Good morning. Welcome to the Life Time Group Holdings First Quarter 2023 Earnings Conference Call. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from the company. As a reminder, this conference is being recorded. I will now turn the call over to Ken Cooper with Investor Relations for Life Time.

Good morning, and thank you for joining us for the Life Time first quarter of 2023 earnings conference call. With me today are Bahram Akradi, Founder, Chairman and CEO; and Bob Houghton, CFO. During this call, the company 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. Also, the company will discuss certain non-GAAP financial measures, including adjusted EBITDA, net debt, free cash flow before growth capital expenditures and free cash flow. For purposes of this call, free cash flow is defined as net cash provided by operating activities after total capital expenditures. This information, along with the reconciliations to the most directly comparable GAAP measures where possible and without unreasonable efforts are included in the company's earnings release issued this morning, our 8-K filed with the SEC and within the Investor Relations section of our website. Our website also includes a supplemental presentation pertaining to the delevering of our business, a topic that Bahram and Bob will address this morning. I'm now pleased to turn the call over to Bob Houghton. Bob?

Thank you, Ken, and good morning to all our stakeholders on today's call. We appreciate you joining us this morning. I will briefly cover our first quarter 2023 results, the full details of which can be found in the earnings release we issued this morning. Bahram will then provide a bit more color on the quarter and how we will continue to grow our business, improve our profitability and reduce our leverage through the remainder of the year. We are off to a strong start this year. First quarter revenue increased 30% to $511 million, driven by a 31% increase in membership dues and enrollment fees and a 28% increase in in-center revenue. Center memberships increased 13% as we ended the quarter at approximately 764,000 memberships. We added 39,000 center memberships during the quarter, including one of the strongest January enrollments in our more than 30-year history. Including digital on-hold memberships, total memberships increased 9% to approximately 814,000 memberships. First quarter average center revenue per membership increased to $667, up from $640 in the fourth quarter and up 15% from $580 in the prior year quarter as we continue to benefit from higher membership dues and increased in-center activity. We generated net income for the first quarter of $27 million compared with a net loss of $38 million in the first quarter of 2022. Adjusted EBITDA increased 196% to $120 million and our adjusted EBITDA margin increased 13.1 percentage points to 23.5% versus 10.4% in the first quarter of 2022. We delivered another quarter of improving cash flow with net cash provided by operating activities of $74 million versus $9 million in the prior year quarter. As I move to an update on our adjusted EBITDA and leverage ratio, I will make reference to the new supplemental slides, which are posted to our IR website. As detailed on slide three, we reduced our net debt to adjusted EBITDA leverage in the quarter and expect further improvement in this key metric as we continue to grow our adjusted EBITDA and reduce our net debt. We are very pleased with our start to 2023. We are successfully executing our strategies to deliver significant revenue growth and improve profitability through growing memberships, increasing club usage through our expanded programming and opening new clubs that are ramping faster in great locations across the country. We are also clearly seeing the benefits from the re-wiring of the business and the strategic initiatives that we put in place last year. And we remain confident in our ability to increase cash flow and improve our balance sheet. I will now turn the call over to Bahram.

