WW International, Inc.

Good day and welcome to the Weight Watchers second quarter 2025 earnings conference call. All participants will be in a 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 a touch tone phone. 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 David Helderman, Director of Investor Relations. Please go ahead.

Thank you for joining us today for the Weight Watchers second quarter earnings conference call. Earlier this morning, we released a shareholder letter and press release with our second quarter 2025 results, which are available on the company's corporate website located at corporate.ww.com. 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. 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 shareholder letter and 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 explained in detail in the company's latest annual report on Form 10-K, quarterly report on Form 10-Q, the earnings release, the shareholder letter, and as updated by the company's other 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 Tara Comant, President and Chief Executive Officer, and Felicia Della Fortuna, Chief Financial Officer. John Volkman, Chief Operations Officer, will also join for the Q&A.

Thanks, David. The second quarter of 2025 marks a pivotal moment for Weight Watchers. Our strategic reorganization has put us on stronger financial footing, enabling renewed investment and innovation for long-term profitable growth. We reduced our debt by more than 70%, freeing up approximately $15 million of cash annually from lower interest expense, and are now relisted on NASDAQ under the ticker WW. We are fully committed to the work ahead and deeply grateful to our members, team, shareholders, and lenders for their support over recent months. Today, we're excited to talk about what's next for Weight Watchers. We've been serving members on their weight loss journeys for over six decades. Our brand is known and trusted the world over. Our behavioral lifestyle program has been proven and recognized as the best weight loss program by experts for years. Our global community of coaches and members is second to none. And the latest innovation in our field, GLP-1 weight loss medications are intended to be clinically prescribed with exactly the type of lifestyle change and support that we've spent years building. While others offer fragmented solutions, only Weight Watchers integrates medication access with behavior change, coaching, and community, all proven to drive superior and sustainable outcomes. And yet the landscape in which we operate has fundamentally changed over recent years, and with it, I'll pass forward. In times of great change, established brands must innovate, adapt, and lead. Weight Watchers is no stranger to innovation, having navigated periods of significant change before, emerging each time with greater clarity and strength. In recent years, however, high leverage and interest costs have constrained our ability to invest and evolve, with the notable exception of our sequence acquisition in 2023. With our balance sheet now reset, we are in a position to move forward with focus, flexibility, and renewed ambition. Moving forward, the most important task at hand is returning this business to profitable growth. We have confidence in achieving that and are investing in the strategic framework to make it a reality. It won't be immediate, and we have a lot of work to do over the coming quarters and years, but are energized by the opportunity ahead. We have an experienced and driven team that we continue to strengthen. In the second quarter, we made meaningful progress across our medical, product, community experience, operations, and marketing teams, adding new leaders to take us through this next chapter. While our strategic reorganization was a major milestone, we do face near-term headwinds, including residual noise from the bankruptcy process, which was acute in the second quarter. In addition, following the 22nd of May FDA deadline prohibiting outsourcing facilities from compounding semaglutide, we've been working to transition impacted clinical members to alternative medications, albeit these are generally at higher price points, and as other telehealth players are continuing to offer compounded GLP-1s under the guise of a personalization exemption. As we work diligently to offset these headwinds, our immediate focus is executing on our 2025 strategic plan while setting the foundation for the longer-term transformation required to reignite sustainable growth in the years ahead. We'll focus on the plan to restore Weight Watchers leadership in the category we created. and expand our role in long-term weight health. We'll continue to share more detail around our longer-term strategy over the coming quarters, and our path forward is anchored by four core pillars. Build a unified and engaging member experience, grow emerging and adjacent revenue streams, revitalize our brand and reclaim market leadership, and drive operational excellence and efficiency. These pillars are interconnected and mutually reinforcing. They reflect the enduring strengths that have defined Weight Watchers at its best, while requiring us to modernize, differentiate, and extend our reach in a fast-changing landscape. Starting with building a unified and engaging member experience. Our focus must be on strengthening our foundation while also building for the future, and that begins with the member experience. We're clear on what our member experience needs to become, seamless, personalized, and connected, not only across digital, virtual, and in-person settings, but across the full Weight Watchers ecosystem. This will require both incremental and foundational improvements to our technology and product infrastructure, much of which was built for a different era. While