Life Time Group Holdings, Inc.

Previous wording

Certain statements in this discussion and analysis are forward-looking statements within the meaning of federal securities regulations. Forward-looking statements in this discussion and analysis include, but are not limited to, our plans, strategies and prospects, both business and financial, including our financial outlook and cash flow, possible or assumed future actions, opportunities for growth and margin expansion, improvements to our balance sheet and leverage, capital expenditures, consumer demand, industry and economic trends, business strategies, events or results of operations. Generally, forward-looking statements are not based on historical facts but instead represent only our current beliefs and assumptions regarding future events. All forward-looking statements are, by nature, subject to risks, uncertainties and other factors. This discussion and analysis does not purport to identify factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,”“assumes,”“expects,” “anticipates,” “intends,”“continues,”“projects,”“predicts,”“estimates,” “plans,”“potential,”“may increase,” “may result,” “will result,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,”“foreseeable,”“may,” and “could”as well as the negative version of these words or similar terms and phrases are generally forward-looking in nature and not historical facts. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

Current wording

Certain statements in this discussion and analysis are forward-looking statements within the meaning of federal securities regulations. Forward-looking statements in this discussion and analysis include, but are not limited to, our plans, strategies and prospects, both business and financial, including our financial outlook, growth, business initiatives, memberships, cost efficiencies and margin expansion, capital expenditures and free cash flow, improvements to our balance sheet, net debt and leverage, interest expense, consumer demand, industry and economic trends, tax rates and expense, rent expense, expected number and timing of new center openings and successful signings and closings of center takeovers and sale-leaseback transactions (including the amount, pricing and timing thereof), possible or assumed future actions, business strategies, events or results of operations. Generally, forward-looking statements are not based on historical facts but instead represent only our current beliefs and assumptions regarding future events. All forward-looking statements are, by nature, subject to risks, uncertainties and other factors. This discussion and analysis does not purport to identify factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,”“assumes,”“expects,” “anticipates,” “intends,”“continues,”“projects,”“predicts,”“estimates,” “plans,”“potential,”“may increase,” “may result,” “will result,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,”“foreseeable,”“may,” and “could”as well as the negative version of these words or similar terms and phrases are generally forward-looking in nature and not historical facts. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

Previous wording

The forward-looking statements contained in this discussion and analysisare based on management’s current beliefs and assumptions and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to numerous factors, many of which are beyond our control, including risks relating to our business operations and competitive and economic environment, risks relating to our brand, risks relating to the growth of our business, risks relating to our technological operations, risks relating to our capital structure and lease obligations, risks relating to our human capital, risks relating to legal compliance and risk management and risks relating to ownership of our common stock and the other important factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) andas such risk factors may be updated from time to time in our periodic filings with the SEC that are accessible on the SEC’s website at www.sec.gov. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive. Consequently, we caution investors not to place undue reliance on any forward-looking statements, as no forward-looking statement can be guaranteed, and actual results may vary materially. Additionally, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

Current wording

The forward-looking statements contained in this discussion and analysisare based on management’s current beliefs and assumptions and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to numerous factors, many of which are beyond our control, including risks relating to our business operations and the growth of our business, risks relating to our brand, risks relating to our technological operations, risks relating to our capital structure and lease obligations, risks relating to our human capital, risks relating to legal compliance and risk management and risks relating to ownership of our common stock and the other important factors discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) andas such risk factors may be updated from time to time in our periodic filings with the SEC that are accessible on the SEC’s website at www.sec.gov. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive. Consequently, we caution investors not to place undue reliance on any forward-looking statements, as no forward-looking statement can be guaranteed, and actual results may vary materially. Additionally, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

Previous wording

Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of more than 1.6 million individual members, who together comprise more than 891,000 memberships, as of September 30, 2025. We are a leading innovator in the industry having successfully created a leisure model that incorporates the country club wellness lifestyle within a fitness and active living community. We have earned the trust of our members for over 30 years to make their lives healthier and happier by offering them the best places, programs and performers. Wedeliver high-quality experiences through our omni-channel physical and digital ecosystem that includes 185 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada. Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance.

