as land, decide with approval, that purchase are on a go focus permits, We ready, get the the forward. we when making the just sure

feel sure will demand, levels we we strategically the are we pick the now where pent-up going and that will locations business the up market so construction EBITDA And maintain the Growing debt have just bigger then levels making to de-lever at without is right ones. we like on amazing. the they we start it that will so continue and the

John Heinbockel

businesses headwinds, where then, recovery of anywhere? My softness what from talked and macro will it right? we And will big And in-center - know Is re-tool, COVID, of assessment your some that you businesses. that? where if we the some in-center Okay, great. think - some stand with we obviously personal And engagement their about I in to trying build the the you but but curious show do see be is it you the see on think today, fine personnel maybe in-center of that up? dues training

Bahram Akradi

to No, execution. that. has with I anything with do has to actually don't our think do Everything it

opportunity tremendous programming. with control execution the our our in-center of have within We

significant of the size have in have and performance certain clubs, clubs similar we so-so in others conditions, We similar performance some demographics, offering. similar similar with

we this the business, take I'm we execute. launching have places on is opportunity is going those to continued time. right really to really new gradually and So to just It's excited opportunity ways take are about what work significant now. creating an grow innovation, where news And positive the is to to there

itself opportunity another least at executing yet more to growth will another before robustly a will It for basis. training be which have a couple dynamic per-month on months our double-digit take within XXX get stretch, locations personal we

that basically of asset working been then that beyond launch four we and on, profitability of that volume have walls So, forward. that will other going things we've already increase the we to and or each anything in revenue the own the we

you're to So never you do some stood creating Time business the still. standing out But that's you're get you, well point. nothing at look, and tapped if still, same expecting to going if has to are for continue Life

us and We to that are higher other introduce more a have to invent quality constantly opportunities more and see experience programming what the opportunity. elevate looked gives to the extraordinary new

to just this really transformations all to And record from So at level work we 'XX growth last different our of think all producing beyond. get now our roll these are the super-excited new of had out the where to on company continue to we're and years, we innovations, the EBITDA opportunities to margin a I couple business. point, different for levels

John Heinbockel

Okay, thank you.

Operator

next & Please question Nagel with Company. from Oppenheimer Brian proceed. is Our

Brian Nagel

morning. good Hi,

Bahram Akradi

Brian. morning, Good

Brian Nagel

quarter. Nice Congratulations.

Bahram Akradi

Thank you.

Brian Nagel

laid doing implies maybe mentioned down in leverage have I'll first ask guidance, talked but - QX question, prepared you I'm and I QX, correctly, the Bahram, leverage parts, the for ratios to But couple mean we've questions. if ratio the lot EBITDA guess, So my ratios, guidance that first the X.X% - you about the of but I in a math so a to leverage about I couple out both a given a comments, X.X%. Bob your of

you want my - how is So close there, you that getting target to the question how that to be make to did at? I just with sure bigger math but I now want are correctly

Bahram Akradi

rough Brian, from I question. you. mean great a and It's tough

last the looking million look what then when couple months, months thumbnail, to last XQ is of quarter the of the right came and at rough plus the XX you tough - about EBITDA. $XXX and EBITDA the end - we just the for XX first the - first guidance have You delivered at trailing first is year, and XQ trailing

was that We proud a very, internal steadily the I'm EBITDA year, very executed. we mean had our goal of of for I doing of and So, million goal have team. the company always $XXX this have

Our on every team has the and to goal raise quarter. and steadily executed the guidance been - beat raise able we've

obviously, again, Our foreseeable we're grow that going a future. trailing expectation to in XX on every and revenue quarter, EBITDA months the basis is

very under is three a And the the to nice the Time emphasize, billion so sheet continues in Life excess with going we're get support times one company. want fee-owned that strength is EBITDA that And but to debt number way owns considered the of of company - what's I this to of $X being to assets today rapidly really well of to balance or debt at other, EBITDA. the least quickly to not

on times very, and good the under Thanks three way so to question, our we feel get Brian. the And clearly about very we there. are getting for company

Brian Nagel

then That's regard to to want very the with openings. second question club ask, the just And I the center, helpful.

about we here. the So talk delays

think performing these first I delays? guess be, I my through question looking I are has very performance the well. what's think new how But maybe, the causing been model. but particularly been? delayed, I more Because would of These more So then clubs importantly am like they've

that well actually right, for and recognize then guidance for given bode should So you 'XX. specific haven't 'XX,

