Life Time Group Holdings, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 218,897 $ 10,879 Restricted cash and cash equivalents 22,541 16,999 Accounts receivable, net 24,370 25,087 Center operating supplies and inventories 70,666 60,266 Prepaid expenses and other current assets 53,630 52,826 Income tax receivable 20,162 4,918 Total current assets 410,266 170,975 Property and equipment, net 3,456,519 3,193,671 Goodwill 1,235,359 1,235,359 Operating lease right-of-use assets 2,449,274 2,313,311 Intangible assets, net 181,088 171,643 Other assets 94,369 67,578 Total assets $ 7,826,875 $ 7,152,537 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 91,758 $ 87,810 Construction accounts payable 134,485 101,551 Deferred revenue 55,782 58,252 Accrued expenses and other current liabilities 229,153 179,444 Current maturities of debt 22,965 22,584 Current maturities of operating lease liabilities 79,252 70,462 Total current liabilities 613,395 520,103 Long-term debt, net of current portion 1,489,908 1,513,157 Operating lease liabilities, net of current portion 2,532,962 2,381,094 Deferred income taxes, net 146,055 85,255 Other liabilities 59,203 42,578 Total liabilities 4,841,523 4,542,187 Commitments and contingencies (Note 12) Stockholders’ equity: Common stock, $ 0.01 par value per share; 500,000 shares authorized; 220,262 and 207,495 shares issued and outstanding, respectively. 2,203 2,075 Additional paid-in capital 3,164,932 3,041,645 Accumulated deficit ( 169,902 ) ( 420,573 ) Accumulated other comprehensive loss ( 11,881 ) ( 12,797 ) Total stockholders’ equity 2,985,352 2,610,350 Total liabilities and stockholders’ equity $ 7,826,875 $ 7,152,537 See notes to unaudited condensed consolidated financial statements. 3 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Center revenue $ 760,897 $ 674,775 $ 2,182,416 $ 1,900,267 Other revenue 21,752 18,459 67,743 57,445 Total revenue 782,649 693,234 2,250,159 1,957,712 Operating expenses: Center operations 414,328 371,134 1,189,240 1,048,544 Rent 87,511 78,575 251,866 225,804 General, administrative and marketing 59,840 57,737 179,361 159,836 Depreciation and amortization 75,094 69,451 219,001 205,068 Other operating expense 10,231 22,642 58,927 47,952 Total operating expenses 647,004 599,539 1,898,395 1,687,204 Income from operations 135,645 93,695 351,764 270,508 Other income (expense): Interest expense, net of interest income ( 18,440 ) ( 36,011 ) ( 65,331 ) ( 111,083 ) Equity in earnings (loss) of affiliates 149 ( 116 ) 170 ( 403 ) Other income 21,994 — 34,867 — Total other income (expense) 3,703 ( 36,127 ) ( 30,294 ) ( 111,486 ) Income before income taxes 139,348 57,568 321,470 159,022 Provision for income taxes 36,921 16,213 70,799 39,945 Net income $ 102,427 $ 41,355 $ 250,671 $ 119,077 Income per common share: Basic $ 0.47 $ 0.20 $ 1.15 $ 0.60 Diluted $ 0.45 $ 0.19 $ 1.11 $ 0.57 Weighted-average common shares outstanding: Basic 220,063 202,945 217,132 199,793 Diluted 226,007 214,633 225,075 207,841 See notes to unaudited condensed consolidated financial statements. 4 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 102,427 $ 41,355 $ 250,671 $ 119,077 Other comprehensive (loss) income: Foreign currency translation adjustments, net of tax of $ 0 ( 1,586 ) 1,266 2,391 ( 1,050 ) Derivative instruments: Unrealized gain, net of tax of $ 266 , $ 0 , $ 650 and $ 0 , respectively 718 — 1,715 — Realized gain reclassified from accumulated other comprehensive loss to earnings, net of tax of $( 626 ), $ 0 , $( 1,210 ) and $ 0 , respectively ( 1,674 ) — ( 3,190 ) — Other comprehensive (loss) income ( 2,542 ) 1,266 916 ( 1,050 ) Comprehensive income $ 99,885 $ 42,621 $ 251,587 $ 118,027 See notes to unaudited condensed consolidated financial statements. 5 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) (Unaudited) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Shares Amount Balance at June 30, 2025 219,902 $ 2,199 $ 3,148,712 $ ( 272,329 ) $ ( 9,339 ) $ 2,869,243 Net income — — — 102,427 — 102,427 Other comprehensive loss — — — — ( 2,542 ) ( 2,542 ) Share-based compensation — — 12,474 — — 12,474 Stock option exercises 293 3 3,747 — — 3,750 Issuances of common stock in connection with the vesting of restricted stock units 67 1 ( 1 ) — — — Balance at September 30, 2025 220,262 $ 2,203 $ 3,164,932 $ ( 169,902 ) $ ( 11,881 ) $ 2,985,352 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Shares Amount Balance at December 31, 2024 207,495 $ 2,075 $ 3,041,645 $ ( 420,573 ) $ ( 12,797 ) $ 2,610,350 Net income — — — 250,671 — 250,671 Other comprehensive income — — — — 916 916 Share-based compensation — — 34,646 — — 34,646 Stock option exercises 9,605 96 37,520 — — 37,616 Issuances of common stock in connection with the vesting of restricted stock units 1,268 13 ( 4,224 ) — — ( 4,211 ) Issuances of common stock in connection with the employee stock purchase plan 87 1 1,874 — — 1,875 Issuance of common stock in connection with an asset acquisition 1,355 13 39,717 — — 39,730 Settlement of accrued compensation liabilities through the issuance of common stock 452 5 13,754 — — 13,759 Balance at September 30, 2025 220,262 $ 2,203 $ 3,164,932 $ ( 169,902 ) $ ( 11,881 ) $ 2,985,352 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Shares Amount Balance at June 30, 2024 199,052 $ 1,990 $ 2,873,839 $ ( 499,091 ) $ ( 9,241 ) $ 2,367,497 Net income — — — 41,355 — 41,355 Other comprehensive income — — — — 1,266 1,266 Share-based compensation — — 9,265 — — 9,265 Stock option exercises 1,547 16 18,042 — — 18,058 Issuance of common stock in connection with a registered offering, net of issuance costs 6,000 60 124,297 — — 124,357 Issuances of common stock in connection with the vesting of restricted stock units 14 — 2 — — 2 Balance at September 30, 2024 206,613 $ 2,066 $ 3,025,445 $ ( 457,736 ) $ ( 7,975 ) $ 