WW - Earnings call transcript Q4 2020 | WW International, Inc.

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Operator

Good afternoon, and welcome to WW International Fourth Quarter 2020 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. Please note that this event is being recorded.

Now I’d like to turn the conference over to Ms. of President Vice Kinger, Investor Relations. Corey

Corey Kinger

to company’s on the a most everyone fourth investors disclosed some available quarter you, under also about full section PM website we update year this regarding for on quarter The comparable investor further at press our on conference corporate call joining the International’s WW X:XX progress. to is issued Investors provide measures results, today, measures as financial GAAP Time are the of The for corporate.ww.com. Presentations XXXX available conference release. today call Eastern release a release & press company’s are and available materials and with financial well directly located general company’s company’s the At reporting fourth us as also the is call. on Events. the corporate the of Thank press purpose as full this Reconciliations website results. in non-GAAP Supplemental XXXX part year provide to details of

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

CEO; and Amy Mindy will Grossman, the CFO. Joining I turn call Nick President now O’Keefe, Mindy. and Hotchkin, today’s are to COO; over call

Mindy Grossman

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QX a lapsed As headwinds, of consumers, majority result significant from members business. workshops. in-person this in XXXX, with primarily associate particularly our The we’re had vertical closed. been which Most workshop facing

however in expect include Importantly, end to digital strong we period deliver Digital QX to subscriber growth XXX. of

we’ll and Nick our will and highlights later UK. I our it to inspiring upcoming of who operating marketing, James Looking outlook, our priorities but featured our now spring be XXXX integrated TV ahead commercials stories will to in speak I performance. key including our campaign, in members, and highlight discuss Corden, future on to U.S. over the turn quarter-to-date will real the

Nick Hotchkin

Mindy. you, Thank

subscription Our years. has past a to shift digital the significant gone a model business several through over

XX% our XXXX, mix includes digital, a of in notable and an workshops, end XX/XX subscriber virtual base is XXXX the in by including XXXX. workshops. a be This Digital and XX% will which XX/XX XXX from shift that mix in-person expect and We

subscription than subscription were way As significantly able this it the path geographic market. to year workshop ago, pre-COVID, in now to QX, In this digital Xx were plus workshop growing to our but are in already digital we digital We relates more accelerate past revenues year, and equal revenues. transition. been revenue a have every down revenues

XXXX business Our continued beyond. focus and in to our driving is and investments critical in technology

focus levers, and hubs support products additional tech and always innovation, the around our on our three have experience. app on our tech growth and to globe resources We WW

reasons the higher been and of France of has restrictions, year of it the which than trends benefited relates from Germany markets, COVID whereas higher had member that mix have subscribers. greater as usual workshops with had more geographic unique UK, to number a have such pressure in for signup have digital penetration a markets it varied As a a

economic have reset rules everywhere it especially that value lockdown the mentality the seeking as Over year. trust. and The consumer that the behavior, also to at of beginning is one are affected the is relates consumers thing true

create a and a have total commitments. level test retention strength. have On of global office and that’s value, worked we benefit average XX basis, so And also months economic continued relevant retention but WW, but strategies to it’s remains over that longer-term emphasize showing record the

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our we Germany, coaches France As people be XXX,XXX out digital launched Mindy have and already U.S. the UK had to featuring and of just half new campaigns mentioned, signup year. the have We’ll TV Canada experience. this DXXX and during over DXXX that and rolling first the for in

Given our and we digital expect month in XXXX. Digital launch core per the and growth of $X,XXX subscriber offering gross digital in trends improvements margin successful XXX

approximately Globally, are the specific our some beginning today planning for X,XXX versus year third-party managing third-party Let XXXX, at roughly guides, countries we where X,XXX me ago, how to XX,XXX give In and and the you and and guides, future. we workshops we studios XX,XXX COVID we of locations. had a and locations. have branded expect XXX business, studios coaches coaches context are WW depending on XXXX, X,XXX restrictions on strategically and

about estate a WW market, In we’ll For real and additional XXXX, context largest began and the our of footprint with we studios have U.S. within locations. studios XXX XXX locations. third-party third-party branded XXXX X,XXX XXX

can So you to as right-size clearly we’ve actions segment. aggressive taken see, this

on focus the structure, We aligning partnerships. maximum cost and to flexibility strategic continue workshops, managing leveraging for

