WW - Earnings call transcript Q4 2019 | WW International, Inc.

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Operator

Welcome to WW International Fourth Quarter and Full Year 2019 Earnings Conference Call. All participants will be in listen only mode. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Corey Kinger of Investor Relations. Please go ahead.

Corey Kinger

Kate. you, Thank to International's you call. joining today, us And quarter everyone, and WW fourth conference full for thank for year XXXX At quarter Time release about XXXX Eastern issued X:XX press a results. today, reporting full and we fourth year fiscal our PM

of a provide with website The press the progress. general details update this website some well as release is and Presentations Supplemental financial investor available also in Company's under corporate.ww.com. on at The corporate Company's the on located the results, call the is as Events. further Investors section to purpose are investors regarding to Company's the available provide Company's materials on corporate

also conference to on Reconciliations of directly disclosed non-GAAP of the call measures the press as available part measures release. comparable this are most GAAP financial

me results differ let any aware be everyone risks and could remind Investors today. call uncertainties subject various that those that statements. forward-looking will to to begin, that we materially actual Before from contain discussed should here forward-looking are statements this cause

the such explained factors detailed Commission. Exchange and filings Company's the with these risk in statements the of in and These refer forward-looking and of for uncertainties a Securities to discussion statements. filings more Please detail risks are

as of otherwise. result All obligation or the whether Company as of any to revise events today forward-looking undertakes new future publicly made a statements required are as statements forward-looking no except information, and by law, update or

Markets. Officer, Mindy Grossman, America call are CEO; Emerging Nick CFO, Joining and North today's and Hotchkin, and President, President Operating

to the I'll over call turn now Mindy.

Mindy Grossman

signups Oprah’s U.S., our member market. XXXX to to in great reinforcing across say weight myWW of loss attracted marketing today. everyone, that arenas tour you our program the The wellness. global new crowds I and to launch impact, thrilled our in global efforts and driving a had and is position afternoon joining start. thank call Thanks Good resonating and strong Vision The Corey. XXXX every is off has have sold-out the am Presents: for WW

but our first review I'll shortly, results. our priority highlight to XXXX actions against our

delivered operating $X.X our $X.XX billion, the year of in we million XXXX, For EPS full $XXX revenue of line with guidance. and of income

Retention We in ended both over an we Right globally, X also market. with all-time of accelerated and first in subscribers XX of is January months the dates XXXX having and international XXXX for for history. our X% an have have the record up trends our million is in U.S. top which million from yearend. time in Signup $X.X early now, over all with subscribers, XXXX, many time, signup high. all-time our

engagement are and with points greater rated are app to trends at logging using percentage X.X we star we Community the syncing touch in a continue in engagement and everything of Member to has, more connect be have tracking know more success. food, members of the Because, likely member our a the that journey the good even weight, strong, device. continues they fitness do. who and their heart are

over making January. used record new alone, January, creating members million up The of nearly in giving likes. million XX% X and device connect nearly activity from over number January a posts, an million million X In to members was X comments, last million X XX syncing

In XXXX, on focusing we each key momentum saw XXXX five improved by and with year-over-year sequential quarter, performance entered priorities.

and strategy, XXXX activation. innovation, strategy personalization community studio future and global Our and marketing execution experience,

action or take call marketing. informing approach the our channels, a So and and creative We across digital, starting with all offers. promotional eCRM social, driven TV, more, data

throughout Our our informed learnings strategy campaign. and marketing our XXXX, XXXX winter

ambassadors, When dozen insight diverse a high different. content, with it media, centered needs losing encompassing who is markets, two Across multiple of PR. lapsed integrated featured success targeting of WW. campaign to global shared print, on marketing off global around their content are local new we my all celebrity TV, members weight, approach which almost both kicked guiding The not impact to campaign, XX, This comes digital custom stories. December and the members, everyone's pieces social radio fun fully search, platforms, XXX and media, mention over terrestrial features and and including streaming

and tested Ambassador introducing separate targeted market. This pop-up across various club stores winter, UK, all activities a we in content our two people in formats XX QVC, men's including in to WW, Canada, on events markets, cold locations the XX hundreds for partnerships of global appearances campaign across

and in Jewish in ambassadors new to and Fat honored, López. Germany, had UK, this Daphne Sahin Sweden, Pattison Annaleigh Sal International, France. We're Tue, WW Ashford Adamari Vicky in be Damidot U.S. joined Fielder in Christian winter, Jonas Ostrovsky, the past Oz, Valérie incredibly Josh We Hallberg the U.S. Minnie

and efficacy program. for know, we News has weight loss loss straight a accolade important This throughout credibility diet XX and our best years. World prominently for featured to anyone been looking weight marketing, as Report, is

our a was solidly QX. business to And return studio, say was in to to signups focus studio happy studio of XXXX year-over-year that major to Turning I'm positive growth.

