WW - Earnings call transcript Q2 2018 | WW International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the Weight Watchers' Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Corey Kinger, Investor Relations. ahead. go Please

Corey Kinger

and today Brian conference to for everyone Thank Weight thank Watchers us for XXXX International's joining you, you second call. quarter

corporate issued website further on conference available the as company's part general X:XX today, call update The directly as is of release. company's Eastern well investors a to the this company on press non-GAAP with company's measures of as press progress. call financial provide the also some results are most this As purpose at of is release located a release measures the regarding The the comparable quarter second on Reconciliations GAAP p.m. reporting press to XXXX of available weightwatchersinternational.com. the details disclosed results. to provide the Time financial

cause undertakes whether that these various forward-looking otherwise. risks let detail Before forward-looking obligation forward-looking are as any information, future of Investors detailed These a should result for statements we in begin, forward-looking and discussed no or to and explained and, except statements. revise forward-looking today of events publicly here and aware the a Exchange or filings statements law, the to remind risks more company statements by of refer and the Please risk subject the Securities materially uncertainties such results statements. today. filings factors of made update uncertainties discussion All in Commission. as with me are statements call contain new required as are any could to that differ actual be from to those company's will this everyone that

I Nick turn are President the company's will to call and call over CEO; Hotchkin, and today's Mindy. Grossman, now Mindy the Joining CFO.

Mindy Grossman

and a to may of We global what for of continued of Friend and you model increase constant subscribers bringing double-digit video throughout our new X.X expanded a Weight basis, Invite of high saw the global and had appeal member our new our in Summer currency first power summer, the in This begin WW with how in the WW we record to XXX has well campaign, significantly showing By ago, family events WW campaign. summer, in and in we're U.S., pleased who doing On January. and not launched a that today. celebrating results in demonstrating campaign, be strong, Thanks increase for past. more the fun program, more markets. of the powerful And to the one first-time relations, broader many can what in healthy year following our lift to we X public This and of of summer, will our afternoon marketing recent TV platform. to a starting WW quarter the our was up digital food, speaking levels subscription offseason has Freestyle U, coordinated audience, in members performance Summer strong want million we mindset, performance, with Watchers with members robust quarter been XX%, QX, basis supported It's Summer U.S., Freestyle as we nine and not our to great health all signups Similar social proportion worldwide, advertising, gross in a years. an and people's another to momentum activations months. over launch an the a growth were year-over-year new digital diverse has that We globally the highlighting QX and eCRM, in execution, given of presenting year-round, impressive WW. move first lives demonstrate revenue attract around, get These integrated we a Impact in XXX spring marketing, WW, improving in exactly by profitability. the first of everyone. that continues continued engaging quarter, of with historically and People be as compared alike. Impact to we're and is be it the geographic retention media, major to effort ways, year-round. partner in of our program flow-through Corey. are signups just Good the have points, marketing margin to the global content, have than XX% with importantly, from XX%, in And considered our them encompassing and business a of income margin across ambassadors to Impact members average ended at member recruitment unique million subscribers and and due engaged and for increased operating

million dad-style of social are audience conversation Better sharing social Together campaign media media videos one Summer month encourage DJ appealing Khaled, and via platform Greenspan, app. launched WW, their Chef a To members better invited who for feature of members success. in is into social and their good Smith, has Anyone to friends to our mobile receive each up WW. enthusiasm the both million other, our one X.X we membership. we a added hashtags with you're connect younger and in-app added to a summer, and family Day, reason. to is likely most media knows looked the impact program, who for views Father's participating leading for referring members-only friend, For a free When X.X engagements. Kevin delivered with to Eric and you're from and which this following to an reward engagement friend popular signs and program more Invite motivate for the an When that Friend our

ability WW WW across summer, our U.S., up members. membership, few. inspiring have community. fitness the Through interactive make the we Holly over initiative to free America, all community inspirational fun with than six an healthy course the trainer to engagement Weight we're bringing encouraging. group This those are featuring of fitness has importantly, a unite and people Good, launched far, XX% make been for led healthier XX% motivational festivals habits In have events, just by together of summer first-time and referred Invite global to Friend we of and in food, by highly global over communities about referred happening mini not more of Watchers free more this So for the a signed North accessible becoming Rilinger, those results opportunities speakers, a ages. the purpose-driven activities as all, series always healthy brand, program

event, And our X,XXX have month. ahead. an in one Angeles, in join via addition, more this later month's X,XXX pounds fresh our helping per effort, in For worth we over Please us every of thousands are Square produce Good a festivals so WW events local of for of produce fruits we with and New and people person impacted need, York possibly donated and who Toronto banks family in families still Los to already Union with vegetables. attends month, We've three receiving far. food in

the Watchers is to aspiration have app As our app Weight the said become for previously, everything for world's we wellness.