2,561,800 6 Table of Contents Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Shares Amount Balance at December 31, 2023 196,671 $ 1,967 $ 2,835,883 $ ( 576,813 ) $ ( 6,925 ) $ 2,254,112 Net income — — — 119,077 — 119,077 Other comprehensive loss — — — — ( 1,050 ) ( 1,050 ) Share-based compensation — — 27,216 — — 27,216 Stock option exercises 1,691 17 19,531 — — 19,548 Issuance of common stock in connection with a registered offering, net of issuance costs 6,000 60 124,297 — — 124,357 Issuances of common stock in connection with the vesting of restricted stock units 701 6 ( 986 ) — — ( 980 ) Issuances of common stock in connection with the employee stock purchase plan 103 1 1,461 — — 1,462 Settlement of accrued compensation liabilities through the issuance of common stock 1,447 15 18,043 — — 18,058 Balance at September 30, 2024 206,613 $ 2,066 $ 3,025,445 $ ( 457,736 ) $ ( 7,975 ) $ 2,561,800 See notes to unaudited condensed consolidated financial statements. 7 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 250,671 $ 119,077 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 219,001 205,068 Deferred income taxes 60,918 21,693 Share-based compensation 45,179 30,450 Non-cash rent expense 28,876 25,181 Impairment charges associated with long-lived assets 1,293 2,941 Loss (gain) on disposal of property and equipment, net 4,953 ( 6,548 ) Write-off of debt discounts and issuance costs — 3,510 Amortization of debt discounts and issuance costs 2,729 5,891 Changes in operating assets and liabilities 18,576 1,794 Other ( 1,530 ) 2,919 Net cash provided by operating activities 630,666 411,976 Cash flows from investing activities: Capital expenditures ( 586,980 ) ( 388,213 ) Proceeds from sale-leaseback transactions 172,683 207,714 Proceeds from the sale of land — 15,577 Other ( 21,786 ) 2,819 Net cash used in investing activities ( 436,083 ) ( 162,103 ) Cash flows from financing activities: Repayments of debt ( 14,292 ) ( 408,612 ) Proceeds from revolving credit facility 220,000 1,045,000 Repayments of revolving credit facility ( 230,000 ) ( 925,000 ) Repayments of finance lease liabilities ( 1,604 ) ( 626 ) Proceeds from financing obligations 10,300 4,300 Payments of debt discounts and issuance costs ( 628 ) ( 1,873 ) Proceeds from the issuance of common stock, net of issuance costs — 124,357 Proceeds from stock option exercises 37,616 19,548 Proceeds from issuances of common stock in connection with the employee stock purchase plan 1,875 1,462 Other ( 4,341 ) ( 1,304 ) Net cash provided by (used in) financing activities 18,926 ( 142,748 ) Effect of exchange rates on cash and cash equivalents and restricted cash and cash equivalents 51 ( 38 ) Increase in cash and cash equivalents and restricted cash and cash equivalents 213,560 107,087 Cash and cash equivalents and restricted cash and cash equivalents – beginning of period 27,878 29,966 Cash and cash equivalents and restricted cash and cash equivalents – end of period $ 241,438 $ 137,053 See notes to unaudited condensed consolidated financial statements. 8 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) 454 1. Nature of Business and Basis of Presentation Nature of Business Life Time Group Holdings, Inc. (collectively with its direct and indirect subsidiaries, “Life Time,” “we,” “our,” or the “Company”) is a holding company incorporated in the state of Delaware. As a holding company, Life Time Group Holdings, Inc. does not have its own independent assets or business operations, and all of our assets and business operations are through Life Time, Inc. and its direct and indirect subsidiaries. We are primarily dedicated to providing premium health, fitness and wellness experiences at our athletic country club destinations and via our comprehensive digital platform and portfolio of iconic athletic events – all with the objective of inspiring healthier, happier lives. We design, build and operate our athletic country club destinations that are distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. As of September 30, 2025, we operated 185 centers in 31 states and one Canadian province. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and as required by rules and regulations of the Securities and Exchange Commission (the “SEC”). While these statements reflect normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. When preparing financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All intercompany balances and transactions have been eliminated in consolidation. 2. Summary of Significant Accounting Policies Segment Reporting We have one operating segment and one reportable segment. Our segment derives revenues from customers by providing premium health, fitness and wellness experiences and products at our athletic country club destinations and via our comprehensive digital platform and portfolio of iconic athletic events – all with the objective of inspiring healthier, happier lives. We manage our business activities on a consolidated basis. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer (“CEO”). The CODM assesses performance for the segment and allocates resources based on consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Our CODM does not review segment assets at a different asset level and is regularly provided with only the consolidated expenses as noted on the face of the consolidated statements of operations. New Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (the “FASB”) issued guidance to enhance transparency of income tax disclosures. The updated guidance requires additional disclosures on income tax rate reconciliation and income taxes paid, among other things. We expect to adopt the accounting guidance for our Annual Report on Form 10-K for the year ended December 31, 2025. The adoption of the updated standard is not expected to have a material impact on our financial statements but will increase disclosures on rate reconciliation and income taxes paid by jurisdiction. In November 2024, the FASB issued guidance that requires public entities to disclose the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable, included in each relevant expense caption presented in its income statement. We expect to adopt this accounting guidance for our Annual Report on Form 9 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) 10-K for the year ended December 31, 2027. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. In September 2025, the FASB issued guidance that removes all references to software development project stages and requires that an entity capitalize software costs when both (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). We expect to adopt this accounting guidance for our Annual Report on Form 10-K for the year ended December 31, 2028. We are currently evaluating the impact that the updated standard will have on our financial statements. Fair Value Measurements The accounting guidance establishes a framework for measuring fair value and expanded disclosures about fair value measurements. The guidance applies to all assets and liabilities that are measured and reported on a fair value basis. This enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The guidance requires that each asset and liability carried at fair value be classified into one of the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts related to cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, income tax receivable, accounts payable and accrued liabilities approximate fair value. Fair Value Measurements on a Recurring Basis. As of September 30, 2025 and December 31, 2024, assets and liabilities that are measured at fair value on a recurring basis were as follows: September 30, 2025 Level 1 Level 2 Level 3 Total Assets: Interest rate swaps (1) $ — $ 2,562 $ — $ 2,562 Cash surrender value of life insurance policies (2) — 17,684 — 17,684 Total assets $ — $ 20,246 $ — $ 20,246 Liabilities: Interest rate swaps (1) $ — $ 4,016 $ — $ 4,016 Deferred compensation (3) 15,808 — — 15,808 Total liabilities $ 15,808 $ 4,016 $ — $ 19,824 December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash surrender value of life insurance policies (2) $ — $ 15,979 $ — $ 15,979 Liabilities: Deferred compensation (3) $ 13,575 $ — $ — $ 13,575 (1) Interest rate swaps are valued using pricing models that incorporate market interest rate curves that are observable at commonly quoted intervals for the full term of the swaps. (2) The life insurance policies are valued based on the underlying investment assets, which are priced using observable market data. 10 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) (3) Deferred compensation liabilities are valued based on the quoted market prices associated with the underlying assumed investments that have been selected by the plan participants. For more information regarding our interest rate swaps, see Note 7, Derivative Instruments and Hedging Activities. Long-term debt. At September 30, 2025 and December 31, 2024, the carrying value and fair value of our outstanding long-term debt was as follows: September 30, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value Long-term debt (1) $ 1,531,190 $ 1,536,828 $ 1,555,597 $ 1,551,222 (1) Excludes unamortized debt discounts and issuance costs. The fair value of our debt is based on the amount of future cash flows discounted using rates we would currently be able to realize for similar instruments of comparable maturity. If our long-term debt were recorded at fair value, it would be classified as Level 2 in the fair value hierarchy. For more information regarding our debt, see Note 8, Debt. Fair Value Measurements on a Nonrecurring Basis. Assets and liabilities that are measured at fair value on a nonrecurring basis primarily relate to our goodwill, intangible assets and other long-lived assets, which are remeasured when the derived fair value is below carrying value on our condensed consolidated balance sheets. For these assets, we do not periodically adjust carrying value to fair value except in the event of impairment. If we determine that impairment has occurred, the carrying value of the asset would be reduced to fair value and the difference would be recorded as a loss within operating income in our condensed consolidated statements of operations. We had no material remeasurements of such assets or liabilities to fair value during the three and nine months ended September 30, 2025 and 2024. Employee Retention Credits On March 27, 2020, Congress enacted the CARES Act to provide certain relief as a result of the COVID-19 pandemic. The CARES Act, among other things, provided for refundable payroll tax credits for employee retention, or employee retention credits. During the three and nine months ended September 30, 2025, the Company received $ 22.0 million and $ 34.9 million, respectively, in net cash proceeds from these employee retention credits, including interest income and net of fees and expenses. These credits were recognized in the period in which the cash was received as Other Income in our condensed consolidated statements of operations. One Big Beautiful Bill Act The United States Congress passed budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act (“the OBBB Act”), into law on July 4, 2025. The OBBB Act provides for, among other things, the reinstatement of full expensing for qualified business property acquired and placed in service after January 19, 2025, immediate expensing of domestic research and experimental expenditures and modification of the limitation on the business interest deduction. The OBBB Act has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The provisions that are effective in 2025 increase the deferred tax liability and increase the current tax receivable but do not have an impact on the effective tax rate or the provision for income taxes. 