attendance houses studios, member together Our and fostered word positive perception. experience, initiatives more member open the to workshop challenges, enhance mouth of including studio awards adding reinvigorate and milestone

incoming signup addition, studio experience. In tested emphasis on members putting studio to we choose various to greater encourage offers, further the

that members, that which customized they matches to time, to We for them. joined XX% signup know launched take XX% an based on approximately who approach personalization, and WW works personalization for members On the loss. personal important launch when now, is in that on XX% most weight myWW, blue plan mid-November, and best green, three flexible first the program new them our evidence our so WW assessment Of the blue rooted plan, of in is ever. members for the innovation on proven and myWW, since plan All are are options purple. to green, a and scientifically purple

decrease results a WW indicate average participants at of decrease the on center, X% program including Management that in habits all for blood about agreed the cravings of pressure, the benefits helps XX% myWW Medical that X% off reduction programs, scale, myWW loss, Carolina's overall participants healthy clinical month trial XX% South weight of experienced the six the on And in and Weight program, three University for hunger, systolic the and you long-term. asked learn when in X% my conducted

ZeroPoint and and to and based, tech recipes, skills driven content we the assessment. personal members from SmartPoints enabled. includes receiving mindset tailored is science strategic to and actionable the their addition foods enhance be are our is are an rollout personalized will more data and practical. Budgets, and ongoing to based continuing members, list, content that focus Personalization personalized In that content customized findings on activity recommendations, The

reaching in final Presents: XXXX, the diverse initiative wellness Vision, Life launched around global various Throughout activation. Oprah’s And galvanizing priority, content this XXXX community market, events XXXX. activations our events, new early and through the communities Your This XXXX in and special we global audiences, WW all Focus experiences. towards for new our tour built, WW,

I outlook. the discuss will after priorities tour XXXX, reviews more performance our outline and for Nick our and

Nick Hotchkin

the us ended major versus growth positive headed and turned subscriber the subscriber recruitment in Total XXXX Mindy. million the a accelerated recruitment I'm up X.X the We into prior winter that in the in was our subscriber end Recall, recruitment of to QX. in of this markets. all studio a QX, year positive strong record of digital in QX. turned XXXX, in with pleased QX geographic position say, positive season. Thanks, subscribers, put global growth year from also and And X%

only years. last annual QX peak five the history. XX% X%, an with of our over XXXX is the slope was a traditionally in decline subscribers, seasonal to our sloping in illustrate in period To average end progress, trough, decline best QX our our further

our constant basis. QX, up X.X% million, we Reflecting $XXX momentum, of delivered in on year-over-year a currency revenue

year down year-over-year to total currency constant billion, $X.X revenue For was X% on XXXX, the a basis. full

EPS our $XXX model. with $X.XX, for the GAAP was highly business generative EBITDAS XXXX, and in million guidance was cash reflecting in year our line

for was Our XX.X%. year the tax rate

yearend, At an million cash and revolver. $XXX $XXX had undrawn we million in

we During $XXX debt term leverage XXXX, and with net of of the a prepaid X.XX year EBITDAS times. to voluntarily ratio ended we loans, million

recruitment, our this our for we a growth year-over-year. Recruitment the and up the period markets. mid-teens key XXXX. assumptions in on minutes around expect geographic is I'd Turning spend performance subscriber year-to-date, like in to QX, digits in double channels. of to end all discussing Based retention, few growth

revenue every we XXXX growth year. and subscriptions total of currently XX% forecast about be anticipates quarter, year-over-year this subscriber to expect Our digital subscriptions

Recruitment channel they're continue and such In-App purchase and effective highly time Invite members. a as first for well Friend to us, attracting in work

through We will to these two our global expect continue join channels. XX% that about of recruits

Overall, average to focused of continuing on On expand level engagement be WW. revenue retention our through member our subscription over XX% is We're we for total record a in XXXX. basis, expect a months, retention XX to revenues approximately initiatives. global

WW increased will the ecommerce is expected growth expanded revenue sales relaunched products. We XXXX, product our recently during from incorporate and shop accelerate and app of our we line and benefiting In other XXXX. our to into in availability WW platform,

We segments. geographic rates expect billion, year XXXX currency of our year-over-year a to full growth $X.X on with similar across approach basis revenue each constant

and fiscal which range XX full full million on marketing on XXXX guidance in week, during $X.XX for expected of heavy an EPS year timing Due that X, has XXrd bridges $X.XX. week, assumes December full the reflected and incorporates January guidance XXXX. the the ends that shares XXXX, GAAP negative inclusive this fact, EPS to guidance activity Our to impact guidance. last $X.XX is outstanding week the the year, This this our and EPS that's year

of December of A our XXXX, stock Meeting million May second in grants our EPS reflect share our record partnership the guidance. charge full May, date the not reflected extension the Winfrey, associated in approval price of in would which in of with On note the XX, actual a is X.X year onetime Oprah of our in and guidance. we'll through charge May, of approval EPS announced as Annual the XXXX. Upon quarter few assumptions shareholder the we option at