it will take time, it's essential to unlocking the full value of everything Weight Watchers uniquely delivers across behavior change, nutritional guidance, clinical expertise, and community connection. Data will be a key enabler of our future experience. With one of the largest proprietary data sets in weight management, we have a powerful foundation to build smarter, more personalized tools designed to truly meet members where they are and respond to their evolving needs, goals, and health conditions over time. Behavior change in service of long-term health remains core to our model. Since its launch in 1997, our science-backed points program has helped millions build sustainable habits, and we're focused on evolving it to reflect the latest in nutritional science and technology. Looking ahead, we see meaningful opportunity to further enhance this experience by leveraging AI and machine learning technologies, integrating data from wearables, and creating more timely, personalized insights to support members in their daily choices. Equally important is human connection. Community has always been a core part of the Weight Watchers experience and one of the most powerful drivers of sustained behavior change and better health outcomes. As how people seek connection continues to evolve, we're expanding our virtual formats and programming to offer more scalable and dynamic support. To help lead this work, we're thrilled to welcome Julie Rice to our team as Chief Experience Officer. A lifelong Weight Watchers member and former board member, Julie's work building SoulCycle completely redefines the power of community. She will lead our global workshop business and brand efforts, working across teams to reimagine how community, coaching and connection show up throughout the member journey and bring the Weight Watchers experience to life in new and meaningful ways. As part of this new chapter, Peoplehood, the community-driven wellness support platform Julie most recently co-founded, will wind down its current operations and Weight Watchers will integrate its curriculum, technology, and learnings to evolve key parts of its business and product. The sum of all this improved member experience work is extensive and won't happen overnight. However, these collective efforts form the cornerstone of our transformation, simplifying and redefining the Weight Watchers member experience Deepening engagement and driving better outcomes. Shifting to our focus to growing our emerging and adjacent revenue streams. Access to clinical care represents one of the most important opportunities for long-term growth at Weight Watchers and is one where we've already started to show the power of our Weight Watchers clinic offering. We combine access to clinical care with our trusted behavioral program to deliver a differentiated, science-backed solution in an increasingly competitive space. While scaling this opportunity will take continued investment and focus to fully realize, we believe our integrated approach positions us to lead in a rapidly evolving weight health landscape. To help lead this next phase, we recently appointed Dr. Kim Boyd as Chief Medical Officer, who comes to us with deep experience across metabolic health, women's health, and obesity care, as well as leadership experience from a host of innovative healthcare organizations. We're also pleased with how our registered dietitian offering is scaling, which launched to our US behavioral members in late 24, and is a natural fit for our holistic weight care model, and importantly, demonstrates our ability to expand revenue streams and ARPU, including through insurance billing. Another area of future focus is our GLP-1 companion program. We're beginning to shape the next phase of this program with the goal of expanding features and support around behavior change, adherence, and long-term weight health. These GLP-1 medications are intended and FDA approved to be prescribed with exactly this type of lifestyle change and support. And in fact, early data shows that we see 11% more weight loss for members who combined weight loss medication, including GLP-1, with our behavioral program after just four weeks. As we expand our clinical offering, we do so with the highest regard for member safety, building on our longstanding position as the brand millions trust for healthy, sustainable, and safe weight management. Our agreements with Eli Lilly's Lilly Direct via Gift Health and Novo Mordisk's dispensing pharmacy center well reinforce this commitment. These integrations are designed to provide Weight Watchers clinic members with seamless access to FDA-approved medications through at-home delivery and fulfillment, and also create opportunities for future collaboration, including real-world research and strategies to improve long-term outcomes. These trusted relationships reflect our commitment to clinical integrity and to operating in full compliance with FDA guidance, federal and state law, as well as respecting third-party intellectual property rights. As such, Weight Watchers Clinic providers ceased prescribing compounded semaglutide on May the 22nd. Our pharmacy integrations and wide formulary of medication, including branded GLP-1s and oral medications included in our clinic subscription price, are helping support members through this transition, which will continue through August. We also ran targeted savings offers in June to help new patients transition to FDA-approved medication. While we anticipate near-term headwinds, particularly as others are continuing to offer compounded GLP-1s, we remain confident in the long-term outlook for our clinic business. Our proprietary AI-enabled software facilitates medication insurance coverage for members at scale, giving us a distinct competitive advantage as much of the market is