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spk02: Good afternoon and welcome to the WW International first quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Corey Kinjer of Investor Relations. Please go ahead.
spk03: Thank you to everyone for joining us today for WW International's first quarter 2022 conference call. At about 4 p.m. Eastern time today, we issued a press release reporting our first quarter 2022 results. The purpose of this call is to provide investors with some further details regarding the company's financial results as well as to provide a general update on the company's progress. The press release is available on the company's corporate website located at corporate.ww.com. Supplemental investor materials are also available on the company's corporate website in the Investors section under Presentations and Events. Reconciliations of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measures are also available as part of the press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and certainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and certainties of such statements. All forward-looking statements are made as of today and, except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Joining today's call are Seema Sastani, CEO, and Amy O'Keefe, CFO. I will now turn the call over to Seema.
spk05: Thanks, Corey. Good afternoon, everyone, and thank you for joining us today on my very first earnings call as the CEO of WW International. I'd like to thank our board of directors, especially Ray DeBain and Oprah Winfrey, for the opportunity to lead this iconic company at a pivotal time. I joined the company seven weeks ago and have enjoyed digging in with the team across all aspects of our product and business. There is so much to cover, and I want to give you a better opportunity to get to know me. So to help do that, as mentioned in our earnings release, a short video is available in the investor relations section of our website, speaking further to my experience and my decision to join Weight Watchers. But for today, I will focus on an assessment of the business, immediate priorities, and thoughts about where we're headed. Amy will then cover our Q1 financial performance and outlook. I've spent the better part of my career building digital communities, specifically with empathy at their core. I look at Weight Watchers, and I see the original social network. We gather people around a shared interest of health and weight loss. For almost 60 years, we have met the need of members looking for a sustainable way to meet their weight loss goals. It's clear that in the last two years, there has been a shift in consumer sentiment, with many deferring action on these goals. But we believe we can deliver a product that gives them a renewed desire to address it. Weight Watchers, through its experience at the intersection of science and community, has been the gold standard in effectiveness, and frankly, still is. The digital product has come a long way But beyond the inspiring member community found in Connect, it has remained largely content and tracking tools, both of which are a commodity on a weight loss journey. 24-7 messaging chat with a coach was a good first step, but the level of coaching found in our workshops, where each week you meet with your coach and a group of like-minded members, remains lacking in the digital-only experience. What differentiates us is a human connection. Digital tools and features are table stakes. Real personal connection, that's the magic. The mixed shift to digital was accelerated by the pandemic, bringing us to today, where workshop subscribers have come to represent only 16% of the total, meaning nearly 85% of our members are not experiencing our gold standard. I am committed to changing that. Weight Watchers is one of the most trusted brands in the world. People need to get healthy, and weight loss is the first step for many. We have the foundation to deliver results for consumers, but we're trying to do too much and complicated our marketing and the product in the process. We know how to help people lose weight and get well because we've done it for almost 60 years. coaching, accountability, and community. We will continue to deliver that with warmth and humanity, utilizing the latest technology. People are begging for simplicity and efficacy in this space, and we can and must deliver that. The company has scaled up investments in the business over the last years, but not all of those investments have delivered impact. There are many paths to growth, However, the organization has been pursuing too many at once, creating complexity and overextending critical product and tech resources. With continuing pressure on our revenue, we will take action to stabilize subscriber trends of our existing offering while building a platform that will be the foundation for a path to profitable growth. To do so, it was clear to me that structural changes were required to create simplification, drive throughput, and ensure accountability. On April 22nd, we announced a restructuring to simplify and flatten the organization in order to minimize redundant workflows and improve decision-making. These actions were primarily focused on reducing layers of executive leadership with VP and above positions to decrease by about 30%. The organizational realignment combined with real estate is expected to deliver