11 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) 3. Supplemental Balance Sheet and Cash Flow Information Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: September 30, 2025 December 31, 2024 Property held for sale $ 2,471 $ 1,866 Construction contract receivables 12,550 8,513 Interest rate swap assets 2,562 — Prepaid insurance 3,124 2,351 Prepaid commissions 7,428 6,476 Prepaid rent 2,264 3,927 Prepaid software licenses and maintenance 9,947 5,199 Prepaid payroll — 11,883 Other 13,284 12,611 Prepaid expenses and other current assets $ 53,630 $ 52,826 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, 2025 December 31, 2024 Real estate taxes $ 45,289 $ 34,779 Accrued interest 15,813 10,170 Payroll liabilities 51,390 44,347 Self-insurance accruals 33,341 29,437 Corporate accruals 42,975 35,653 Other 40,345 25,058 Accrued expenses and other current liabilities $ 229,153 $ 179,444 12 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) Supplemental Cash Flow Information (Increases) decreases in operating assets and increases (decreases) in operating liabilities are as follows: Nine Months Ended September 30, 2025 2024 Accounts receivable $ 549 $ ( 3,175 ) Center operating supplies and inventories ( 10,377 ) ( 6,448 ) Prepaid expenses and other current assets ( 11,370 ) ( 5,361 ) Income tax receivable ( 15,244 ) 4,802 Other assets ( 200 ) ( 284 ) Accounts payable 5,236 ( 10,532 ) Accrued expenses and other current liabilities 52,608 22,258 Deferred revenue ( 2,563 ) ( 867 ) Other liabilities ( 63 ) 1,401 Changes in operating assets and liabilities $ 18,576 $ 1,794 Additional supplemental cash flow information is as follows: Nine Months Ended September 30, 2025 2024 Net cash paid for income taxes, net of refunds received $ 25,090 $ 13,413 Net cash paid for interest (including cash settlements associated with interest rate swaps), net of capitalized interest 59,712 110,084 Capitalized interest 11,467 4,664 Non-cash activities: Common stock issuance in connection with an asset acquisition 39,730 — Right-of-use assets obtained in exchange for initial lease liabilities: Operating leases 188,637 172,106 Finance leases 11,893 969 Right-of-use asset adjustments recognized as a result of the remeasurement of existing operating lease liabilities 9,395 5,069 Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 900 13,350 Non-cash increase in financing obligations as a result of interest accretion 127 89 4. Property and Equipment In January 2025, we entered into a purchase agreement to acquire existing health club and racquet facilities. The acquisition was consummated during April 2025 for a total purchase price of $ 59.7 million, of which $ 19.3 million was paid in cash, $ 39.7 million was paid through the issuance of unregistered shares of the Company’s common stock and $ 0.7 million represents liabilities we assumed. We accounted for this transaction as an asset acquisiti on and allocated the entire purchase price to property and equipment. Accordingly, the $ 19.3 million we paid in cash in connection with this acquisition d uring the nine months ended September 30, 2025 is included in Capital expenditures in our consolidated statement of cash flows. 13 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) 5. Intangibles During the three months ended September 30, 2025, we acquired a trade name and related intangible assets associated with our LTH nutritional products for a total purchase price of $ 10.0 million, of which $ 9.5 million was paid in cash at closing and $ 0.5 million was held back until July 2026 for potential indemnification claims. T he $ 9.5 million we paid at closing is included in Other within investing activities in our consolidated statement of cash flows. 6. Revenue Revenue associated with our membership dues, enrollment fees, and certain services from our in-center businesses is recognized over time as earned. Revenue associated with products and services offered in our cafes and spas, as well as through e-commerce, is recognized at a point in time. The following is a summary of revenue, by major revenue stream, that we recognized during the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Membership dues and enrollment fees $ 547,306 $ 488,105 $ 1,576,268 $ 1,376,212 In-center revenue 213,591 186,670 606,148 524,055 Total center revenue 760,897 674,775 2,182,416 1,900,267 Other revenue 21,752 18,459 67,743 57,445 Total revenue $ 782,649 $ 693,234 $ 2,250,159 $ 1,957,712 The timing associated with the revenue we recognized during the three months ended September 30, 2025 and 2024 is as follows: Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Center Revenue Other Revenue Total Revenue Center Revenue Other Revenue Total Revenue Goods and services transferred over time $ 678,089 $ 21,752 $ 699,841 $ 599,700 $ 18,459 $ 618,159 Goods and services transferred at a point in time 82,808 — 82,808 75,075 — 75,075 Total revenue $ 760,897 $ 21,752 $ 782,649 $ 674,775 $ 18,459 $ 693,234 The timing associated with the revenue we recognized during the nine months ended September 30, 2025 and 2024 is as follows: Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Center Revenue Other Revenue Total Revenue Center Revenue Other Revenue Total Revenue Goods and services transferred over time $ 1,940,941 $ 67,743 $ 2,008,684 $ 1,684,453 $ 57,445 $ 1,741,898 Goods and services transferred at a point in time 241,475 — 241,475 215,814 — 215,814 Total revenue $ 2,182,416 $ 67,743 $ 2,250,159 $ 1,900,267 $ 57,445 $ 1,957,712 Contract liabilities represent payments or consideration received in advance for goods or services that the Company has not yet transferred to the customer. Contract liabilities consist primarily of deferred revenue for fees collected in advance for Dynamic Personal Training, media and athletic events, enrollment fees, other in-center service offerings and membership dues. Contract liabilities at September 30, 2025 and December 31, 2024 were $ 55.9 million and $ 58.4 million, respectively. 