Bahram Akradi

Absolutely.

to get team very to outside our to - Being our initial have is then we that the be of control. able professional I there everything group launched, is want - work building is within that. So we something are things get clear. And our at permits control.

you sometimes of we outside But or our give electrical started, permit, municipalities plumbing and will I their to it can't permits completely get and control just the take is mean. time their

inspection go. have once through the then and we end, start, come we we health to And we can the health get building then to permits. other to inspectors in have once the the So

a of and here. get those little non-event You the the outside occupancy control and in of situation permit a it's of really frankly just are some construction, as your delay completely on bit a

the in three positive. EBITDA after negative two, contribution is slightly months clubs two revenue or to a Our the first in margin either months three positive months revenue

just on that's it anything, doesn't numbers. bit our the move a it's baked EBITDA, So the but little if into of really negative, already a needle

going to the get in up you really the and literally clubs X, hand, fourth on generating like generate will here But after of XX days other X or next look we're going quarter, the X going in to back, to in that. years those all we're and then nice it's all revenue EBITDA opened that but XXXX and open the start

So in satisfactory - we're continue management not we that EBITDA. to growth a here concern to group been as is deliver that and seeing looking the de-levering very and increase the us. forward we anything would that in us moving Everything to have

Brian Nagel

Bahram. Thanks, I appreciate the all color.

Bahram Akradi

you. Thank

Operator

Brian Harbour Morgan is Stanley. proceed. Please question next Our with from

Brian Harbour

wanted in-center I just well. to up as guys. morning question good thanks, revenue that follow about on Yes,

on to what training to will be takes is execute, specifically? of revenue? it that just actually Is some it's there out What these specifically more mentioned is revenue? just costs of that that more kind harvest going to You initiatives Is but hire of sort required? better some of capital launch of think like is roll required programs? that's time to or some those to any it drive you you have that to Do that you just guys

Bahram Akradi

And they in - Great have we we equivalent in weren't COVID okay. went really training, but question, through actually well, Brian. we clubs spa, doing as And - that the in had we were cafe. performing when then went they performed it's personal who through well clubs and before

we with go During basically stuff, backwards. everything shutdown the COVID, almost had

the each to, we hiring getting able we're And where hiring, more going just just came running isn't is it's way going focused been then trainers and with much back in it category as leaders reintroduction we the work. the casting the business, on of personal have those not real to

highest absolute the cast quality professional to trainers. have You

get then It's We're those a thing. happen So office. the we're in from to It is them placed, all the able to going all at growing. not support that all the once. It's and secured initiative from work and seeing progress.

team of we It's impact then to a the of are time take piece on the make we each good and roll in to to better to you each make like opportunity more benefits. like That's just nice a a it next going trainer have innovation money, at members and Life therapist dynamic Time as massage - stretch. significant going the more told is a our to have I really opportunity create for money with living good to income

Now in from down work Nothing community is progress. Time. continued to to That Nothing that, stopped. grab those has best come just on. continuing Life we the the continually it slowed talents has is with

I'm it it's not we're the So but again, - our seeing unsatisfied in-center, time, not in growing. take with going is overall growth to steadily just

Brian Harbour

Okay, sense. thank makes that you. Yes,

going kind if lean you it's CapEx differently going could into be more think at all is the what this you've think in may, asset-light of shift of forward but same you're even do fact, a you I Or just this of grow - quo. in you're CapEx? kind that Is restrained do you know Some to if if the don't of like thinking these? faster opportunities out. the quantum status called sense largely or this about if

Bahram Akradi

a of that able That's as give is different repeatedly, of finance I timing. basically can a to and level to continue get to great you with just EBITDA stated goal basically question two $X form. again. the my to a and horizon internally this it have we three our to in And - to personal I upfronts, the XXX% to that are significantly company to want EBITDA there to in we the in million with grow being just where $XX cash years, locations next growth do able is generated My million are it's

build battle get of the going sale-leaseback And as these sort Again to are just on we get also to big heavy. lean $XXX $XXX of right then, able through million, we to they can $XXX you million. to look to of those For of with fantastic shifts. $XXX heavier once the we're to EBITDA front them, kind million now, the go sort million then to be that a EBITDA,

more, big then news and so And has have grow more of well. as this take this, EBITDA and just great we completely can control EBITDA, are we'll of grown revenue. the that we cash the our under grow the when to We is, balancing excess can reduce all the the significantly absolutely, narrative. We flow we leverage, opportunity battleships grow and revenue do

going are want just I also We be to clear. our sale-leasebacks. to do continue to

intention strategy, ones right so now of have to well. that company changing ever of layering but much on asset-light the and we're the of company on asset-light it's We more based macroeconomics, early chosen bigger as the later no have then from the the on advantage we the of opportunity boxes just strategy has take

Brian Harbour

Thank you.

