Yahoo Finance Life Time Group Holdings Inc (LTH) Q1 2024 Earnings: Revenue Surpasses Expectations, Net Income ...
Revenue: Reached $596.7 million, an increase of 16.8% year-over-year, surpassing the estimate of $588.55 million.
Net Income: Reported at $24.9 million, down 9.5% from the previous year, falling short of the estimated $26.91 million.
Adjusted Net Income: Increased by 31.5% to $30.5 million, indicating strong operational efficiency.
Adjusted EBITDA: Grew by 21.6% to $146 million, reflecting improved profitability and cost management.
Membership Growth: Center memberships rose to 802,010, a 5% increase, supporting revenue growth.
Capital Expenditures: Total capital expenditures decreased by 8.2% to $156.8 million, aligning with strategic growth plans.
Net Debt Leverage Ratio: Improved significantly to 3.6x from 5.2x the previous year, highlighting stronger financial stability.
On May 1, 2024, Life Time Group Holdings Inc (NYSE:LTH) disclosed its financial outcomes for the first quarter ended March 31, 2024, through its 8-K filing. The company, a prominent lifestyle brand offering expansive health and wellness experiences, reported a significant revenue increase but a slight decline in net income compared to the previous year.
Financial Performance Overview
Life Time's total revenue for the quarter reached $596.7 million, marking a robust 16.8% increase from $510.9 million in the same period last year, and surpassing the analyst's estimate of $588.55 million. This growth was primarily driven by higher membership dues and in-center revenue, reflecting the brand's strong market appeal and customer retention strategies.
However, net income for the quarter was reported at $24.9 million, down from $27.5 million year-over-year, a decrease of 9.5%. This decline was attributed to one-time net benefits in the previous year, including gains from sale-leaseback transactions and the sale of two triathlon events. Despite this, adjusted net income saw a significant rise, reaching $30.5 million, up 31.5% from $23.2 million, indicating strong underlying operational performance.
Operational and Strategic Developments
During the quarter, Life Time continued to expand its footprint, opening one new center, contributing to a total of 172 centers in operation. The company also reported a 5.0% increase in center memberships, demonstrating continued consumer interest and engagement.
Life Time's operational expenses mirrored its expansion, with center operations expenses climbing 17.4% to $321.9 million due to costs associated with new and ramping centers. General, administrative, and marketing expenses also rose by 15.1% to $48.9 million, reflecting increased share-based compensation and IT costs.
Liquidity, Cash Flow, and Outlook
The company's liquidity position remains solid, with total available liquidity standing at $242.7 million as of March 31, 2024. Cash flow from operations was strong, increasing by 21.7% to $90.4 million. However, total capital expenditures were $156.8 million, down 8.2% due to a decrease in growth capital expenditures.
Looking ahead, Life Time has raised its full-year revenue and Adjusted EBITDA guidance, anticipating continued growth and operational efficiency improvements. The company expects full-year revenue to be between $2,500 million and $2,530 million, representing a 13.5% increase at the midpoint compared to the previous year.
Investor and Analyst Perspectives
Bahram Akradi, Founder, Chairman, and CEO of Life Time, expressed satisfaction with the quarter's results, highlighting the brand's desirability and member engagement as key drivers of financial performance. "We are extremely pleased with our first quarter financial performance," Akradi stated, emphasizing the company's strategic initiatives aimed at enhancing shareholder value and customer satisfaction.
In conclusion, while Life Time's net income for the first quarter faced slight headwinds due to non-recurring benefits in the prior year, the company's revenue growth and strategic expansions paint a positive outlook. Investors and analysts will likely keep a close watch on the company's ability to maintain its growth trajectory and manage operational costs effectively in the upcoming quarters.
For detailed financial figures and future projections, interested parties are encouraged to access the full earnings call and supplementary materials provided on Life Time's investor relations webpage.
Explore the complete 8-K earnings release (here) from Life Time Group Holdings Inc for further details.
This article first appeared on GuruFocus.