content, continue And full our app, a providing engaging add have X.X to All such make features and of as rated to and Invite content will our we connection, WW access Friend, even highly more tools, anytime, our subscribers inspiration anywhere. and to app rewarding. million

is device, on food. of WW XXX as closely members the and social million our XXXX, the we average, each correlated opportunities million an our months X.X engage members first six important and digital for usage times on a on used track be memorable engagement members for X.X app to WW to X.X tracked and million convenient members fitness both million bar know, for And on network That's million retention. unique year synced code community; unique more longer at success WW. is unique month, approximately Looking scanner; XXX engagement. XXXX Connect, have

test technology on Our business by culture. and mobile-first consumer is development brand-led and focused strong, mindset, insights learn approach, a platform a agile a and supported

As to our more to are next to am platform, diverse the and I audience a to we wellness our opportunities capture the move relevant more strategies engagement. be to to confident in make a brand continued holistic steps attract ahead. drive culturally we modernizing growth

over about the will Nick discuss QX in call performance first XXXX future. the and to talk hand I to to Now, our I'll join then

Nicholas Hotchkin

Thanks Mindy.

were online performance. retention gains the year, years those X.X topline strong driving to or increase We and million, paid XXXX quarter and above was QX XX% embedded engagement months reflects both up improvements three all which is major app. platform retention versus member over be our more in ago. social margin driven be continued expansion. record growth Connect, rates in to increasing great growth WW of than well meetings geographies. On very our bringing like end-of-period nine the business global weeks to recruitment This to in obtained average during XX% X momentum and subscribers a Year-over-year on million XX% tools have global in up and strong experience and recruitment continues by with an basis, in of prior XXXX, and this with continued throughout our QX in media double-digit with year-over-year well from online, Total QX second our subscribers

plan commitment to We success offerings. our term longer also have continued with

constant XX%, our of currency model finance to our margin ago. QX, operating the saw $XXX reflected on in growth constant second a from operating six-month XX% option XX% QX in million points prior-year million our of currency global versus margin of the quarter. brought the revenue in million $XX leverage to quarter flow-through basis XX% or and six-month $XXX a up profitability on or was plan and XX% in accelerated a at operating constant XXX Looking the a year QX. the increased initial an income rate in nearly taking that continuation chose rate XX% on increased QX. income year-over-year is business in year-over-year we Gross the $XX basis The strong basis, currency million

higher This from expense cost QX, subscriber end of it effectiveness marketing a $XXX compares year X:X. model, of demonstrate was flat which focus spend. of cash a extinguishment we to EBITDAS million efficiency quarter. balance $X.XX GAAP the our year-over-year percent our signups of of and We delivered revolver of To QX up QX relatively looking to the marketing from EPS our quarter notably our end, from At $X.XX QX in million early debt. prior million, to benefit up EPS the undrawn. $XXX in was XXXX, is our included was $XXX in the value $X.XX. continue basis, QX, of GAAP was as acquisition on per U.S. remained as at in While sales a ratio on the

our Turning the constant end-of-period America increased currency In currency subscribers to North performance XX% increased XX%. and increased In increased on end-of-period subscribers XX%. geographic XX% U.K., Continental Europe revenue constant revenue XX%. on and constant and end-of-period QX, on by market. X% up subscribers was revenue increased currency

rest our the that for strength topline of continue confident XXXX. are We will

year We strengthening the XXXX of expect our $X.XX has despite which the approximately dollar, reduced billion be full of slightly million. revenue forecast recent by U.S. to north $XX

revenue now our foreign exchange year, an guidance the $XX benefit estimated million. assumes of For

we major We year $X.XX of to strong EPS representing our of all momentum to driving a our are across are the increasing guidance full range GAAP continuing geographies. $X.XX,

This EPS our outlook of for the full this which dollar, guidance also assumes reflects year. by the recent As our shares $X.XX. negatively strengthening prior has U.S. noted XX million about outstanding the forecast, impacted guidance versus

our of provide remainder full U.K., To basis. we full the comments, to year in year of a on we bit range And forecasts, revenue be the in midpoint revenues North I'll range. anticipate on full America, constant up we Continental year to revenue In a the revenue up mid-teens. our low more speak digits. in the our year and be expect market, double expect full to the be largest up mid-XX% my color currency to Europe, For the in in EPS

reflects evolving XXXX largely This increase and is strength by gross in margin XXX initiatives as through advance targeted spend in million $XXX partially flat rates offset expected and leverage marketing operating our as digital business other long-term increase points in basis in campaign, and expect up to is a expense the to We in be of of that of sales. will business, our investments online Impact as XXXX. Summer momentum. by technology year-over-year or brand. year-over-year to This absolute our approximately driven well investments investments percent our Marketing

in due percent we've in and spend expected compensation marketing of as We to investments in XXXX be in and is TV capabilities, slightly results pleased dollar our are G&A to are areas, increase in expense higher advertising and the run in particularly channels the with upcoming fall addition seeing decided campaign. approximately our to higher is we down not million revenue-driving digital product primarily sales. The tech $XXX a equity expense. marketing to

to strong flow-through business has income. operating Our

For of expect revenue, million is generate the we loan to $XXX of million our full $X an we prior balance result believe debt. we may this a refinancing And full expense completed XXXX the to direct we year, expect to given later the we in for have operating be our $X.XX versus financial reprice of year. each maturities the term QX our sheet in of opportunity at The and extend increase incremental least line, income. interest $XXX Global incremental year year. to momentum,