Thank you, Bob. I am very pleased with our first quarter results. Our team has been executing on our strategy with a great deal of passion and care. With our newly re-wired structure, we delivered Q1 records of revenue and adjusted EBITDA for Life Time. We have great confidence that we can continue to elevate our programming and experiences for our dedicated member base, while also growing our revenue and adjusted EBITDA. As Bob mentioned, memberships grew very nicely, up nearly 40,000 in the quarter. Our attrition has been coming down steadily each quarter and we project June will be the first month with attrition rates below 2019 levels. Not only our membership is growing, our in-center businesses are also improving on both top and the bottom lines. These improvements are driving better margins and are reflected in our better than expected first quarter performance, our Q2 guidance and our updated outlook for 2023. First, we are reiterating our full year revenue guidance of $2.2 billion to $2.3 billion. At the midpoint of that range, revenue increases approximately $430 million or 23.5% from last year. This guidance includes a revenue expectation of $560 million to $570 million for the second quarter, which is 21% to 24% growth over last year's second quarter. Second, we're increasing our full year adjusted EBITDA guidance to $470 million to $490 million from $440 million to $460 million. This includes an adjusted EBITDA expectation of $124 million to $126 million in the second quarter. We continue to be very conservative in our assumptions and are focused on deleveraging our balance sheet. As I mentioned previously, our number one focus has been to lower our net debt to adjusted EBITDA by first and most importantly growing our adjusted EBITDA. We have made good progress in this effort, as Bob mentioned. Page three of our supplemental presentation shows the improvement trend for our leverages over the last four quarters and our projection for '23 year-end, which is around 3.5 times. It's important to mention, we have approximately $400 million of our debt associated with assets under development. These assets are not yet deployed nor are they generating any revenue or adjusted EBITDA. Once these assets are brought online and mature a bit, debt to adjusted EBITDA will reduce by nearly a full turn and that's before any sale leasebacks. As I've mentioned on prior calls, earnings calls, our future development strategy will include building more clubs that are financed by landlords, which typically require less than $10 million of capital on average per location for Life Time. Further emphasizing this strategy would allow Life Time to generate as much as additional $300 million of free cash flow each year that could be utilized to reduce debt. In closing, I'm very happy with the position we're in today and we're very excited for the future. With that, we will answer your questions now.

Thank you. [Operator Instructions] Our first question is from John Heinbockel with Guggenheim Securities. Please proceed.

Hey, Bahram. Can you hear me?

Sure, can, John. How are you?

I'm good. I want to start with in-center revenue seasonally for the two summer quarters. How do you think about members spend, willingness to spend? And then the sort of things that you're going to do, Bahram, when you think about specifically for those quarters in terms of getting more involvement in the kids' camp, some of the events that you run and trying to get more engagement than you've ever gotten before?

I love it. John, we have been improving our processes and our technology where the members are -- they have started buying summer camp because the supply on that is basically limited in every club and it can only take so many summer camp kids from our memberships that we started this year by taking those reservations a few months back. And I am absolutely certain that we will outperform anything we've done in the past because already we have the kind of a view of how pack those programs will be. We are not seeing any resistance from the customer to spend at this time, even though we're extremely conservative and are baking in a pretty healthy macroeconomic headwind coming up some time in the next six to 12 months. That's we're baking that into our assumptions, but we are not seeing change. People love the programs, love the service, love all the additional changes we have made to make transactions for them easier and more robust. And all of those programs are working and personal training is setting records in EBITDA on a monthly basis. Everything is working. I mean, I wish we -- there was something that I could tell you. But right now, all things are working.

Great. And maybe as a follow-up, the transaction you just announced, Atlanta and Tampa, taking over existing facilities. Is there much of an additional opportunity to do that given the condition some facilities or owners may be in coming out of COVID? I guess, obviously, that's attractive in terms of capital cost and member ramp as long as the facilities are good. Is there an opportunity there?

Absolutely. When we see these things, in order for them to become a Life Time execution, they require significant overhaul. And landlords who basically haven't been getting paid by some of these tenants, when they have the opportunity to take those assets back, they look around and they look what tenants paid rent throughout COVID without mocking around, they call us and they ask us if we want it. And they're willing to make bigger concessions to have Life Time be the one going in there. So, yes, we have significant discussions on these types of facilities. And they will become a bigger percentage of our growth as in the future years because we are in discussions, we're talking to them, we'll take them many times, we shut them down to completely overhaul them and get them back where the landlords are providing TI dollars for us to do so. They are extremely attractive from the economic standpoint. They're sometimes two, three times better on the return on invested capital than we would do it the otherwise.

Okay. Thank you.

Thanks a lot.

Our next question is from Brian Nagel with Oppenheimer. Please proceed.

