Life Time Group Holdings, Inc.

Greetings

and welcome to the Lifetime Group Holdings, Inc. First quarter of 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Connor Weinberg, Vice President of Capital Markets and Investment Relations. Please go ahead.

Good morning and thank you for joining us for the first quarter 2025 Lifetime Group Holdings earnings conference call. With me today are Bharam Akrati, Founder, Chairman and CEO, and Eric Weaver, Executive Vice President and CFO. During the call, we will make forward-looking statements which involve a number of risks and uncertainties that may cause actual results to differ materially from those forward-looking statements made today. There is a comprehensive discussion of risk factors in the company's SEC filings, which you are encouraged to review. The company will also discuss certain non-GAAP financial measures, including adjusted net income, adjusted EBITDA, adjusted diluted EPS, net debt to adjusted EBITDA, or what we refer to as net debt leverage ratio and free cash flow. This information, along with the reconciliations to the most directly comparable GAAP measures, are included when applicable in the company's earnings release issued this morning, our 8K filed with the SEC, and on the investor relations section of our website. With that, I will turn the call over to Eric.

Thank you, Connor. We appreciate you joining us this morning. Starting with our first quarter results, total revenue increased .3% to $706 million, driven by a .9% increase in our membership dues and enrollment fees, and an .7% increase in our incentive revenue. We continue to see strong revenue growth in our clubs open within the last 12 months, which are outpacing their anticipated revenue plans. In addition, we are seeing strong comparable center performance. Comparable center revenue was 12.9%, which increased from .1% in the prior year period. We continue to see robust comparable center revenue due to, first, an increase in our membership dues revenue, which is primarily a result of a full quarter benefit of legacy member price increases taken in the previous year. We took virtually no legacy price increase in the first quarter, and on average, legacy members continue to pay approximately $30 per month below our rack rate. And we also realized a benefit from new members joining at higher dues rates, replacing members who were paying a lower rate. For example, if we lose an existing member paying monthly dues of $178 and gain a new member at a current dues rate of $208, we realize a net revenue benefit. Second, our ramping clubs continue to perform to our expectations. And third, we continue to see strong performance in our in-center businesses, particularly in our dynamic personal training. With our strong first quarter, we raised our guidance for our comparable center revenue to be between 8.5 and .5% for the full year as we normalized towards our long-term revenue growth targets in the following quarters. Center memberships increased .0% compared to Q1 last year to end the quarter at more than $826,000. When combined with our on-hold memberships, total memberships ended the quarter at approximately $880,000. These membership totals are in line with our strategy. As noted in our earnings released this morning, we are focused on our member experience and adding memberships with higher revenue and visits per membership. In addition, retention continues to pace at record levels, and our in-center businesses are performing exceptionally well. Average monthly dues grew .8% -over-year to $208. We continue to open locations in premium markets with strong demand and higher dues rates. Average revenue per center membership was $844, an increase of .3% from the prior year quarter. Net income was $76.1 million, an increase of 206%, and adjusted net income was $88.1 million, an increase of 189% from the prior year quarter. We received an income tax benefit of $14.6 million related to the one-time exercise of stock options by our CEO, which is now factored into our updated guidance. For the remaining quarters of fiscal year 2025, we expect net income to benefit from reduced interest expense as a result of entering into the fixed interest rate swap of under 6% on our term loan fee. Adjusted EBITDA was $191.6 million, an increase of 31.2%, and our adjusted EBITDA margin of .1% increased 260 basis points versus the first quarter 2024. Net cash provided by operating activities increased approximately 103% to $184 million as compared to the first quarter 2024. This increase was largely a result in income from operations as well as timing of cash interest in the first quarter 2025. For the fourth consecutive quarter, we achieved positive free cash flow. Free cash flow was approximately $41 million, and we had no sale leaseback proceeds in the first quarter. We have signed a letter of intent for the sale leaseback of three properties for approximately $150 million, which we expect to complete in the second quarter. Before I conclude my remarks, I will give a brief comment on how we look at our exposure to tariffs. We have completed a review of key areas of our company that could be subject to tariffs, including construction, equipment, and retail, and we currently do not expect there to be a significant impact. As tariff policies are still evolving, we are diligently monitoring the situation to assess and respond as needed. After a strong first quarter, we have deleveraged our balance sheet to a net debt leverage ratio of 2.0 times. We have clear visibility into our cash interest expense for the next three years, having fixed the interest rate on our entire term loan to below 6%. And with over 30 years of operating experience, we believe we are well positioned to navigate any macroeconomic conditions. With that, I will now pass the call over to Brahm. Brahm?