Current wording

Life Time, the “Healthy Way of Life Company,” is a premier lifestyle and leisure brand offering premium health, fitness and wellness experiences to a community of nearly 1.6 million individual members, who together comprise more than 888,000 memberships, as of March 31, 2026. We are a leading innovator in the industry having successfully created a leisure model that incorporates the country club wellness lifestyle within a fitness and active living community. We have earned the trust of our members for over 30 years to make their lives healthier and happier by offering them the best places, programs and performers. Wedeliver high-quality experiences through our omni-channel physical and digital ecosystem that includes 190 centers—distinctive, resort-like athletic country club destinations—across 31 states in the United States and one province in Canada. Our continuous commitment to members has resulted in strong brand loyalty and fueled our strong, long-term financial performance.

Previous wording

Our luxurious athletic country clubs total over 18 million of indoor square feet and over seven million of outdoor square feet in the aggregate. Our centers are located in affluent suburban and urban locations. Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, recovery spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces. Our premium service offerings are delivered by over 43,000 Life Time team members, including over 10,900 certified fitness professionals, ranging from personal trainers to studio performers.

Current wording

Our luxurious athletic country clubs total over 18 million of indoor square feet and over seven million of outdoor square feet in the aggregate. Our centers are located in affluent suburban and urban locations. Depending on the size and location of a center, we offer expansive fitness floors with top-of-the-line equipment, spacious locker rooms, group fitness studios and spaces, recovery spaces, indoor and outdoor pools and bistros, indoor and outdoor tennis courts, indoor and outdoor pickleball courts, basketball courts, LifeSpa, LifeCafe and our childcare and Kids Academy learning spaces. Our premium service offerings are delivered by over 45,000 Life Time team members, including over 11,400 certified fitness professionals, ranging from personal trainers to studio performers. We believe that no other company in the United States delivers the same quality and breadth of health, fitness and wellness experiences that we deliver, which has enabled us to consistently grow our annual membership dues and in-center revenue.

Previous wording

Our members are highly engaged and draw inspiration from the experiences and community we have created. The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits to our athletic country clubs. Our average revenue per center membership increased to $2,638 for the nine months ended September 30, 2025 as compared to $2,361 for the nine months ended September 30, 2024. Total visits to our clubs were over 93 million for the nine months ended September 30, 2025 as compared to 87 million for the nine months ended September 30, 2024, and average visits per membership to our centers remained strong at 113 for the nine months ended September 30, 2025. Our membership mix is notably shifting with couples and family comprising an increasingly larger portions of total memberships. These memberships have historically been more engaged with higher retention and higher average monthly dues. With these membership dynamics and our premium, high-use model, our newer clubs are typically reaching their desired utilization and revenue with fewer memberships and in certain centers we are limiting qualified memberships, which have significantly lower average membership dues.

Current wording

Our members are highly engaged and draw inspiration from the experiences and community we have created. The value our members place on our community is reflected in the continued strength and growth of our average revenue per center membership, center usage and the visits to our athletic country clubs. Our average revenue per center membership, which includes membership dues and in-center revenue, increased to $930 for the three months ended March 31, 2026 as compared to $844 for the three months ended March 31, 2025. Total visits to our clubs were nearly 32 million for the three months ended March 31, 2026 as compared to over 30 million for the three months ended March 31, 2025, and average visits per membership to our centers remained strong at 39 for the three months ended March 31, 2026.

Previous wording

Our total Center revenue increased to $2,182.4 million for the nine months ended September 30, 2025 as compared to $1,900.3 million for the nine months ended September 30, 2024. We believe it will continue to grow as we open new centers in desirable locations across the country, new members join at higher membership dues rates, our new centers ramp to expected performance and we continue to execute on our strategic initiatives discussed below. Our new centers on average have taken three to four years to ramp to expected performance. As of September 30, 2025, we had 30 centers open for less than three years and 17 new centers under construction. We are expanding the number of our centers using an asset-light model that targets affluent markets with higher income members, higher average revenue per center membership and higher returns on invested capital. As we open these new centers in more affluent markets, our average revenue per center membership should naturally increase.

