Is Life Time’s 30% Q1 2023 Revenue Boost a Sign of Post-Pandemic Fitness Boom?

Life Time, headquartered in Chanhassen, Minnesota, announced that it had generated $510.9 million in revenue during the first quarter of 2023, a 30.2 percent increase from the $392.3 million it earned in the same period of the previous year.

Life Time also revised its full-year adjusted EBITDA guidance upward by $30 million, to a range of $470 million to $490 million.

The company attributed the increase in revenue to the strong growth of membership dues and in-center revenues, which was driven by the continued expansion of centers and a higher utilization rate of in-center offerings among members.

In addition, net center memberships increased by around 39,000, surpassing the 25,000 net center memberships added in the first quarter of 2022. Overall memberships, including digital memberships, rose by approximately 9 percent to 813,500.

According to Bahram Akradi, Founder, Chairman, and CEO of Life Time, “We are very pleased with our start to fiscal 2023. We delivered record levels of revenue and adjusted EBITDA for the first quarter. We also delivered sequential revenue, profit and margin improvements over our strong fourth quarter 2022 performance. All of our strategic initiatives, together with our rewiring of the company, are delivering increasing revenue and higher margins. We are successfully opening new clubs, with faster ramping, in desirable locations across the country.”

Due to increased revenue and ongoing margin expansion efforts, the company’s net income and adjusted EBITDA also improved. Adjusted EBITDA rose by 195.8 percent, from $40.6 million in the same period to $120.1 million, while net income rose from a net loss of $38.0 million in the first quarter of 2022 to $27.5 million.

The primary factor driving up center operations expenses was the need for additional staffing to support increased usage of existing and new centers, as well as expanded programming, rising labor costs, and inflation in utility costs.

Life Time opened three new centers in the first quarter, bringing its total number of clubs to 164. The company plans to add seven more new centers before the end of the year.