XX% of currently rate We quarters of tax full remaining for are rate the a implies the approximately assuming year. this about XX% year, for which tax an

of adjusted up year, full $XXX we the For of expect million XXXX. EBITDAS approximately $XXX in EBITDAS million, from

Our balance sheet improve continues to quickly.

from attractive Our times leverage capabilities. good to continue while technology expected of on leverage rationale, end to a end be at highly financially below X.X down those we our leverage, product QX. turn debt-to-EBITDAS that acquisitions four and could including consider focused we at be times may of And small enhance the reducing strategic net and X.X XXXX, with another the is

in investment, We $XX driven by range. spend, helped by to primarily expect CapEx, be and software office million tax space the

where retention, is exiting approximately for about XXXX properties investment subscribers, intellectual XXXX. we $XX million. G&A $XX our to this brand ended Based or also year-over-year have the million recruitment growth with to in related current to And X from an be approximately we up addition, XXX,XXX continued expected expect on approximately XX% year. million anticipate In and we end-of-period

EPS approximately XXXX, it's independent and anticipate year-over-year, higher positive of starting flat Note nature recruitment an XXXX. when tailwind of for of that this just point is EPS our XXXX, impact level assist with $X.XX the recruitment model, we $X.XX any Given to subscription modeling. subscribers, entering of assumptions of would into this member assuming effectively a translate business quantification the alone so in

towards our XXXX. increase revenues We are than in making billion progress three-year more to goal solid to $X our

by growth geographies in partnerships, BXB, picture. We with continued expect XX% recruitment about and be overall products, improvements the of opportunities positive to this to in growth driven contributing licensing, retention, new also revenue and

expenses the As of and margin see Mindy. we our to Therefore, sales. to have growth our you to performance, I can keep recruitment results flat. our and growth we turn and sales in in growth gross expansion of a percent we G&A that, business back to would of rate relatively are marketing as we margin like expansion rate expect continue future it believe exceed profit to upside managing With

Mindy Grossman

Thanks Nick.

Freestyle is Kevin life employees partner worldwide in and Good creation teams These for brand our the its collaboration. event, public. bringing people, From purpose. As and company, for democratizes but of real all life needs impressed We've for the year WW and with to highlights to world, to inspire just ambassadors, among global a an families, have for becoming everyone. launching exciting more not work new look at increasingly positive from the engagement also at DJ impact through few that of joined our Oprah and our WW It inspiring XXX highest partnerships global To up subscriber in live we brand Eric and to management look, momentous expression, to of activity past to bring scale The habits first the to only lives well. are on launch Elena which every feel, Impact, Khaled, accomplished of are evolve and rolling being From in we others. our retention of leader in management the the be invaluable the this our From To to the bringing partner only of and digital who as evolution. global healthy community that beginning launch aspect my the to for this being on in is WW wellness Smith I our WW Winfrey, year, the out and to development how an of up to the we base [Indiscernible], short features purpose, content made journey. history. embodiment the in our of and communities, all From weight this also by with partnerships such and Summer weight so people's manifesto, wellness. science I our to back Greenspan, am and We Chef with our broadcasting world's including the WW mindset for embarked new to our intention our time. articulation show globally.

and a partner in women and Our Healthy moving exemplifies better health -- Oprah bring believe what people brand life. Xth whether Nidetch skinny. more weight, gathered mindset And people embody group and has now the so best, her live people, trusted both of reflect a diverse world. legacy. millions that the the to having and a more a be proud healthier, efficacy all Jean and be can become brand future personal can the wellness. in is eating today it this positive which holistic, that could to At we their the for to sustainability around event, in eating We're day, best kitchen, healthy a of in to community new but a wellness heritage our February and millions losing and more. from to inspiration the of We of the or regardless legacy we that that's science said of brought goals, we've want of speaks better and of global what We and the mark much

be present more will brand ourselves relevant highlights We of evolving our wellness. and that way to the even culturally in a articulation modernized

we've of Our brand expression to reflection and will who become we be better a where want go.