Operator

Our Please next Robbie is Bank of from question America. with Ohmes proceed.

Robbie Ohmes

Hi, us to getting. you're you if wanted an on update could continued thinking good Hi, morning. sort I see, of benefit how about the give pricing you're Bahram,

- $XXX I year going long monthly is to that is up? a was membership think and half going can year? think Can to last next how running how much back of the keep the year. around now average you and up for about this you that continue think to it are - you be do end the versus And tailwind of XX% dues we're growing? I Where

Bahram Akradi

the covered have new entirely adjusted we the manage in, coming prices I've to for we the customers that, As want. experience

well or waitlist. about so currently doing they're actually had X have we many that clubs a we X clubs that So on so have

through and the but want. we will experience taking that with the in the people we still these continue ways go as help take that these delivering using basically call in of to waitlist, we're in, the clubs memberships people are forms the Now, able them to

time, we changes the are an At and of same we has entirely as completely experiential this - deliver want the experience the controlling has price again Company. been a allowed function to

month. everybody I'm So the if given that month new right on everybody was joined million will people is cover call benefit any a million ever million at the lower about suicide. be the when no rates, a a who there a $XX dues, have like member be - is where we a way that rack wins, with changes to there price versus this at glad this if such rate at - the $XX rate between $XX And you to rack rack earlier million, would difference $XX look because time who is brand do thing that because would that on

increase However bump very very know we where like rate. systematically a a to of amount we attrition what have pass a have do very, big massive it we AI with that the up or sophisticated of satisfaction use dues the complete supply, is on opportunity continually slight doesn't

to even the the that - can that some they top we clubs as the bumps so with though revenue drop as customers continue get going of the and we of that out to dropping in revenue seeing And keep on dues new also dues see numbers, below in, XXXX and increase coming attrition rates we're people

we COVID. the We month now clubs over $X have clubs before - of had a went more million we significantly than through dues doing more

here report So to now. to we bad and it's extremely is way mean wish could something happy working I - balance the everything really try out, I but sit things right are out I with like

Robbie Ohmes

are maintenance lower on it million. center that something were thought. we or And that there ops the the think was guys we helpful. for I then seems And really just like was CapEx, $XX conversely, Bob, a maybe also Was I thing? would there? was timing that great. stay going it you - double doing Or follow-up, this then year-over-year. Is than have Does That's That's that? expense how lower quarter, expecting think than is a lower the center like

Robert Houghton

we and year Yes. in part, that's out. always that's timing. invest something I to will do that mean the protect remember, second member we'll and To experience, answer Robbie, just for year

So timing. that's just

previously, to relates of clubs we've rewiring sustainable. it made in I the with That's and ops sustainable one change about that's not As Bahram operate. function that's and how company quarter that our center of and a talked the that

going So you to should benefit forward. expect see that

Robbie Ohmes

Thank That's you. great.

Operator

Our Please next Woronka Bank. from is Deutsche with question Chris proceed.

Chris Woronka

memberships maybe you guys. you sites? an can Wanted a here. markets of issue. out you're to prioritize guess slightly asset-light what's back the here I clubs. which way understand where obviously, you But decision you you morning in these when - cannibalize how do a - - most important to to evaluating drives what's the get, go a of pick that the can like I of come don't like to good lot be more question the, trying from want Just number and mean wouldn't order Hi, don't get, time, margin? one store There's not what to rank terms a existing is different of your pricing but over that department old it

Bahram Akradi

great Great, question. Yes.