nearly $30 million of savings on an annualized basis. We need to narrow our focus to what we do best. Weight Watchers is the most clinically studied program in the world, and we do weight loss better than any other program, full stop. We need to focus all of our efforts into advancing this position by building a shared experience that keeps current members engaged and excites new members. So that means we're pulling back on certain initiatives. While many of these were strategically compelling, the investment and resources required were a distraction and didn't deliver the necessary return. Starting with Digital 360. D360 was the company's first attempt to bring coaching to digital subscribers and attract a younger demographic, which makes strategic sense. However, as it was designed, D360 did not accomplish these objectives. Engagement in the product was low. Therefore, we will be sunsetting the D360 products starting in the U.S. and Canada. As appropriate, we will upgrade these members for the same rate at their current membership. The decision to sunset serves as an important cultural shift to embracing data-informed product development and calibrating quickly off those learnings. We will take the learnings from D360 and develop a roadmap to bring coaching and community to our digital product in a compelling, holistic way for all members. Our team is focused on creating a new app experience that is streamlined around three pillars, coaching, accountability, and community. This is a process that will take up to 18 months, but there will be quick wins along the way as we improve the core experience through a data-informed feature pipeline with the goal to stabilize the business trends in 2022 and to return to member sign-up growth in 2023. At the same time, In-person workshops will become a priority. We are going to tech-enable our workshop experience to help coaches better serve our members. The studio is a critical differentiator. Though the digital experience is part of your everyday, it's convenient after all. 20 years in digital community building have taught me that nothing compares to IRO in real life. While end of period workshop subscribers were down year over year in Q1, global in-person attendance was up 95% year over year, demonstrating the desire to meet in person. With workshop subscribers down by nearly 700,000 since the pandemic, we have a near-term opportunity to build back this business while we work on our improved digital-only experience, which notably... has remained higher than pre-pandemic levels. We will continue to optimize our studio footprint, particularly the fixed location. We are also committed to investing in our studio teams. Effective May 1st, all U.S. member-facing employees are receiving a wage increase. I believe it's incredibly important for us to not only create an environment that allows people to do their best work, but to bring greater purpose to the employee experience across all areas of the business. These coaches are the touch point to our members, a source of motivation and support, not to mention a critical feedback loop to our product roadmap. As we narrow our focus to what we do best, we are also rationalizing other parts of the business. First, The enablement of our e-commerce platform has been essential to our consumer products business, particularly given the changes and limited accessibility to our studio footprint during the pandemic, which previously had been our primary channel for product sales. But over the last few years, we have also significantly expanded our SKU count to include products across a variety of wellness categories. However, the 80-20 rule applies here, we see that 80% of our product sales are concentrated on approximately 20% of our SKUs, namely our points-friendly snack foods, kitchen tools, and scales. Combined with margin pressure, we have decided to scale back our consumer product SKU count and instead focus on high-turn, high-profit items. Beyond those products, we are evaluating the opportunity to expand WW's presence via a high-margin licensing model. Second, we are reassessing our growth expectations for Health Solutions Channel. Breaking through a B2B2C model has been a challenge. It creates an extra layer not only in tech requirements, but also marketing the last mile to the member. We will continue to serve our partners with a focus on increasing penetration with our existing clients. We continue to be excited about the opportunity to better serve members living with diabetes. We've taken the first steps through our latest food program innovation to better serve this population. 6% of our US members are self-reported as people living with diabetes, compared to the 12% prevalence of diabetes among adults with a BMI over 25. We have a feature roadmap that tailors our core product for people living with diabetes that we believe will attract more members and close the prevalence gap. Before I turn the call over to Amy, I would like to thank Nick Hodgkin for his many contributions to the company over the past 10 years in his roles as COO and previously CFO. While the intention of the changes to our leadership team is to simplify and dematrix the decision-making process, I also recognize the personal impact of departing friends and colleagues. The contributions of the impacted employees are immense, and I thank them all for everything they've done for WW. Now to Amy.