14 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) Contract liabilities that will be recognized within one year are classified as deferred revenue in our condensed consolidated balance sheets. Deferred revenue at September 30, 2025 and December 31, 2024 was $ 55.8 million and $ 58.3 million, respectively, and consists primarily of prepai d Dynamic Personal Training, media and athletic events, enrollment fees, other in-center service offerings and membership dues. Contract liabilities that will be recognized in a future period greater than one year are classified as a component of Other liabilities in our condensed consolidated balance sheets. Long-term contract liabilities at September 30, 2025 and December 31, 2024 were $ 0.1 million and $ 0.1 million, respectively, and consist primarily of deferred enrollment fees. During the nine months ended September 30, 2025 and 2024, $ 45.1 million and $ 35.1 million of revenue was recognized that had been included in the contract liabilities balance at December 31, 2024 and 2023, respectively. 7. Derivative Instruments and Hedging Activities We are exposed to interest rate risk on our variable rate debt (see Note 8, Debt). As a result, we utilize derivative instruments from time to time, including interest rate swap agreements, to manage our exposure. We only hold derivative instruments for economic hedging purposes, not for speculative or trading purposes. Derivative instruments expose us to credit risk to the extent that the counterparties are unable to meet the terms of the arrangements. To minimize our exposure to such credit risk, we transact only with highly-rated banks and financial institutions. For each derivative instrument that qualifies for and is designated as a cash flow hedge of interest rate risk, the unrealized gain or loss associated with changes in the fair value of the instrument is initially recognized as a component of accumulated other comprehensive loss (“AOCL”) on our condensed consolidated balance sheet. This gain or loss is subsequently reclassified into earnings in the same period that the forecasted hedged transaction affects earnings. We assess hedge effectiveness using the dollar-offset method on a cumulative basis at inception and on an ongoing basis. We would prospectively discontinue hedge accounting for a cash flow hedge derivative instrument if and when the applicable criteria are no longer met, the instrument expires, is sold, terminated or exercised or we remove the hedge designation. In that circumstance, the net unrealized gain or loss that is then recognized in AOCL would be reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings, unless the forecasted transaction is no longer probable in which case the net gain or loss would be reclassified into earnings immediately. Interest Rate Swaps During the nine months ended September 30, 2025 , we entered into receive-variable, pay-fixed interest rate swap agreements with five high-quality institutional banks, each of which had an effective date of April 8, 2025 and is set to expire on April 5, 2028. On the effective date, the initial aggregate notional amount associated with these interest rate swaps was $ 997.5 million, the then-outstanding variable rate borrowings under our Term Loan Facility. The aggregate notional amount associated with these interest rate swaps decreases over time in a manner that is aligned with the timing and amount of scheduled principal payments due with respect to the outstanding borrowings under our Term Loan Facility. At September 30, 2025 , the aggregate notional amount associated with these interest rate swaps was $ 995.0 million. Pursuant to these interest rate swaps, we make fixed interest payments at 3.409 % in exchange for receiving variable interest payments based on SOFR. Because the fair value of interest rate swap arrangements is derived from market-based rates, they are classified as derivative financial instruments. We recognize all of our interest rate swap assets and liabilities at fair value (see “Fair Value Measurements” within Note 2, Summary of Significant Accounting Policies). Each of our interest rate swaps qualifies for and has been designated as a cash flow hedge. As of September 30, 2025, w e have determined that each of our interest rate swaps is highly effective in achieving offsetting changes in the fair value of the expected future variable cash flows associated with the outstanding borrowings under our Term Loan Facility. Accordingly, unrealized gains or losses associated with changes in the fair value of our interest rate swaps are recognized as a component of AOCL on our condensed consolidated balance sheets. Realized gains or losses associated with the monthly cash settlements we receive or pay, respectively, in connection with our interest rate swaps are reclassified out of AOCL and recognized in Interest expense, net of interest income in our condensed consolidated statements of operations in the same period during which interest expense associated with the hedged variable interest rate payments is recognized. 