Hey, guys, good morning.

Good morning, Brian.

Congratulations on another nice quarter.

Thank you.

So my question, as you look at the results, a nice beat on EBITDA on a modest upside in your revenue. So as you look at that kind of how the model is flexing here, we talked a lot about the re-wiring of the model and the cost controls and such. But is there a particular area as you're really getting ramping or you're seeing better than expected efficiencies that are allowing you to drive these EBITDA beats?

Yes. So I want to be clear, we're spending roughly $40 million, $45 million more than three, four years back on an annual basis in additional programming. So we have focused on increasing, not cost cutting, improving the quality, improving the programming that we offer the members as part of the signature membership. So but we did go back and we really looked at our infrastructure and the way the company was making decisions. We re-wired that so that the decisions we're going through two to three stop at max rather than six or seven. We dramatically reduced the red tape in the company, very little change in -- actually there was no cuts in the number of people delivering services, I want to be clear. That is completely contrary to my direction to the team that I want the highest NPS, I want the highest quality ever. We basically re-wired the business. And the improvement in the percentages of the margins you guys are seeing are here and they're permanent. They are not for a quarter or two quarters. You can expect roughly between 20% and 23% EBITDA margin, which is a good couple of percent better than what we have done pre-COVID, right, before COVID. Once you add the rents back to our EBITDA, that number is about 2%, 3% better than the best numbers we had before on a steady basis. So as far as the revenue, the revenue was actually a little better than it reflects the way you guys are seeing it. We have been -- we've taken our foot off the gas on pushing the timing of the club openings. So if it takes a little more time to negotiate the bids a little more, allow the quality come together, not spend money on overtime for delivery of the clubs. So we have had delays in opening, so therefore, delays in revenue coming online, but the outperformance of the total clubs, opened clubs are making up for the delays and we're still kind of giving those revenues. So the revenues are strong as well as the EBITDA. It's not just the EBITDA, membership sales, we gained 39,000 to 40,000 additional members -- net memberships in the first quarter, amazing results. So everything is working, Brian.

Yeah, Brian, it's Bob. Just to add, the PT business, as Bahram talked about in his comments, I mean, we're delivering record levels of EBITDA dollars, record levels of EBITDA margin. We're growing that business sequentially in the top-line month-over-month. So that's another business that's really working well for us.

That's great. I appreciate all the color there. And then one quick follow-up, if I could. So Bob, you mentioned in your comments, maybe just talk about here too just the strength of that membership growth, particularly in January, which I guess is the typical New Year's resolution type season. So as we head now into the cool season, we have the guidance you gave, how should we be thinking about the membership here or the trajectory of membership? And given that this will be the first, I guess, un-COVID affected cool season for Life Time?

Yeah, membership will be very strong here in May, June, July. We expect no -- at this point, we're not expecting any negative sort of a factor coming into play. We are so ready, the clubs have been upgraded, the beach clubs are looking amazing and I think there will be significant pent-up demand for that. So we are also working on figuring out ways so we can make it easier for people to order food on the pool deck and that will allow to kind of improve the opportunity on revenue side on that. So we're pretty stoked about what's about to come here the next quarter as well.

Congratulations again. Thanks for all the color. Appreciate it. Thank you.

Thanks a lot.

Thanks, Brian.

Our next question is from Chris Carril with RBC Capital Markets. Please proceed.

Hi. Good morning. So could you expand a bit more on your latest thinking around dues pricing strategy? What are you seeing from new and existing members in terms of reaction to pricing actions? And where do you potentially see further room for pricing?