First, demographics, what locations way those want want to strategy that of services be decide we in. Then and markets, and the community. studied the deliver exactly in what to we is we best deliver what's we best - on products the product to type the

But that's And or all in clubs with acres and with XX one so geographical big markets, sometimes based everything your urban acres or things land go big does XX acres by under the allow on do not the more situation when big, XX fantastic. roof. of you the one, to build you boxes

delivered the form some XX,XXX do class those total we So we then but and services feet deliver best of of and components of in some product we some the in locations, product assortment XX,XXXf XX,XXX in be that deliver it our offer. may square or we or in the

downtown contribution like at XX% Austin is clubs have We margin.

it's square feet. and XX,XXX - So only

- from, represented Time in market service and network these got provide that. can all and of have community, the we brands, the on those amazing have model mean and brands be the a be can as just brands go we all go choose just opportunity it's enough have on [Strike] ultra-fit, our a feel I and we to of deliver that have we of we So clubs the we that Life we'll I part is a brands of like each and Alpha, profitable ahead properly then we we've if will deliver can assemble and business and as

- And couple and the maybe where big, shows they it then big one the apart. a have XX whole the So sometimes, become sort smaller you in miles opportunity of have between clubs, you of opportunity thing that to together. put the and

been - So another and for team been did here to to time. - Prior XX about doing Life this at we've I prior I it XX my that Time, that we've years. years for

So development the all boxes' and selecting We're on with IRR into of after They're depending we've a targeting and sites sale-leaseback go that sizes the high profitability. different XXs, and lease. situation been low if types XXs can strategy similar all we always delivering just change. or

Chris Woronka

I Okay, appreciate that.

we growth, - not next want we any and but to Thanks. if we're trying you in-center variables sanity have add to we're units forecasting to is a there however to I and you still I going sense. we're not I going of talking define in through mean in to to not margin question wouldn't economists reason And a year? I up layer - think ask get a number in-depth, if a mean, just just little we of is all is next know significant we know those not which add to flow reason are pricing I check. So directional that think not there roughly year, that that revenue you're - positive yet, know Just but might to wanted we XXXX bit growth expansion? any about

Bahram Akradi

of we as margins. the let's well, last on look, piece talk about your question - So

- go I you - you same grow? EBITDA on at could high can all - end the clubs - a in to end months so then and right put pressure and or put a XX%, quarter level as on it put can of of that XX.X% of to get see, little margin go a But can yes. on is contribution positive, margin just believe and open as I XX.X% what that margin depends low out deliver ahead those that, The confidently time how bit and margins and So ramp that XX% that can to the the will So negative we end five the you, the now, lower really is rough we and just forward. clubs we tough, push many it from negative it answer XX% of pretty contribution can that those going or

of into our opportunities And to lot double-digit, I at and - a as digits just guidance that's And will line, concern a been, to ahead double delivering far commitment we bottom expectation that goal. I as the we I don't in but growth, the sort have range. has of I company get and my then any growing with grow us, company of number XXXX, for committed the making top - this point, of don't are want

Chris Woronka

thanks good, very guys. Okay,

Operator

with Politzer Dan from proceed. Please is Wells question next Our Fargo.

Dan Politzer

thanks everyone, far. morning good the for thus color Hi, all and

Bahram Akradi

Thank Dan. you,

Dan Politzer

back the to on this just year. is mean, conversations terms that I one, of year the reiterated conversations, guys this timing, along versus extent in $XXX follow these risk-reward wanted to the three are sure, have higher obviously, total months ago. wanted want that I received any and half update $XXX I - the and if make of the million yes, the you there's about that how would you rates year, of six you up tone Thanks. proceeds how point. lot the that we're in in are, and of get maybe now to million far this terms to how I progressed or even think of you sale-leasebacks you done at

Bahram Akradi

I'm what question, fully go to we with Great forward Dan. forward still set expecting have a goal. as

attack have that very trailing million $XXX to months the my this EBITDA working range XX been goal market. kind to get been has of of and We methodically, company then

for As I been I've years. and mentioned years working market to you that and have repeatedly, guys years

them I sale-leasebacks in just us will to those. we're with an no calls were the how to still on concerns planning to going we that getting It's update guys and getting in getting and have XX that terms matter through done give I of done, we're rate, those a next get of inbound get about days go you done.

Dan Politzer

And follow-up. then, it. my just Got for

but I it take OpEx, sure and centers of was I In implied bunch I of quarter, like third in the to think think open little that's want make sounds going clear, on right? a it higher as fourth touched new terms a the the I bit, quarter, center you've just you just to

were extent recessionary guess, new centers conservatism onset? is the in-center that little in revenues you new guidance or a I variables contribution bit any margins a that But like pressured of centers fourth just it these you quarter that at in that the have are you as Or reflecting to going be other the there as ramp-up come these open to on?