15 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) The monthly cash settlements we receive or pay in connection with these interest rate swaps are reported within operating activities in our condensed consolidated statements of cash flows. The fair value of our outstanding designated interest rate swap assets and liabilities is reported in our condensed consolidated balance sheet as follows: September 30, 2025 Classification on Condensed Consolidated Balance Sheet Interest rate swap assets $ 2,562 Prepaid expenses and other current assets Interest rate swap liabilities $ 4,016 Other liabilities The unrealized gain (loss) associated with our interest rate swaps that was recognized in AOCL, as well as the realized gain that was reclassified out of AOCL to earnings, during the three and nine months ended September 30, 2025 were as follows: Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Affected Line Item on Condensed Consolidated Statements of Operations Balance in AOCL at June 30, 2025 and December 31, 2024, respectively $ ( 519 ) $ — Unrealized gain: Pretax unrealized gain (effective portion) 984 2,365 Less: Tax expense ( 266 ) ( 650 ) Unrealized gain, net of tax (effective portion) 718 1,715 Realized gain reclassified to earnings: Pretax realized gain reclassified to earnings (effective portion) ( 2,300 ) ( 4,400 ) Interest expense, net of interest income Less: Tax expense 626 1,210 Provision for income taxes Realized gain reclassified to earnings, net of tax (effective portion) ( 1,674 ) ( 3,190 ) Balance in AOCL at September 30, 2025 $ ( 1,475 ) $ ( 1,475 ) At September 30, 2025 , we expect approximately $ 1.3 million of after-tax realized gain on interest rate swaps to be reclassified out of AOCL to earnings within the next 12 months. The remaining maturity of our interest rate swaps at September 30, 2025 was 2.5 years. 16 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) 8. Debt Debt consisted of the following: September 30, 2025 December 31, 2024 Term Loan Facility, maturing November 2031 $ 995,000 $ 1,000,000 Revolving Credit Facility, maturing September 2029 — 10,000 6.000 % Senior Secured Notes, maturing November 2031 500,000 500,000 Mortgage Notes, various maturities 32,585 41,865 Other debt 3,436 3,448 Fair value adjustment 169 284 Total debt 1,531,190 1,555,597 Less unamortized debt discounts and issuance costs ( 18,317 ) ( 19,856 ) Total debt less unamortized debt discounts and issuance costs 1,512,873 1,535,741 Less current maturities ( 22,965 ) ( 22,584 ) Long-term debt, less current maturities $ 1,489,908 $ 1,513,157 Term Loan Facility The variable rate interest payments on our Term Loan Facility are hedged by our interest rate swaps. Pursuant to these interest rate swaps, we effectively pay fixed interest on our outstanding Term Loan Facility borrowings at 3.409 %, plus an applicable margin. With the upgrade of our issuer credit rating by S&P Global Ratings on June 18, 2025, our applicable margin was reduced by 0.25 % to 2.25 % effective on June 19, 2025, and with the amendment to our Term Loan Facility on August 18, 2025, our applicable margin was reduced by an additional 0.25 % to 2.00 %. Loans under this amended Term Loan Facility were issued at par with no original issue discount. As a result, the effective fixed interest rate associated with our outstanding Term Loan Facility borrowings a t September 30, 2025 was 5.409 %. We are required to make quarterly principal payments of 0.25 % of the outstanding balance on the Term Loan Facility. See Note 7, Derivative Instruments and Hedging Activities for more information regarding our interest rate swaps. Revolving Credit Facility At September 30, 2025, there wer e no outstanding b orrowings under our $ 650.0 million Revolving Credit Facility, and there were $ 31.8 million of outstanding letters of credit, resulting in total revolver availability of $ 618.2 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus an applicable margin of 2.00 % or base rate plus 1.00 % . The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2025 was 7.26 % and $ 5.1 million, respectively. The highest balance during that same period was $ 60.0 million. Debt Covenants We are required to comply with certain affirmative and restrictive covenants under our Term Loan Facility and Revolving Credit Facility (collectively, our “Credit Facilities”), 6.000 % Senior Secured Notes and Mortgage Notes. We are also required to comply with a first lien net leverage ratio covenant under the Revolving Credit Facility, which requires us to maintain a first lien net leverage ratio, if 30.00 % or more of the Revolving Credit Facility commitments are outstanding shortly after the end of any fiscal quarter (excluding all cash collateralized undrawn letters of credit and other undrawn letters of credit up to $ 90.0 million). As of September 30, 2025, we were either in compliance in all material respects with the covenants or the covenants were not applicable. 17 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) Future Maturities of Long-Term Debt Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at September 30, 2025 were as follows: October 2025 through September 2026 $ 22,965 October 2026 through September 2027 29,835 October 2027 through September 2028 10,123 October 2028 through September 2029 10,139 October 2029 through September 2030 10,149 Thereafter 1,447,810 Total future maturities of long-term debt $ 1,531,021 9. Leases Sale-Leaseback Transactions with Unrelated Third Parties During the nine months ended September 30, 2025 , we entered into and consummated sale-leaseback transactions with two unr elated third parties. Under these transactions, we sold four properties with a combined net book value of $ 178.4 million for $ 184.0 million of gross cash proceeds , which were reduced by transaction costs of $ 1.0 million , for net cash proceeds of $ 183.0 million . The estimated fair value of the properties sold was $ 174.6 million . Accordingly, the aggregate cash sales price associated with this transaction was decreased by $ 9.4 million , which resulted in the recognition of a loss of $ 4.8 million on these transactions . This loss is included in Other operating expense in our condensed consolidated