So really, honestly, we -- as I've mentioned this over and over, our pricing strategy has been a function of controlling the experience we want in the club. So we are -- where we have more than abundant opportunity in a certain club to gain yet a couple of thousand more memberships, we are not pressing the price point in that club. Where we have members in a club feeling like it's being over-membered and we're trying to limit the membership coming into that club and control the experience then we just raise the price. So it really speaks for itself. The customer clearly demonstrating that they like the new strategy. Our result shows that all across, our NPS shows it, the NPS is higher, revenue is higher, EBITDA is higher. The customer who wants the Life Time athletic club experience isn't comparing Life Time athletic country club experience to anything else. They just want to be in Life Time. So and we have limited supply in every club before the experience gets tarnished. So managing that experience naturally guide us for where the price needs to be. And that has allowed the prices to go to where they really need to be established. They're working right now. We don't have huge plans to adding additional new rack rates, except if nothing gets done, just Chris, nothing gets done systematically. We don't have a price increase ever across every club of all the country or something like that. It is literally location by location, member by member. And it's based on what makes the most sense overall. So the way that I would tell you for you guys to think about and work with Bob and Ken is you really need to look at the average dues for all subscription.…

Yeah. No, super clear. And then just for my follow-up here, just circling back to the incentive revenue going forward. Could you update us on demand and trends around dynamic personal training? I know Bahram, that's been a big focus area for you this year. Thanks.

Yeah. So I'm really happy with our team. I just got to say, the execution of our team has been phenomenal. I believe we set the record EBITDA number in March for that business. It's really awesome to see our newly invented dynamic personal training model and the re-wiring of that business has been so successful. We significantly and I mean significantly reduced the overhead that was outside of the clubs to the corporate office by like literally like 300%. It's 1/3 of what it used to be that overhead. And I am involved personally weekly with our personal training leads across the country. And it's the best momentum, the best model that we have ever had and the results are coming. We're getting people who had left Life Time because they didn't like certain things and the COVID kind of made it ice on the cake. Weekly, we're getting some of those people knock back on the door and wanting to come back and work on the new culture, new system. And then we are completely tooling the clubs with additional equipments so the clubs have the best environment, the best setup, the best equipment for a trainer to train their customer. You couldn't find a better opportunity with equipment and spacing to train your customers. So that also attracts the best trainers coming in. So it's all positive momentum. I expect this year on a monthly basis we'll also break personal training revenue records, not just EBITDA records. It's all moving in the right direction.

Awesome. Thanks so much.

Our next question is from Brian Harbour with Morgan Stanley. Please proceed.

Yeah, thank you. Good morning, guys.

Hello, Brian.

Good morning, Brian.

Your comments on the cost side I think were clear. I think one question I had was just as we see at the kind of center operating expense is basically back to where it was kind of pre-COVID, actually a little bit better as a percent of revenue. Should we expect that to continue? I know that there's some seasonality to that, but how should we think about that line?

As I mentioned, we have fine-tuned the model of the way the clubs run with their management system converted to a leadership concept, everybody is leading the way rather than bossing other people around. So the GMs, the structure, they're called Lead Generals and they have a very, very clear approach on how -- they have lots of authority and they're responsible. And so it is completely match. So pretty much all the waste has been taken out of the clubs and the way they're running correctly, they're running right now is the correct way. Where we're going to see potential margin improvement still is going to be on the revenue that is still are there to increase. And as the dues revenue increase in the clubs, the cost isn't going to grow proportionally to that. So there is room for that to improve. But at this point, I would basically model what I told you guys is between assuming the rent will be between 12% and 13%, that's really the number that I think is going to fall in and so it could be a little lumpy when we do a big sale leaseback, we can get closer to 13%. And prior to that, this is going to be closer to 12% of our revenue. So if you think about that, then our EBITDA margin you can kind of plan between 20% to 23% is where it is right now. Can it improve? Yes. Will I commit to that improvement? Should you put it in your model? Not right now.

Okay. Thank you. Could you also just comment on kind of the sale leasebacks, the pacing of what's still to be done and perhaps kind of the cap rates on those today relative to what you'd seen in the past?

