Life Time Group Holdings, Inc.

Greetings and welcome to the Lifetime Group Holdings, Inc. Q2 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Connor Wienberg, Vice President, Capital Markets and Investor Relations. Connor, please go ahead.

Good morning. Thank you for joining us for the second quarter 2026 Lifetime Group Holdings Earnings Conference Call. With me today are Bahram Akradi, Founder, Chairman, and CEO, and Erik 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's 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 AK filed with the SEC, and on the investor relations section of our website. With that, I will turn the call over to Erik.

Thank you, Connor, and good morning, everyone. We appreciate you joining us for our Q2 business and financial update. Please note, this morning we posted an earnings supplement on our investor relations website, which includes additional detail on our membership mix and comparable center revenue. Starting with our second quarter revenue, total revenue increased 13.7% to $866 million, driven by continued strength and performance across our clubs, including higher dues revenue and strong utilization of our in-center businesses. Comparable center revenue grew 9.1%, This was above our expectations, driven by in-out performance in our membership acquisition and in-center business performance. As outlined in our earnings supplement, there are four components of our comparable center revenue growth. Improved membership mix contributed 3.1% growth. Price contributed 2.9% growth. In-center businesses contributed 2.9% growth, largely driven by double-digit, year-over-year growth in dynamic personal training and life spots. and Volume contributed 0.2% to comparable center growth. As a result of our Q2 performance, we have raised our full year comparable center revenue guidance to 7.9 to 8.3%, up from 6.9 to 7.5%. Average monthly dues were $245, up approximately 12.3% year over year, and average revenue per center membership was $993, up 11.8% year over year. Growth in average dues was driven primarily by positive membership mix trends and execution of our pricing strategy. We ended the quarter with approximately 860,000 center memberships, which reflects 1.2% year-over-year growth. As we've discussed on past calls, we have been managing our membership mix. Part of our strategy has been to limit certain qualified memberships, specifically those administered by third-party medical insurance providers. We refer to these as qualified medical memberships. This strategy continued in the second quarter. Qualified medical memberships declined by approximately 20,600, down 18.9% year-over-year. All other memberships grew by approximately 30,900, up 4.2% year-over-year. Our strategy is working, as reflected in our 13.3% growth in total dues revenue year-over-year. We expect total center membership growth of 1 to 1.5% in the third quarter and 2 to 3% in the fourth quarter. Excluding qualified medical memberships, we expect center membership growth of 4 to 5% in both the third and fourth quarters. Moving on to net income. For the quarter, net income was $101.4 million, an increase of 40.6% year over year. Second quarter net income included approximately $8.5 million of net tax-affected items excluded from adjusted net income, primarily consisting of share-based compensation. Net income in the prior year included tax-affected net cash proceeds of $9.3 million received from employee retention credits under the CARES Act, partially offset by a tax-affected net loss of $9 million on a sale-leaseback transaction. Adjusted net income, which excludes the tax-effected impact of these items, was $109.8 million, up 30.6% year-over-year. Adjusted EBITDA was $246.5 million, an increase of 16.8% over the prior year quarter, and our adjusted EBITDA margin improved by 80 basis points to 28.5%. As noted in our earnings release, we increased our full-year 2026 revenue, net income, and adjusted EBITDA guidance. We also increased the midpoint of our full-year adjusted EBITDA margin guidance to 28.2%. Our updated guidance includes the impact of seven clubs scheduled to open in the fourth quarter and the associated pre-opening expenses and early operating ramp impact on margin. Net cash provided by operating activities increased to $209.6 million, approximately 7.1% higher compared to the prior year quarter. Total capital expenditures were $263.3 million, up 18.6% from the prior year, reflecting construction activity in support of our new club openings for 2026, as well as the construction on clubs planned for 2027. As of today, we have opened seven of the 14 clubs scheduled to open this year. The remaining seven clubs are expected to open in the fourth quarter. We still expect 12 to 14 new clubs in 2027. Ten of these clubs are already under construction. In April, we closed on sale-leaseback transactions that generated approximately $200 million of sale-leaseback proceeds, and we expect to complete approximately $400 million for the full year, supporting our ongoing focus on generating annual positive free cash flow. With that, I will now pass the call to Brown.