XX%, our year our to line, rate and pending closer that effective tax could a about income, finalization the foreign on of assumes tax could regulations guidance of the year impact be full tax full XX%. Below rate

our full be Our million, interest year to $XXX reflecting guidance rates. assumes interest expense current approximately

sheet our have we conditions, term opportunity and an on our Given believe dependent momentum during balance to loan may and financial market XXXX. we reprise

perspective, margin. the tour and services and revenue tour Presents: which the appear accounting campaign standout WW Vision of success and From as and brand in will been only a transformation direct Oprah’s financials, impact our gross The the a considers cost additional in the impacting has reinforcing GAAP raising visibility U.S. campaign service XXXX

Our in QX tour $XX million to results expenses. $XX million expected up include are revenue approximately and to in direct

an about fuel the has QX is lion join us to marketing reminder, a XX% of these highest of as annual share in QX, our signups such, And QX spend As our recruits quarter. the having to costs of that by loss a portion QX, members, only of and in captures the anticipate up associated new spend driven revenue. marketing tour we EPS of investments. attracting Therefore, $X.XX

currency I'm our For the midpoint speak of full to on EPS constant my remainder year of going a range basis. and comments, the to

expect up and points offset partially We margin gross signage, to increased by from a to year tour studio for the contribution XXXX, mix, basis full from the lower reflecting direct investment, benefit operating and digital leverage increase licensing. XXX

We expect tour margin and cost QX approximately to points, into to XXX improving down QX due be basis and the year. then launch expenses ramping gross throughout in QX myWW the

produce behind expected versus QX Marketing be We’ll primarily marketing agile investment. and the flexible spend, million, and being that in higher by week expense XXXX, investing to to year, is XXrd be initiatives prior $XXX in the continue our approximately driven results. approach, increase

year-over-year. expense and are is a technology relatively marketing digital $XXX flat primarily to growth. as be percent reflecting in G&A million, Both to future headcount, products and expense long-term drive expected be sales to added expected of G&A approximately

driven D&A million. we the tech capitalized primarily For expect range, by is spend software expected be be million about the year, and to to CapEx in and $XX $XX

full strong We year, million cash generation. continued EBITDAS of about expect the for our $XXX driving

drive We continue resources operate growth. only initiatives levels, not but and debt flexibility, that our also and business to our the invest will have the to the to reduce in

the our as may we M&A and select Beyond and acquisition investments business, of Vegas also capabilities, technology franchise. Las product and franchisees, into digital recent the such direct pursue

with of We times. ratio a debt-to-EBITDAS to year, X net the end expect about

In in summary, and growth a pleased I'm year we've XXXX deliver good is trajectory. revenue us and The position growth, after that to in a start, earnings putting to a beyond. returned strong

to turn I'll it Mindy. that, back with And

Mindy Grossman

is their tour unmatched. new Oprah’s can just the Thanks, better by Oprah San with to life our best Francisco, of on say than response year seventh incredible. connect think to people have tour. joining live Nick. Winfrey and the off I power no inspire We to to kick healthiest in and way has completed them stop been I

not personal lead only powerful wellness her intention spirit, and their through her a engage Oprah body and assessment, spanning a and making truly assessing Have identifying is directly tell audience them commitment story but perspective, mind, holistic also with focus, share and and experience. wellness a members

people to a mass more people, most XX,XXX of then some And world together to meditation, dance hearing Saturday Los the Gaga, their Lopez an packed The about including this sold participating other. influential arenas from in party in journeys, no Dwayne it everything of the Michelle from and wellness and than like Angeles, event Johnson Lady have Obama, out makes a own Rock to Jennifer

ripple transforming full filled success their highlight of inspiration, her a how and his appeal story, to all. the an our of vision inspiring wellness includes person power onstage WW moment, and with with and or wellness community, loss A of WW out weight wellness starts joining fun, showing events sold effect demonstrate to These life, day day in community. accessible make activity the one an local

had creativity and and significant of Rock overall to The well in XXXX visibility and far. billion Super impressions, who wellness those by We spontaneous nine broadcast tour result for who has high is over spot, generating generated you vision beyond our audience. those Oprah media media and about this fueled a a believe the Bowl the WW. interest thus online, that effect XX was city print halo saw has mission. enthusiasm the the are of reinforce has teams coverage across And tour The

brand WW your how is our transformation, and weight both In showing tour reinforce loss in partner helped addition, wellness. the