limited to cash pay models or struggles with the complexity of facilitating insurance coverage. And as highlighted in our shareholder letter, our holistic care model that leverages the power of behavioral science and community connection shows stronger results at six and 12 months with Weight Watchers Clinic compared to many of our key competitors. Looking ahead in the obesity market landscape, we see strong tailwinds from ongoing clinical innovation, improving medication supply, increasing price competition, and a growing body of evidence underscoring the positive health and economic value of these obesity medications. We're also expanding into adjacent areas of weight health through our upcoming menopause program, a curated, science-backed member experience that blends behavior change tools, tailored community support, and expert clinical care, including hormonal treatment where appropriate. into a single integrated offering for women in this life stage who represent a significant segment of our demographic. Internationally, we see strong potential to grow our impact and our member base. Obesity is a global health crisis and Weight Watchers has operated in major markets outside of the US for more than 50 years. While we've taken a limited approach to international investment and expansion in recent years, we're excited to better leverage our trusted brands and global footprint moving forward. As one recent example, our May partnership launch with the UK-based Telehealth Checkup now brings our GLP-1 companion program to all their members, expanding our relevance and reach in one of our largest global markets. We also continue to see long-term growth opportunities in the B2B channel. Employers and payers are facing increasing pressure to offer obesity solutions, but they need models that drive outcomes and manage cost. Weight Watchers is well positioned to meet that demand through our proven behavioral approach, new pricing model, and expanded digital care delivery. Although this channel experienced some slowdown during our Chapter 11 process, we're regaining momentum and onboarding clients both directly and through our growing channel partners and health plan relationships. Recent highlights include our collaboration with United Healthcare, both as part of their hub vendor network, and as one of two solutions for their total weight support programme, as well as a recent Florida Department of Health agreement that gives residents in select communities full access to our behavioural programme. Finally, as we look to expand revenue opportunities, we're renewing our focus on licensing, building on decades of brand equity and consumer trust with new agency partnerships now in place in North America and the UK. This will take time, but we see licensing as a high-margin, long-term growth lever, one that can help extend the brand's reach in new and exciting ways. Shifting gears, talk briefly about our work ahead to revitalize our brand. Weight Watchers remains a trusted name, but in today's fast-changing and increasingly competitive landscape, awareness alone is not enough. Our priority is to close the gap between familiarity and relevance. helping a new generation of members engage with Weight Watchers and benefit from our holistic care model. In order to do this, we must reassert our leadership as the trusted authority in comprehensive weight health with breakthrough creative and clear and consistent messaging. Over time, strengthening everything from how we approach customer segmentation, measurement and pricing to conversion and lifecycle management can pave the way for stronger performance from our valuable marketing dollars and deliver greater impact across the acquisition funnel. Content will be a strategic lever for growth, spanning SEO optimized wellness articles, recipes, fitness resources, and expert advice, all delivered by the trusted voices of our community. Our coaches, clinicians, and member ambassadors are uniquely positioned to bring this content to life, serving as authentic advocates who drive word-of-mouth engagement and help build deeper, more connected audiences. This organic targeted approach, supplemented with other top-of-funnel initiatives, is designed to support both acquisition and retention while reducing long-term reliance on paid media. And finally, beyond everything I've outlined, We're also deeply focused on driving operational excellence across the organization, working smarter, reducing complexity, and making full use of best-in-class technology and automation. We've substantially completed the execution of our previously committed $100 million in run rate cost savings and continue to further optimize our cost base, including the recent downsizing of our New York corporate headquarters, and expanding our adoption of AI solutions across global member support and internal operations. We're also integrating our clinical and behavioral operations, transitioning to shared infrastructure, tools, and cross-training of our teams for seamless support and resource efficiency. Ongoing efforts across all areas of the business will assist in the redeployment of capital to address some of the investment needs I've mentioned today. This work, along with continued focus on optimizing high-impact areas like marketing, reflect our commitment to building a stronger and more scalable foundation for long-term profitable growth. With a stronger foundation and a clear strategic direction, we're well positioned to lead within the expanding weight health ecosystem. Realizing this opportunity will require focused investment, disciplined execution, and sustained effort. We believe this work is both necessary and achievable, and it will set the stage for a return to meaningful, sustainable growth over time. And with that, I'll turn it over to Felicia.