Life Time (LTH) 24 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Ken Cooper	executive
Erik Weaver	executive
Bahram Akradi	executive
Brian Nagel	analyst
John Heinbockel	analyst
Megan Christine Alexander	analyst
Chris Woronka	analyst
Michael Samuel Hirsh	analyst
Alexander Perry	analyst
Alex Fuhrman	analyst
Owen Rickert	analyst
Logan Reich	analyst

Call transcript

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Operator

Greetings, and welcome to the Life Time Group Holdings, Inc. Q3 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ken Cooper, Investor Relations. ahead. go Please

Ken Cooper

Chairman thank Quarter and Call. joining for CFO. MacCready, us me Executive Eric Good President Vice Life you Time Third and Founder, Bran Akradi XXXX are Conference CEO; Group the and today Weaver, morning, Bahram for and Holdings With Earnings

EBITDA factors a During today. discuss from earnings GAAP what debt that turn risk SEC morning, which actual Relations may adjusted comprehensive included which financial a section the results of adjusted will There company's information, those of number to company's statements, along issued the Eric. forward-looking to Investor as discussion in adjusted company The materially and website. that, With the cash the to to measures this our filings, comparable EBITDA, including reconciliations you call the review. diluted refer or to the forward-looking filed most cause flow. will company measures, net net made EPS free over I our we directly with statements net are with adjusted are certain This SEC to ratio on risks leverage is encouraged income, call, applicable debt of differ when release make in the the will involve the and X-K and and uncertainties also non-GAAP

Erik Weaver

you morning. we found joining Thank be details you, excited this this earnings which full appreciate quarter share good the release us our of We and in third with the morning. results, Ken, everyone. morning, to We're issued you can

to prior to $XXX, were XX% higher ended the in memberships with XX% in the period million $XXX enrollment dues increased combined XXX,XXX. Average last membership than in-center quarter, $XXX and million, membership year compared third the an monthly an total the XX% period. increase end in EBITDA of year year of third XX.X% margin $X.X quarter Adjusted increased XXXX. in year quarter $X.XX to million per net earnings prior was per compared last period. basis third third quarter XXXX. Net total for revenue Center XX% fees EBITDA third $XX.X in quarter the the was $X.XX revenue the was share quarter $X.XX and hold driven third in increase prior of Average XXX% more and quarter by memberships, of at was up When million. XXX,XXX X% revenue. an the at from an million versus last digital to million memberships. dues a per year. our increase basis for compared to as increase the For to the to $XXX.X on a million third the share compared increased in an increased Adjusted $XX.X to $XX.X quarter from quarter in of million, year income points and increase as approximately quarter and third versus was income versus $XX.X Diluted benefit dues approximately $XXX the membership $XXX.X from versus XX% the XXXX continue center period adjusted This the share we activity. on prior per adjusted XXX our $X.XX increased

of million by XX% the as provided compared $XXX to quarter activities XXXX. increased cash Net to operating third

period. cash in $XXX by flow achieved million Free flow For $XXX compared million to the increased consecutive prior cash quarter, positive year the third to quarter free second the we

now period. net proceeds. EBITDA quarter pass land includes sale-leaseback the We the sale prior X.Xx proceeds the to versus third we of for number and With reduced adjusted in call to year in to cash the $XX over quarter, to debt that, our X.Xx prior flow I will million this achieved leverage Bahram. free these While positive

Bahram Akradi

you, team going for extend me possible. this than the numbers who my for themselves. that to thanks remarks my great and made Thank speak our to XX,XXX doing keep short more you let shared job members I'm with very such fantastic performance Eric, a Eric just

never challenges many our As you but team every improving am of the satisfied, last last transforming Life and with years, ever the the Time. We over as of responded over years. I've I pleased accomplishments know, to I am been of reinventing, X as entire few aspect the presented

today, we've as before. with engaging brand, members and our our We our never deeply elevated we're and evolved clubs

business experiences love that efficiency. in version Our we industry. highest At structure by in maximize ever member the the and health We are, quality the far, we members Life to Time. the facilities been. we leisure best have and our Today, the organizational rewired best ourselves have time, same offer of