in saw with surprise and local the WW both me WW each with their strong for For as to communities for Oprah instance, groups we a as tour as more. Oprah morning local programs, visits favorite a local post-event perception participating WW increases surveys, brand. in attendees of city, plan in restaurants, and and And walks engage joined the modern

tour philanthropic bring In addition, benefited WW underserved helps each has to food in over these our of proceeds good, markets. fresh of $X million healthy that arm communities local

wellness the of venue now partner the most the our is of to WW OVG, partner tours arenas. in

overall offered perception wellness recruitment continuing with signage, We to the has Our beyond WW tour awareness been to dates, tour the their be at healthy and live for concessions our WW. brand venues, is believe WW offers partnership audiences. message select and of member spreading accelerating fantastic

study. all of and have obsessed every perception We conduct a and results our are new XXXX brand consumer continuously familiarity of global has And strong monitor only the year, we myWW awareness. program. logo the that In not perception brand markets, but across with January our also showed, awareness consumers a strong WW

loss perceptions opportunities advancing by our including to and see We healthy as these even highlighting and personalization, further, leadership, by weight such gamification. areas advance and living

world's trajectory and our growth our These focused years of addition in the And leader have then XXXX at strengthening three to three past accelerating momentum. strengthening are defining not returned the dividends, finished. has as modernizing was our our a this looking the foundation is launching and capabilities, team investments, company, they're work now the are brand. over on as been journey was and have we about These only about but loss. being past pay to significant. company, been WW brand Our beginning our enhancing and and years forming in wellness growth XXXX, to presenting XXXX strategy. a ourselves weight

fuel year of retain XXXX and beyond. for our and WW continue which focusing are brand, but strategic term, objectives recruit, priorities that core the an will in in guide our key making not in our XXXX, actions our key the business, to XXXX, will the framework, maximizing Within also For organization. elevate only investments to on as and business growing this and immediate

we we to interest have know, and the to we innovating. move program value Since on XXXX, we our innovated in features, two forward as every constantly already year years, next will sustainable but XXXX, deliver toward and always sustain that offerings growth. bring on the we're for food And program business added market focused are

our the as from in XXXX WW Our app and and possibilities, virtual and power from integrate coaching, as experience, in see the more lives that members we one-on-one element for group to known evolve workshops on and are WW the best their our coaches providing XXXX focused solutions our coaching see our a range formats in personal members to community, personal priorities studios, of create are of integral to to of chat and dedicated coaches. we the amplifying We being offerings, in an experience. communities coaching fit

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relationship or that Beyond more full the Kohl's, various exploring WW into we can either studio where make to pop-up audiences. brand, incorporate and complementary locations and are high we hubs to are as our visible traditional partnerships such accessible locations, workshops partner our traffic with WW health

enthusiastic for WW workshops XX% a group revenue We opportunity subscription an the to our with we members virtual digital of drive into see of our by growth. inspiration enhanced and are very future about as new community a an members environment, offering, being the coaches. led upsell bringing programming digital tier to to expert With potential our coaching, those only,

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the of market a have members wellness compelling group connect our of differentiator impact positive believe and our their We a will a and with journey. members and more while its know group to We and of we way coaches, modernize ability engagement to be will level who great true virtual its coaching extraordinary virtual offering on refining brand, staying foundation to coaching, community. knowing continue testing value is our

and app key. and is ecosystem experience gamification wellness deepening Our the

our In weight and and activity, nutrition improve motivation, deeper weight features loss. addition to health mindset, members hydration we wellness, help integration these in particularly areas the important their tools building and forming program, will to factors leading of our overall a sleep, continue management between and all and

on Our of work science content. and a interest completed have body know sleep members actionable in sleep, team has strong related we a our

the we solutions During sleep launching WW into and features XXXX, functionality be will experience.

the will of to WW our U.S. service weeks coming we to with and world's of gyms. thrilled can work will for various content members. complimentary on other's together allotment spas today, benefit respective is ClassPass, the and ClassPass and largest the that of step receive monthly also access WW integrations network members opportunities, we a bring announce members. where each an fitness a subscription that are just is offer members studios, This complimentary partnership to to credits, we ClassPass digital see receive offerings partnering and In I'm boutique, fitness, first subscription. providing our our

We digital experience. will also to continue our elevate

a and As using in wins change a days meal and part look tracking for journeys. program. recently we a lifted gamification will row, and as added challenges, tracking our succeed members along app to our with higher loyalty help introducing meals We've multiple of experience. overall challenge the in competition with excitement zero the to streak rewarded We this, members in wellness of challenge that behavior tested really their to tool, forward and resulted levels on engagement the

be to will iOS launching this more next streak users We month. challenge broadly

have continue repackaging reformulating huge members need for the in as we strides a ecommerce kitchen kits. products was the by our going to we're our and they expansion, we've supporting growth ecommerce succeed want friendly as just members and Consumer and step huge to And access our and WW to to providing platforms. beyond product our things products well products us, tools, to know cookbooks studios, SmartPoint to snacks meal from from made

through in expanding on XXXX and integration directly including focus into will app. We beyond, the WW this

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payers. We're health value the physicians on out support team drive strategic in WW technology, of partners, focused and benefit has Our solutions to representing as awareness employers, building this foundational and demonstrating increasing to done considerable and and providers, talent of wellness a business. work, WW the

will to that partnership continue special making proud say than three rate New the York our to available City WW more with York City's for years, more I'm New of XXX,XXX as employees.