spk04: Thanks, Seema. We finished the quarter well ahead of our EPS guidance. While demand continued to pressure volume on a year-over-year basis, it was in line with our expectations. In light of demand, we pulled back on marketing in the quarter, particularly outside of the U.S., where macro factors were likely impacting the efficiency of spend. Additionally, better than expected gross margin and G&A cost controls in the quarter also contributed to the overdrive. For Q1 2022, we finished the quarter with 4.5 million subscribers, down 8% from the prior year, and relatively in line with Q1 of 2018. Workshop end-of-period subscribers of 719,000 were down 3% year-over-year and down nearly 700,000 from the onset of the pandemic in Q1 of 2020. Digital end-of-period subscribers were down 9% to 3.8 million. Revenue of 298 million was down 10%. with expected year-over-year subscription headwind from a lower year-end subscriber base. Additionally, the weakening of the euro against the U.S. dollar compared to Q1 of 2021 created approximately 200 basis points of pressure. Consumer products revenue comprised of e-commerce, workshop product sales, and licensing of $35 million was down 13%, driven by a 19% decline in e-commerce sales primarily due to lower traffic and conversion. Adjusted gross margin of 60.5% is up approximately 60 basis points from prior year, primarily related to higher digital subscription mix. Marketing spend in the quarter of $108 million was down 8% year over year and lower than we planned. The decrease in spend was primarily in Europe, where macro uncertainty was likely to affect the efficiency and effectiveness of investment. So we pulled back, particularly in certain international markets, and are planning to redeploy those dollars in the back half of the year. G&A of $64 million was down $10 million, or 14%, versus prior year, primarily due to adjustments to bonus expense and timing difference. In addition, we've been cautious with G&A spending in Q1 in light of the demand environment. Adjusted operating income of $9.1 million was well ahead of guidance. As I mentioned, strong gross margin and lower marketing and G&A expenses drove the outperformance, allowing us to increase income levels to prior year. EPS was a loss of 12 cents. When excluding one-time items in Q1 and the prior year quarter, This is an improvement of $0.08 versus Q1 2021, primarily due to lower interest expense in the quarter. As Seema has discussed, we've taken a hard look at streamlining our organizational structure and announced a restructuring on April 22nd. Not only do we believe that this action right-sized spending at current demand levels, but are also confident that the reorganization simplifies the organizational structure, will improve accountability and speed decision-making, while focusing resources on higher impact initiatives. To summarize the impact of the cost actions, in Q2, we expect to take a restructuring charge in the range of 18 to 22 million. This charge is comprised of approximately 12 to 16 million in severance and related payments, the vast majority of which will be paid over time. In addition, we plan to exit approximately 41 unprofitable branded workshop locations in the U.S. In each case, we will either consolidate the workshop into existing locations or replace with a flexible third-party location with a more efficient cost structure. We estimate annual savings related to the restructuring action to be nearly $30 million, with in-year savings of $16 to $20 million. and I expect that the savings will largely benefit G&A. As Seema mentioned, we expect to redeploy a portion of the total savings to investments in our workshop field organization. Turning to our outlook for 2022, we will continue to plan cautiously for the balance of the year and expect that current demand trends will continue in the near term, although the comparisons to prior year will get easier as the year progresses. Additionally, we are evaluating the current year financial impact of the reprioritization of initiatives, including the sunset of D360, transitioning our approximately 200,000 D360 members to workshop plus digital subscriptions and skew rationalization in consumer products. With a jump off point of 4.5 million subscribers at the end of Q1, we would expect to end the year in the range of 3.7 to 3.9 million subscribers, which would be consistent with the typical seasonal decline from Q1 to Q4. With revenue headwind of approximately 30 million from the lower subscriber level entering 2022 versus 2021, and lower end of period subscribers expected for year end 2022, we expect revenue for the full year to be down in the mid to high single digits. Adjusted gross margin is expected to be at or above 60%, which includes the impact of investments in the U.S. field operations team. As we plan to deploy marketing savings from Q1 to the back half, I expect that full-year marketing spend would be flat to 2021. Excluding restructuring charges, adjusted G&A will likely land in the $255 million range. Adjusted operating income for 2022 is expected to be in the $160 to $170 million range. The effective tax rate for the year is expected to be approximately 22% when excluding the impact of restructuring charges. And full-year interest expense is expected to be approximately 76 million. Therefore, GAAP EPS is expected to be in the range of 72 to 78 cents per fully diluted share, incorporating the negative impact of approximately 20 to 24 cents of estimated restructuring charges. Related specifically to Q2, we expect revenue to be down in the mid to high single digits with gross margin per cent and marketing spend comparable to last year. Turning to the balance sheet, we ended Q1 with approximately $128 million of cash plus an undrawn revolver. Q1 net debt to EBITDA leverage ratio was 4.6 times, up slightly from 4.5 times at year end. While our leverage ratio is likely to increase in the quarters ahead, we expect to use excess cash flow generation to repay debt. CapEx and DNA, primarily driven by capitalized software, are both anticipated to be in the $40 million range. In summary, we are pleased with the EPS overdrive to expectation in Q1 in a soft demand environment. As you would expect, 2022 will be a year of transition for WW. We have taken significant and decisive action to reset the cost structure and manage earnings in the near term. while shifting the organization's focus to executing on a new narrowed set of priorities to accelerate growth going forward with a scalable cost structure as a foundation for operating margin expansion. I will now turn the call back to Seema.