Our spectacular, exceeded membership for set ourselves: and performance and momentum We today. adjusted continues and has financial free EBITDA, goal been flow cash it we metric EPS. every every revenue, retention,

balance our deleveraged have are flow, EBITDA continuing our generating adjusted will on we and cash free focus revenue be deliver double-digit to and we that sheet, growth. Now

revenue As EBITDA range are release, our press guidance to a million guidance you range to raising in of billion. this $X.XXX adjusted a read and billion $XXX to we of morning's million. $XXX to $X.XXX

We looking questions are forward take now to your

Operator

Thank you.

session. question-and-answer Instructions]. Now we conduct our [Operator

from question Nagel first coming is Our Oppenheimer. from Brian

Brian Nagel

First through Life you is as and debt be below Time the towards targets now about, say, looking smaller very I on work together. there, we maybe previously. side, picture thinking How one or nice the ratio balance openings. on guess, your bit particularly Once all them new on along have quarter. questions. profile XXXX sort a I of we the one the should start bigger the two going at sheet, articulated But off, so put growth picture, bigger of again, it's of

actually estimates second And as question quarterly for for you are to the now, the we just guidance I'm this you well? asking the guess but term, then lifted your just guidance internal quarter shorter with don't guidance, the this and increase have year. I lifting targets [indiscernible] respect own is once again, question is, I with guidance give

Bahram Akradi

Okay.

let So start your we with first question. me --

think targeted would EBITDA appropriate billion X is estate, debt real $X.XX on market is is considering Our X.XX $X.X our fact have to that of $X price EBITDA company, more didn't billion. we we have that, range for X.X. billion. debt-to-EBITDA to over I -- be $X.XX that like I That's to own billion like to If the the will our to

such Life brand an brand. an such incredible is So Time It's paying incredible dividend.

thanks balance been we leverage to of want has sheet match had brand. where team, Our partners getting been mindset everybody, our that we that And Eric, to to. to our and steadfast has the kind

hand. company that positive is has flow the have different thing other company that is in after their basically that growth kind capital cash its I The in destiny is company. a It's of a of own the mind kind

is everybody it's mind, say So of a about when make continue we we better 'XX. basically to what's growth even looks $XX the cash our the of to million net sure rest our square that, over chasing deals XXX to large-format or pipeline to pocket equivalent million year. have 'XX, And we million the can in of different of I that, $XX flow to right have pipeline two, uphold out it feet and now. and per in of manage will to are we company. The intended take continue guided for going The able brand; we we're a, probably generate deliver is $XX sort per incremental to so and we and location. to the excellent And and per grow free results 'XX looks XXX,XXX for good build. $XXX And very million our

going now has cash substantial which after still call modernization maintenance for we after the in have will additional be expedite So we what to interest lower free growth were couple it But projects than and have able cash that after is CapEx we last We CapEx, to of maintain days. flow capital. flow what accomplish been positive. significantly and interest, 'XX. and we can start significant free 'XX XXXX,

So first your that's really what question.

always anything deliver. we very We it of want all sure we we the to conservatively, share that we we sure to is, we is with means any that Eric guys you foresee high you, that. number make incorporate have one potential number number that's can to second to mean the macro I, guided a The we question doesn't is have or with headwinds All and hard you a very, be. miss. make that level don't want below give It can that confidence look, go

Erik Weaver

in Yes, business. the because seeing just trends we to increased guidance, the very add to still positive we're it that, obviously

XX% on and so EBITDA. adjusted on XX% And year-over-year half, implied XX% QX is then the second revenue growth adjusted and for on XX% for about guidance the a revenue And the about EBITDA. side on it's basis

still seeing. in the So very we're momentum business that great a

Operator

John Heinbockel from coming Our Guggenheim next is question from Securities.