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opportunity larger in to We see a come. years significantly the

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reaching event continue the activations, from community, by focus With leveraging to audiences. audiences and new we influencer ambassador these worldwide. share activations these to on content also and with our We're and leveraging diverse will

have addition sharing on launched select Now WW YouTube already our moments viewed has and channel, Instagram In WW videos followers. XXX,XXX WWs been Now million to X.X times, Facebook tour recently

bring as network life, advance content new wellness become manifesto we're our and building continue their WW where people places will throughout can and we others connect the with to creating experiences And year. inspired, the We impact journey.

transforming and served leadership roles Dulski Facebook, technology will Finally, WW’s Board to as and to forward invaluable. start-ups. as and communities Jennifer stage roles Jennifer I to building her Yahoo, both in experience early in I'm CEO look at Google excited founder scaling working and well be in scaling her Directors. of know COO with organizations, at welcome

include addition women. I'm that XX proud will six of person now to Directors of the WW’s say, Jennifer, With Board

top have It Executive members for companies with Our levels. both also representation female XX of women. these to rare have six committee is XX% at

commitment Index. demonstrate in to equality been for that workplace. the companies and Gender are Equality goals our We proud inclusion Bloomberg to The women with their in recognized publicly WW’s XXXX has advancing here the commitment

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in In profitability plans and growth confident and our drive and strategies which sustainable XXXX summary, our for broadening our I'm impact, reach in both and expanding beyond. will

and driven to a focused technology living by results. organization, wellness And and accessible As purpose a experience, deeply and human that a we are healthy members personal human we with science to providing sustainable a based powered that on and delivers is with a foundation program all. we make believe effective aspire right

call for Q&A. you us on for now call turn we’ll that And to the the Thank joining the today. with operator

Operator

Olivia is from ahead. America. first Our Instructions] question of Tong from Bank [Operator Go

Olivia Tong

mid-teens obviously current I evening. a subscriber number to million also growth, about big number high. you're And then that’s that pretty a QX, But that looking because Good the X for of the little fantastic. wanted talk that also driving at Thanks. the subscribers, the is bit looking growth growth expenditure then cost for and great.

cost So, can that you of just talk driving about the growth?

much in substantial attendees all of But how around you the tour, were the that about more do and signups where great tour you event? because this anything is talk the then again? tour, of to you that Thanks. in that or stops hope can actually sales of something you And Oprah cookbook see signups resulted various that. it's terms see effectiveness energized the member wellness cities you in the And Did like had with or that?

Nick Hotchkin

year bear the XXrd marketing that's time that. Olivia, XXXX, impact, Marketing us. million, that in mind, expense Hi, increase for prior thanks heaviest in $XXX the week of year, versus for

our pay it million the X you over of milestone getting in that, double see in in are marketing to to subscribers so mid-teens paying spring the digit anticipating far and up those that recruits working behind off integrated for members. initiatives winter investing and be we're So campaign And us. or beyond be campaign, that end

we're nimble and all but this in always all team's now. social be be work spend, great marketing work managing cylinders, the doing will a et TV good think digital globally, across on eCRM, in And we But, our channels, campaign, right fantastic I year cetera. firing

studios. In and to it's States, terms a the be buzz. to of PR being had tour recruitment seeing and It's enjoying to all And tour stop at the actually been the halo certainly the brand, way one such seeing in how the each United that signing there, the the concourses things do XX% resonating. at attendees of in signed on and during my to tour the brand while roughly, up breaks great our more is just And in and exposure shows, tour people event. WW effect is the of favorite bring wonderful given our in cities up tour, WW a wonderful have they're people is the and the

Olivia Tong

you. Thank

Operator

ahead. Go from is question Jason English Goldman from next Sachs. Our

Jason English

Hey, for me squeezing you. in. guys, Thanks thank

pick it's cleaner underline and that make give a for XXrd and much just cleaner to How up we us the can around number adding on revenue question us the parse can week? get So, to just Olivia's marketing, for it question, out to so read? marketing the you

Nick Hotchkin

in Its yes. teens, mid-teens. the It's

about $XX of in think being million. Now, it terms

Jason English

Got Of marketing. it.