Current wording

Our total Center revenue increased to $767.6 million for the three months ended March 31, 2026 as compared to $685.7 million for the three months ended March 31, 2025. We believe it will continue to grow as we open new centers in desirable locations across the country, new members join at higher membership dues rates, our new centers ramp to expected performance and we continue to execute on our strategic initiatives discussed below. Our new centers on average have taken three to four years to ramp to expected performance; however, many of our newer centers are ramping faster than this historical average. As of March 31, 2026, we had 27 centers open for less than three years and 17 new centers under construction. We are expanding the number of our centers using an asset-light model that targets affluent markets with higher income members, higher average revenue per center membership and higher returns on invested capital. As we open these new centers in more affluent markets, our average revenue per center membership should naturally increase.

Previous wording

We believe we have significant opportunities to continue expanding our portfolio of premium centers in an asset-light manner. We are now targeting 12 to 14 new locations on average per year starting in 2026 and we are planning to deliver at the high end of that range in 2026 and 2027. We also expect a larger percentage of our new centers will be large format ground up construction builds as compared to 2024 and 2025.

Current wording

We believe we have significant opportunities to continue expanding our portfolio of premium centers in an asset-light manner. We have opened five new centers in 2026 to date and are targeting 12 to 14 new centers on average per year. We also expect a larger percentage of our new centers will be large format ground up construction builds as compared to 2024 and 2025.

Previous wording

We also continue to execute several strategic initiatives that are driving revenue, engagement, membership optimizationand expansion as we elevate and broaden our member experiences and allow members and non-members to integrate health, fitness and wellness into their lives with greater ease and frequency. These strategic initiatives include pickleball, Dynamic Personal Training, Dynamic Stretch, small group training such as Alpha, GTX, Ultra Fit and MB360, our ARORA community focused on members aged 55 years and older, where we have experienced a significant increase in our unique participants or total sessions, and most recently LT Games, a unique hybrid-athletic competition. Our MIORA performance and longevity health offering is performing to our expectations in our first two locations, and we plan to expand these offerings to additional locations in 2025 and beyond.

Current wording

We also continue to execute several strategic initiatives on a club-by-club basis that are driving revenue, engagement, membership optimizationand expansion as we elevate and broaden our member experiences and allow members to integrate health, fitness and wellness into their lives with greater ease and frequency. These strategic initiatives include pickleball, Dynamic Personal Training, Dynamic Stretch, small group training such as Alpha, GTX, Ultra Fit, MB360 and CTR, our ARORA community focused on members aged 55 years and older, and LT Games, a unique hybrid-athletic competition. Our MIORA performance and longevity health offering is performing to our expectations and we now have a total of eight locations.

Previous wording

We have also been executing on enhanced offerings to accelerate growth beyond our centers. We are selling our LTH nutritional products more broadly on e-commerce platforms. Additionally, our digital platform is delivering a true omni-channel experience through our integrated digital app that is available to members and non-members at no cost, including live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content. We are continuing to invest in our digital capabilities, including artificial intelligence such as L•AI•C, our first generative, artificial intelligence driven healthy way of life personal companion with personalized content and recommendations, to strengthen our relationships with our members, reach more people looking for a Healthy Way of Life and more comprehensively address their health, fitness and wellness needs so that they can engage and connect with Life Time at any time or place.

Current wording

We have also been executing on enhanced offerings to accelerate growth beyond our centers. Our digital platform is delivering a true omni-channel experience through our integrated digital app, including live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support and curated award-winning health, fitness and wellness content. We are continuing to invest in our digital capabilities, including artificial intelligence such as L•AI•C, our first generative, artificial intelligence driven healthy way of life personal companion with personalized content and recommendations, to strengthen our relationships with our members, reach more people looking for a Healthy Way of Life and more comprehensively address their health, fitness and wellness needs so that they can engage and connect with Life Time at any time or place. Additionally, we are selling our LTH nutritional products more broadly on e-commerce platforms.