John Heinbockel

segregate the I to years, How those XX to would you of do channels, the deals capacity want would you that a buildings, do in limit with right, out? to right? you more, you start eventually various know to how if out prefer about the you What that? you than your can talked XX is out, I ground-ups, XXX-plus the the take you XX segregate it do LOEs. think maybe pipeline. Bran, Residential to couple then organization's the And look more XX?Or club takeovers, would

Bahram Akradi

XX the XX right that No. now, could XX, XX, Actually, like the next already as probably I looks schedule as number to that XX, out think and can way year is be rolls to it XX now right expand.

we on we're pipeline deals. the So have working and

take are go a those others. And high-rise obviously, time. they are into they in that are the the put ones those we're ground longer resi longer the the been but buildings, time, pipeline of a that on have the much long gestations together, long deals ones time to some up working than for -- that And take there we the

we're feet sweetgreens. So building XX,XXX, -- from can opportunities. everybody answer XXX,XXX, XXX,XXX different else. XXX,XXX, building on square I of and variety and anywhere to as It's our to real -- XX,XXX square you not look feet a estate you what at have We're

in right we that us them for their and own for these have schedule timing the for the -- deals whole and the each developer, pipeline, of project. So the have it's

year be a ground lumpy. to of going What lot year that more be the they're could to our following mean be their more next I going is by is that and up. takeovers transformations, So clubs

a point. everybody blended So at and what about as half half them think this to recommend basically to I would really is

I think results living based lifetime of today, And on terms about of buildings into side incredible we're as the rate the that in we X they for that producing rent. actual owners business these we ramp of and seen is before years the as living the based number in about the have of in on them is in other apartment XX%, conversations of four getting the go we from buildings. the X, as attrition we're never Consistently, XX% for retention course, much have that more consistently, versus ramp faster. lifetime XX%

these So five, that have It's six, so we at look has It's not and can of increased, process. just place supporting. they thought locations in the a fact seven data. actually now

they a lot we So in of -- those discussions. are

X out John, there's I coming lot But probably would think look going as to about look X I other So to, XX online. up see half a like a at or be versus of those to of that period -- and take years X-year stuff. ground I period mix for guide a out, is half XX locations more I in the now, X-year right of everyone hey, right to

John Heinbockel

incentive I hard So people And revenue it right? are certainly that, -- right, per if then follow-up I the $XX. also expanding than to maybe a higher a that? think all naturally. Or you want How do your it's not it's engaging happens share offerings. It spend, like about right, wanted next think do that, with think you've several could Is per do just as theory, in wallet there is differently think But be to sell over you month years? the I member on to about there. anything accelerate that

Bahram Akradi

Yes.

personal dynamic has nice you we have team at job. three a and million million. clubs But with that, has And with been that done a job So One, you My a categories. doing there really $X despite have similar-sized done clubs clubs training. two, DPT, nicely. nice growing $X they're year in really doing have that our are DPT

happening more category, have practices bottom we each PT, top go And always we that clubs through terms XX more So areas to the in opportunity kids. risk going to do to are Time. is what's in Life time as XX, then there really more And exactly routinely. We Cafe, at Spa, focus opportunity. the on have that's where things well,

opportunity substantial doing then in that clubs in or say are exceptional or And is food amazing still there or PT Spa execute I there across I So there's to clubs think in performance when better not. the some board. are is and

have job and So job with the do better three big we to we we drivers to are do room F&B room have -- aggregately in even aggregate, with with have PT. better our Spa of in-center. Those

kids also one, a we with good that. Of is course, job do pretty but

Now fantastic. and don't told sure excited you sometimes was not a it, talked unit I MIORA, create to get doubling week, by the doubling is business right to month-over-month you need across a IP are is by club, once that. our and a we it's customer we profitable is October that roll We've every model goal get The is basically model. of while still goal out excited XX it. September I one journey least for over which MIORA. a the at is we you end now, we And done about Then the that then for sometimes the revenue to about this beauty My XX, Not that, was goal deliver the have back about important, guys market, locations have absolutely that two, that it. in would have August, say the country. can year, per probably of September. once but in three over perfect, one, we we

the need Chief Officer. You Science

it. have We

the already going space. You it's have to business the space, -- -- be has a like need freestanding you're customers. already so have to We we have

the demand. have We

that. got we So

are we LTH, of That's products. launch nutritional all supplements Time to just -- Life and about brand. have health We the

digital expect business but subscribers about not XX%, is I mean, year-on-year. that subscription grow XXX,XXX more than We to The growing year. over a in substantially XX% or significantly XXXX. that

increase partner are with million fuel X be now will We a the products opportunities to our X subscribers, different apparel partnerships and partners million products. LP -- will partners. to that of other revenue partnership, month we LTH the -- to over the the just that that

more and continuing anticipate foot company we brand the asset-light EBITDA brand more exceptional building that we our as locations, based of So revenue building to footprint, on out expand asset-light. continue ways building and expanding of power company and deliver to are the the we as well to and footprint, incredible for to our opportunities our roll the an incredibly square expand as look of revenue format revenue on EBITDA