spk05: Thanks, Amy. As mentioned, the intersection of science and community is where we excel, and we will continue advancing these areas. And in turn, we will attract more members across new cohorts, couples, millennials, new moms, as well as reactivate former members and bring them back to Weight Watchers. We must elevate the product experience alongside our narratives. Connection is everything. I plan to deploy my expertise to be an advocate in service of our members. After years of social distancing and polarization, people are suffering more than ever from a lack of connection. Author Brene Brown says that connection is the energy that exists between people when they feel seen, heard, and valued. When they give and receive without judgment. I witnessed this energy in our workshops. A group of people walk into a space because of a shared interest in weight loss. They share their vulnerabilities, then they walk out connected, lifted, with a sense of belonging. Not only will we translate that experience to the digital landscape, we will also focus on attracting members back to our in-person experience. When we achieve that, we will create a network effect that delivers efficient acquisition, improved engagement, and longer retention. together putting the building blocks in place to drive meaningful subscriber growth. As we execute on a focus list of priorities in a streamlined organization with a lower cost structure, I am confident we will be able to return the company to profitable growth. Thank you for joining us today. We are now happy to take your questions.
spk02: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. And our first question will come from Greg Badish-Conanan of Wolf Research. Please go ahead.
spk00: Good afternoon. This is Spencer Hannis. I'm for Greg. We really appreciate the pace of changes and color on what you view as core to the business, but maybe can you talk a bit more about how you can replicate the best of the workshop experience on the app and the type of investment that would be needed to achieve
spk05: your goals there and then how are you prioritizing investing in the workshop business versus the digital digital platform hey Spencer thanks for your question so let me start off by saying that I was a member myself and I can speak to the efficacy and the accountability of the program but I What we know is after two years of social distancing, people are fatigued and they're craving personal connection. And we can see indications of that with the workshop attendances being up almost 100% in Q1. So I believe we have an opportunity to meet people at this time when they're seeking a connection through a more modern tech-enabled workshop experience. We need to remember that only two years ago, workshop subscribers were double what they are today. So that's a near-term opportunity for us as we work on the digital experience. So, you know, in terms of the mix shift between... We're going to invest in wherever the LTV is best. So we're really excited to see... you know, investment in the space and prioritizing it in an environment where customer acquisition costs have been exploding and digital is crowded. Even recently, I heard Meta Platform say that the average price for ads had increased 30% year over year in Q1. So IRL discovery can really set us apart and serve as a halo effect for digital subs. And I recently heard this, and I like it, is Bricks Save Clicks.
spk04: Hey, Spencer, it's Amy. The other thing I'd say is, if you recall, we've done a lot of work on the cost structure on the workshop side of the business over the last several years. We still have quite a bit of overhead to leverage. And so I think we've talked before that we can double attendance and still not add a single workshop. We're still comfortable with the mobility statistics for our members surrounding workshops. And so I don't envision... a significant amount of investment in the real estate footprint. And we've been able to use what we call those studio ads, the variable third-party lease space in order to step up a more efficient model and to vary those costs as workshop members return. So in the short term, I don't see, other than what Seema mentioned, as it relates to the wage increase for U.S. field operations, I don't envision a significant amount of fixed cost investment in the short term.
spk00: Got it. That's really helpful. And then just to go back to your point on the marketing, how are you thinking about lowering customer acquisition costs over time and improving returns there? Because that tends to be a pretty big part of the flex in the P&L. And Should we look to 2023 diet season as the next catalyst to really get subscriber growth again? I think that's implied by the 3.7 or 3.9 million subscribers, but just any cadence on how we should expect sort of improvements to flow through the business.
spk05: Well, I just want to say that, you know, I think the onus is on us to drive interest and demand and the product needs to do that work. We've really relied on marketing and, to do the recruitment, but when the product experience works, the recruitment is more efficient because it's driven by word of mouth. We've also remained really agile with our marketing spend. We have more visibility now into our initiatives that we've in-house performance, so we can make better, more real-time decisions.