loved For always what everyone true. us about will be has

about look will life be our new of but our about have to couple this We to a community, next reflect always maternity. bringing elevated will the feel, we about We forward in to real, look, months. livability,

our we through Everything a implementing purpose member and of is screened and are through lens culture. retention. recruitment brand-led We do the filter

mindset, To decisions, marketing, to of content, and positive science, have are do, we partner to partnerships, our our be eating, have a partners as to integrate always be also we're best and of goal healthy we we how be we the and products, creative, discernible in WW of a will evolve if doing choosing now but wellness, activity purpose. And from informed who the a by same aspects and to impact into our doesn't into the be lives. the global lives. WW bringing we All leader to global partner and need purpose, meeting first leader recently people's app in shouldn't by all with beta it. on people's foremost, and the Headspace, to in guided in content rooms. fulfill a all U.S., In will launched something meditation exclusive mindfulness, we've the

by to that products, will year. own that XXXX, in a offering January We've announce kitchen, products consumers. and this directly a We healthy experience. food, by that experts, in wanted content be sells potential more to to the wellness and there we artificial of previously I'm ingredients excited more no and any stated content, WW culinary broader integration we have to are plans add excited

in-stores in our these online, been speed will products reformulated, which to the reflection across that work nothing addition, and and short brand In of has The with of product which new every and be the be teams meeting partners world. a developed rooms, impressive. will reformulate is repackaged, our reimagine

distribution. that logistics, U.S., products. food are food quick launch brings launch portion in we're As later Sweden, to this in for prep finalizing since a we aim expand and FreshRealm, have significant where WW Fresh this and to who scale XXXX, globally. year fresh million expertise type over global grocery in fresh is food WW and meal meals opportunity. to announced the individual previously, and to-date other We In WW a national believe kits example, had food we've We with this XX plan working programs been initiative sold

and a have to reintroduce about WW a way and week with Cruises at been fantastic all showcase new Our we're to what sea. WW to wellness of audiences fun

out Our an loyalty they to with and next program. XXXX, from and sailing our and first inspired, motivated We forward launch a experience about Europe. and more also cruises members in sold November We're WW's provide look including are in experience, excited rewards where first already is deeply human personal we connected.

on spent. will healthy their be to rewarding. We most another the more that empowering purpose. motivation, Unlike experience creating dollars health take the proof of program rewards are will our innovative be believe enhance rewarding focused and actions marketplace, in other making behaviors, not yet even about will We that people point loyalty well-being, programs, ours this and

and We its positive We and to habits, will we rewards members success launching potential curated are results been lead satisfaction, positive, WW linkage engagement, testing products The forward with and that recognizing members. highly and look engage actions know about to enthusiastic with behavior be to rewarding and to experiences. healthy increased retention. have for will motivate

on have impact. our been while organizing focus executing and for We evolving,

marketing brand. office our our and to our are key the Francisco teams in bench, tech innovation, place talent we'll such talent tech-enabled product, this and have other We only moving new revenue-driving digital technology a and strengthening October, and deepening not putting building in areas blocks fuel San world-class, and we in adding expand product We're market. we're to late the space, teams into but organization. business, be in global as also Across as

have am who more the truly and are early where and business to days, can are it's they purpose day, impact have attracting opportunity I purpose. I an drawn join believe and Importantly, just organization to my tremendous excited talent inspired but we and role, to great live brand, want our the we the passionately positive I really realize our Every make truly and about right impact.

for thanks the call So, now We'll turn joining the us to for operator the call today. Q&A. on

Operator

now We'll ahead. question today [Operator Please the Our question-and-answer Capital Fuhrman with Instructions] Group. comes from session. Craig-Hallum Alex begin go first

Alex Fuhrman

very and very quarter. curious I about XXs younger to back to hear over tend of Thanks as successful seems about to well-rounded, all younger Summer as was much taking their campaign. Just and wanted differently? really that these Great. becomes accounts if think base the I'm younger in summer have curious were I question XXs, they you strong ask the are interested to not commentary customers And Impact as the with that on about like another was for program with audience. pretty your age-wise, the older And what on of or you more in do how that's my by time. was just any congratulations marketing presumably It the think it beginning as as customers? the resonating customers, we campaign. long stay it expecting extent but just against, marketing at even customer the you they behaving your should campaign we look do it

Mindy Grossman

elements on all are of We diversity. very focused

focused lifestyle So, we gender, about very and areas ethnicity, on age. and age, think geography, of

I which was which campaign in prior that. audiences, young that's summer, we or local lower the and markets XX%, than like resonated significantly the the young important. relevance XX%, as program, for specific evident it's mentioned, very with was dads broader new moms and and it And developed So, everywhere. been XX north into one executed concept in When cohorts of

the If terms about really talking what you reflected diversity was the at look it different of cohorts. the I was in in campaign, that pictured

efficacy male that we that campaign. winter our with results can audiences. that as And thing we as an fall doing example. other to our to into both going our positive definitely you're move particular, the we forward, spend digital and saw of then And see content and is we efficiency certainly in in relevant to audiences marketing continue different with to drive The learned really really