So we deliver. expect to

I a don't Now I EBITDA goal. and very satisfied revenue want respectable to anything year, going But mentioned the to be before for that's a number. revenue very commit more to low double-digit obviously with the to and going than we to is XX% But which aren't XX% internal not like EBITDA, think that, not commit just more. per we're to we

you do we overpromising earlier, want or mentioned to I by any disappoint underdelivering. As and not investor

Operator

coming Your from next Stanley. is from question Megan Alexander Morgan

Megan Christine Alexander

the on just change maybe in touch target to leverage Wanted around Xx. the

talk about Can versus for about you just us? midpoint the prior. that a the bit talking thinking at X.X-ish You're that around

Bahram Akradi

No.

you think have might misunderstood. I

Moody's or before a BB that a believe held that the S&P to committed -- investors, investors of Thank get regardless by for us to critical strong three, but beginning wait to under or God, of another it's engage until we're said, three investors they We get bulge to corporate bracket the X.Xx. many point three of a to BB. company want giving large don't target which rate to strong give is the large, two some credit. the under us really basically is many We rating. so okay. quarter a really matches the Our is The even in hey, wanting was actually investors,

for last accomplish what very grateful this very, week. to are were able we we So

the I But EBITDA. BB needs company the to target strong It a that is makes under to a be I believe exactly numbers debt you. told Xx

For could our billion comfort entire fact real X.XX% enough me that sure, and the what debt retired you if just $X.X be estate sale gives have the by don't to completely leaseback. doing assets, is X.XX% be between

to what the on say, that under to one okay, is So -- now going easily end we're And let's going by of estimate Eric's -- to going step we're number between down least which at our gives year, our to estimate X.XX right target. is to be allows more us that revolver. is go be me X.XX X.XX

of growth really going where restrict the but growth much want as we we We feel it we it's that's doesn't, our can inside Megan, are to a grow both to to like the sheet So we have like by balance of non envelope there. capital. just a that feel and We opportunities that cost opportunity. be. they're as cheapest and get want brand excellent

Megan Christine Alexander

helpful. follow-up of sense. lot on really that. a a Makes just And That's maybe

I you as to about as you'd see? have that year. sale year the sale leasebacks are still you mostly talking sale do rates the could opportunistic? see about into what think the we better $X.X than come of are you start billion said that to closer proceeds Obviously, Is you much head you leaseback thinking to leasebacks. this in how kind of Are were like cap And XXXX. as market for starting what to

Bahram Akradi

question, Megan. Fantastic Yes.

robust. going incredibly So it's to be

that leaseback assets. of We million like of couple they of worth dollars, to $XXX are our conversations that inbound hundred sale we already outprovide if the from million sort have getting partners can

in. let's is and it as facilities ground-up to take to we What of If keep million. everybody, think we $XX So million could about $XXX as all way. reiterating keep we that this much telling XX $XX were million build capital,

even you million. number, off XX take million, that's those on it the if of $XX that million of take So $XXX $XXX

you clubs saying built, recycling to I'm you. is that know it if have The what we other portion of already

last two half at all paid least up format, of the year the the So still ground very, estate. or own we very for built large dozen large. we a now just amazing assets, all clubs, in super We have right real

these . those taken We haven't to back. sell

sense? incoming And our we've are year, recycle we I will to capital us ever the new is more done. attractive. $XXX that see money leasebacks about sell lease than net that by annual million, best favorable each than do worth basis. So million the offers take I sale on so factor of think no more million. and credit invested ground $XX Does that on when based of next up middle expect to the leaseback sale And make in million $XXX an $XX it

Operator

is Chris Bank. from from coming question Deutsche Next Woronka

Chris Woronka

So the assets, club takeovers Bahram, ultimately of obviously, when you're the, cash distinct are ROIC, that separate from conversion you talk some or you to I existing more and existing you're is on think any -- there some right, takeover, for yield about tend you case or revenue do flow you'll about like be solving something a of better club more free the whether look those at for guess, rent to solving opportunities, it's to or -- upside builds, models. the which when new kind way of that more or an operating think to opportunity center Is opportunity to just means in , existing a is there get there or surprised better an you?