in create we support. role is days events as today, some operating a provide flexibility are a in per coaches guidance to attracting some provide members millions is of inspiration has and and a and XXX members While becoming year up ways a week and community. workshop launched our Virtual per a portfolio workshops, people just virtual business workshop perspective are program and engaged. part which digital weight U.S. ago, applying The our our XX workshop workshops, members following to differentiator to workshop we XXX and workshops of day, seven Over keeping the month members our an premium at as virtual our mega typical hours approximately we for lost new pivotal much $X,XXX for history, possible. by attracts from to smaller high-touch offering become plus important many mix brand. our workshop successfully the have the the the member WW our And same are finding

represent As subscriptions and total you Product revenue. about remaining other sales represent our of know, XX%. the XX%

pleased assortment performance in extremely of our product was our is a launched experience channel sales studios. business, expansion, app sales than product are buyer offset a the XX% remind primary the ago. e-commerce year our which the XX% in We which to a Previously, helped has to Today investments studios. and you ago, less us e-commerce year represents in significant after integrated with of This physical of sales.

on in growth continue that strong expect XXXX e-commerce a We will trajectory.

you our our announced see recently can collaborations portfolio, build Vitamin co-branded collaboration the continued to expect Shoppe. product says and and We and that with to expansion continue branded, marketplace

also Finally, and focused opportunity the healthcare in I’m diabetes. on

business health key to Our lever a solutions continues be growth us. strategic for

Adam Type XX physicians, joined that growth, base. HS has In despite to U.S. telemedicine. expansion areas specifically, more we relationships for our health WW plans our underrepresented WW at diabetes correlation the addition and membership and dedicated living are have In of population care as than people such million telehealth we’re Kaufman employers, and Dr. partnership oversee And alone, in direct I’m to high and WW consumer with with offering, the develop in to with expanding between X now diabetes. designed business a thrilled responsibility people providers, payers obesity diabetes, is business this and the our diabetes.

In addition to has Adam of technology his healthcare to deep diabetes, experience expertise services. in unique applying improvement

potential our financial with HS XXXX in growth and momentum Amy expect are We revenue discuss outlook. WW to And building XXXX beyond. accelerated over performance turn strong and now, in it and I’ll to growth

Amy O’Keefe

Thank you, Nick.

million XXXX or subscribers subscriber of geographic with major with the ended record X% XX%, of a our end we growth of mentioned, up more XXXX XX% X.X all digital Mindy up markets. As from in

We digital are in the substantial extremely subscribers this unusual pressures workshop offset year. in growth pleased that the

COVID environment. the For a lower the a on an over constant prior the margin a on full up to on basis Digital sales up basis revenue subscription down the result our cost quick year. considering total for XX% in-studio in product revenue Adjusted significantly constant to structure. testament declined gross billion XXXX, actions million, revenue $XXX year-over-year addition from workshop year currency currency taken $X.X full to due was subscription impressive that was years, approximately was basis, just points XXX X% XX.X%,

in In and the to our is business which benefited in to cost digital demand. XXXX, workshop was digital the the to of structure addition, reflecting our the EBITDA XX% shift Adjusted business. million larger shift mix subscriber over a digital impact margin, flex mix ability gross $XXX

certain closing of we global During operations our implement reductions six additional to made the cost decision by locations. QX, workshop our to

prior one-time negative and million, from Incorporating $XX.X full As charge restructuring other restructuring year GAAP the $X.XX. was full year items, million. was impact a estimate up of our our XXXX $XX.X XXXX EPS from result $X.XX

context, in our We as now Turning workshop an a XXXX of had for XXXX the of impact strong XXXX, benefit had QX workshop to launched last a and and we year-over-year In in to which tour food be to to to Mindy just member record program the both highlighted, year. primarily expect significant prior outlook, expect down momentum Oprah’s had we in exceptional Vision start and from Vision the by driven mid-March revenue revenue that in decline media the of first COVID business, signups XXXX, revenue new quarter million digital. of XX% our $XX we from XXXX, approximately non-recurring quarter we compared tour.