Thank you, Eric. We had a great start to the year, and the business has continued to perform well. We have raised our revenue and adjusted EBITDA guidance, but only modestly in recognition of the uncertainty in the macroeconomic environment. Our focus in the near term is to maintain our very strong balance sheet position and positive free cash flow as we grow the business. Our clubs continue to experience increased traffic with many at or near optimal levels. Visits in our comparable centers are up .7% versus the first quarter of last year. Many clubs are using waitlists as a mean to protect the member experience. The large majority of our first quarter membership ads were full dues paying customers. This strategy is reflected in our results, including record visits per membership and retention, record in-center performance and revenue per membership, and record total revenue and adjusted EBITDA. We have a robust pipeline of club growth, and we expect to deliver 10 to 12 clubs per year. We will continue to use cash flow from business as well as proceeds from sell leasebacks to pay for our growth. We will maintain the strength of our balance sheet and our current debt levels while growing revenue and adjusted EBITDA. This aligns with our focus of achieving and maintaining a strong double B credit. We are well positioned to operate in any macroeconomic conditions. We're also pleased with the progress in our three additional growth areas, including LT Digital, which is already over 2 million subscribers, Miura, and LTH. With that, we're ready to take your questions.

Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line using the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from the line on John Heimbache with Bugenheim. Please proceed.

How broad now? How many clubs have wait lists? You know, where can that go? Can most of them have them? You know, I know on cases you've charged like a country club like Joint Fee, how broad is that? And then, Buram, the question is, I know the wait lists, you're trying to limit traffic because you've got capacity on visitation. I guess there's no good way to increase capacity in a club, correct? It's not like you can do an easy remodel and accommodate more members. So is there anything to be done on that front?

Let's handle this once and for all because I'm sure this will be the number one question for everyone. We are extremely pleased with all the statistics of the company and everything working the way we want to. We have experienced this year a increased level of visits. We still also measure number of swipes or number of visits per club. And number of visits per club were up over a very healthy number in the past last years. We have opportunistically focused on shutting down any sort of a membership that would come with any kind of a discount from a third party payers in some clubs. Some of the new clubs don't have any opportunity for sort of Aurora memberships. And we really have gained the memberships we wanted to gain as members who are joining with the full dues paying customers. So the focus of the business has been as always, nothing changed is manage the clubs, adapt the clubs so that we deliver the ultimate experience. The clear indication that our strategy is working is that we are basically getting the highest revenue per memberships. We're getting the highest in center revenue. Our in center revenue as Eric mentioned, in the first quarter of this year outperformed the in center revenue of last year same quarter as a percentage of our revenue. So I think the only strong message that I can give you guys is that we are executing the strategy we've always executed. Member point of view first. And when the clubs feel like they're being pinched, the peak hours of the clubs are like at the point where your experience might start getting pinched. We basically put the club on a wait list. And we definitely have the opportunity to take that wait list both ways. It's wait list for the people who join and pay the full dues or wait list for the people who would join through the third party insurance programs. And we basically execute one or the other or both. And this year, we definitively took steps to make sure more of the memberships we gained in the first quarter came from full dues paying customers rather than the third party customers. So that's really the only major issue in this, in the major point in this call. Otherwise, everything else is basically moving exactly. This is this moved exactly the way we wanted it. And so is everything else in the business.

