Earnings call transcript Q4 2022

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Operator

Good afternoon, and welcome to the WW International Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

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

Corey Kinger

joining year for XXXX for quarter International's everyone, full and conference you, us WW today fourth Thank call. At about XX:XX p.m. we full Eastern fourth today, issued release press Time reporting quarter and year results. XXXX a our this of regarding provide details a financial some Company's update on purpose provide the investors call The the as well with as results general further to to progress. is Company's

website Supplemental the in investor Presentations Reconciliations is the release conference financial website part corporate also GAAP press the under Company's Company's Investors measures call comparable available on the available on as corporate are the section and materials of of release. at disclosed The also non-GAAP to available corporate.ww.com. on are directly located Events. most measures this press

that factors everyone detail detailed this aware uncertainties discussion Please statements. statements to risks actual remind today. filings such me more differ call refer should a contain are and cause from Commission. here the risks for and statements. subject let explained to begin, any uncertainties Exchange those we Company's that to forward-looking risk in filings of be the results materially statements Investors forward-looking and in of are various These these could will that Before Securities with and the forward-looking discussed

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

Sistani, call to Officer. will the I today's CEO; over Heather Financial Principal now call and Joining are Stark, Sima Interim Sima. turn

Sima Sistani

thank us and everyone, joining Good today. Thanks, Corey. for afternoon, you

and our the weight science. clinical management our provider proven most into space. in nutritional results, Weight behavioral sustainable highlight plans enter to the is get weight grounded latest and I trusted of the Watchers loss, I want Before to

weight prescription members evidence components condition weight address the components. for growing some management includes biological is across chronic scientific There's the loss of that and that complex support biological medications full chronic can Obesity a spectrum. both obesity. behavioral We

have accelerate Weekend business entered technology and health support we acquire providing eligible Sequence definitive weight medication this with a as integrates and a care platform prescription space, platform experience, subscription clinical offering doing patient that to into management. To Sequence, and ongoing medications. a is management digital agreement members our to entry access to clinical chronic clinician access into online Health,

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everyone. not solution this for will Importantly, be

community features our make are work at on and a number around in map out order accountability rolling We hard our of better. Watchers enhancing even product coaching, with year Weight road to member experience this

the time, also need we in expand our clinical on discuss and serve prescription of recent our our cohort medications. of details incorporates I the will At XXXX will a but acquisition results the this people more strategy scope to shortly, that turning performance. solution same to first, and

year. our We outperforming ended cancellation It X.X starting and new and into heading higher approximately to sign-ups momentum $XXX,XXX improving subscribers, been nearly the position XXXX I organization of for since year that been transition, has Company significant Weight one tomorrow. and the to moves has a point our forecast than trends our million year and throughout Watchers due the expectations, bold joined with rationalization time

our improving for the experience on trajectory. setting establish the culture, data an simplify we informed program the execute the actions and ambitious streamline road focused a map community, processes accountability to and year, global returning business, decisive subscribers member to Over and foundation our centralize and growth past several on took coaching, teams,

we visibility us have more and driven very to different team forecasting, marketing, our With accurate of drive operations were from what season by to seen from peak our performance global marketing stronger Turning able performance, previously. data was you execution improved in-housing the results. our approach

the greater the high-quality prioritizing than CAC drove with sign-ups made spending while year. last for to LTV focus less. same a strategic time This efficient marketing XX% We ROI at more performance efficient these on decision sign-ups being

this of So decision an better to are we year-over-year, throughout while intentional maximize year. dollars the our was took down sign-ups the impact

alongside Historically, approximately the of spend a sign-ups QX plus are annual XX% of marketing community we to our fall occurred cadence experiences. from the and look annual spend as we intentionally the approach. This digital shifting our marketing into during reflected this focus QX product of first portion of year, spend launch our

year with likely expenses expect year, to year-over-year marketing we flat our be half full spend roughly the of putting XXXX. Therefore, to increase second in the

by our in we our satisfaction addition, our are that brand and actions engagement positive and which experience improve seeing encouraged In to a are member improvements metrics, product we having impact. indicate are

has First, It been the and downward examples: up which on activation in half Three last year. caught began trajectory been rate, X% over the of up XXXX uptick a had year-over-year. second previous year November, to in in with

program a relatively metric been internally and is member's tied by first the rate, the activation reminder, new directly is month success. a to As we've and during on defined engagement a tracking progress