Previous wording

We continue to monitor the macroeconomic and policy environment and its impact on our business, including with respect to tariffs, inflation, interest rates, taxes and labor, as well as a potential economic recession and general economic and political conditions. There continues to be macroeconomic uncertainty in many markets around the world, including as a result of international unrest and trade policy, and new or elevated tariffs, which have increased certain of our expenses and capital expenditures, but have not had a material impact on our business. We continue to analyze the potential impact of these events and any resulting downstream impacts, including higher inflation. Despite these headwinds, we have experienced growth in our revenue and expanded our operating margins. We will continue to monitor the macroeconomic and policy environment and while any future uncertainty or volatility, a decline in the U.S. or global economy, or the public perception that any of these events may occur, could adversely affect our business and results of operations, we believe that our business is resilient and has performed well historically during different economic cycles including during a recession.

Current wording

We continue to monitor the macroeconomic, geopolitical and policy environments and their impact on our business, including with respect to inflation, the war in Iran, interest rates, tariffs, taxes and labor, as well as a potential economic recession or low growth and general economic and political conditions. There continues to be macroeconomic and geopolitical uncertainty in many markets around the world, including as a result of military operations in the Middle East, the international unrest, and new or elevated tariffs, which combined have increased certain of our expenses and capital expenditures, but have not had a material impact on our business. We continue to analyze the potential impact of these events and any resulting downstream impacts, including higher inflation and any disruption to the supply chain. Despite these headwinds, we have experienced growth in our revenue and expanded our operating margins. We will continue to monitor the macroeconomic, geopolitical and policy environments and while any future uncertainty or volatility, a decline in the U.S. or global economy, or the public perception that any of these events may occur, could adversely affect our business and results of operations, we believe that our business is resilient and has performed well historically during different economic cycles including during a recession.

Previous wording

Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the three and nine months ended September 30, 2025 and 2024. The following information has been presented consistently for all periods presented.

Current wording

Set forth below are certain GAAP and non-GAAP measurements and key performance indicators for the three months ended March 31, 2026 and 2025. The following information has been presented consistently for all periods presented.

Previous wording

(a) Share-based compensation expense recognized during the three and nine months ended September 30, 2025 was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan (“ESPP”) and liability-classified awards related to our 2025 short-term incentive plan. Share-based compensation expense recognized during the three and nine months ended September 30, 2024 was associated with stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2024 short-term incentive plan.

Current wording

(a) Share-based compensation expense recognized during the three months ended March 31, 2026 was associated with stock options, restricted stock units, performance stock units, our employee stock purchase plan (“ESPP”) and liability-classified awards related to our 2026 short-term incentive plan. Share-based compensation expense recognized during the three months ended March 31, 2025 was associated with stock options, restricted stock units, performance stock units, our ESPP and liability-classified awards related to our 2025 short-term incentive plan.

Previous wording

(f) Includes (i) legal-related expenses in pursuit of our claim against Zurich of $0.1 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, (ii) gain on sales of land of $0.6 million and $5.0 million for thethree and nine months ended September 30, 2024, respectively, and (iii) other immaterial transactions that are unusual or non-recurring in nature of$0.1 millionfor thenine months ended September 30, 2025.

Current wording

(c) Includes (i) legal-related expenses in pursuit of our claim against Zurich of $0.1 million for the three months ended March 31, 2025 and (ii) other immaterial transactions or items that are unusual or non-recurring in nature of$0.5 million and $0.1 millionfor thethree months ended March 31, 2026 and 2025, respectively.

Previous wording

(g) Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income using the effective income tax rates for the respective periods.

