WW International, Inc.

Good afternoon and welcome to the WW International third quarter 2022 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 Kinger, Investor Relations. Please go ahead.

Thank you, everyone, for joining us today for WW International's third quarter 2022 conference call. At about 4 p.m. Eastern time today, we issued a press release reporting our third 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 uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are also 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 uncertainties 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 Sistani, CEO, and Amy O'Keefe, CFO. I'll now turn the call over to Seema.

Thanks, Cori. Good afternoon, everyone, and thank you for joining us today. We are encouraged by early indicators that our data-informed approach to product development focused on our core pillars of community, accountability, and coaching is yielding positive results. That being said, we are eyes wide open that our turnaround will take time. We have a substantial amount of work to do to update our product to deliver the most compelling solution. But the initiatives driven in the short time that I've been here already are resulting in a sequential improvement in our year-over-year sign-ups trend. We have identified critical experience moments to increase member retention and are leaning in, building momentum for us through the next year and beyond. Despite headwinds, I'm confident that we will continue to grow our position as the leader in our category. We have a program that works. Members who love us 60 years of efficacy in a space where new entrants come and go, we are turning that solid foundation into a best-in-class digital experience for the future. We have been consistent that 2022 would be a year of transition, shifting focus and resources back to what we do better than anyone else, weight loss, and away from initiatives that were not driving an impact and complicating the member experience. We have done that with urgency. We have improved trends and are focused on positioning the company for a return to growth. The need for efficacious and sustainable weight loss solutions remains constant. Our remit is to make Weight Watchers the solution of choice. Relative to Q2, while still down on a year-over-year basis, we delivered an improvement in sign-up trajectory during the quarter. With sign-ups coming in modestly above our internal expectations, despite demand pressure in our category. We were pleased with the performance of our creative in the fall campaign, where our simplified messaging and our stance as being unapologetic about weight loss broke through. The U.S. ran a modern, high-energy spot with a simple message that Weight Watchers is here for people who want to lose weight. The campaign has proven to be effective both for efficient member acquisition as well as positive brand building. We showed up differently and consumers took notice. Importantly, not only among former Weight Watchers members, but also new consumer cohorts. Ad awareness is up significantly year over year and on par with winter campaigns despite significantly lower spend. The spots became a topic of conversation on social media, showcasing our ability to break through culturally. And we saw significant increases in brand consideration. We are seeing positive impacts from the shift from traditional media buying to data-driven global performance marketing. By in-housing our team in North America, we are faster to market, responsive to media and creative trends, and more efficient with spend. And we will be leveraging all of these learnings as we head into our peak season. But while we are making progress on sign-up trends, we also saw a modest uptick in cancellations during the quarter. largely related to six-month commitment plans that ended in July. We have found that member engagement and satisfaction have declined with personal points compared to prior programs, an issue we are actively solving for. This simply reinforces what we already knew, that our program and our product must provide a simple and engaging member experience. As a result, our teams have begun tracking a new measure Activation rate. Activation rate is defined by a member's engagement and progress during their first month on the program and is directly tied to member success. Our data shows that activated members turn at a rate that is roughly half of a non-activated member. In addition, the science in our data supports that these members will be more successful on Weight Watchers over the long term. Now that we are measuring activation rate, we have observed a promising uptick in recent months, demonstrating that the changes we have made to the app are working. Driving the behaviors and connections that lead to member success will create a network effect that delivers efficient acquisition and longer retention. We are now better able to calibrate our product roadmap moving forward. With that in mind, we have considerably increased our technical velocity, shipping feature improvements to increase engagement and retention in our product. Recent changes include a meaningful update to our food search algorithm with test results showing a double-digit reduction in customer service contacts and a reduction in churn, streamlining weight tracking to drive consistent accountability demonstrated by a material increase in the usage of this feature, Last month, we rolled out a new onboarding funnel in the U.S., increasing the share of sign-ups choosing our premium product. And we enhanced our in-app encouragement of weight and food tracking activity, which has contributed to the increase in our activation rate. This has demonstrated that our gamification techniques are a meaningful lever, and we are excited about future iterations planned in the coming quarters. In short, there is a clear order of operations. Greater activation leads to improved engagement, which leads to greater weight loss and satisfaction, ultimately driving greater retention and positive word of mouth, which makes marketing more efficient, driving sign-ups. I believe that as an organization, we need to be agile, continuously testing, learning, and evolving the program to better fit the needs of members. We are committed to instilling a company culture of bias to action data-informed decision-making, and evergreen innovation. As we noted during our last earnings call in August, our analysis has shown that personal points could have and should have performed better. After challenging ourselves to understand how members behave through analytics and a laser focus on the activation rate, we implemented the following actions. Uncovered and diagnosed issues with our current program to inform a new direction, For the first time ever, rolled out an A-B test to a subset of new members to inform if food plan changed through data, and further validated the results. Early member survey results showed that the simplified plan outperformed personal points on MPS, supporting our decision to scale quickly. And we did it all in under three months. Because of this tremendous effort, we plan to begin rolling out the simplified program in the coming weeks. We believe the changes will make Weight Watchers easier to follow and help members achieve their weight loss goals. We announced this decision to our coaches recently, and their feedback has been overwhelmingly positive, as this has been what their members have been asking for. We will be retaining certain key elements of personal points, including the ability to deliver a program for members living with diabetes, and the points algorithm that incorporates the latest nutritional science, including advances in fiber, healthy fats, and added sugar. There is no question that the Weight Watchers program works. That has been well documented in more than 130 peer-reviewed studies and 35 randomized controlled trials. We just need to deliver it better, both from a product and brand standpoint. As we look ahead to the peak winter season, We have the essentials in place to deliver a strong member experience that will put us on a path for improved performance. However, we still have a good deal of work to do to deliver the connected community at the intersection of digital and IRL that I believe is our future, which will drive subscriber growth. I will turn the call over to Amy to discuss Q3 performance and our outlook.