spk04: Yeah, and I'd also just add to that, you know that we've We look at recruitment from an LTV perspective, and so we're trying to attract a member with the greatest LTV. But it should be no surprise that cost of acquisition is increasing in this environment. So we've maintained and we've historically told investors, you know, we've maintained an LTV to CAC ratio above 5 to 1. And I think that's going to worsen over the course of 2022, given where our subscriber base is and given our intention to redeploy savings in marketing in Q1 to the back half.
spk00: Got it. And then just one final one. In the release, you used Weight Watchers more often than we've seen over the last few years. Do you see bringing that brand back as an opportunity, given sort of the name recognition that that has versus WW, or any thoughts on brand and overall positioning from that standpoint?
spk05: Look, I mean, Weight Watchers is an iconic brand, and it's a legacy and a heritage that we are incredibly proud of. So you will see us use both names interchangeably. Call us by our nickname, WW, or call us Weight Watchers. We're both.
spk00: Got it. Thank you.
spk02: The next question comes from Lauren Shank of Morgan Stanley. Please go ahead.
spk06: Great. Thanks for all the detail. I wanted to dig in a little bit on the focus on the studio. Maybe remind us where you'll end from a footprint perspective after this most recent restructuring, and do you think that's the right number long term, or is there further reduction or perhaps even some new locations that you think you can add? Second, what do you think sort of initial thoughts in terms of what the right mix of digital versus studio subscribers will be sort of over the medium term? And then lastly, we used to talk about how digital margins were higher. How do you think about sort of this refocus on studio impacting margins long term? Thanks.
spk04: Yeah, so I can start there. Today in the U.S., well, I'll say post the 41 closures, will be just below 400 branded workshop locations in the US. And so, I think it's a wait and see, Lauren, really, from my perspective. We're gonna continue to evaluate the profitability of these locations, location by location, and we're gonna take action accordingly. But at this point, Uh, we're relying, you know, I think it's also worth mentioning by the way, that, that. Those workshop closures aren't going to change the accessibility of a workshop location for a member. So, you know, 70% of our members will still be within a 15 mile drive from a workshop location, whether it's, whether it's branded or whether it's a third party lead, a third party kind of pay as you go location. And so right now, you know, we're comfortable with that level. You know, we're at a bit of a trough from a workshop subscriber perspective. We ended Q1 at, you know, under 720,000 subscribers, which is, you know, about half of where it was at the end of Q1 of 2020. And so, you know, we certainly don't want to do anything that would impair our ability to service our members. And so I think this is, you know, this is a good location or this is a good spot for us to be in. being able to build back using a variable cost model versus a fixed cost model. As it relates, and then I'll skip to the end of that and then I'll let Seema jump in. As it relates to margin, digital margins are still really strong. Digital margin in Q1 was 80% and workshop gross margin was over 30. And so we are absolutely committed to maintaining strong gross margin on both sides of the business. But I think it's a little bit more of a wait and see from a leverage perspective about how soon we could get back to, you know, a gross margin in a workshop business that was at, you know, at pre-pandemic levels.
spk05: Yeah, I would just add that we want to pair people with what works best for them. And as Amy said, 70% of our members in the U.S. will still be within a 15-minute drive to the nearest location. So these additional closings, they're not an indication of how we feel about workshop business. Workshops and coaching, that's a competitive advantage for us. And we'll invest in them, but in a scalable way. And I've been building digital communities for a long time. Nothing compares to in real life. That's our magic. And you'll see us moving more in the direction of one holistic product experience that When you join WW, it shouldn't be you join the app or you join a workshop. You join our membership. You join our program. And that intersection between science and community, that's what makes us special.
spk06: Okay, great. And then just one clarification on the guidance for the full year. I wasn't sure if it includes the impact from the sunsetting of D360 and the product streamlining process. or not?
spk04: Yeah, I would say, Lauren, that it does. We're still obviously, you know, CU's been here seven weeks. We've been pretty busy in those seven weeks, and so obviously we're still evaluating the impact of some of these initiatives and building out, you know, plans to wind these things down thoughtfully. But I think I've got, I think the guidance range incorporates you know, some conservatism to account for any expected downside impact.
spk06: Great. Thank you.
spk02: The next question comes from Alex Furman of Craig Hallam. Please go ahead.