Current wording

(d) Represents the estimated tax effect of the total adjustments made to arrive at Adjusted net income using the effective income tax rates for the respective periods. We updated the Taxes amount used to arrive at Adjusted net income for the three months ended March 31, 2025 to include $12.6 million in income tax benefits resulting from a significant exercise of stock options by our Chief Executive Officer that were set to expire in 2025. This change did not impact our condensed consolidated financial statements prepared in accordance with GAAP, but it did decrease our non-GAAP Adjusted net income and Adjusted income per common share for the three months ended March 31, 2025.

Previous wording

(a) - (e) See the corresponding footnotes to the table in footnote 6 immediately above.

Current wording

(a) - (c) See the corresponding footnotes to the table in footnote 6 immediately above.

Previous wording

Our asset-light, flexible real estate strategy has allowed us to expand our business by leveraging operating leases and sale-leaseback transactions, among other asset-light opportunities. Approximately 69% of our centers are now leased, including approximately 84% of our new centers opened since 2015, versus a predominantly owned real estate strategy prior to 2015. Rent expense, which includes both cash and non-cash rent expense, will continue to increase as we lease more centers and will therefore impact the comparability of our results of operations. The impact of these increases is dependent upon the timing of our centers under development and the center openings, the timing of sale-leaseback transactions and terms of the leases for the new centers or sale-leaseback transactions.

Current wording

Our asset-light, flexible real estate strategy has allowed us to expand our business by leveraging operating leases and sale-leaseback transactions, among other asset-light opportunities. Approximately 71% of our centers are now leased, including approximately 83% of our new centers opened since 2015, versus a predominantly owned real estate strategy prior to 2015. Rent expense, which includes both cash and non-cash rent expense, will continue to increase as we lease more centers and will therefore impact the comparability of our results of operations. The impact of these increases is dependent upon the timing of our centers under development and the center openings, the timing of sale-leaseback transactions and terms of the leases for the new centers or sale-leaseback transactions.

Previous wording

We have been monitoring the macroeconomic and policy environment and its impact on our business, including with respect to tariffs, inflation, interest rates, taxes and labor, as well as a potential economic recession and general economic and political conditions. See “—Overview—Macroeconomy and Policy Environment” for additional information.

Current wording

We have been monitoring the macroeconomic, geopolitical and policy environments and their impact on our business, including with respect to inflation, the war in Iran, interest rates, tariffs, taxes and labor, as well as a potential economic recession or low growth and general economic and political conditions. See “—Overview—Macroeconomy, Geopolitical and Policy Environments” for additional information.

Previous wording

Total revenue. The $89.4 million increase in Total revenue for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was due to continued strong growth in membership dues and in-center revenue, including higher average dues, membership growth in our new and ramping centers and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training.

Current wording

Total revenue. The $82.7 million increase in Total revenue for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was due to continued strong growth in membership dues and in-center revenue, driven by higher average dues including from improved membership mix, membership growth in our new and ramping centers and higher member utilization of our in-center offerings, particularly in Dynamic Personal Training.

Previous wording

With respect to the $86.1 million increase in Center revenue for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024:

Current wording

With respect to the $81.9 million increase in Center revenue for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025:

Previous wording

•68.7% was from membership dues and enrollment fees, which increased$59.2 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. This increase reflects the growth in our new and ramping centers, as well as higher average monthly dues per Center membership during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024; and

Current wording

•73.0% was from membership dues and enrollment fees, which increased$59.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This increase reflects the higher average monthly dues per Center membership due to continued improvement in membership mix and the growth in our new and ramping centers during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025; and

Previous wording

•31.3% was from in-center revenue, which increased$26.9 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. This increase was recognized across all of our primary in-center businesses and reflects the higher utilization of our offerings by our members, particularly Dynamic Personal Training, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

Current wording

•27.0% was from in-center revenue, which increased$22.1 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This increase was recognized across all of our primary in-center businesses and reflects the higher utilization of our offerings by our members, particularly Dynamic Personal Training, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Previous wording

The $3.3 million increase in Other revenue for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily driven by the improved performance of our media and events business and Life Time Work locations.