Bahram Akradi

new have times, already in somebody club of have Tampa just some has it's deals, just just at facility in providing a One, been Club build a I give would TI took with Not in right starts we take this those the We landlord great one and clubs the we the November. Atlanta. -- took that approved for incredible things in it dollars. opened zoning, The and the a on I open One When Tampa, Both and Atlanta location else, benefit the additional from as out. out us all. package this is summer, year in year, think, two already opened TI to Detroit in we got from Landers basically business. one the it -- like lease, will is gave you club many last you August, a two and we you Tampa. year go I'll in last club examples.

challenges, some So it's get-go. just literally it designed redesign -- from it it but -- we cuts through a

zoned from we're is sometimes We're then getting completely that And that piece a [indiscernible]. use. rebuilt getting we brand-new the But of it's scratch fact really land. shell like a for already a and it's

instead year Now because and the curb you so. XX have takes XX the have gutter, months a taking years, of to you have zoning, you it or that do all

we expect to same exactly it Then type return. of deliver the

and going if be return do. Our we business it plan it excited things of a than has to isn't go the these things about other rate lower into

So same at return, is on a We that that to net of way. these rate in speaking, look XX% and capital generally XX% basis. the IRR -- always invested

there And because might strategic. so take it's and are other strategic, extremely some that -- then there are assets are some over you

what square probably how give model the feet Otherwise, better go a about you your to how You're Tennis $XX can little really format other we intending of your to guys to But try some that maybe to we hard soon hundreds is want is is can get Pickleball with per with thousand to is you try or "Oh create really bit to it blends best all help for it. anticipates, it enough it And as to or schedule you a something going guiding of ground-up way with really, just quarter opening per do in. I we a different. to work, my make might you a if as deal are the easy capital XX many invested million, commit need you're something million you in get of that to to about really all XX equivalent, XX, god, $XX large that net clubs. work,

So give we guys it to and you simplify and manage to easier. a way try will that much it's just -- model

Chris Woronka

revenue together brand yes, branded we'd how any ultimately And know that Is that. appreciate it? how to Is going on you'll if do? have framework a put are you going you full could. I you doing. on how way member digital certainly LTH the whenever Or for any quick reached a super follow-up, do be Okay. plus measure it per That's based you've things the there to per I you now color opportunity member? be potential that And in-center that is? the generate just big helpful. And on to

Bahram Akradi

look the Look Yes. X my companies Thorn. top because high than props at like to myself give No, brands, products but I bunch X, really quality, think other their either I'm LTH at there you of great production, take Thorn we going that's might a really just going is. are not and to -- not regulated trust look take to high-quality to to put I is that by. generally drugs at a is because pills XX I like really, rare product other what want and some brands, I'm they're or in Thorn. But not hard come for tested body about a supplement the high-quality which Very anything products take very why my day. nutritional are, to are it

But -- absolute we've the for products. growing. Athletic event this scale subscribers been didn't really discipline growing to I to energy have XXX,XXX really have the enough emphasize it. we behind We years So a best Time produce month. with had at Life is now XX-plus subscription put didn't

billion to sit is the Our to business a XX could be billion growing. business. X years, time billion, and is XXX $XXX supplement can the keep impressions, -- brand is easily growing build now it's partnerships we The that XXX going years

better Life nobody than so space a And Time. in that right win has to and

$X.X my not I long-term my vision that is, XXXX, yes, So that XXXX not of thing. with built than term, business or out really vision have achieved we billion long my a haven't

in and you're that it's not you It's There stuff there tested just So for it's do money. you to because find there a take incredible that that lines, good the aren't can we and where in a about I take stays you really society half quantities think just not the going not and -- there. place it say it's supplement is lab, or there. they the to them many have some they're

Operator

is today question coming next from Michael Hirsch Our from Fargo. Wells

Michael Samuel Hirsh

centers. from Investor your target X% your of fully X% you Day, XXXX At that. growth announced ramped to exceeded long-term