As the subscribers, a QX Gross from efforts we in revenue expected to and expect increase in Marketing the to of growth points, tour. downsizing basis digital Due result, decline the aggressive the management related cost workshops to total falling taking anticipate costs however, $XX absence the teens. and QX. in we margins, in to in our XXXX our of mid charge with QX benefiting high line over the are XXX XXXX levels. G&A in studio footprint, to are million with an XXXX Vision restructuring be relatively expected business, majority

and on to QX income in digit just expect Given impact few effects with down workshops. be the anniversary adjusted single leading charges, will weeks, to operating income negative its million has regard low we impact on to to had a the operating factors short begin restructuring millions. year’s In all business, particularly our we QX the these excluding from from $XX last COVID

strengthening XXXX for expect basis. XXXX to to deliver QX and not QX, a exceed we is adjusted to objective if on income. meet, full Therefore, beyond year our QX results revenue operating Looking year-over-year

of expect months we last growth and year-over-year in expect revenue return year see the nine Therefore, aggregate, year-over-year strong the member to weeks to earnings remaining growth. to the signup of QX. We few for starting in

business, success revenue subscriber this will continued a by We marketing the digital our be and growth the expect of accelerated in and strong spring DXXX by led campaign.

over year-over-year environment, expect We access having build comfortable to that in-person get addition consumers turn business time, an returning in will our signups workshop workshop. also in to and positive as to unlimited virtual more will

over by basis We year, gross full margin strong growth. XXX expect for by to driven digital points expand the

cost structure our continue right-sizing organization. on throughout focus will our the We

$XX that in million However, please in reduction benefited in note temporary XXXX, from compensation. G&A

in we’ll environment in we with to demonstrated be XXXX. XXXX, will evolving discipline we an WW As position for responsive balance growth cost best investments and to

or first $XXX cash priorities, interest net capital ended cash the be had our to approximately X.X EBITDA on Reflecting times in to debt structure a debt is million debt at end X.X levered We lien Turning the to current and we and an year on ratio expected $XXX our of time, basis. a this interest XXXX, leverage revolver. at full year million. undrawn year times rates our with expense

Given on debt of our dependent our sheet the in reprice strength near-term. conditions, opportunities market are and evaluating balance we the to

annually. blended illustration purposes, point pretax in a For to would reduction million basis our XXX $XX interest equate rate savings in

statutory of on expected restructuring rates XXXX. our primarily anticipated to $XX software tax Excluding XX%, be approximately spend full changes assumes the tax driven our in in the CapEx expect G&A and range to is no which to to capitalized P&L, be rate. impact be is million. the charges year $XX million current we by

to in of evaluate the the talent, and and addition fueled will digital companies. to we investing product acquisitions growth resources continue future In which business, tuck-in technology potential of technology

several initiatives generation Mindy. now we drive were of in and seeing In will territories the right believe are flexibility. the and turn We I to call maximize on summary, cash franchisees. acquiring revenue for are to we franchise focused financial also strong long-term discussions growth opportunities and back with earnings fuel

Mindy Grossman

the needs loss Today, WW verticals more wellness world digital wellness pre-COVID and multiple streams, model. than more subscription and so, what and with healthier, even is health profitable business Amy. ever revenue more the weight we’ve sustainable was before. a leading given and experienced platform clear creating now past year membership the It more over that Thanks, and

connection. of tactical community, and choice, They but and more looking for WW, everyone. are than solutions, loss tools. coaching, seeking for singularly on making for wellness communities, for are We the families, personalized people, are focused Consumers the are they solutions world weight partner looking

and reflected offerings. that focused achieve experience, To culture have resources in have programmatic the initiatives established our the future. impact technology on on and we and prioritization, today our the a of engagement our we these priorities. following this that, have greatest objectives, platform our key in for will rigorous the focusing We efforts for are our To marketing, XXXX

always First, innovation members give both the and innovate pathway need. recruitment assessment intuitive retention. an and we our that to and to of Investments and ongoing and roadmap member to our the technology personalized This on experience. in From will to and experience. increase moment the app the key experience continue in our experience they the engagement, invest consideration differentiated frictionless onboarding digital to create is a

personalization, We our to discoverability, at data are and and efficacy member from and the demographics, how can focusing Instead cohorts ultimately to insights and then deliver habit engagement everything groups, tenure onboarding within new an platform by a greater dashboard look of proprietary expanding experience. These LTV. their building and way. measuring proprietary them into KPIs, formation, behaviors to measure new the actionable guide on these we to entirely and optimize grouping of member enhance efficacy engagement, activation, driven behavior