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addition, over In successful members these Watchers on will more the longer be term. Weight

year-over-year XX our is Second: app member workshop measure points NPS, members up year-over-year digital and a members. QX among among up points of in experience for satisfaction X

surveyed X up more plan XXXX with is points Weight the affinity them. this brand January agreeing that members is versus for third, And Watchers

in increased openness chronic the behavior and how the landscape consumers therefore, and many an as recognizing same biology of people The and the in are obesity to understanding weight help. loss. science are clinical interventions a including an midst is condition causes, evolving. to More evolving view we its time, community now medical At

can new foundational Weight a pivotal at that market expand reinforced point we where our build is strengths. Watchers capabilities our by

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or To program for. famous and intervention they are clinical But to proven a who we for everyone, been medications a those or needs. will meaning XX these are medications, have greater will not creating have of new choose continue for absolutely we offering, have weight-related be one of weight ailment we and medically BMI a BMI for or unique be qualify diagnosed deliver the and clear, management greater XX their specifically with

last more be in finding of generation has Research the a trusted Weight consumer of months is these choice everyone. management XX In marked science-backed for by medications. been The rapid short, new interest growing Watchers weight will chronic effective. medications as solution

only are treated anti-obesity medications. obesity, with living with people X% among However,

The particularly in was newness, injectable of medications, their people such significant relatively using limited often availability, number low financial to expense. GLP-Xs XXXX and formulation due

resolved are challenges these access and are is more insurance chain medications, supply plans to increase. expected covering that Now being

as The be behavioral FDA indicates medication lifestyle adjunct should that prescribed changes. an chronic to only weight management

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way. can are these to develop in done A guidance behavioral from help and are the food, members program nutrient-dense to may Watchers sustainable be support lifelong where paired a commitment, to weight maintain muscle healthy, medications with a against medications clinical managing prioritizing ensure intervention that provide the areas and these Weight understanding loss is loss people journeys habits healthy critical on

or sustainable, and things. emotional does fix is it critical something to trends move quick Startup as for and mantra, often that culture fads as are highly as weight known break When even irresponsible, participate comes in health, or not fast be view not Watchers healthy popular. can they the we do highly loss as as that when approach Weight

how we has medical a these very management under the GLP-Xs best condition view to leverage If medically they they work how them what medications and someone these to of prescription certain But medications fully that use one ongoing the of differently. on can treat, guidance a understand basis. deserve professional an weight of are,

medical enabled pharma weight alongside and breakthroughs as changes, considered scientific people are in with our obesity-related can lifestyle significant provide conditions. These and pathways as effective administered when well sustainable improvement management important responsibly

agreement for entered trust Watchers Sequence, enter science our subscription and weight of the Weekend community. before, brands our chronic our into Consumers Health, space. acquire clinical noted we provider telehealth to Weight to As prescription because to management excited an I'm offering access a or medications.

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of management, a improve There outcomes consumer is access, and significant program. with to community lifestyle complementary integration care better opportunity education,

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particularly we have medications, have will ensure GLP-Xs members that the and both. programs different than experiences for to best are Members We needs want on not.