XXXX? I'm about wondering So how we think just this should for

Bahram Akradi

my come going So good Bahram. state. taking and is give with give Eric to on. to I'm Michael, pills some XX shake this to a you Eric, those chance start

Erik Weaver

still still the little we're pricing. bit year some Yes, what a But the to term. is we're this X% modeling benefiting Yes. from of X% long

year going into forward, to next and that's to going X.X% begin normalize that range. So for

Michael Samuel Hirsh

as I know mentioned Okay. XX openings XXXX. And you XX then my follow-up, for to

You the had quarter. in then the Atlanta opened and location centers two new during third November.

specific XX target? So was versus I'm openings in seven to XX just there XXXX around led that to new the wondering, anything

Bahram Akradi

clubs. pushed and all year with year. in projects multiyear I We've a Yes. up had to in some XX delays again, XX now, getting right more, back. look of Well, big because humongous rather can looks a in say, like this at got you as than by make we everything for

still getting on not yet additional have are to just some some a they're we XX into get delayed pretty but -- yet, deals good And the done coming. additional XXX%, potentially it's but working is opportunity So 'XX. we for growth done,

in we very like irrelevant is, robust how the a whenever you, you, slower will in very core a very, been that capturing as opportunity on commit our make portfolio. we we then to sure we've to By drops for you. growth to about execute line. and way in-center desire or methodical continue we've business and to that company. which commit opening to manage to openings that to double-digit a the momentum And have have we in now -- very, club that keep X%, So a strong But what figure deliver MIORA opportunity we'll we entire much are it's we partnership so X% and we to of out known our we two that of the have we deliver own. to and you LTH much right could have so is -- told growth the down that really line the additional numbers time -- it then terms growth, bottom and and we've new we've enough told latitude delivering because top

Operator

is Bank Next from coming Perry America. Alex from of question

Alexander Perry

Are just dissect back in expectations to pieces and raise Just be seasonally sort which the you you gives of baking the to raise. than would the membership wanted What confidence see. to guidance I that continues a pricing, go of higher to churn go for less through maybe lift led to the tailwind it maybe for pieces normally you? for the a some seeing you're Is guide bit. you us?

Erik Weaver

This Yes. is Eric.

our seeing So a still couple We're from flow-through great membership here. really does. of things

So In you mentioned, very retention, that's be one big continues as piece. to strong.

You saw same-store was our was Bahram which And driver so about also driver is release, -- big XX%. demand of our another in to it talked very and DPT, earlier, that. strong sales a of big see continue that, we of north in probably our

as So continuing again, demand confidence to show gives us guidance. of strong that to able raise we've talked those all things in absolute are, just being about, the consumer,

Bahram Akradi

Alex, little a to speak to you with more color.

told When really the have or best seeing told and love lifetime. we I they retention. that of guys customers the We do love you all are we say you over, lifetime,

in like really XX of history ever We like better And years. in in have even could of -- top on looks seen it that that, the be best retention the it like the than XX, it's I have company XXXX.

a continue we're guys. to it at the with during not point, give, presentation to this the have given -- So it's but I Again, going retention. debt we're number

going we're want north finish XX% just year in to to -- the of I retention. So

that. resonating different really important for is there the that it's retention, anybody really And than understands giving and no than our us customer, metric results more this opportunities And does. business, more to It's have who else with strong. will business. partner it for create really the The that's products is once does, additional everything kind the retention brand But just no is the And into working strong And key. a the of reason. you we're follow. where

Alexander Perry

year quarter? even think just year-over-year fourth we membership expecting for same then we into given XXXX, Perfect. pricing, as you the structure And on move move as to the then next price lift And level about year, your you're you you of higher demand the likely reset the into prices will are as start seeing? pricing