Bahram Akradi

exactly that Everything mentioned correct, Dan. is you're you

been club few bit openings, there's delayed little a So mentioned, have the as a I quite new some here.

going contribution contribution location going of the openings. they're next and to or So a positive. month, two take, three or flip opening on, negative they open are those they a And margin it's month, and we depending the all again, margin opening before early with then clubs lot are month now, got on a to

consideration. taken have we into So that

our our baked more XX%. of some mentioned execute standards the margin to they all get to cafe, locations in right? as to come those conservatism many to for at going than And we on lower XX%, the in-center, as continue in-centers We have we strategy the our macroeconomics, - a finally, have spa, are executing

So the customer, providing Athletic to revenue and of those we for Club but margin. They Country still EBITDA they that's because they differentiation lower come. those Life want the grow a services Time generate but at do more come more

- of So taken into consideration you. of you that what just are we're are all those those exactly giving covered for guidance all

Dan Politzer

Thanks so Appreciate it. much. Got the detail.

Bahram Akradi

you, Thank Dan.

Robert Houghton

Dan. Thanks,

Operator

with Simeon Capital from proceed. is Please question next Our BMO Siegel Markets.

Simeon Siegel

Thanks, summer. guys. nice you're all a hope having morning, Good

Bahram Akradi

you. Thank

Simeon Siegel

center maybe per average, some little about like you and your you you're growing the the recognizing I areas talking then so have Bahram, like higher different, about to in speak of could the number cities. and just other learnings right traffic - you update Recognize memberships centers presence how the of Manhattan, thinking are from the any

members And and guidance. the speak embedded quarter full-year guys. then that's the price you versus Bob, within revenue third to Thanks just could new

Bahram Akradi

Okay.

time. Let's those questions, a at through one go

First question, again.

Simeon Siegel

Just memberships per center.

Bahram Akradi

Okay.

So we clubs square and square from now XX,XXX feet. XX,XXX to the XXX,XXX ones have of we - with Simeon, literally urban some feet

take going I number that offer So per of a not know that and with I I can an divide know try that but can offer don't just of to membership center the we membership center, by have, a get memberships help anybody number up average, per a I it's you it that the anything. basically to can clubs don't

looking pricing of just of And as I of you the in clubs, we variety membership think the is of in with help for, we think number on different we're are maturity we right guys need of that what opening what market. to a giving the sort based maybe a you memberships perspective number

So mean that I offer. creating to of we the frankly to without how of that there's the out, average don't I know nothing more variety answer the vastness because products confusion

second The question?

Simeon Siegel

Learning from high like opening clubs Manhattan. in traffic areas

Bahram Akradi

Yes.

is things. is terms what Life the to really lift of brand So are how we get now, we are Time seeing right on allowing processing

open team our we're and because group a only We are our that are then pre-sales have before will established bigger pool They're waitlist up, getting about XX there. days, waitlist. we getting approach sure the - of clubs

right more we much, it. that and pretty much efficient the opening are hit club Simeon, and able steadily exceed to a now, have is goal dues for So it desired we

So than before. faster faster margin ever ever positive more contribution than margin are contribution clubs - reaching

to places is to do continue and So on, people. we're what grow pressing learning and keep Life Time keep opportunistic for and looking doing, products deliver to to services the the the brand

Robert Houghton

saw And clubs from year. then, price in to membership opening at opened the clubs the if prior second one on we we we were growth this look clubs XXXX opened XXXX the growth to membership 'XX Simeon, last quarter, growth, saw membership versus I'll pandemic, or take you and in saw that

protect member growth pricing we very pricing would membership we we've our to take taken, So actions that additional to they opened. only done of already complete. that see pricing, clubs benefit we've is that all price got sort first earlier, Any experience. when what really due broad-based mentioned it's regardless already across were The of that Bahram

Simeon Siegel

a luck of Great, year. Best the thanks of lot for guys. rest

Robert Houghton

Thanks, Simeon.