Let me transition right to the club pipeline because that also you add more clubs, that takes pressure off of the existing locations. So the pipelines, we're getting visibility on that. You talked about 10 to 12. What's the organization's capacity to do more than that? So I think the opportunities you're gonna get from landlords and ground up would exceed 10 to 12, eventually exceed 10 to 12. What's your capacity to do more than that if you could? As the gestation

of these clubs is longer, I can tell you that 10 to 12 for 25 is just the right number. For 26, we have the opportunity to do 10 to 12. We have the opportunity to do more. We are very, very carefully studying all the impacts of different scenarios that can happen with the economy. As you guys might've heard, right now, this is the first time that some of the new home builders are having a tough time moving inventory. That type of impact is a positive impact for us in the sense that once some of the construction, I mean, it's just spotty buys market by market. Some markets, because of government contracts like Phoenix, et cetera, they're not impacted. Most markets, you'll be able to do the construction significantly better if you take the time to rebid before you have started construction. So we are methodically going through where the opportunities are, and we can continue to deliver 10 to 12. And if the economy gets robust and the volatilities settle down that we are dealing with, we can step on the gas and do more. So otherwise, my approach, our approach, is to focus on having a balance sheet that allows us to take advantage of the opportunities that will rise if the economy is tough or opportunities that rise if the economy is robust. It's sort of a mathematical hedge so that if it's heads up, we win, just tails up, we win. And with that, I think I have given you a very clear answer. For 26, we could deliver more clubs if we want to.

Thank you, appreciate it.

The next question comes from the line of Brian Nagel with Oppenheimer, please proceed.

Good morning, nice quarter, congratulations.

Thank

you. So first question I wanna ask, Eric, you talked in your prepared comments, you mentioned just the pricing, and clearly, as we see every quarter, Lifetime's done a great job monetizing memberships. So the question I have is with regard to the actions you took in Q1, if I heard you correctly, you didn't raise dues on legacy members, so I will make sure I heard that correctly, but was that planned? And how should we think about that effort going forward?

Yeah, that's right, we didn't take a lot of legacy pricing in Q1, that was our intention. We're obviously monitoring the macro very closely. And so a lot of what we saw was legacy price increases that were from last year, and those members are lapping a full quarter, right? The other important impact to understand is the churn. So when somebody atrits out, right, they atrid out at a lower rate typically, and so then the new member joins in at a higher rate. And so that was really the most of the, what do we call it, pricing benefit that we saw in Q1, so not a lot from legacy in this quarter.

Yeah, we have had a schedule on when we roll out legacy price increases that was not planned out for the first quarter, it was planned out for second quarter for April, May, June. We are doing exactly, executing exactly our plan. As I've mentioned to you, it's extremely sophisticated programming, AI driven on how we do this. That's not something we're gonna get into the details of that with anybody, but we are still experiencing best retention rates than we have ever experienced in the history of the company. We're still having better retention than last year, and second quarter, from second quarter of last year forward, we had our very, very best retention, and we're still doing better than that at this moment in time. So all indication that the micro adjustments we are making on day to day, it's all working, Brian.

That's very helpful. My second question, recognizing you don't provide quarterly guidance anymore, we obviously have the updated annual guidance, but so you report results through March, I mean, we're into the, I guess, now we're into the kind of the pool season. I mean, any comment on how you're seeing member signups or member activity as the pools get ready to go for the season?

Yeah, I think it's too early to make any indications on that at this moment in time. Overall, the in centers are performing extremely well at this moment, and the days of the week and timing of the week, so it's too early to actually get into the, you know, how that's moving, but it's just pretty much right in line with what it has been.

All right, guys, thanks a lot, appreciate it.

Thank you.

The next question comes from the line of Alex Perry with Bank of America, please proceed.