Friend had Day, for So, I was out just, it Invite and his together. Friendship was Kevin yesterday, and a example, believe, we it around, friend best this do Smith there International and

really trying platforms audience, efficient targeted, broaden to social a very use in our to but we're our So, way. and abilities

Alex Fuhrman

I considering really could helpful expected? the Mindy. hear the is I digital was just surprised planning ads mentioned that we're marketing. that this one though and and returns if the more Great. run spend winter ask the that as of and TV strength then just digital not marketing the Was investors, you're you That's And to to the successful. TV on more spring very fall follow-up, in it sitting from where, looks Is as were the campaigns it that certainly summer efficient year? much than

Mindy Grossman

up immersive and very of across Yes, have to using content we And in very video six in digital We tested believe, we from it so markets couple differently. but storytelling successfully. prolifically, where not a TV, a run across video we running second let content me platforms. had speak little strongly, content platforms. And will video instead developing, TV, very be

be the of we're doing, feel strong. confident creative want is cohort the we very that we're So, that platforms across we're all it's development doing, that our to tremendous I creative really the But clear; doing, the assets. targeted that video marketing still

Nicholas Hotchkin

Yes, and to for we've TV strategy of like, better. digital Alex, been add the given thing much, become effectiveness high a cost only much I'd relative it's about, thinking the as fall, implement the marketing in has is TRPs wanting

Alex Fuhrman

Great, both. helpful. really Thank that's you

Operator

ahead. with Brathwaite Christina Please go J.P. from Morgan. comes question Next

Christina Brathwaite

campaign. on to Summer you wanted the guys made. Impact that follow I of just Hi, up Comments

end in in new are conservatism like embedded Are member -- the subscribers increases million of XQ. maintained related it of I it's Summer of sounds far any Impact your embedding is or you been campaign level you by So, you so performing some kind of expectations bet the X there this above year, to quarter-to-date there?

Nicholas Hotchkin

and but strong me quarter, good been we've that assumes guidance doing not let by the you context that in look, momentum very as only we're we're of and see summer, increases, floored with momentum, are continues. not our now delivering that, And only also. expansion this XX% start but now the Yes, winter global revenue and into margin we it in at spring

fall X brand the our million excited $X.XX doesn't winter, slowdown for end in heading we're tailwind at be into XXXX. our about So, great the momentum. people to it'll that and assume in And plans and that any the have of year

business so versus I X.X patterns. X.X for record thrilled seasonal Our subscribers was up following QX. million end-of-period the QX, a in is stayed million, normal nicely,

revenue And forecast million where exchange be. So, forecast that guidance no foreign impact. or surprises includes XX it versus bear negative in mind, we to expect too that

Mindy Grossman

And its started Campaign, digital it's a forward Summer Cup. given weeks were the also that in TV and we the couple World but we of and timing, U.S. summer of actually ended just continues, lapping of into

we that were and really at executed markets, was leveraging first really the growth look example, Germany TV France time, even together. assets. for for when you in with and like And market, global the digital I or campaign as and they without pleased growth the said, actually every integrated So, running had it a

all of to ever which actually than the of increases development the assets the efficiency and more access they've were So, before, able the campaign. had countries the spend

Christina Brathwaite

on just also if margins, I wanted could. I Thanks. helpful. question a That's ask to

increased for for be some projects So, there basis benefit that still mentioned XXX are that guidance margin of the impressive -- mix you some year. infrastructure and to shift full gross guidance, the point year? offsetting targeted are So, going an some investments the this

given little investments always about that more you've the if for the So, to. guidance an in investment pull in talk year? have you Are of you that kind choosing margin Or performance? I you're of could the year, kind forward incremental alluded there was a your embedded wondering

Nicholas Hotchkin

basis you year-to-date see points think, I expansion, Well, impressive what, expansion operating XX% margin operating XXX in of alone. QX delivering, margin margin look, us

future absolutely time, the we're that same investing performance, we're at delivering While to drive growth.

If what people brand. in whole absolutely products, things got just our new want we're to confidence, excited we're packaging in and look to to tech Fresh, next and about our because and with for this Yes, space. investments very investing we deliver to products further and at launching you in WW brand the, the to we've months the Headspace few now beta articulation, wellness opportunities, from and newer the rewards,

Mindy Grossman

and based for going results, really rolled have yet seen in a campaigns on see what forward. we our not marketing. core kind out as heavily summer you'll Friend Invite And that we've the Yes, to of

Nicholas Hotchkin

are I by anything a uploads, launch. was XX%-plus with to when course, the are surprised Invite folks them, the brand. And new the frankly, it QX, it's very and conversion marketing. was of referred, Yes, of Friend to in people XX% program joining our that, cost-efficient pleasantly response that

Mindy Grossman

Yes, marketing it's even very of, the early and program. days

Christina Brathwaite

Okay. Thanks guys.