Digital XXX. Second,

the As from coaches DXXX are coach particularly content, returning I as with members Members U.S. as DXXX launch enjoying, upsell digital and on well WW and thrilled the the of UK we mentioned, live as in experiences. our an with from with strong new members, engaging choosing are rejoining. sign-ups

the amplify of coaching XXXX This one-on-one will our accelerate to expand experiences The advance as offer the coaching expertise. global we XXX We will focus of experience one-on-one to we an and our however, will and coaching be as the will continue rollout platform, have on across optimize continue well benefit our the digital, entirety of relaunch the Digital virtual and that our for to one-on-one. today. experience

Third, XXXX food innovation. our

in innovation across across constantly wellness breakthrough livable, experts to even to weight behavior and make are loss, team science our identify simple, best the using and psychology Our more and success members sustainable. more efficacious more in nutrition, more technology change, constantly ways

strong feedback member has entire any and food team excited healthcare we’ve And other consumer we and of development been and ahead year, never or driver about The testing a results for Our to will significant had finally diabetes. process, believe technology is a XXXX. it innovation. more be recruitment date,

WW relationships have three employers, talent we the opportunity and entirely providers, expanding the is platform, in and the building health our with over years, invested mentioned, and resources an payers business greater. Nick past As new advancing solutions physicians. team But technology

be a WW vertical healthcare will We well as diabetes core markets, the offering. broader as focused on as

join We include have Adam with to telehealth, the in WW Kaufman, healthcare and will are and efforts, thrilled which team solutions, globally. lead our these working Dr. health telemedicine partnerships to teams diabetes strategic

our are We earnings in of confident course over drive revenue the the growth year. to and ability

take has The WW. business and closing, and opportunity we’ve objectives and expansive vision for the that maximize now this investment With vision questions. past that, allow your and and and we’ve new We have to lives us which deliver strength our with of a I in thesis and global will belief our an applied on able of to talented to the In to drive the cultivated focus. as growth. model, as year in radical growth and solidify impact partnership be path that XXXX and our our combination progress our will efforts sequential our reinforced well multi-year creation profit people’s discipline improving value their our through team

Operator

[Operator Instructions] go Steph First Jefferies. ahead. question comes from Wissink, Please

Steph Wissink

Thank you. Good everyone. afternoon,

a questions. of have We couple

us of share confidence you Mindy, a see mentioned year stable progresses. this to first rate. the digital XX% help coming. the sales down Maybe The which expect on and implies bit us a EPS again, then for is first some upside waterfall little us you potential Maybe kind of quarter you a through that progress about contrast year. think Thank we to walk the and end, just comments think with how year. arc that the where the workshops composition the to could the I could you I you guidance, you. through up. start that if then bit the your in at And mentioned the as growth And actually, of Maybe think business

Mindy Grossman

Sure.

typical year a say thing normal in arc seasonality, I COVID. think this of because is, not would definitively terms first the of a I of is

you’re little look to going to it at have a differently. So

were strong we comping. articulating sign-ups, XXXX, on had is studio that very the what what studio business, at are the so And because we particularly that’s we the particularly first beginning of And quarter. that of side in

end though, we the at that’s go of have So even the sequential cadence that QX, will in growth of into where back have comp, of Starting at the mentioned you digital the gap. strong improvement you digital will business. and March, the particularly we

I business. in that is, to piece seeing second the no we’re and digital efforts And signups. mentioned UK point The XXX,XXX U.S. our right which with DXXX, premium whatsoever, already to now, is over a marketing just

that be Nick is in other cadence in really spoke to trajectory seasonality, that, our does the also sales based into the not and a of balance typical WW So solutions our the efforts will have about which business addition health efforts. on because et employers, cetera. of throughout year, our marketing it

business. building that cadence will different Castlight, CVS, time. with it’s over So And with a of our and just be partnerships memberships we you on announced Welltok

our members as business. XXXX. more did we more in is of our in And business that we product In expansion March of we e-commerce and have app not until addition, launch X and have scaling more significantly, the

year the of have we different revenue is confident the we’re why kind of earnings course for the which traditionally would curve then. than why is about and of year been growth the it’s feel trajectory So you talking what a we over see,