Hi, thanks for taking my questions here and congrats on a strong quarter. I just wanted to talk about the guidance a little bit. So how much of the sort of same store center raise was one queue flow through versus, you know, higher expectations in two queue through four queue? I think the guide implies a slowdown in comps, you know, in sort of the remainder of the year. What's the driver here? Is that, you know, just an element of conservatism? And then have you seen any impact to your business to joins or cancels as, you know, we've seen consumer confidence, you know, soften a bit here as of late? Thanks.

Yeah, I think the, what we are seeing right now is a stronger retention and a strong in-center spend. That means the customer who is inside of Lifetime is extremely happy, they're having more visits into the club, they're using the clubs more, they're doing their in-center purchases and they are staying with us longer, okay? That's all positive news. The memberships coming in per, you know, sort of a, which is extremely small piece of our business that, you know, when you think about one month worth of new membership sales versus last month, versus the overall revenue impact, it's very, very, very small. We are seeing, we are seeing a sort of a customer who is a little more thoughtful about the timing of when they join, maybe they wait a little longer to before they start. We are seeing some of that conservative in that, but that is such a small piece of our business that I don't think it has an immediate impact on our numbers, but I think that if that type of a situation continues where you have, you know, customer holding back for the next 12 months in a row, then you're gonna see a little more impact on the business. Therefore, our guidance is guarded for this potential macroeconomic volatility, customer sensitivity, sustaining for a long period of time. Does that answer your question?

That's perfect. And then I just, my followup is just on tariffs, I guess, like the net exposure here, is it like zero or construction equipment costs not going up for you? Do you source any of the fitness equipment out of China, any of the tariff regions right now? Are you seeing price increases on any of that? It sounds minimal, but could you just maybe walk through that? Thanks.

Now look, there are, for the most part, on the big purchases, we are not seeing, I mean, it's like a 0.5%, 0.4%, and the big purchases as an overall impact, it doesn't have a huge impact. You know, t-shirts we buy for our athletic events, which is, I mean, these are de minimis numbers in terms of the lifetime's total revenue, even the, you are seeing some things, you know, coming in like 30, 40% higher, but those things don't just, don't matter to us. And we're talking about buying, you know, $60,000, $200,000 worth of t-shirts that we use for athletic events. So it's just not, we are not a company that is heavily impacted directly by these events. And there are all the type of things we are doing on continuation of value engineering on how we designing our new prototypes that we have, a dozen of them, that we basically choose which one works in what market. We're continually working on having flexibility to be there use of steel or concrete when we build those. We have both types of plans. I mean, we are working to make sure we mitigate any of those impacts. And at this point, I can tell you, we are super comfortable that we can bring in the new boxes in at or better prices than last year. Despite changes in that. Furthermore, it's two-way street. If the economy does actually get a little more headwind, you hit recession, housing slows down, the contractors who basically before will like, this is the price, take it or leave it. I have too many jobs. They're basically start begging for work. And then you can basically get them to do the work for 5% overhead and profit instead of 20% overhead and profit. So we can manage that. I don't believe we are in a position to worry about those type of things. We just, we are gonna continue to work on how to, we basically mitigate any of those impact. And as Eric said, and I said, we have been anticipating for two years, we've been wrong about the headwind. Sometimes we're gonna switch from tailwind to a headwind. And we've been preparing and preparing and preparing and preparing for what if we switched from sort of a tailwind economy to a headwind economy. And our strategy is to win in either kind. Okay. And so based on our strong balance sheet, we just mentioned $150 million of sell lease back, definite agreement to basically close by this year, but by this second quarter, in the second quarter, debt levels are at a billion five without that cash coming in. So our growth is going to be funded pretty much entirely with either proceeds, sort of taking the money from sell lease back and putting it right back into new bills, or we just basically from the substantial free cash for the company is generating on its own. So we feel like being in a super, super strong financial position allows us to basically negotiate better, get more deals, get better deals, be the game changer for the residential buildings. So we feel like we're stacked correctly for any kind of a wind, head or tail.