Current wording

The $0.8 million increase in Other revenue for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by the improved performance of our Life Time Work locations and events business.

Previous wording

Center operations expenses. The $43.2 million increase in Center operations expenses for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth.

Current wording

Center operations expenses. The $35.7 million increase in Center operations expenses for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to operating costs related to our new and ramping centers, additional center operating expenses related to increased club utilization in our mature centers, as well as costs to support in-center business revenue growth.

Previous wording

Rent expense. The $8.9 million increase in Rent expense for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily driven by sale-leaseback transactions, taking possession of other leased properties, as well as the recognition of a higher level of contingent rent expense, which is generally determined based on a percentage of center-specific revenue and/or other center-specific financial metrics over contractually specified levels.

Current wording

Rent expense. The $8.7 million increase in Rent expense for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by sale-leaseback transactions, taking possession of other leased properties, as well as the recognition of a higher level of contingent rent expense, which is generally determined based on a percentage of center-specific revenue and/or other center-specific financial metrics over contractually specified levels.

Previous wording

General, administrative and marketing expenses. The $2.1 million increase in General, administrative and marketing expenses for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily due to increases in center support overhead to enhance and broaden our member services and experiences and general corporate overhead.

Current wording

General, administrative and marketing expenses. The $1.8 million increase in General, administrative and marketing expenses for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to increases in center support overhead to enhance and broaden our member services and experiences.

Previous wording

Depreciation and amortization expenses. The $5.6 million increase in Depreciation and amortization expenses for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily due to new center openings and capitalized software development costs.

Current wording

Depreciation and amortization expenses. The $9.8 million increase in Depreciation and amortization expenses for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to new center openings and capitalized software development costs.

Previous wording

Interest expense, net of interest income. The $17.6 million decrease in Interest expense, net of interest income for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily driven by lower average levels of outstanding borrowings and a lower interest rate largely as a result of the interest rate swaps entered into in April 2025.

Current wording

Interest expense, net of interest income. The $9.4 million decrease in Interest expense, net of interest income for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by lower average levels of outstanding borrowings and a lower interest rate largely as a result of the interest rate swaps entered into in April 2025.

Previous wording

Provision for income taxes. The $20.7 million increase in provision for income taxes for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily driven by an increase in earnings before taxes and a change in the valuation allowance in the prior year associated with certain of our deferred tax assets, partially offset by the excess tax deduction associated with share-based compensation. The effective tax rate was 26.5% and 28.2% for those same periods, respectively. The effective tax rate applied to our pre-tax income for the three months ended September 30, 2025 is higher than our statutory rate of 21% and is primarily due to the state income tax provisions and deductibility limitations associated with executive compensation, partially offset by the excess tax deduction associated with share-based compensation.

Current wording

Provision for income taxes. The $24.8 million increase in provision for income taxes for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by an increase in earnings before taxes and a decrease in the excess tax deduction associated with share-based compensation. The effective tax rate was 26.1% and 7.8% for those same periods, respectively. The effective tax rate applied to our pre-tax income for the three months ended March 31, 2026 is higher than our statutory rate of 21% and is primarily due to the state income tax provisions and deductibility limitations associated with executive compensation, partially offset by the excess tax deduction associated with share-based compensation.

Previous wording

Net income. As a result of the factors described above, net income was $102.4 million for the three months ended September 30, 2025 as compared to $41.4 million for the three months ended September 30, 2024.

Current wording

Net income. As a result of the factors described above, net income was $88.1 million for the three months ended March 31, 2026 as compared to $76.1 million for the three months ended March 31, 2025.

Previous wording

Our principal liquidity needs include the acquisition and development of new centers, lease requirements and debt service, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated equipment and member experiences. We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the Revolving Credit Facility, construction reimbursements and through sale-leaseback transactions. Additionally, we benefit from our in-house architecture and design expertise that allows us to design operationally efficient centers.