Yeah, the cap rates we have done for the first $135 million is the same range at the mid-6s that we told you guys. And we are not anticipating that there is going to be much higher rates. I think, again, I emphasize, these assets and when people are doing -- buying these, they're buying them. It's a 20, 25-year lease with 25 years of options with fixed bumps in it. So it's not tied into the two-year mortgage, it's two year T-Bills or three year. It's just a headwind for temporarily. So I think the -- our expectation is we're going to get them done in the same range that we've done before. And I'm pretty certain that it's all going to come together. That's as all I can kind of share with you right now.

Okay. Thank you.

Our next question is from Robbie Ohmes with Bank of America. Please proceed.

Good morning, Bahram. Great quarter. I have two questions. The first is just can you talk about -- give us some insights on how the new clubs are ramping up? And are they ramping up faster than normal or sort of in line with normal? And when you look at the ramp up of new clubs and what are the drivers you think are making some new clubs outperform other new clubs?

Well, that's a great question. But pretty much the universities are working extremely well. They are ramping faster now in dues and in margin contribution particularly than our old processes. So the new model is working. Again, the new, overall, the new model of execution and these clubs are ramping faster and they are getting to -- we have clubs that just opened literally like in 60 days, they are contribution margin positive. In 90 days, they're contribution margin positive. So they're working extremely well. I mean, we have virtually no -- nothing that looks like is less attractive than the past, Robbie. It's just all positive to the past.

Got you. That's helpful. And then maybe for Bob. So the revenue guidance is the same, but the EBITDA guidance is up about $30 million. Could you maybe just give us more -- maybe break out how we should think about where that $30 million comes from versus the previous guidance? And obviously, some of it's the beat today, but that might help us.

Yeah. So Robbie, starting with the top-line, as Bahram alluded to the timing of opening new clubs is the driver. We've shifted those out a bit later than what was assumed in our original guide for the year. So that's one element. As Bahram said, we feel great about our revenue growth. All the investments we're making in the clubs are working in terms of higher activity within the club, swipes or badge scans are up, memberships are higher. So all of that's working. It's just really the timing of shifting those clubs. And then in terms of the EBITDA guide, we've taken it up $30 million. We still have significant macroeconomic headwind assumed in that guide. So that's a little bit of context from a margin perspective in the back half of the year.

Great. Thanks so much.

Thanks, Robbie.

Our next question is from Dan Politzer with Wells Fargo. Please proceed.

Hey, good morning, everyone and hope you are all doing well.

Good morning, Dan.

I had a question, I wanted to unpack those margin comments a little bit more. I mean, the last couple of quarters, your EBITDA margins have been 36.5%. And I'm trying to kind of bifurcate or isolate for what the factors are that would change last two quarters or with the next three quarters. I mean, is this a function of in-center versus dues mix? Is it something seasonality where employment costs maybe go up or is it also some inherent conservatism, which it does sound like that is a component as well?

So part of it, Dan, is that we're trying to make sure we give the Street and you guys the guidance that can be met regardless of macroeconomic headwinds. We keep telling you that we're baking in potentially a recession or at least major headwinds, we are baking that in. Can the results be better? Yes, they could be, but we're not going to put that out there and then disappoint. Okay. The second thing is that, yes, during the summer, we will have significant increase of revenue and cost. We have to fill these clubs up with lifeguards and the beach clubs are not inexpensive to run. So there is a conservative modeling for rest of the year. But the 36.5% margin you mentioned is really where I would like to see things to continue to come. And I -- is there a path that we can get that done throughout the year? Yes. Would I recommend you keep your horns in and be a little more conservative? Absolutely. Is that correct?

Yeah, yeah. That's helpful. For my follow-up, the enrollment fees, you guys have talked about that I think a little bit last quarter. Is that still something you guys are considering rolling out or have you kind of pushed pause a little bit there?