As strength come program moat, mind. well Weight is and market in two. competitive as our we core to does science to advances, are a positioned Watchers which builds in it This off six particular lead

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with as Two, U.S. the and brand ranking years experience trust, XX of

earned number and years in have we loss our World one the a last XX Report, row, trust of Weight News members. the Best Diet

high of other. a millions with level network Community, we members Three, like of engagement, a and no member have

premium mindset apps. omni-channel product studio presence complemented studios digital-first with a in experiences and IRL our by Four,

Weight to Watchers the employers over such BXB Solutions stand start-ups Clinic. clients Cleveland and and already up while the with City payers, Five, XXX including of partnered New relationships, York as is look Health

in and LTV ongoing partnerships, market With are a this to scale. six, position And grow we profitably. CAC uniquely marketing efficiencies to

clinical want and drive additional of offering. combined benefits expected time the to it who take market short, benefit the and while scale an solution near-term can is with that will acquisition when innovative treatments closing, opportunity solution, help stress people based to it provides is scale. to biologically while lifestyle But more have following In up the Sequence for from to important an those I this integrate

isn't or loss We weight multiyear growth we are scalable pathways individual's one medications journey That said, remain of to and we size believe all, whether all an strongly committed weight significant. to science-based fits solutions is part not. opportunity management know bringing the

medications to Our continue current and the decide millions. care. Watchers for for qualify, But to who expertise full-service them offer prescription alongside others use we Weight will remain and program will pathway recommended

need we As am that introspective I leadership, of in for our brand, change. to Weight energized to and fearless, permanence we approach the be granted by Watchers embrace take anniversary, I maintain order but XXth don't our

I our upcoming and will road to the for back turn over financial Heather milestones to provide a more product on map. call on now update come then we'll the color

Heather Stark

Thanks, Sima.

and reviewing platform of outlook, serving grown through quickly Before XXXX, of I revenue would mouth. XX,XXX into the results Sequence. U.S. the in business, word $XX annual cover like acquisition has our by launch Since run its a across planned million effectively rate scaling the to technology Company late our of members details its

is conditions balance will price transaction, the is net on and a effective quarter subject the cash cash closing million, valued The to of XXXX. second the approvals, purchase at of to customary in million WW of $XX $XXX is a acquire during million sheet. of regulatory which of the minimum close Company transaction Sequence's inclusive assets. expected $XXX assets The

approximately $XX $XX WW and assets, require closing, the newly $XX pay million net of will from million million will issued Upon WW. in shares Sequence's X of will be which in of us, stock common cash, paid cash owners million

Subsequent accretive both be cash expected share of each payments is earnings fourth to paid and of be will second the then XXXX. closing. per $XX WW the first by The the million acquisition anniversaries on of quarter to

guidance both Now approximately with we sign-ups our full our cancels subscribers, fourth turning with the XXX,XXX subscribers XXXX results, forecast and in XXXX ahead finished by to our quarter. outperforming year of X.X million

that prior $X.XX of foreign basis was exchange. gross margin Adjusted or revenue XX down on year currency related was basis. the down full of full the year, down XX% guidance, was XX.X% the constant subscription a for points to approximately unfavorable XX revenue, primarily our year mix billion with from due to line of In of decline basis XX% points

expense international from discipline expenses reflecting markets, down X% as savings prior spend TV foreign of overall spend actions, Marketing and foreign reflecting $XX exchange. benefit was our advertising XX% lower year-over-year, from were $XXX Adjusted a our restructuring $XXX nonworking million G&A million benefit year, from million in of well exchange. on or lower down versus a as

full guidance charges million with million XXXX, prior the in was $XX.X down line for primarily year, and our revenue year, which foreign full million income the to year XXXX versus totaled includes our pressure and due $XX exchange $XX.X Restructuring operating related restructuring Adjusted to million headwind. $XXX plan. for

charges acquired the rights recorded capital, $XXX.X totaling million. driven higher cost Company's The average was and in values QX trading the charge goodwill Company's in and and million In impairment XXXX, the noncash of weighted impairment rates reflecting interest increase including we equity franchise an debt. market XX.X by factors, of largely

share impairment, which items of net charges restructuring impact negative $X.XX, impacting items. was net the GAAP noncash net intangible $X.XX incorporates loss including of tax-related and per comparability,