Bahram Akradi

where athletic Look, a people's now want company other on destination. customers. as the place we have not just with place, be It's want to using the largely We I it's see about think be. day. They're second to we club to average facilities we every third country gym, our the repositioned

is now another that So actually, strong retention strongly exceptional desirability on reason even we do for right in working high, all-time the more at to can we deliver Ram is the is RVPs that okay, and of that this what is are engagement place operations, ], estate, every That's all aspect and Club everybody, President [ with work lead today all me, of then real business. strategic the and generals. per our really taking the an

that in any see roll pricing you at level the then gives the we day. that a It's adjust have busy day. that we is out, visits a demand And want throughout power. X,XXX as more getting where way we clubs to the we At that per price really So visits really that don't club creating are day. that function the level, of

the okay, a fee. started more maybe is just an key locations. with now Now few. We're starting We enrollment there is,

to location other at XX,XXX swipes, that XX,XXX in a they locations few this swipes looking $XXX fee is where to equivalent. order they we room enrollment have a more memberships. we're The type to $XXX manage format are of clubs club. to Now month, get a the in large at raise $X,XXX, have sitting that XX,XXX, hundred box, from

XX,XXX to. going to So yet -- we've there's that people not necessarily get XX,XXX, club got to

location So by location. it's club-by-club

opportunity right now. We have

think few that raise like to to bit. we really based or want the I been has club. that. on just not gotten a for have a customer moved weeks, a little just rates It's there it's X the everything because something I particular rack into And managing experience, this told you, few last weeks right mix rate quite club

the the customer oh, then between with a pricing And that, thing month once a is you that gap of having that two for rate. it. that's and unacceptable clear time completely hard Nobody And is run of a rate the big indication rate. real rack is a rack or

through investors that difference the price. rate sales gap extremely good price ending told maybe everybody below that tested opportunity that fight bit we've the macro company. year retailers a between rack million, $XX versus so guys you recognize that paying million, that, are in people there's you, if same-store rate that getting same their to are churn, don't rate, paying below pay number it. you per other you've appreciate not million to who's the rack And that they're this because swipes, either can little $XX rate X%, creates natural Or well the the and gives buffered legacy a increase know you that pass good is of and for draw and that we then $XX people to So because what go you you loyalty coming below pays for are are Then keep get the it, from rack reservoir the they people those $XX, from per still new they're coming in, dues happy $XX, to two number you that their basically tough ways or you we're draw even up of a a memberships more we a of people a on and when that. have maybe down good $XX everybody

Operator

Craig-Hallum. coming Fuhrman Next Alex from is from question

Alex Fuhrman

this next should expanding. out clubs you here. alluded the number your months, Bahram, and Does over and were of saying, to that what of price past new the see member it in members just mean just meaningful pretty is October, gap now between paying like reach rate rack we kind couple that a the months Great. the to up you of those starting the they're but new what in over to September looks of you clubs expect taken couple in at you've

Bahram Akradi

No, just It's a good question. clubs. not those it's

They're does not through, So people be being it's can increase months will will in rack suggesting four. the ago. XX,XXX XXX,XXX like year. XX,XXX platform. just going the It X more rack basically the a or people -- It's whole members than not low skip, example up low right probably Whatever -- through leather. it those rate paying once to membership below members very year. or rate. as XX,XXX. or paying now. eight I XXX,XXX are goes increase five get X signed We times dues we the clubs there's sort we a think, like They're rack guys that lovely AI categories. And or the program, rate, a increases systematic have we across seven, the these that all get don't months is go those there hitting so all of of X, it members but -- give generally are an

over gotten So have seen want developed there best I've is And of say, last, significantly a incremental now that I very, very X, X XX,XXX, even when and incremental it's sophisticated the algorithm those we over version out it we're this last the year, years of the AI better. year out out, any attrition see XX,XXX, right it. hardly go hardly we attrition we notices XX,XXX or letters see any to go

fine-tuned we extremely well. have that So

Operator

Rockland Capital Next from question is Rickert Markets. coming from Owen

Owen Rickert

vast providing as And portfolio it plan performing. these? equipment, the do these what phenomenal these may the And another are sounds be forward the of look very what's in new of I of high look like all is ones? a But you in just with the Is some of how all, quarter. majority locations? going that not more high renovation on again performing, at it we offerings? club, clubs getting at guess goal Congrats the the take as clubs

Bahram Akradi

Yes.