Operator

of Olivia comes question America Lynch. go Tong ahead. Next Bank Merrill Please from with

Olivia Tong

is Great. all expectations. to strong, but XX% divisions clearly it about a of revenue very down ask Wanted Thank quarter a across to QX. slow you. growth your was the this bit Obviously, relative

the So, used can had talk the tougher that said you going, materially keeps correct, mid-teens. for it half? you also be Nick, talk second in I And get I growth momentum particularly U.K. if were through comps expectations to as and what through, had think, double-digit that

So, Thank could little what's bit you talk driving you. a that? about

Nicholas Hotchkin

I'd speaking; mean, constant that. the I revenue our the really view quarter year. what did of in currency this for No, this broadly growth look, quarter context we fee, last Yes. thanks XX%

revenue revenue top XX% growth a on XXXX. QX was XX% of in growth it So,

were. So, sell slowing. year, leveraging as I the see, business revenue half can we're of growth. the see we quarter versus fifth delivered about And excited we're you just for we've constant rest of don't forecast where first year the excited in double-digit rewards; Invite I our straight Friend. of this a the currency the about And accelerating

in no momentum. So, change

you I'd of picture the look U.K. U.K., the subscribers X%. and a on You performing. up how warped last, slightly the at gives metrics paid is some up mentioned XX%, on focus weeks the XX%, end-of-period Because it revenue, like U.K. the When to up of we encourage

impacted revenue by U.K. some year-over-year the which onetime impacts, favorably accounting last impacted was revenue So, year.

versus actives. to So, the tough shown by those weeks U.K. in teens in in up our U.K. revenue, but and paid that, it's compare, in a mid-teens equalizing year-over-year low for is guidance as this mean, growth overall, to, prior double-digit I performing nicely point, the guidance. your end-of-period up

So, the bit the assumptions, change change trajectory a business. of on to margin, in no the but little of our

Mindy Grossman

just by all Nick came elements week all not as we enthused a the the are Impact execution and from moves their make and on year And their U.K. only themselves, aligned away, of significantly the of around what what of I the GMs they be the teams they our countries. and each that the and well Yes, course as the back And in through got of of Manifesto end in and teams France markets. have next delivering full will but with from to over to are aspirations XXXX.

Olivia Tong

decision these color past, think in to bit done fall. campaign television? video the I'd effectiveness assuming for you've just in that it. search? do on follow-up, TV during sponsored like provide never to Are forgo paying how but little Is the about it a Got the on more Just YouTube? your I'm versus advertising that. the of And commercials you

Mindy Grossman

right. Yes,

but some we're a we'll elevated. content feel So across the own, we clear, very leading great of U.S. the for we influencer, have summer we and to developing events abilities they're to definitely lot been extension campaign, partners be world we work And video what in of both specifically market, best relative in digital, as doing to with are lot the fall. about part on their of to into our content practices U.S. And a no a actually And going really talking be okay? of so their content social, the about different platforms, have that talking we other rest have of developing strongly monetize different number It's and well.

confidence look that have we efficiency, at is So, to we efficacy what will and deliver. do when across we clearly, going platforms

Olivia Tong

Great. Thank you.

Operator

Company. Frank Sidoti Please from Next ahead. with & Camma go question comes

Frank Camma

guys. afternoon Good

Mindy Grossman

Frank. Hi

Frank Camma

of Just ones. quick a couple

above area, just breakout color, that nine meetings? retention, little or can seeing months First, you you on us give specifically online in either are anything more the a

Nicholas Hotchkin

over to now as see program months, excited Look, Yes. another rewards well we're of and it's nine catalyst. the launch our

nine program. members means responding half, to to XX very closer our with pleased so engagement are So, nine well and how we're with a months than over

Frank Camma

don't and the online a meetings? in Like find same that you difference? Is basically

Nicholas Hotchkin

close. very they're Yes, Very close.

Frank Camma

Okay. Other do XX%? question, last XX% Did just Or on modeling. I Did you wrong? lower your quarter? have tax to rate that have you assumption

Nicholas Hotchkin

forecast for in Our tax year that's-- the prior and XX% our is XX% versus rate guidance

Frank Camma

So, you it? did lower

Nicholas Hotchkin

driven primarily higher of accessing by and impact of the lowered positive work grants equity by prices. and employees some that's their resolution stock also successful at audit Yes, it

Frank Camma

now. Okay, great. Thanks. That's all have for I

Operator

from comes ahead. Lasser go UBS. with question Next Please Michael

Michael Lasser

also Thanks Good question. taking for evening. my

Mindy Grossman

Hi.