And Alex, I know you mentioned, equipment is one of your questions specifically. So we don't source that from China. Most of our equipment comes from Italy and Sweden. And so given the size of what we do with those vendors, they have not passed on and we do not expect any tariff impact there. Perfect. That's incredibly helpful.

Best of luck going forward. Thank you.

The next question comes from the line of Megan Alexander with Morgan Stanley. Please proceed.

Hey, good morning. I wanted to start with a question on the balance sheet. And then I do have a quick follow-up just to one of Alex's questions. You took your leverage target down. You're now talking about under two times versus 2.25 last quarter. You're gonna get some sale lease back proceeds here in the second quarter. So, and leverage is already at two times. So it should be pretty easy for you to stay under there. And, you know, Brahm, you talked about wanting to have a strong balance sheet to give you some flexibility, but I guess theoretically, let's just say the macro remains volatile and maybe it doesn't make sense to accelerate club opens. How does the strategy around capital allocation evolve and you start to think about other uses of cash, like something like buybacks, or would you rather just sit on higher cash balances and lower leverage and build some ammo for when things settle down?

Yeah, definitely the latter. I don't, we don't, we're not, we are not going to, you know, we're not, we're not Amazon, we're not Apple, we're not JP Morgan. We're a very strong, good-sized mid-cap company. We need to be thoughtful about our balance sheet and make sure that works to our strength. So we're gonna have, we're going to have the ability, at least with half of our development, which is the ground up, to start a couple months later if we want to. We have the ability to start, you know, we would start faster because we have the permits. So we want to have the full flexibility to basically navigate through how the world shakes up in here. So I feel super strong. I'm just telling you, I feel really, really, really strong about how we are positioned right now. We basically have put the company in a situation where we have every option. Okay, that's, that's helpful. So we don't need to, we don't need to start as many, and we have the ability not to. So if you have something just massively wrong, we're still gonna grow revenue. We're still gonna like 2009. We're still gonna grow EBITDA. We're still gonna grow EPS. And we can be in extremely -talked-in defensive position. If things go robust, then we can step on it and go faster on development and build out. And I don't know what else I could tell you guys other than based on our feel of what's straight ahead, we wanna be in full control of how we manage our balance sheet. I absolutely wanna achieve a double B from, the next one from either S&P or Moody's to get the company to that double B status. That's super important. It's been my next big objective. And we're putting the company in a position where we can get that and stay in that position as we go forward.

Great, awesome. And then just a follow-up on the response to Alex's first question. Brahm, you said you're seeing a customer, I think you said that's more thoughtful on when they're joined, maybe waiting a bit longer. Can you just expand a little bit maybe on when you started to see that? Clearly there's been a lot of volatility over the last couple of months. Was that something you started to see with some of the stock market volatility we saw in the March, April timeframe? And are there any markets in particular where you're seeing it more than others? Just hoping you could expand a bit more on that

comment. Yeah, it's a dynamic situation, Megan. We have clubs that they're on a wait list and even the, you know, they're operating at such a maximum level of output from visits to in-center revenue, EBITDA, margins, everything. And so there are some natural limitations on how many more people you can take in. So they're on a wait list. So we're managing that the best way we can. There are clubs where I've always said, you know, there are some clubs that they have the extra capacity. And so when we're looking at the macro picture, we see that April and May, that new members sign up, which is again, a de minimis number for our total picture is slightly, slightly softer than it has been the last couple of years. So, but that's partially because clubs are more full. Retention is higher. We're not losing as many people. When you don't lose as many people, you don't have as many opportunity for rejoins. So at this point, it's not something to, have a huge concern about, but we got to shake this out through really Memorial Day, June, to see how that shakes out. So for right now, I think everything is just fine.