Steph Wissink

your a could your made, business be inside I that maybe you in be opportunity base selection an to feel Is if could just app. one And model, a and e-commerce even third-party with like you follow-up where there curate services done and develop the your is of which comment a would user or marketplace you partnership would that through… deliver to beneficial Great. products,

Mindy Grossman

glad up, really I’m Yes. that our is fully wellness you a goal operational to brought because be and marketplace. health

sales just to studios, into company, all fit products the if came the So weren’t perspective, our if felt you we they and when products all, basically brand. give a of I in our or that not most,

product to that et while built and we So in of And X, launched rebuilt rolling course been platform time, sold products our XXX% source, new co-branded of our got what the that out branded platform products WW relaunched e-commerce product the we’ve we expansion. the portfolio. of develop over are addition globally. new global a the products is out assortments cetera, Currently, all that have we we March

with a engagement businesses able and product So app. capabilities to side. that potentially integrate product And And see coming Shoppe for will gas you’ll is for doing drop ship supplements, and And you expand third and see more of on co-branded. we’re of building have out me, development, and within general exciting engagement even partnership our the both from background other subscription with marketplace. as a be with lot it’s Vitamin we the member for to a more more smaller electrics the in example, our the see then really what

Steph Wissink

very you much. Thank Great.

Operator

Thank you.

Next question comes ahead. from Morgan go Lauren Schenk Stanley. of Please

Unidentified Analyst

Hi, this is Nathan on for Lauren.

a retention, Just core a seeing some you on member? you’re quick engagement me. provide digital one when to customer the what Digital XXX compared Can and studio color or for behavior in early

Mindy Grossman

coaches addition really portion of seeing that we attracting we’re that an about really significant heavier their to and new lapse for comment digital, as are our being just those the in again, that creating their for a before definitely marketing developed and XX. are under significant consumer audience What on our on own influences really coaches one are Yes. degree. coaching, exposed excited And we mechanism. upsell was recruitment own and is the who that we did to identified And DXXX

offer you ability at is growth many And closer this look element. brand, as has also one important digital well. to we to see this coaching margins, the very for a that’s our lastly, And margins has which a a who greater us working So now developing as of be content, our vertical, to the coaches exciting we part with content it able but do through to digital to and are integrate where we robust content. the team the create And or then beyond engagement. lastly, been that we’re platform can new that,

people like Matthew Oprah, with So Gupta, for Sanjay walked McConaughey. example, have towards we

the very marketing. satisfaction both confidence there’s is So giving are and us a very aggressive what’s on rollout very our to high, the and be highly scores engaged which the

Nick Hotchkin

Yes. add. It’s just Nick. I

retention LTV digital than price, have So but and excited similar can to our $X,XXX offering. it launch DXXX with higher at the digital, core characteristics about

Unidentified Analyst

Great. Thank you.

Operator

go you. next Craig-Hallum. Alex Thank question ahead. Please The Fuhrman with comes from

Alex Fuhrman

of much to changes points you the the and you’re in you era. over studio very the build next there a meeting envisioning to the taking other of Other couple Thanks than them, back for some, conducted? years modern any have lifetime how place. I opportunity big as that terms that Great. business of it question. of workshops once distribution kind a here the Are the you seems really and wanted could my ask see like of about, rebuild are kind many for business different experience where mentioned we in picture taking of definitely

Mindy Grossman

Absolutely.

amplify pilot give give we – at as see on very is a what give and able look where a audience back traditionally location. the meld this it the perspective the just why basis. aggressive virtual we to to in us to we on physical If and made, we studio it to new in looked experience everybody at you come be ability than today changes that different we people service to are gives the also to significantly are the the had and how react branded quickly to the ability It concepts it’s also gives a our wanted business, optionality different global us we us does way. is very very a And flexible going

said, different the virtual that’s short-term, and their they’re have to, people to have could going membership it’s And kind give in lifetime coaches. definitely they entire this But for market. as to is us, are different what studios also but studio, obviously you they the So can to vertical physical our with of really a going local access cohorts in be to a what responding future. of reframe lot closed once

Alex Fuhrman

exciting. Mindy. very you, Thank That’s

Operator

Thank you.