Michael Lasser

Did compared per you investment you the that up that return first marketing being get the expected It on to year-over-year quarter. in down the subscriber XX% the X% quarter? in second was and

Nicholas Hotchkin

thought been acquisition our we would've with in the per cost in overall, QX. and look, and it we with line line exactly Yes pretty much levels where in would've was saw global efficient

Michael Lasser

And as the a the indication quarters? quarter did second been versus had follow-up, the can discounting some of where you few amount the last in you give in of us that trend

Nicholas Hotchkin

of growth, that, price in because only and, realization. of on currency points think Yes, that was that's the but good work mix, partly very it's one expansion. team with I'm this the operating not that's you by margin leverage, XXX asked currency XX% constant tandem I quarter doing glad Obviously, online also basis strengths constant gross but revenue partly the

typically more discounting we weren't were. than So, we

Mindy Grossman

efficiency lot around, we our and big a And of that's product. a an more and Friend, drove that and efficacy matter fact that's in very a it's we're in is focused obviously, want a as give much very, not example, you not Invite what on on, and believing discount. No, people delivering focus of us, continue articulating for discount, over how a what ways I'll value very is that

Michael Lasser

much. very you Thank

Operator

Next with Riley B. Kara go question FBR. from Please Anderson ahead. comes

Kara Anderson

evening. good Hi,

identify cancel may timeframe And with who we're and target to if I any nine be being back around to as new at maybe more livable sort if of people done about stride they're those are that I too So, program, them to but the have cancel, narrative changed tracking, may, track. that. action of Freestyle are sort the a follow-up why the of If not month just new get all? approaching there's and has to soon, on it wondering sort

Nicholas Hotchkin

opportunity these to driving Yes, met lifestyle to it spend an It that at people features the people money no stay have partner. us to than things. shift I don't look further our more having being think gets cancel they think giving the wellness whether on because adding our Connect and reasons increased gives goals choosing it a initiatives place on people their our as But wellness you digital. a there's to discretionary we're in or see for product set where be to chat themselves, materially. I changed or we that's We're retention, to program, why holistic reasons the other

Mindy Grossman

a to pleased in and We're what capabilities is might Nick, from retention. the continuing program. lot do people we're more -- identify personalization within with signing heard are people when investments work doing longer up times proactive around you for to the fall off also being of insuring As and around

well. of lot a of that So, work and lot being a in that as executed

Operator

comes question Swartz SunTrust Please Robinson go Humphrey. ahead. Next Michael from with

Michael Swartz

Hey, good evening everyone.

Summer the missing, Just member or there in is the wanted than we commentary guess of retention, heard the year at with half understand success off of in that lot year-end a call, past to trying should positive that expectations I'm what there Nick, the we've subs, little to steeper guess, a see something terms I'm of dig fall years? I more. reconcile the in why the the new a or on Impact, few into back maybe seen with guess I members there? of offsets least of some we've I

Nicholas Hotchkin

the Now we've look, with start we're on tailwind. forecasting let do we'll so more not it's think people business the important certainly pattern at and this guidance seasonal we I excited that those to follow for the giving we're given that we're the same The August, Street year. year, XXXX coming Obviously, on brand have, it's typically to have in just of us know momentum the the that we got and this today, based $X.XX for call what see,

launching delivering we'll and what door not certainly XXXX. be tailwind expecting a off than So, a we're forward But into normal. great in December looking or or drop steeper forecasting to price

Michael Swartz

correctly. think, Mindy, that's that I that monthly And you helpful. million I mentioned I were users app, Okay, Connect the then, heard number unique there on X.X hope

I in members. million was X.X think the around that you've said past

investment, what was maybe cause that absolute And I how as both, seasonally? better, a term, understand little longer play the then as I into thoughts around an maybe to of your standpoint that increase? maybe well does from want guess, just marketing So,

Mindy Grossman

Yes.

that power So, of in I've I am to know it; platform. believer I Connect seen a the it's correlated huge retention.

inspire feel even people, going their to who've they're others. achieved goals, So,

seeing actually at it's hashtag Connect, look on #NSV, victory. that, We are if within one the number you non-scale

people talking about just the So, and we're that life. not having, on weight really their impact their

for that can that the them. people we to Connect be going involved more feel the that's in be So, platform,

capabilities new us, to do to create feel able And in that investing for particularly to member retention. will do people are own because We groups. we obviously, such is it asset an communities continue their be their in own we to form to

platforms, does communicate mean also to not powerful members that that and future that Now, cetera, our other whether are members. Facebook, both to social very Instagram, not be et our

video, or part as very is to that's of storytelling, us, community, we're will full where like that be doing all and continue going to Stories social, in what of whether be, So, very powerful important. six-second and continue a we're Instagram as content be, to investing

Michael Swartz

Thanks lot. Great. a

Operator

D. go Bolton-Weiser comes Please question from Davidson. ahead. Next A. with Linda

Linda BoltonWeiser

of have the bring each about And opportunity to to sales opportunity talked those the you've technology into to of products. opportunity more the bring on also, you the about in-app Can your In past, Hi. meetings. initiatives? more to you've progress referred talk

