It’s just steady. But the beauty of our business is that it’s a strong subscription base, and every given month of sales, new sales is 136, 140 of the total impact on our total revenue or EBITDA. So it’s really less important. The net membership is the key, and we’re doing well with that.
Robbie Ohmes: Got you. That’s helpful. And then one of my other questions was just the center operations costs are running sort of flattish this quarter. How are you kind of holding the center operation costs per average center kind of flattish with the swipes going up?
Bahram Akradi: That’s a great question. So our center cost fluctuates because the type of revenue that comes in. So in the summer months, we have great revenue and a great margin of the summer camp. We have great revenue, but not great margin out of our increased activity on the pool deck. So you basically have a lot more customers coming in, but we have massive amounts of life cards. And so I think if you try to dissect it month by month, it’s not even the same the three months of a particular quarter, if that’s helpful at all for you. Like third quarter, July and August are more the same and September is totally different. So when you look at it in a 3-months basis, we are delivering — the team is delivering better than the budget in terms of what I can tell you.
So the numbers are on the top line and the bottom line — on the top line is as good as what we had expected, and the bottom line slightly better as you can see in the results. But they’re really like a fourth quarter there, the revenue mix shifts. We have about naturally, like I said, $20 million, $30 million less revenue that — it’s a summer revenue that doesn’t exist in the fourth quarter. And so what we are balancing is to try to give you guys with all the different moves we make that steady 23%, 24% EBITDA margin, but that all comes in different forms of shapes.
Robbie Ohmes: Got it. That’s very helpful. Thanks so much.
Bahram Akradi: Thanks Robbie.
Operator: Thank you. Our final question will come from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.
Chris Woronka: Hi, good morning, guys. Thanks for squeezing me in. A lot of ground covered already, but really wanted to I guess, revisit kind of the conversion angle in a different way, which is you’ve talked a lot about why it makes sense strategically and financially, but is there any way to — I think there’s confusion in the market about what this really means for you guys. I mean is there any way to [ ring sense ] in terms of, this is what a conversion club ROI is or payback period? I mean I think we can conceptually get it directionally, but is there any way to put numbers around it to kind of show folks how powerful it is?
Bahram Akradi: Yes. I mean, it’s going to take a little work for us to create a dozen example for you guys of clubs. I mean, there are clubs that we have built to conversion that they have better returns than some of our best ground-ups. And when we have ground ups, that they’re better than some of the conversions. But if you look at them in aggregate, if you take a look at all the clubs, if you look at Life Time today, these are people who think these are new stories. There are just no new stories. It’s just the pace of it. In 2006, the company had, I know, 20, 30 clubs and I took over six or nine clubs at one time, massive change to our size of companies or much bigger clubs. And they — sometimes they take a little longer, sometimes they take shorter.
But today, when you look at it in a long-term view, every one of those clubs are amazing assets and everybody will think of them today as one of our ground ups. They don’t think of them as something new. So you just got to think about the fact that we open a club, x amount of square footage, with the programs that we have, Strike and Ultrafit and GTX and Alpha and all the same programs, whether or not that box was this box or that box or how the outside of it is, the inside programming is all the same. And then it’s the cost of, okay, how much money do you have to spend and how long in advance and before you get the first dollar of revenue, and these types of takeover, they just have a quicker turnaround, you get to revenue and EBITDA from them faster than you do when you go buy a piece of land and takes you three to four years before you have revenue coming from all those dollars that you spent over that period of time.
So the right way to think about Life Time honestly is as a portfolio. We’re big enough today at 170 locations. To look at this company as a portfolio, we manage a portfolio of assets. And it’s the job of the entity and the executive team and the management of the company to sort of deliver a steady growth of revenue and EBITDA and memberships while we uphold the quality of our brands so it can give us the opportunity for other ways using our brand to grow revenue and have expansion there. Frankly, I think the results will speak for themselves. And we’ve — I’m proud of what the team has delivered the last three years, and we expect to continue to grow revenue and EBITDA at a very, very nice pace despite whatever soft landing or hard landing that the market will offer.
So what I have thought is the most important thing based on our assessment of the higher interest rates and the impact on different sides of the economy, and as I’ve mentioned to you guys the difficulties that I think the real estate market is going to see, we wanted to get to this cash flow positive after all of the capital we need for the growth a sooner time than later. And I’m just really, very happy where we are at with that.
Chris Woronka: Okay. Thanks Bahram. And if I can, just a super quick follow-up. You’ve talked in the past about how potentially, I guess, the right word is franchising some of your concepts or licensing some of your concepts, not locations, but Dynamic Stretch or something like that. That’s still on the table in terms of generating some 100% fee-based income?
Bahram Akradi: I would just tell you that Life Time is completely open-minded to benefit from the programming and the power of our brand. But we’re always going to protect the brand. So we’re not going to jump into what sounds great and have somebody bastardize, but Dynamic Stretch, Ultrafit, many of the programs we have could become a franchisable model at any given time we decide to do it. They are amazing programs with great success, and there is no way we couldn’t do those as good as anybody else. So that’s a possibility, but it’s not a straight line in the game plan of the company at this moment.
Chris Woronka: Okay. Great. Thanks.
Bahram Akradi: Thank you so much.
Operator: Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Bahram Akradi for closing comments.
Bahram Akradi: I appreciate everyone. Great questions. Hopefully, we provided the right color for you guys. Looking forward to be with you guys again in three months. Have a good day.
Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