Okay, great. Thanks, Ram. I'll pass it on.

The next question comes from the line of Kate McShane from Goldman Sachs. Please proceed.

Hi, good morning. Thanks for taking our question. You mentioned a few times that people are using the clubs more and there's higher in-center spend. And so we're wondering if there's a way to tell if you're just capturing more share of wallet and more share of time too, is there a way, do you think that it's coming from other health and wellness activities, or do you see this behavior as incremental? And then you called out the dynamic personal training as one of the higher growth areas of in-center revenues, but we wondered if you could speak to the growth in other offerings.

Yeah, so the spa and cafes are doing better than they were doing last year. They're not doing as good as I want them. We haven't still implemented all of our strategies in all the clubs. We're just, we're basically going location by location, trying to improve the offering. The personal training, dynamic personal training, dynamic stretch is one of the first things that we implemented three years ago to transform how that business is done. Because as I mentioned during IPO, I didn't believe that business as it was before, it would actually have the ability to kind of get its legs back under it. So we changed it to a programmer truly, truly has an incremental value. So, and we have been, we've been working an amazing execution of strategies. And I believe that the win on the personal training, which is substantial, is really just due to the function of all the things that we have been putting in place, and we're getting the benefits, the fruits of our groundwork that we've been putting in the last two, three years, okay? We still have opportunity to continue to improve in cafes and spas quite significantly. I don't, I'm not, I'm not by any means, you know, thrilled with what we are, even though they are better than last year, I wanna be clear, there is significant more opportunity for us to execute better. That's within our control. And that, it has nothing to do with the macroeconomic, and we gotta work on that. The customer who comes to Lifetime wants to interact with us, they wanna do more things with us. All we have to do is deliver to them the type of things they want in a high level, and they spend the money. And we aren't, and they love the brand, so, you know, I mean, it just, it's a constant repetition of they love the brand, they travel around Lifetime. And when the economy gets a little, as I've gone through this with all of you guys, when you get through a recessionary period, you, customers start pulling back on spending on big spends, right? So they have more time, as they have more time, they've used the stuff they own more. They're gonna spend more time in the clubs. They're gonna utilize that membership better, and that extra utilization means better retention for us. And so we are well positioned for economy that is growing or a economy that might be in recession for two, three quarters.

Thank you.

The next question comes from the line of John Bumgardner with Mizuho Securities, please proceed.

Good morning, thanks for the question. You're welcome. First off, on programming, given the uncertainty in the consumer, do you see a situation similar to

COVID where you take advantage and sort of accelerate programming here, you throttle back a little bit, you know, given the uncertainty, and in terms of the programming you're offering, any highlights you can offer in terms of anything new rolling out over the next 12 months, whether it's recovery, cold plunge, whatever it may be?

Yeah, so we have been on a steady execution. I was just talking to our regional VP for Texas, and like so far in that market, 30 plus clubs, seven clubs have converted to cold plunge. We have, we're putting recovery in, we're putting in work lounges. So we have a steady plan in our budget, sort of the modernization and CAPEX, and we're executing on those. And those are really, really great adds to our business. As far as the other question you had regarding programming, you know, we're obviously always working on what are the programs that naturally are losing steam, and people aren't participating naturally in as big of a format. And then there are other ones that people are sort of kind of going leaning into. As I've always told you guys, modality of exercise, how you achieve your fitness, your wellness, your health, that is more like a fad. People will, you know, do, everybody goes crazy about spinning, and you can't teach enough spin classes. Then all of a sudden it changes, goes to some other form, and spinning starts kind of getting way down. So we have always designed and adapted the clubs to move and adjust those fads. And then lifetime is a big part of people's lifestyle. We position lifetime so it's part of your life. You're using it 10 times a month, 12 times a month, 14 times a month. It is how you live. And within that, we keep adapting what inside of there we need to adapt to keep our customer with us for, as we have customers who've been with us for 30 years, 20 years, 10 years, and that is the approach that we take on running the business. So it's constant adjustments and constant adaptation.