Mindy Grossman

One Yes, me products doing talk is different what let we we so whole. our have as work. a bodies in of are two about --

has So, reformulated, across platforms. available that in currently be, product our will every have I mentioned we all been re-strategized and January,

is we e-commerce and our so, and develop then that are in enhance And of are how phase we technology the to second to other looking products digital presence. to what the investing expand

hand, a So on there's that working team and hand development is is that that. global in going

and of continue to see, view our point it will point be both site or view, whether you a experience app product So, develop. our of on an from in

purchase. she saying was in-app what was of, -- terms In

Nicholas Hotchkin

great sales, that of those products in-app sales at new will of mean, to In I our we've got the this, products. with launching terms look Internet we a opportunity be

to subscriptions looking within increase to purchase as the opposed buy se. in-app, Weight for the biggest to of is go terms Watchers our people In sales via per opportunity opportunity in-app app,

Mindy Grossman

a as then, meeting we've And on business our worldwide. far done Yes. comprehensive as, entire diagnostic

a meetings XX,XXX about week. have We

different about X.X new million we those sites the where a whole of as in of test end-to-end will for we go experience. we're in a number we about And integrating from particularly five And X.X X.X We we highlighting experience. those into have are way be meetings. looking -- technology have million, million a January

Linda Bolton Weiser

very Great. Thank you much.

Operator

question go from Greg with Badishkanian comes Next Citi. Please ahead.

Frederick Wightman

Hey on guys. Greg. Wightman It's Fred for actually

Can program. so? improvement function possible slow a about past continued you I some from are and just improvement? over loyalty step impact? I you you retention mentioned talking the guys we think possible steady have the help size benefits Or mean, us sort the year or of the seen

Mindy Grossman

very are excited We program. about the rewards

you norm. it tested et the areas, or friend, food journey, everything a cetera, we So, definitely that form when activity when what track, a meeting, on you from it to take in do, saw behavior. think would that health mindfulness we could every And be every retention big increased of you do and about step in other it, believer that's take of if your yourself further that invite support that this, could so the presents every for your gamification you your reward I'm is be be human you

successful, more what do this will only in retention, these to to doing. And them be it of not able so of combination people incentivized things, being that increase they're will make terms

going XXXX, So, element into to very though will the important going launching prior. of strongly even it be it's very a be we combination that, feel

Frederick Wightman

you the we're of U.S. strategy, sense. talk accelerate Great. think a how would probably guys about able you're we we if can to the first That in enter maybe it, here, the speed markets? just Then especially at digital more that new towards would shift articulated that have something. I look can international impact makes but missing

Nicholas Hotchkin

having opportunities. that the recently. America architecture, of tech digital good look, us and initiative presence offering subscription same been certainly in I'm that leading And got no new the international entry international have having just that global to Latin the in presence working in opportunities Asia-Pacific, excited market markets and but wouldn't small and digital at a providing no Yes, special until time there with market really our Brazil some business with cloud-based accessible a while a enter the for easily about really app human to a And we've market modern on any thing with us engagement, elements and with team. the very time, those ability makes other

Frederick Wightman

Great. Thanks.

Operator

Please from Capital Markets. Edward Yruma go And today comes KeyBanc ahead. the question last with

Edward Yruma

I thanks program? any the outcomes me in in. Freestyle actual of that into clients they Hey outcomes health guys, in seen the squeezing weight changes you kind now terms program, new losing months from I of have weight consumer break the you're first, young initiatives that eight would've Are same that for loss or are have some I successful. increased I guess, help us new been guess, know those been you've And as of follow-up, they down then, fathers, a Thanks as amount targeting kind if some previously? much. of guess cohorts, of so

Mindy Grossman

program. responding out of our strategic that engagement People has really anywhere our said this I so have have allowed actually a tremendous program is feel they ease what And the and employed with it, that haven't diversity marketing our healthy we We've Freestyle. seen much appreciated can WW I the from weight more within than members, livable do. It's have mentioned that not we're we something And gone and freedom to, equity a how strategy. men, simplicity before as in to it as relate of brand. not to them seeing that the does with and But are the, living for simplicity had framework. speaking very they before that they and that the they people as we've call in thrilled kind said, if we're and losing more looked it's brand back Yes, livability addition to with that in again, ease, let's that are efforts. men. and really not else

see the as more it people opportunity we So, into still an bring to business.

Edward Yruma

much. Great. Thanks so

Operator

over any session. remarks. At this conclude Grossman back will time, Mindy to like this closing turn I'd today's the for question-and-answer to conference

Mindy Grossman

honor global company you your thank I informed a keeping this everything will want today, also Thank the of that to to us look and Watchers, part on to you. you an in certainly It's everyone. Weight you, our deeply joining lives of thank be journey. we you interest teams millions. impacts And do. for forward So, thank for

Operator

conference today's The want to thank for concluded. presentation. We attending you has now

now may You disconnect.

WW International (WW) 6 Aug 182018 Q2 Earnings call transcript