spk01: Great. Thanks very much for taking my question and nice to speak with you for the first time. I was wondering if you can talk a little bit more about the sunsetting of the 360 and Do you feel there could be a role in the future for a mid-price offering?
spk05: Hey, Alex, nice to talk to you. So we are integrating coaching into our digital product. That was the right strategic decision. It just didn't deliver on the KPIs. Our members, they want to feel a sense of belonging and a connection to the coach. We keep hearing, show me that you know me. And D360, unfortunately, didn't deliver that. I think the bar is too high for one-to-many digital content business. And instead, we're going to come back to what we know. We've been doing coaching for almost 60 years, and our product needs to do the talking, not videos. We mentioned... that 85% of our subscribers, they didn't have access to coaching as a result of workshop closures. And so we're now focused on bringing that to the core product in a compelling way. And I think that as far as different tiers, again, we want to simplify the product experience. And so we're looking and testing different models around that.
spk04: And Alex, today we've got about 200,000 D360 actives. And so over the coming weeks in the U.S. and Canada, we will be giving this active base an opportunity to get an enhanced value membership at the same price. And so we'll be transitioning them into a different membership tier. And going forward, You know, we're expecting, you know, we'll continue to have our digital and our digital plus workshop membership. And going forward, my expectation is that new members to the brand will be joining, you know, in a roughly the same proportion.
spk01: Okay, that's really helpful. Thank you.
spk02: The next question comes from Steph Wizzink of Jefferies. Please go ahead. Thank you. Good afternoon, everyone. We had two questions. The first is on some of the cohorts that you mentioned. I think you talked about diabetes, but I know you've had specifically designed programs and marketing programs in the past for postpartum and repeat dieters and maybe even community seekers now. Talk a little bit about how you think about cohorting your target markets and how you message into some of your new strategies around
spk05: Thanks, Steph. Well, I don't believe we should be building a product for a demographic or a specific cohort. We should build a product experience that has great engagement and retention and ultimately spend to acquire different cohorts from a first-time member standpoint. Right now, we're laser focused on improving the product, and our focus is on retaining and attracting our current demographic and last members. But I do want to spend a minute on diabetes, since you asked, because I think there's an opportunity, and as part of our new food plan, people living with diabetes were able to use our program to help manage And that was the first step to us closing the prevalence gap. So 6% of our U.S. members are self-reported as people living with diabetes. And that compares to 12% of adults living with diabetes with a BMI over 25. So we just closed the prevalence gap. That's about 250,000 members. And honestly, I believe we can exceed it. And we have results from a clinical trial of our diabetes program that are really encouraging, showing significant improvements in weight, blood sugar, glycemic control, blood pressure, diabetes distress. And participants on the WW program have felt that managing their diabetes was easier and specifically that the supportive community was critical and helped them understand gave them a sense of belonging because they were with other people that understood the journey of having diabetes. So, yes, it's a growth opportunity, but I want to emphasize that I believe that this cohort is just as important as all our other members. We are focused on improving the experience for all members.
spk02: Okay, that's helpful. And then just to follow up on Alex's earlier question around pricing, is Is your view that you want to compress the price layers and have one standard price and that price would include a physical experience if chosen? Or are you still managing the business into the two-tier model as you had in the past?
spk05: We're going to continue testing various pricing and promotion strategies. I am very interested in bringing more simplification to our membership model and For instance, we recently simplified our pricing page, and as a result, we saw a really strong conversion. In the U.S., 65% of Q1 2022 signups chose a six-month or longer initial plan length, and that's versus 50% in Q1 of 2021. So, you know, more on that to come, but again, we are testing and learning.
spk06: Okay, thank you.
spk02: This concludes our question and answer session. I would like to turn the conference back over to Seema Sastani for any closing remarks.
spk05: Well, you know, as we talked about, I'm seven weeks in, and we've been able to lay a framework to return to profitable growth. We've executed an organizational restructuring. We've developed high-level priorities. We've deprioritized others. I've spent 20 years in the tech industry building digital communities, and I've never seen a better opportunity to do that than with WW. The combination of our track record and efficacy plus engaged membership is the reason I'm here. Thank you again for joining us today. I look forward to keeping you informed on our progress, and happy Cinco de Mayo. Take care.
spk02: The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
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