gross there tour that's Okay, going a got color clarity and gross you the launch then noise whether may on that's are the helpful. it. Can expenses of components got margin drove new I in some away overtime? with cost. then to margin the launch mention but soft also some softness and in what it I of expected the fourth side, fourth quarter? you margin, or more sort give launch us appreciate, fall WW the a And And coming dub-dub base, cost cost the any appreciate quarter, it's keep the in the on we've to of quarter. services sort that these quantification, the much first than And softer we've of

Nick Hotchkin

clearly we QX Look, based down, be resulted that in recruitment on expenses gross expected and the trajectory. good margin cost Yes. to a launch field have training the

of volumes related in in some onetime those in people staffing costs higher and are January So, higher for to QX the studio. levels

how business operating We're the we're performing benefiting would leverage, it seeing richer with from expect exactly model to. forecasting growth, operating and leverage, digital mix. we're is So, I a

within points gross there's that forecast costs. margin the of in costs XXXX, XXX basis leverage direct gross mind direct will that's those be in the about Bear margin We for benefits beyond wonderful for year. direct those know booked points XXX includes expenses, of which the basis tour

be And and another that is we're introducing that very licensing on and margin going points basis licensing offset focusing why to partners to factor a that's year-over-year, XXX down excited revenue walk streams the new to gross about brand business is that's to forward. and new

Jason English

you. pass it on. stuff. Helpful Thank I'll

Operator

B. is from Our Kara ahead. Go question next Riley FBR. from Anderson

Kara Anderson

good base. question. how could Are the I people the a that Hi, maybe Just demographic you seeing wellness of you has in provide? there kind was the hoping Thanks a thoughts had that to taking up into you any company holistically subscriber of are signing broader weight translated you curious up? evening. or goals as if shift about for even can loss Thanks. show your shift just my talk

Mindy Grossman

markets. the Kara. there's We quantitative all across and know the definitely perception Yes, in shift a qualitative from that all research brand

year, have our digital on race, we which we years, elements on continued And has particularly gender, groups, in well. focused we from launched as age, Over and the of subscriber that the been couple all have of as been the geography, to engagement last our Connect focused significant. we see course of diversification, diversity, see stage last very ethnicity, life base,

out So, have community focus for and and us the the in we a being has continue ways to be certainly contributed that. to that will

Kara Anderson

just Thanks. squeeze I in. more And if one could

international provide that's growth for you plans. you lever on know If you. can us don't update I mind, growth a an

the update for timeframe launching an like to you're that that? had you any or something closer if on curious sort if of Just

Nick Hotchkin

for us. but planning growth the rejuvenating right a and important research in year. Look, are we're new any launching about Yes. is excited long-term Look, this lever in for phase. anticipating thing in Brazilian business market excited to later planned expansion natural year. not myWW we're we We're that launching and now. think is our that this no We're markets new about company, I international launch One be this business countries going

Mindy Grossman

the it's way can you just about launch, think complete program actually a launch. And the not Brazil, brand

to doing growth really as excited at of stages externally. the we've especially there now market on right a timing, given that. down lot But looking be Nick what's said, we're planning happening been the So, for and

Kara Anderson

you. Thank it. Got

Operator

is from from Oppenheimer. Nagel question ahead. next Our Go Brian

Brian Nagel

evening. my Thanks taking good question. Hi, for

Mindy Grossman

Hi, Brian.

Brian Nagel

the to start Nice year.

I a questions. had couple So

higher retention with but XX had off, the at there there these the and I program, is retention this, under any new coming maybe signing early you months. new up as early, now new mentioned know I And to the a yet? be yet First any in now it's you above indication the climbing is But look with data associated a indication guess, program? in members that could there members

Mindy Grossman

Yes.

or the new have we what be of kind that program they So, why similar existing members about, equally able that to program had members, it's able in were a a and transition excited switch. launched because I'm program, has members. appealed into to Because, history the here's new existing our time first members and either to lapsed

from anyone. program. as happy were away taken was we people successful, not was as with their were And as it prior very saw who there much nothing as So

basically has number that will incredibly impact impact hope on one. positive would this across. across, had we So And retention have an that

a that everyone measuring forth. statistics elements positive I that all we to believe took a heard personalized third been fact put integrate is will the assessment from continue And the into certainly be to our the then plan two, you that that we've app we them, as bucket of And is for engagement the some very focused also relative experience. this that a Number on of retention.