KeyBanc Next go question Markets. ahead. Edward Capital Please comes from Yruma,

Unidentified Analyst

this Ed. for is [indiscernible] Hi, on ahead.

thoughts So a accelerate relaunch Any you’ve you gone you it’s to growth can since there. do on year how what had and CPG.

Mindy Grossman

products, with to business. eats, I significantly other Yes, in Pillpack, tech. focused I you’re continued all both for as in Vitamin we’ve Healthy as as do healthy their for everything and we healthy on kitchen, there. mentioned aspects have call digital good well locations, for it’s commerce, of all a their both trained small beyond Shoppe’s measurement platform, products marketplace products. great done our a which then digital in out consumer WW. are electrics businesses, our platforms, But delivering living, that and in expansion see heart call been build WW being coffee launch all now – just out but Shoppe, food product beyond opportunity with built to I expanding everything health. health healthy And healthy and to what which would not what to our have our did those we’re lifestyle, associate portion, other creation. having also from areas right tech partnership. a really see our it’s pasta marketplace have Vitamin and to going Health the it’s products able also a physical also we’ve you’ll really because what eating. it’s scales kitchen before, the tools of about use our way start we we are example And We to has products, snack And just products, very the areas we that we’re

have And of so doing we sign-ups within the capability also the stores.

us partnerships, trying in these more audience. which to creative So opportunity what be gives an to strategic reach is do we’re also

Nick Hotchkin

just in we’re Yes, in growth opportunity. that’s that, beyond with number and in we XXXX, a we and skews great. we’re if by e-commerce confident the in this tripled business sell of purchase we thrilled just very growth e-commerce repeat why I surface XXXX looked Mindy could scratching the members on our look Despite our had rate. and feel, is that the the doubled I both with And and strong penetration

Unidentified Analyst

you. Thank Great.

Operator

you. Thank

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

Mike Schwartz

Hi, this Lasser. from Michael questions. for Thanks Mike is Schwartz our on taking

long key if a target time. you offerings. with the think Even over age aspects have this leading your inability relationships relationships. of way, that a with if demographic you story can gaps the of along Do build One the cohort, digital to to a create begin durable templates even been you don’t Is members WW to there of younger were personal has to similar relationship workshops? peer-to-peer connection with you period

Mindy Grossman

Actually, we’re seeing that. already

retention to building and core engagement. all program digital our integrated throughout across to build our of the in a seen an the that Our we’ve your retention community building relationship, to the now you real well the personal is with everything significant we Connect, continue was is from digital platform as DXXX and increase. And And also that and key with coach but platforms. matched assessment to personalization the to journey, seen built before joined we’ve digital as being

age that been range, consistent of So regardless gives us confidence the across. it’s

Mike Schwartz

acquisition around to give ratio past and And target turn you. one quick you with still the you’re five a year how LTV? customer Thank and that it’s a cost sense follow-up. Can whether over of it

Nick Hotchkin

model, very XXXX. in some continue and and from Look out I five marketing expect and efficient comfortably Yes. job, containing strong building to shift to to our the such strategy fantastic to TV our maintain a video work team’s really a CAC business part of digital marketing great LTV that also one model. doing And

Mike Schwartz

Thank you.

Operator

Thank you.

ahead. Please Next go Oppenheimer. question Brian Nagel, from is

Brian Nagel

Hi, good evening.

Mindy Grossman

Hi, Brian.

Brian Nagel

So of guide so but the been totally trajectory current I within the there. before, the gave growth QX, what the subscription guidance think I’m message apologize, I in think digital growth about has not digital here the still asked far And is this certain, how parameters, XXXX. we the you on for should – so

Mindy Grossman

we’re strong on is The Well, that QX. going the pressure see is growth what digital we to in to studio business. spoke

Brian Nagel

comparisons. then Is now, you’re as as progresses? their then the And against difficult up right the better that [indiscernible] tracking get business should there’s we’re QX

Amy O’Keefe

Absolutely. Yes.