statement of operations. Of the $ 9.4 million aggregate off-market adjustment, $ 10.3 million was associated with properties in which the sales price was g reater than the fair value of the properties sold, which was recognized as a reduction to the aggregate sales price associated with these properties and as financing obligations separate from the related operating lease liabilities, and $ 0.9 million was associated with a property in which the sales price was less than the fair value of the property sold, which was recognized as an increase in the aggregate sales price associated with this property and an increase in the related operating lease right-of-use asset . Proceeds from the financing obligations are reported within financing activities on our condensed consolidated statement of cash flows. Right-of-use assets and lease liabilities recognized in connection with these sale-leaseback transactions were $ 99.5 million and $ 97.3 million , respectively. 10. Stockholders’ Equity Share-Based Compensation Expense Share-based compensation expense for the three months ended September 30, 2025 was $ 16.9 million, of which $ 12.5 million and $ 4.4 million was associated with equity-classified awards and liability-classified awards, respectively. Share-based compensation expense for the nine months ended September 30, 2025 was $ 45.2 million, of which $ 34.6 million and $ 10.6 million was associated with equity-classified awards and liability-classified awards, respectively. Share-based compensation expense for the three months ended September 30, 2024 was $ 11.8 million, of which $ 9.3 million and $ 2.5 million was associated with equity-classified awards and liability-classified awards, respectively. Share-based compensation expense for the nine months ended September 30, 2024 was $ 30.5 million, of which $ 27.2 million and $ 3.3 million was associated with equity-classified awards and liability-classified awards, respectively. Restricted Stock Units During the nine months ended September 30, 2025, the Company granted approximately 1.3 million restricted stock unit awards under the 2021 Incentive Award Plan, of which approximately 1.0 million were time-based vesting awards, the vast majority of which vest in ratable installments ranging from one to three years , and approximately 0.3 million were performance-based vesting awards granted to our executives in connection with our short-term incentive compensation 18 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) program, in each case subject to continuous employment from the grant date through the applicable vesting date unless otherwise agreed with the award recipient. We determine the grant date fair value of restricted stock unit awards by multiplying the number of restricted stock unit awards by the closing trading price of our common stock on the grant date. Performance Stock Units During the nine months ended September 30, 2025, the Company granted approximately 0.3 million three-year performance stock unit awards under the 2021 Incentive Award Plan, all of which were granted to our executives in connection with our long-term incentive compensation program. The performance stock unit awards are based on our Adjusted EBITDA with performance determined each year for one-third of such award but the entire award does not vest until the end of the three-year period. We determine the grant date fair value of performance stock unit awards by multiplying the number of performance stock unit awards by the closing trading price of our common stock on the grant date. Other Share-Based Payment Awards 2025 Short-Term Incentive Program During the nine months ended September 30, 2025, the Company adopted a short-term incentive compensation program for eligible team members who are not executive officers. Pursuant to this program, awards will be paid o ut in cash and/o r through the issuance of fully-vested shares of the Company’s common stock in early 2026 if the Company’s performance exceeds the tranche one performance metric. As of September 30, 2025, we expect that all of these awards will be settled in fully-vested shares of the Company’s common stock. Accordingly, we are accounting for the potential issuance of these shares of common stock as share-based payment awards granted under this program. Because the incentive compensation associated with these awards represents a fixed dollar amount that, if payable, will be settled in a variable number of shares of the Company’s common stock, we are currently accounting for these awards as liability-classified share-based payment awards. Accordingly, the offset to the share-based compensation expense we have recognized in connection with these awards during the nine months ended September 30, 2025 is included in Accrued expenses and other current liabilities on our September 30, 2025 condensed consolidated balance sheet. 2024 Short-Term Incentive Program In February 2025, our board of directors determined that our 2024 performance exceeded the tranche three performance metric under our 2024 short-term incentive compensation program and issued corresponding shares of common stock to our eligible employees. Effective as of the determination date, the $ 13.8 million then-outstanding liability we had recognized in connection with these liability-classified share-based payment awards was reclassified out of Accrued expenses and other current liabilities and into Common stock and Additional paid-in capital on our condensed consolidated balance sheet during the nine months ended September 30, 2025. Accumulated Other Comprehensive Loss Changes in the AOCL balances for the three and nine months ended September 30, 2025 were as follows (all amounts are reported net of tax): Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Foreign Currency Translation Adjustments