So, of those to confidence that gives retention. can things think combination all continue on the see us we improvements I

Brian Nagel

it. question. appreciate One I helpful. follow-up really It's

down, How the marketing which winds very So a following think I we been tour? is particularly has about Oprah's successful you. for with event clearly and the should tour the brand now think the involvement

Mindy Grossman

Yes.

the clearly, mean a great certainly to just company, She's certainly I So, Oprah's this me. engaged, partner, electrifying. has been been I to mean, incredibly tour

closely saw I road. and think how extended us I effective what integrate the we to where XXXX, she's down about you may with need think future and that into we marketing can of really think with we or her it, continue will we the to do efforts her work till relationship

success. the what's and on to intuitive, make closely going very what's work We most

digit we've around around team. the and the world is ambassadors is built is this well excited that producing I'm other I'm also And doing is it. world. every about, the growth clearly, that the that an our business But double we're excited incredibly in and single market engaging also we thing been is team that The glad the tour reflecting tour incredible I'm very Oprah that seeing have in engaged

us the to we and creation on and events beyond that vertical going And will activations working content growth being tour they for the vehicle in community future. a be feel are

think all positive. So, these of very combination is elements the we

Brian Nagel

very you Well, thank congrats again. much and

Operator

ahead. Our from next Group. from Capital Fuhrman question Alex Go Craig-Hallum is

Alex Fuhrman

thinking Hi, question. events. the just taking there about vision ask and how I -- my were much tour XXs of thanks about thousands those very many, at of to for nonmembers XXXX wanted

be necessarily into Just how and ways engagement you What particularly can that program? is some to the into brand? tap aren't to management that your the benefit who brand, has on can continue much members for amongst what are with curious are been weight looking engagement there you that will thoughts that and ways potential a tap commercial Oprah and

Mindy Grossman

almost kind day on okay, a in everyone score. of there's the their sit wellness they throughout tour, big focus So, their ecosystem, very where own the like identifying wellness of

engage. we day, very text there can So, people wellness. it's and can areas a on of that focused And text all has Oprah throughout activations are number the

I different And met it, about really the So, people way people a a and throughout are to to looking the lot program and at talk the new of explain concourse, we brand talked is their to have with tour, not, way. whom home the many about experience. into whom going their now those talk the not and are back are go in of people, are out XX,XXX most and community at members into their even back of

can wanted effect And, understand, brand And regardless I've to that's and everyone, Oprah are every seeing that's we get to do the that to of what on people create arena for do create that what what them is in was to and St. one I help key coming was the office tour. how different, say going do not around how to that is can is that. are Obviously, Atlanta. not live one together thing, commonality personality the every the around the But and really Brooklyn ripple of people wanted market, goal. been was, to Paul life we we their market your best wellness they

Alex Fuhrman

start helpful. Thanks, congratulations really on great that's Mindy, Great, to year. a the and

Mindy Grossman

Thanks.

Operator

from next Our Go Cassel question Morgan from Stanley. ahead. is Lauren

Lauren Cassel

the you new within that the on the of ones seen the I that out questions XQ, for up growth any you've there last? call completely question. are specific just are guess are of thus far, my earlier brand demographic groups of some Thanks that, versus then percentage would Great. specifically? of that taking to subscriber following sort what new And

Mindy Grossman

Yes. last XX% us. new, has which is The been about XX% mix for good a split

So, with we're described across And that within of again, all we elements that. those that are pleased I earlier. diversification seeing

Lauren Cassel

X% Okay. quick further sort follow-up reason in the decline And expect of called going further or would slope the the should trend then out. negative a we Nick the seasonality improvement that XXXX, just on in business Any of that why forward? worth

Nick Hotchkin

was focus been initiatives. Yes. and was It step year, gains important 'XX recruitment driven on and versus a forward also the XX%, us. driving engagement retention, for by Like historical X% during that in the

to going those XXXX, continue in course. we're So, of

slope So, XXXX season in similar I'd to XXXX. expect be versus the

Lauren Cassel

much. Great, thanks so

Operator

next question is Linda DA Weiser from ahead. Our from Bolton Davidson. Go

Mindy Grossman

Linda. Hi,

Linda Bolton Weiser

said of give is just coaching what in how at any us Can point third sense testing you you price give early a pilot us your reads if group curious, that? you? on you're was Hi, and virtual you could I testing. potential are of offering maybe

Mindy Grossman

Yes.

Linda Bolton Weiser

go Yes, ahead.

Mindy Grossman

in give coaching Linda, alternative for of digital coming anything I our I'm face-to-face gives our Certainly, they have support which of level doesn't One, think or alternative. where really members number very ability really on people one-on-one interaction. for a it it about gives a particularly from want, people and this group the meet to to of a lifestyle, really but excited an virtual lot levels. take different members new us us are away people's and an

very it midpoint, pilots still have been strong. And priced and the pilots our the testing doing We see membership. between we're the in pricing. digital studio our being on to membership Response within

pilots Facebook platform If was you Sweden this that specifically really people coaching. is will important actually original who very think will network be all later year. remember, for for And trained our in coaching new launching an we within in the and we this us are app. We're for our stream but group virtual our be started more now expanding through pilots Canada, revenue

Linda Bolton Weiser

specifically this, tour earnings I but sorry then, first share due is did Great. the $X.XX Nick, say if you expenses? the in of how the And much quarter per loss to missed

Nick Hotchkin

We revenue of said $XX direct of the million tour had $XX and million expenses.

a So $X.XX through trajectory $X.XX in where we year. tour drive think invest to $X.XX that in growth in the up the Obviously, range of marketing or of and the of QX. revenue it's loss quarter to

Linda Bolton Weiser

Great, thank you very much.