Okay, and if I think about how that ties into the P&L on the center operations expense this quarter, there was some nice leverage. I think it's the lowest it's been seasonally for a number of years now. I know it's a line that you wanna give yourself flex to reinvest back in terms of guidance. Was there any timing benefit this quarter, or are we starting to see some sort of a rollover where the return on incremental investment is better relative to history? How do we think about that line in the context of the broader guide, especially given, I think the EBITDA margins implied for the rest of the year are pretty solid relative to Q1?

Yeah, I think the whole year, I think our guidance implies I wanna say 27%. So yeah, I think, we're seeing a couple of things. We're seeing the flow through from the additional membership revenue, and also some of our internal businesses, particularly our PT, as that continues to grow, that also has a flow through margin. So there's nothing, to answer your question directly, there's nothing in terms of timing or anything like that. It really is kind of the strength of the model we built and that additional flow through.

Thanks, Eric. Thanks, Brown.

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. And the next question comes from the line of Owen Rickert with Northland Securities. Please proceed.

Hey, Barab, hey, Eric. Thank you, Ton, for taking my question here. Can you guys just talk a bit more about how LTH health or LTH is performing over the past couple of months? There were a decent chunk of press releases during the quarter on this growth initiative. Maybe just provide us a bit more color there and kind of what you're seeing going forward.

Yeah, so the strategy there is to grow LTH to the most trusted nutritional brand that exists. So we are working on building the product lineup and make sure it is absolutely the best. One of the things about nutritional products is that there isn't any sort of a regulated, vigorous testing for them. We have always, for 20 years, tested our products to make sure they have the right ingredients, the right efficacy. So as I take, I just took my 4D Plus supplements that I now normally take in the morning while we were having our call. And we wanna make sure what's in them, they're the best and it's the right product. We had a significant growth, like a 40% plus month over month in March. We expect to see LTH grow substantially over the years. And then we are diligently working on LT Digital and Lacy, our AI companion. And that is moving exactly on our, timetable right now, we're not behind. We expect to deliver an AI option for health and wellness, not for just building a workout, not just for meditation, not just for taking classes. I mean, the entire ecosystem that Lifetime offers, physically will be offered digitally. And we're continuing to work. We open our LT Digital Studio this week, next week in New York to be able to generate more amazing content there. So, and all ties in together between that and LTH and Miura. Miura is right on schedule in terms of the execution, the growth of the few places that we have open. We have scheduled openings for at least a half a dozen more throughout the rest of the year. And then we'll expand and start speeding up. So we're still looking for basically rollout of additional revenue opportunities that they're asset light. And those are all in the works and we look forward to them.

Great, super helpful. And then just quickly, does the LTH health products have any tariff exposure?

The LTH health, yeah, I mean, look, there are obviously, with some of the ingredients there, there are some potential risks there. Again, we don't think it's anything that's gonna be material, but we continue to monitor.

Yeah, and we are... Based on everything that we have done, there is at least gonna be half a dozen months before we get to the point where we might have to feel an exposure from that. So between now and then, our strong belief is that something will be worked out, as I've said before, not in disagreement with our administration that the government, that the US needs to be treated with more respect and a more fair trade. However, I think having tariffs is basically nothing short of just a additional friction for the growth of the economy worldwide. So I am not an expert on which way it's gonna go. All I can say to you is that our expectation is that it will level off, and we are well-installated for our core business, and for these type of things, all we have to do is execute better than other people. That's it.

Awesome, thanks, Tom, guys.

Thanks, Dave, thank you. Thank you. Ladies and gentlemen, there are no further questions at this time. I'd like to turn the call back to Conor Weinberg for closing remarks.

Yeah, thank you, operator, and thank you everyone for the good questions. We're looking forward to next quarter.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.