we that facility running need Do the So change end analytical for the need to right to add? vision or location? It one leadership for single really opportunity? some things we the a need to look. every we we is are that in doesn't Do the full is are particular comprehensive every of the detailed need is we change to add do It's for What's changes plan comprehensive a plan now of we every company, Internally, opportunity? the are to in Do do? What programming? at single works the location plan, those. Where need location. location. business what of we to business. stock make business What

this for at time opportunity will So execute this those that. that, ultimate of go appropriately we is least at know all then what -- And the in things. we

So systematically to it. I more a that answer. it's that place you a you against The exact very very, can just -- in then have process execute question. only is not that basically going we the strategy go give it's tell I'm and thing evaluate we phenomenal robust

Operator

is coming Next Capital RBC Reich Markets. Logan question from from

Logan Reich

flow-through, one is one on incremental had the maybe just for I Eric. this

XX% the aren't running it expansion. Just to looks of know margin quarters. guiding several it's XX% on EBITDA, the towards sort the incremental over just several flow-through guys given revenue us of quarters, been I to marginal past flow-through like Obviously, But the you past takes though around range. over the I'm looks guess I of But some cost as some puts that fixed sort get and be and the incremental leverage. driving would flow-through margins in guys be there's curious you And would that would similar potentially what obviously, there. takes It in puts such down

us us just through you walk could through So walk -- maybe those?

Erik Weaver

make as of things enough we're that that we back said room one we've centers mean really need we the is reinvest sure ourselves leaving into to. I the of kind Yes. to want to

and forward, doing QX condition. clubs and look those keeping we're that and that it sure we're new So and as making to we making like make all into things maintenance that, in like repairs all sure the that

in. So the of one things the to on it we're retention. that as do that's be we Bahram going to continuing flow-through, again, we're the before, mentioned see investing side, about on talked But

lot from a of get flow that. through we So

strong that's main as very of in then that's side, the I mentioned And quarter. third been especially the the And on very, drivers. also so for one us, DPT

Bahram Akradi

year. can't at why beginning the the -- issue we look guided we wanting you are you EBITDA margin you from question to that And caution you to numbers. people guys guys to smart that are The of asked, on was XX.X% XX.X% is all the

a more? the just why sure disappoint. not is can't ratcheting we to to therefore, #X to tweak can't do want of we the and guide brand to So founder backwards. make your that more. models company don't reason say as said, that continues We do we elevate we just visionary is don't And keep Eric like mine number goes to of you it like the and goal we didn't have up. said There no for because you go So

Now I take suggest it than EBITDA don't XX% would hey, much higher margin.

into doing brands, actually range want margin. the think it do you And to to. if They're win. keep new. the we The a our guys we education. wise all I like many They it than -- is proper getting the margin, incentives. -- is make are things, XX% all let And into clubs programming, the facilities those we to into a adequate our invest to pass that of guide that our to know don't modernized. companies have game this those members more are proper delivering Now anybody takes sure EBITDA get then I don't how we are I but thing that that that through, know is can team win

to starts this company expectations higher things higher eventually, and up or those ludicrous If you wrong expectation. ratcheting the keep higher achieve doing

areas, they -- guide they're when to actually down. I grow, the Spa, we drag get maintain Cafe, of So to as grow the back don't that the XX% margin all super going to -- challenging the overexcited some of strong you

never -- Now club they to the will deliver make money. But more EBITDA because to margin. going the total margin get is the XX% going is pressed

cafe, it's -- a get of the to the the you very more people is side more people The are great. is spa, doing more better margin on a those low. for the which it The better great the That's are go engagements, more businesses margin. So negative it, engagement. does,

Operator

our of Please end turn and back go Founder I'd floor Bahram like over to the closing Akradi remarks. the reached session. We CEO, for ahead. to question-and-answer

Bahram Akradi

so investors. really appreciate I all you, analysts, much. of you Thank

looking grateful promised literally feel I for we And year. really you position are results team are passionately seeing. We And you. giving what into deliver Time really in to great to accomplishments to couldn't We Life the the guys the fourth and really, be continue really, that the into this just next more to we're go delivering year. forward happy a like about to quarter

. great a I'm going So guys, have with to and that, you day. thank

Operator

Thank you. That does conclude today's teleconference.

You today. may wonderful time, for a this your your at participation lines day. have thank and you We disconnect

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