Operator

RJ Our Morningstar is from ahead. next Hattovy question Go Research. from

RJ Hattovy

peak same revenues believe one's margins question. Mindy. we the near of XX%. my then to at you Big and high time this start those and you. that that start picture for look to to beyond any were level couldn't getting as $X.X Hey, taking Thanks reason is hit for they theoretically question, XXXX there Nick, billion, XX%

of mix, areas of inflation of business, think revenue mix, the especially Just Just some in the investment on to picture expansion terms that to margin you're about like of hear business evolved? trying terms thoughts thinking the the how that. kind the the your changes in future customer about of and opportunities I'd and has big and with

Nick Hotchkin

that future San I’d in New York Yes. growth And people invest digital RJ look, for tech us tech those assume growth, continue we and opening hub people in you product a drivers, see Francisco, G&A in Toronto. and investing to like future Toronto modeling, any and hiring and those things both future marketing.

to on growth. growing year, flat I much a that would as percent are So, pretty marketing G&A, basis, sales support they but assume of this and

points start XXX this And tend leverage implications. in basis But about that to to this this this leverage margin, with operating And said, gross growth look a has digital yes, to basis XXX when I declines but that's focusing one-time I to impacts those for points, into growth. points, opportunities on has your basis XXX answer growth points. They future XXX in terms that question, growth. also the shift basis margin levers gross so with strategic some rate to a at expansion margin company of focused leverage been come and sort we're business and revenue what's further shows licensing of the And, year mix terrific as why our that continued beyond. 'XX rate the I see drive year,

RJ Hattovy

been that it, guess, exciting any business. where one where, business. then reset better And updates that this I to curious, Can of sense is the are I'm just have a year terms revenue you how you question I the for partnership way in that health or about much kind kind years. It's with couple it And next give a to us potential. a today potentially foundational the had of of to solutions a year, over respect put follow-up know, new had if is stands renewed. in New you time, revenue. of while of how million terms thinking Once hear and it's but $XXX a an I a City It's of being York we've had update. goal since upon a you

Mindy Grossman

Yes.

in looked Let business do work give constituencies, company, really When just I at employers said to is and an on those present a this the a you business right the I'll there. have definitely let and valuable way to Nick chime from be in obviously, resource I to opportunity and with me perspective that to well. as the but all we going ourselves starting joined

across We've built So new new of we all new tech platform. leadership business. built a a team, areas have the

We have deliverables. focused on dashboards and the

of And that's so on business. and up. going it focus why I we're that rebuilt entire to And brought the expansion, now foundation we

opportunity an for it's space. in think diabetes also expanding the us I

we're now I the that the think articulate right growth was about structure focus. So, strategic today. partners, have in very but will with kind of it being time the right to be But place right that a we

Nick Hotchkin

partner don't a it's a I number. say disclose business, can in revenue is. the York solutions city the of Yes. I largest And specific New want health to

RJ Hattovy

Thanks.

Nick Hotchkin

Yes.

of corporate of biggest $XX New York over So I a our of business one solution think little of million of account, but City couple revenue accounts. hundred health a being in the

Mindy Grossman

Yes.

to your great. runway business, corporate be great point, it'd this have We And the for partners.

Operator

closing This Grossman session. any like to Mindy the turn for over to conference I remarks. now question-and-answer would concludes our back

Mindy Grossman

to strong We're which our to enable growth. start brand priorities, retain long-term with contribute sustainable everyone. year. We're us focused Thanks, will our thrilled to and recruit, and the on our elevate

element And to So update of deepening solutions, events of business ecosystem, maximize fuel wellness, growth, in reinforce as and certainly core the for that priorities of wellness, our we'll consumer XXXX consumer health integral then new these of will just our through allow our the pillars to our and we progress about. XXXX not continue will strategic the to virtual e-commerce experience, diversify our and base but building our and against engagement expansion coaching beyond. on group our app out our as you creative also which launch products particularly us experience in priorities talked only community coaching, of activation and XXXX, confidence content launching and

and continued to growth impact. incredible and their And finally, I the want thank world, our WW teams around passion focus on the

our joining today So updating thanks forward we year. and on this us look everyone to for progress

Operator

The for attending conference is now concluded. Thank today's you presentation.

disconnect. may You now

WW International (WW) 25 Feb 202019 Q4 Earnings call transcript