No, it's already rolled out. We need to charge a pool pass to make sure we can control the pool experience so they don't get over-run for new customers coming in and joining just for the summer, crowding the member who has remained a royal member for three years, four years, five years. So this is nothing new. It's exactly what we've done every year. We're just -- we fine-tune, are doing based on what we learn. And -- but we have already launched a -- in certain clubs, and it's not universal, it's not the same, it's location by location based on how busy the club is already or isn't that we manage that throttle of the pool pass amount or if there is any. But we've already started that week or two weeks ago. And again, we have no reason to think -- it's not a material number on the revenue side, I want to be clear. It's not about making money. It's just totally about managing the experience and the flow of the customer through the club we want to manage.

Understood. Thanks for all the color.

Thank you.

Our next question is from Chris Woronka with Deutsche Bank. Please proceed.

Hey, guys. Good morning. Thanks for all the color so far. First question was just kind of on ancillary build and ultimate long-term potential in these new centers. Is there any way to kind of compare and contrast what that ancillary picture might look like at a club you've opened in the last couple of years versus kind of the older clubs in the system?

So I want to understand your question better. You're talking about is the in-center different in the new clubs versus old clubs?

Yeah, kind of in terms of ancillary spend on top of the dues.

Yeah, it's a great question. There is no way that you would be able to -- anybody could basically model that out because of the inconsistencies. We open a club that is a little smaller in an urban market, doesn't have a real bistro, a pool, doesn't have summer camp, doesn't have all of that. It's basically more just personal training and dues, maybe a little bit of a juice bar or something. You open up a big, big, big club in a suburban area with a big huge beach club, full-size cafe, summer camps. And so those are -- will be kind of a give or take. The biggest revenue source for Life Time historically after dues has been personal training. One thing we are doing with the things we're working with the personal training are all working. And I think that is really just a function of launching the club with the right model of personal training. And, yes, they do end up having a better start with the PT model, with the DPT, Dynamic Personal Training model. In fact, we have a club in pre-sell right now in Miami Falls. And the way we're running that, they are basically selling personal training every day as they're selling new memberships, which is much better new model of execution than we have done in the past.

Okay. Super helpful. Thanks, Bahram. And then follow-up is, I know you've talked a little bit about the Atlanta and Tampa, I guess, club re-openings, conversions. There's also -- I think we continue to read about a lot of big box retail, including some stores that might be typical of the size of your clubs closing in 2023. Is there any thought to potentially re-purposing some of those? I know some of them are in markets you wouldn't want to be in, but maybe some are. So is there any thought to looking at those?

Yeah. I mean, I'll respond to your question like this. Our pipeline of opportunity is as robust as it's been ever before. And with Life Time's execution, again, and the relationships we have established, we don't think of our landlord as landlords, we think of them as our partners. We treat them like a partner as we treat our employees like a partner, as we treat -- it's the culture of Life Time. And all I can tell you is, yes, there is significant opportunity for more additional capital-light growth coming up more than ever before and we are uniquely in a position to take advantage of that.

Okay. Very good. Thanks, guys.

Thank you.

Thanks, Chris.

Our next question is from Simeon Siegel with BMO Capital Markets. Please proceed.

Thanks. Hey, guys. Good morning. Hope you are all doing well.

Good morning, buddy. How are you?

Not bad. Looking forward to the summer and getting out there. So we're almost there. So really nice job on the improved profitability guys. This is nice to see. You've talked about the center OpEx efficiency. In addition to that, the G&A was down meaningfully and even ex the share-based comp. So anything you can dig in there as to what drove the savings and maybe what you think G&A should look like embedded in the 2Q and the full year guide? And then Bahram, I was just curious about this. With all the success of converting the digital on-hold back to center memberships, the digital on-hold memberships have actually been nicely lower than pre-COVID for the past several quarters. Just curious what do you think about that? Is this -- is there kind of like a post-COVID normalization that happened and you'd expect that number to revert back up to what it's historically been or do you think there's something more structural as to why fewer people are going on-hold?