Vision weeks. XXXX mentioned we the in we COVID mentioned, if workshop as a QX I had campaign. in begin Mindy tour signups record can of a to Oprah And of So strong in comp digital quarter and comp plus with strong marketing a against we the XXXX add, couple just will that just and had

so are QX pressure a performance. seeing And peak we comparative to

subscriber QX we to QX. from at down QX the revenue comp the and growth tough expect subscriber will in past growth, aggregate earnings And but so of in we growth the still do see digital teens, we quarters. these are healthy move revenue in you guiding And mid-to-high end QX digital some as

Brian Nagel

it. Got

How little where talked I and a from about physical. your transitions think just but about you. winter positive Okay. the the there’s a nature, this – longer-term how that COVID with the should guess against expensive digital, to while the have backdrop we for happening virtual should shift talked to then in expensive for about maybe going bit studio a it? business locations headwinds we’ve it? more the we is legacy but Thank hopefully And the locations, then business shifting abating, Is Nick, think also the are how you you second, about

Mindy Grossman

smaller a that business behavior, segment us and of also gives to the margins. business. us improve I’ll But let significantly on into at given flexibility took it actions able but to are and consumer the the actually in we the of and which Nick sizing margins the the respond studio to be Albeit right to tremendous has opportunity in the digital more go in higher what the seeing detail, we’re it’s DXXX of portion

Nick Hotchkin

workshops look, today has on and in to members you look France, UK, Canada, to we’re our the keep you’re incurring costs. been That’s right, why patient virtual essential And open our engaged. like now, so still studios of if countries, right many because shift that’s

location, it’s the demand. both at we a meet become workshop capacity people add more social in a a We’ll meet increase in does locations in Our a open, have obviously States wonderfully studio United cost-effective even and distancing remaining to people the quickly our XX to cost when such XXX today very can in structure, post-COVID flexible person. about to willing only XX

Brian Nagel

you. Got Thank it.

Operator

Thank you.

Davidson. Weiser, from question is D.A. Linda go Please Next Bolton ahead.

Linda Bolton Weiser

Thanks.

something season here planning us you program there next for? you’re season? that the Thanks. any Is where coming a point I we’re we in to have color that XXXX, of up the a the can where year for diet it’s So magnitude guess on innovation. major diet Is give would up

Mindy Grossman

very we’re to and that have launching. innovative. very It’s results. based how is on early it even was the innovation express XXXX about I what we I seeing. breakthrough, tried Yes, excited It’s in

end XXXX. felt really launch into we know, at the XXXX. you good going And of So we as

So have be – we’ll very benefits that strong. to to as be from well, but it’s able able

Linda Bolton Weiser

Are clarify just subscribers below first Thanks. about that that through year, what of suggesting we quarter you level? understood go subscribers as grow could And wanted sequentially year or cadence seasonality. the with will I the I said actually the the too, to still you we end

Mindy Grossman

What you’re going to see is sequential improvement quarter-by-quarter.

seasonality to going year. we’re of a calling it traditional COVID So year see more reverse, than I’m a the

will see Yes. You growth of over sequentially the year. course the

Linda Bolton Weiser

Okay. very Thanks much.

Operator

Thank you.

go Next Please of English Goldman question Jason ahead. Sachs.

Jason English

evening, good folks. Hey,

Mindy Grossman

Hi.

Jason English

let in. me Thank you for

the figure So b, be looks terms into would quarter, recruitment around a, would what like applied a amount of growth growth that that for couple to are come absolutely just of back in and does – expectation guess clarity road the to I of walking I’m on that high to envelope, subscribers. the one back typical imply weakest And they a to walking foremost, does be $XXX the – figure digital it of a – carrying over of the of you we’ve questions, But of the million. weakest sub or fair the one XQ and sequential digital and as reasonable? of from first XQ. Does slope. I And sort strike degree an of you seen that of first of want sort back the

Amy O’Keefe

expectations I on to headwinds. we do with QX, expect significant So right just mentioned, as start setting

clear, driven workshops. believe be we quarter the teens total that by mid-to-high decline one in revenue our to So will

as so a expected be to revenue is significantly result, on our up a basis. digital year-over-year And

Jason English

Yes.

and XX% up. finished up slope make setting all. and the it back the will you make to can want implies trying in I’m be to because I’m you of year gave I that at I up You contextualizing correctly. if just I’m sequentially then sure. sure year-on-year not number it’s know just sort there’s the

Amy O’Keefe

that in number. order I So into it’s short we so so right, don’t answer back actually, to the think

are growth. So we expecting

growth, the in QX. are point, higher prepared not this higher we yes, that at expecting We’re provide but to split revenue growth in