Bahram Akradi

you. Thank

Operator

is Please question Mizuho Securities. next with Our proceed. from John Baumgartner

John Baumgartner

services, you that the new the of Bahram, whether pay for the been I you're XX and these past, you're with new think most experience into to rack sort that sensitivity, rates picking thanks seals the I the questions. pricing the Simeon's as you you've get months couples, and AI, on question. you're it's know the over as offering the dig up deal terms new demographics, about when facilities overcrowded morning, Good to and just of XX getting you applying surprising to new guess singles, wanted the addressing you sign-up. willingness new learnings these follow what's in you learning I of families, sort amenities at don't When gaining that up, data. member or look

Bahram Akradi

Time seeing are in growth, That's XXX is customer are be this the what membership want any it's They price are last we experience Life refuses They and or and learning you the - is the I not units, night. XXX% that's and experience. pretty daughter what it working you talking Hi, - passionate see Well, cannot our customer is I we deliver to committed just zero, effect. live the somewhere is need or brand or impact metrics has that Life insensitive that to close that - appreciative interested XXX. you the there Time see either just that member to to is to Time, so committed my XXX% I people the what's basically to is Life about to XXX one being doesn't just the be done have are to learning, a was the and

they new to brand close buying one the are one, a house from move when back, another they go they state So to Life Time up. opening

can we we need us more worked, our we've given the all on locations, control to so to to the this leverage, all experience narrative continue the what had. than going amazing right - the offer So our muscle ever now, and more that's they customer of has around we're opportunities brand focus getting are power is

The experienced to going back, there's - a on read I stuff just - we're is like that's we emphasize, to a wishy-washy, cost cost amount of efficiencies, the not try continue you at like and on to cost-conscious efficiencies, execute narrative that, cost learning broken same a conscious coming and can't the learning. about I so of time, have the have cost lot focused that control. And people but the control you can't I tremendous efficiencies. been cost record, be

company. rewired the We

make that serve lead ease There they more be it's decisions is long better and general control, is I robustly cost can to to zero. business can more we with So customers rewired think the decisions faster, more for on from so focus coming make our structural our that zero efficiency and a term. responsive literally

and general, how instruction the on never what for been quality be the want are delivering and well, experience to and to more the every we the and the the has for company every XXX% all inspections of brand right is maximum see that. on the working homogeneous that customer. the aligned That's inspections succinct club, - we delivering focus lead you're Our expectation, is results

John Baumgartner

loss about And ask big the market. your that. to just that Thanks wanted weight drugs are picture hitting I for then new

the individuals new for Your than your about doing you who for the it that for of how membership some are to you Aurora them think the it, folks extent, different of unlock folks pharma, active a out towards some for the active integrate skews there. market And you business? time, you're but in membership does may with in outreach more for about do can opportunities thought be the base pharma these older target first base, complementing like

I mentioned business personal the how could about you. from this morning, curious think some macro programs, on impact that you side. training, the potential apply. Thank the pharma think of your the stretching you the I'm

Bahram Akradi

been weight. that - reality any bone The company, mention of would a names, I eat, eventual suppresses question. don't because people I've whenever your won't I muscle us density. and were and impact That's of of you think fitness take it if taking great particular a purely we that appetite you then lose lose pill is and are that a is lose eventual it will to - pills maybe

it, okay. For bunch someone it's to take a and weight to a jump-start lose of of off get

on to stay detriment absolutely and to someone get health. their long-term things For is those to on

with actually is - loss, they're that and case. This very, impact that, other mean, will for will aspect, network else go, people they way group on gathering all people doesn't I their that learn of I weight joining and fewer club, very lesson it for business. our very, social always broad focused become everything together, have emphasize amazing will come small large it's that reasons. the the the but people been the then of classes get people's It's community, our these have social joining like country is club a beach again, social are aspect, clubs us we

a a our are - stuff, difference just these doing it's people we're sign-up factor. really seeing it's not in But because not

seeing, about are they are lose answered concerned we to weight, I case. not but correctly oh, hopefully you, this because join taking this didn't they definitely the So we person to it god, not that's Life us are nor that coming are particular Time, not for my drug

John Baumgartner

Thanks, Bahram.

Bahram Akradi

you. Thank

Operator

question-and-answer the end to We session. turn to have reached of back conference for I like closing the over would Bahram our comments.

Bahram Akradi

next and see hopefully looking appreciative questions, the just guys you we're of between or continue in and quarter. Now everybody to great all forward

Operator

today's conclude will This you. conference. Thank

your thank you this You may lines disconnect for your participation. and at time

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