You're asking a bunch of really good questions. Let's talk about the G&A. I just be the first one to say when things are not great, they're under my dime, they're my fault, they're nobody's else fault. Our G&A was broken. I complained about it, but I didn't do -- I wasn't forceful enough about it for years and years and years. And our G&A was growing pretty much linearly in a dollar for dollar for top-line growth, which makes no sense whatsoever. So as we re-wired the business the last eight, nine months, it's a franchisor-franchisee model, which basically means our corporate office G&A for all of the in-centers and all those things should not grow proportionally as the club. As we build another $1 billion worth of revenue coming out of centers, the corporate office shouldn't grow 50%. It should grow 10% from where it is today. It will be very, very modest to -- versus the new expansion of our revenue. And I would feel embarrassed if I wasn't able to give our investors that margin expansion that would come from scaling the company correctly. It's all in place. I don't have any reason to believe it's going to change. The field loves it. The area directors, VPs and the lead generals, they love the new system. They have more clear lines of authority. And so that's working extremely well. The other question you had was about fundamental re-design of the on-hold digital. Yes, we changed that over time gradually. It used to be you could go on-hold and stay on-hold forever. We basically gradually took that down to like nine months than six months and now it's four months. You can go on-hold for four months, but you can't go on-hold forever. You automatically have to come back. And so it's just basically -- it just happens on an autopilot. So -- and you can only go on-hold one time a year. So my anticipation is that the percentage of on-hold to the total membership really shouldn't fluctuate from here dramatically. Is that helpful?

That is perfect. Best of luck for the rest of the year guys. Nicely done.

Thank you so much.

Thanks, Simeon.

Our final question is from John Baumgartner with Mizuho Securities. Please proceed.

Good morning. Thanks for the question.

Thank you.

Just one for me. I wanted to come back to the growth in memberships. Do you have a sense Bahram from where those members are being sourced? Is it from other premium or specialty gyms? Is it from the at-home Peloton crowd? Is it folks trading up from lower priced clubs? And then demographically, are there any themes you're seeing, whether it's newer, you're younger versus older, families versus singles? And I'm curious, when you think about that composition of members coming in, is it informing or requiring any sort of changes in how you're thinking about re-investing at the margin, whether it's in programming or anything else? Thank you.

Yeah, great, great question. So when we looked at post-COVID from two years, three years ago, I did not believe that all the members that left would come back. I figured 85%, 80% would come back. So we went to the re-design of what do we need to do. So we overhauled and revamped our small group training. And we made the small group training so easy for people to stay. This is equivalent of our Ultrafit or GTX or Alpha equivalent of certain boutiques. We made it a singular membership. They didn't have to make a double purchase. They buy a signature membership. And we dramatically increased the number of classes we offer. I mentioned to the tune of about $45 million a year more spent in all the extra programming we're doing. That tripled more than that. We looked at it over like a 14-month period. We went from 16,000 unique participants to 56,000 unique participants in that space. So that simply is where we're getting the membership. DPT, we're getting customers who come in that want that. Pickleball, we added at least 100,000 people plus that they're playing Pickleball in Life Time. And so, and simply, if you increase the reasons for people to wanting to come to Life Time, then you will see that every roughly 10, 11 swipes ends up being one membership. So it's not complicated. All we have to do is giving reason to people to want to be in Life Time for a visit and then every 10 or so. Now to your question, it's across the board. We see people coming from boutiques. We see people coming who haven't been working up in clubs. They're tired of doing their home workout, which I don't know some, at one point, everybody thought…

Great. Thanks, Bahram.

Thank you so much.

We have reached the end of our question and answer session. I would like to turn the conference back over to Bahram for closing comments.

We're thankful to all of you, all of our investors and our members and our amazing, amazing team members who have really passionately put their heart and soul underlying to make sure Life Time prevails and get back and go beyond where we were pre-COVID. We're excited for the future. We are very, very confident that we can deliver what we are promising you. And hopefully we can improve that as time goes on. And so with that, we just look forward to seeing, hearing you guys back on our next call in July, August. Thanks so much.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.