Unrealized Loss on Derivative Instruments Total Foreign Currency Translation Adjustments Unrealized Loss on Derivative Instruments Total AOCL balance at June 30, 2025 and December 31, 2024, respectively $ ( 8,820 ) $ ( 519 ) $ ( 9,339 ) $ ( 12,797 ) $ — $ ( 12,797 ) Other comprehensive (loss) income before reclassifications ( 1,586 ) 718 ( 868 ) 2,391 1,715 4,106 Amounts reclassified from AOCL to earnings — ( 1,674 ) ( 1,674 ) — ( 3,190 ) ( 3,190 ) AOCL balance at September 30, 2025 $ ( 10,406 ) $ ( 1,475 ) $ ( 11,881 ) $ ( 10,406 ) $ ( 1,475 ) $ ( 11,881 ) 19 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) Changes in AOCL balances for the three and nine months ended September 30, 2024 were related to foreign currency translation adjustments only. 11. Income Per Share For the three and nine months ended September 30, 2025 and 2024 , o ur potentially dilutive securities included stock options, restricted stock units, performance stock units and shares to be issued under our employee stock purchase plan. The following table sets forth the calculation of basic and diluted income per share for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 102,427 $ 41,355 $ 250,671 $ 119,077 Weighted-average common shares outstanding – basic 220,063 202,945 217,132 199,793 Dilutive effect of stock-based compensation awards 5,944 11,688 7,943 8,048 Weighted-average common shares outstanding – diluted 226,007 214,633 225,075 207,841 Income per common share – basic $ 0.47 $ 0.20 $ 1.15 $ 0.60 Income per common share – diluted $ 0.45 $ 0.19 $ 1.11 $ 0.57 The following is a summary of potential shares of common stock that were antidilutive and excluded from the weighted average share computations for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Stock options 33 1,750 10 1,750 Restricted stock units 387 66 379 66 Potential common shares excluded from the weighted average share calculations 420 1,816 389 1,816 12. Commitments and Contingencies Life Time, Inc. et al. v. Zurich American Insurance Company On August 19, 2020, Life Time, Inc., several of its subsidiaries, and a joint venture entity, Bloomingdale Life Time Fitness LLC (collectively, the “Life Time Parties”) filed a complaint against Zurich American Insurance Company (“Zurich”) in the Fourth Judicial District of the State of Minnesota, County of Hennepin (the “District Court”) (Case No. 27-CV-20-10599) (the “Action”) seeking declaratory relief and damages with respect to Zurich’s failure under a property/business interruption insurance policy to provide certain coverage to the Life Time Parties related to the closure or suspension by governmental authorities of their business activities due to the spread or threat of the spread of COVID-19. On March 15, 2021, certain of the Life Time Parties filed a First Amended Complaint in the Action adding claims against Zurich under a Builders’ Risk policy related to the suspension of multiple construction projects. The Court granted Zurich’s dispositive motions on July 25, 2024, dismissing the Life Time Parties’ claims with prejudice, and entered judgment on July 26, 2024. The Life Time Parties appealed from that judgment to the Minnesota Court of Appeals (the “Court of Appeals”). On August 11, 2025, the Court of Appeals reversed the District Court’s order granting summary judgment in favor of Zurich, holding that governmental closure orders were the causes of Life Time Parties’ losses under the property/business interruption policy, and not the pandemic. The Court of Appeals concluded that Life Time Parties have a coverage limit of $ 1.0 million per occurrence and there were 29 occurrences, reflecting the 29 different jurisdictions that issued closure orders affecting the Life Time Parties’ 150 locations. The Court of Appeals remanded the Action to the District Court for further proceedings. On September 8, 2025, Zurich petitioned the Minnesota Supreme Court for review of the decision of the Court of Appeals. On September 30, 2025, the Life 20 Table of Contents LIFE TIME GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Table amounts in thousands except per share data) Time Parties filed an opposition to Zurich’s petition for review. On October 29, 2025, the Minnesota Supreme Court denied Zurich’s petition for review. The Action will be remanded to the District Court for further proceedings, including the damages phase of this Action. The Action is subject to uncertainties, and the final outcome of the matter is not predictable with assurance. Other We are also engaged in other proceedings incidental to the normal course of business. Due to their nature, such legal proceedings involve inherent uncertainties, including but not limited to court rulings, negotiations between affected parties and governmental intervention. We establish reserves for matters that are probable and estimable in amounts we believe are adequate to cover reasonable adverse judgments. Based upon the information available to us and discussions with legal counsel, it is our opinion that the outcome of the various legal actions and claims that are incidental to our business will not have a material adverse impact on our consolidated financial position, results of operations or cash flows. Such matters are subject to many uncertainties, and the outcomes of individual matters are not predictable with assurance. 13. Subsequent Events In preparing the accompanying condensed consolidated financial statements, we have evaluated the period from September 30, 2025 through the date the condensed consolidated financial statements were issued for material subsequent events. There have been no events or transactions during this time which would have a material effect on the condensed consolidated fina ncial statements and therefore would require recognition or disclosure. 21 Table of Contents