Current wording

Our principal liquidity needs include the acquisition and development of new centers, lease requirements and debt service, investments in our business and technology and expenditures necessary to maintain and update or enhance our centers and associated equipment and member experiences. We have primarily satisfied our historical liquidity needs with cash flow from operations, drawing on the Revolving Credit Facility, construction reimbursements and through sale-leaseback transactions.

Previous wording

Volatility in these markets may increase costs associated with issuing debt instruments or affect our ability to access those markets, which could have an adverse impact on our ability to raise additional capital, to refinance existing debt and/or to react to changing economic and business conditions. In addition, it is possible that our ability to access the credit and capital markets could be limited at a time when we would like or need to do so.

Current wording

As the opportunity arises or as our business needs require, we may seek to raise capital through additional debt or equity financing. There can be no assurance that any such financing would be available on commercially acceptable terms, or at all. Volatility in these markets may increase costs associated with issuing debt instruments or affect our ability to access those markets, which could have an adverse impact on our ability to raise additional capital, to refinance existing debt and/or to react to changing economic and business conditions. In addition, it is possible that our ability to access the credit and capital markets could be limited at a time when we would like or need to do so.

Previous wording

As of September 30, 2025, there were no outstanding borrowings under our Revolving Credit Facility and there were $31.8 million of outstanding letters of credit, resulting in total availability under our $650.0 million Revolving Credit Facility of $618.2 million. Total cash and cash equivalents at September 30, 2025 was $218.9 million, resulting in total cash and availability under our Revolving Credit Facility of $837.1 million.

Current wording

As of March 31, 2026, there were no outstanding borrowings under our Revolving Credit Facility and there were $33.1 million of outstanding letters of credit, resulting in total availability under our $650.0 million Revolving Credit Facility of $616.9 million. Total cash and cash equivalents at March 31, 2026 was $120.0 million, resulting in total cash and availability under our Revolving Credit Facility of $736.9 million.

Previous wording

The $218.7 million increase in net cash provided by operating activities for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was primarily the result of increased business performance and profitability and timing of cash interest payments.

Current wording

The $14.9 million increase in net cash provided by operating activities for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily the result of increased business performance and profitability.

Previous wording

The $274.0 million increase in net cash used in investing activities for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was primarily driven by a $198.8 million increase in capital expenditures and $50.6 million lower proceeds from sale-leaseback transactions and land sales.

Current wording

The $118.5 million increase in net cash used in investing activities for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by a $117.5 million increase in capital expenditures.

Previous wording

12 to 14 centers per year, most of which will be large format ground up builds in 2026 and 2027, the acquisition of existing health club and racquet facilities, higher maintenance expenditures for member experiences and operational efficiencies, and higher modernization and technology expenditures for center remodels, fitness floor reconfigurations and digital and artificial intelligence initiatives.

Current wording

The increase in total capital expenditures for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily driven by an increase in new center construction as we expand our new center openings to 12 to 14 centers per year, most of which will be large format ground up builds in 2026 and 2027, higher maintenance expenditures for member experiences and operational efficiencies, and higher modernization and technology expenditures for digital and artificial intelligence initiatives.

Previous wording

We believe we will generate adequate amounts of cash to meet our requirements and plans for cash in the short-term and long-term and expect to satisfy our short-term and long-term obligations through a combination of cash on hand, funds generated from operations, sale-leaseback transactions, the borrowing capacity available under our Revolving Credit Facility and additional debt and equity financing as needed.

Current wording

We believe we will generate adequate amounts of cash to meet our requirements and plans for cash in the short-term and long-term and expect to satisfy our short-term and long-term obligations through a combination of cash on hand, funds generated from operations, sale-leaseback transactions, the borrowing capacity available under our Revolving Credit Facility and additional debt and equity financing as needed. During April 2026, we closed on sale-leasebacks for five owned properties with two institutional real estate investors for aggregate gross proceeds of approximately $200 million. We expect to close on additional sale-leasebacks during 2026 for gross proceeds of an incremental $200 million and have positive Free cash flow for 2026.