Mindy Grossman

of remember you have the to because overall Yes, with is. percent it what even decline, business the also

Jason English

Are you’re – Yes, growth, only I That’s helpful though. quarter-on-quarter but growth. do. sizable expecting real yes, you year-on-year

that is So helpful.

the suggest clearly Mindy, you’re XQ track so X%, to guiding that where your for on year. would X% that use is we revenue And Okay. declined normal or seasonality,

out expecting normal you. You’re seasonality COVID. I defy because hear they’re to coming of

So resolution the kind if looking fruition? we to nothing looking what think a is you to period, cycle of coming for at be this What you are where guideposts see hope I which that new happens. off should

Mindy Grossman

that’s growth. the we’ve drive it’s how balance just also a of doing year, we similar what the It’s going to are Well, not comp. to looked at that

a engagement and digital in business. strong myWW+ have You our very

You of have the expansion growth and DXXX.

and around reset of have business You growth studio, consumer growth the a of in other solutions. have with WW then such you comp commerce health and as the areas

you that and on quarter-by-quarter, growth. see you’re So start going building to sequential

Nick Hotchkin

as in will mentioned, Look the U.S. James including really the the UK. Yes. in we campaign and TV marketing near-term, excited be spring I’m Corden in for our a featured our commercials

think brand. our to I a of in that’s lot going So guide interest

Amy O’Keefe

just revenue don’t to comp circle a million digital tour. question, back had to your Yes. Vision the year-over-year forget And from Oprah that $XX we

sales significantly that to workshop store be with In product down in revenue. will addition

So the that you’re think missing. I that’s piece

Jason English

you. piece. Thank could Yes. the The million be $XX

Amy O’Keefe

Thank you.

Operator

final our from today of And Vikram question Kesavabhotla Guggenheim. go Please comes ahead.

Vikram Kesavabhotla

Yes. Thanks question. for taking the

of times. for there health the fiscal specific some color solutions to give throughout you if a Thanks. opportunity you curious kind just year that some what the us would about progress on front? the I’m have on you measure talked XXXX. the more for be of And on business looking You few can goals

Mindy Grossman

Nick some had the came going as in into to well. We’ve is for and just take this talk you to I’m a and background solutions realized is to health it future. really give I not business the I’m going going Sure. year. WW to us let that business the

physicians, of the hub as we as you business, technology, Toronto, which number years, across as why didn’t team, it talk well hear et employers, our that platform, first the me with opened rebuilding that’s about was in much offering the cetera. completely what the So tech very payers, the as well

we what that can have is really move with. forward the so we now platform And

I and on that and So based of Welltok’s they going build now mentioned, to other is with we’re when as the CVS’s the sell areas, in year. the and of timing over course

over to more have based course on then to of good the say see timing. scale confident significantly we’re that XXXX, growth fairly visibility business to that that can going So in that much in XXXX we be the

Nick Hotchkin

that’s medium think here small Mindy, levers size focusing like multiple growth businesses. on fine, and I so

offering, course area and to diabetes. I aggregate Welltok physician synergies care no is Of strong also. And between referral and a the developed real are with diabetes that is Adam a CVS, Mindy’s think business joining focus WWHS Castlight, health lead mentioned now and Kaufman there us the

think bright I vertical. is the future for combined this So business

Vikram Kesavabhotla

Okay, great. you. Thank

Amy O’Keefe

able growth we’ll this are we saying, updates in give confident be quarter, be we’ll Now every you to the on vehicle. but

Operator

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

Mindy Grossman

Well, thank you everyone.

experience the once a to XXXX our want time, when work beyond. impact. have will in I delivering accelerate as balance revenue that focused our think base, our company the ever. at it’s which reinforced growth again the focus and rigorous as what teams recruitment, just can to time you And and I technology our the strategy, initiatives on their of during differentiated in this member through digital greatest we critical of we’re confident the a for has revenue and to the XXXX experience as strong growth driving member thank tell key leadership in than around more our on total talented have retention earnings is diversification exceptional and well subscriber growth, world

you So the to today. And thank us keep forward joining throughout you, updated for everyone look year. I

Operator

attending has today’s now Thank for Conference concluded. presentation. you

disconnect. You may now

WW International (WW) 26 Feb 212020 Q4 Earnings call transcript