real and business XXXX, portfolio. streamlining our the restructuring a Last our month, of we lines further non-strategic structure, centralizing and estate rebalancing for organizational certain rationalizing continuing announced

we with process it of The First, for we we and and through our functions. year, certain to strategic last far a that as year centralize our management completed while became to last resolved XXXX, global hadn't enough. better priorities with our restructuring leadership structure, planning team respect resources our systems went align gone clear centralizing

more The teams our and a creating by segments. resources These further reflected countries, XXXX and across in effectively will business actions truly helping changes us global efficiently scope take be more this team consistently. and centralizing execute will manage

our new Starting segment. new Australia, now and the segments will continue include short, U.S. in operations our Continental the into North and segments International. The include QX and be be the XXXX, Zealand will U.K. North Europe, and will American consolidated America franchise Brazil and revenues. segment Canada international our from New In reporting to will other also

a to our consumer the in terms product Second, our in in completed first markets, business America XXXX. and to Products to discussed of decisions previously international expected is our SKUs lines, of which nonstrategic our in Consumer business we've discontinue half rationalize process be North

additional operate America, this consumer business our products significantly the we to best-selling On infrastructure further North expenses review, rationalize will which have and products, on decided only in the to reduce required business. focusing

having the the a less we the anticipate We had XXX than active by of versus SKUs year end XX ago. year

negatively will impact revenues, to is have on expected neutral a operating XXXX this impact it While income.

other to to million We expect during Consumer and contribute revenues million $XX Products in XXXX. $XX

for Third, real workshops. and estate our

our the studio footprint, workshop our we studio We and will footprint on are rebalancing fixed focused reducing more lease overhead count. flexible. In be our fixed making our U.S., significantly reducing

XXX. locations, shifting workshop We to studio delivery will bringing fixed third-party that retain or approximately locations, flexible XXX app total to approximately

consisting Overall, in of the million and in-person to through virtual million mix real first aggregate, will to which be calendar and estimate of which in the approximately million will the the other majority extensive plan continue be of accessible to of We million estate related fiscal costs, of of workshops charges been million will million and to approximately in between apps restructuring restructuring, $XX in the million to related $XX charges recorded time studio XXXX $XX our $XX.X a in of XXXX lease the range six of $XX that at months recorded $XX organizational XXXX. studios, of management's has fourth restructuring quarter terminations widely consisting resolution workshops. $XX

The improvement reduce fixed year. as our lead base we gross the restructuring through adjusted will move cost sequential margin to and

hires critical and expense in largely being are savings G&A by compensation living talent, increases. as key investments reflecting of cost merit as offset increased However, well

so the total are more are year-over-year, down us. sign-ups discussed, As far to XXXX worth remained we acquiring sign-ups but in

plan These are but operating per This rate our longer, driven in efficiency. largely improved efficiency them offers. expect greatly long-term the reduced stay meaning for for commitment us our being more with lock to LTV average is offers success improved paid pay We longer with week by subscribers and to a we CAC duration.

plan, in ago. plan, global XX% up XX% are approximately sign-ups longer notably, longer of from ago. a XX% a far from QX, of or year And choose So or a for about most nine-month six-month a up year XX% sign-ups

improved on last achievements. and addition, versus year realization In those notable plans we have price our

approximately QX to of down to in an increase QX, and million. subscription longer-tenured deleverage points year-over-year margin approaching plans. XXXX million. to business basis to Looking in the the workshop is expected number revenue to sign-ups Adjusted mix, roughly expected be expect we QX QX end XXX in X $XXX is be subscribers due choosing with gross

entirely cost charges $XX of in quarter. be the Restructuring expected approximately revenues are to million in

we the and $XX anticipate impact marketing, of redeploy half. $XX For as expense approximately QX the spend approximately of we better into million, back maximize down our million

QX expected G&A $XX $XX the be the million in of loss in QX. million expense year. last Therefore, we is adjusted versus approximately mid-teens in range an $XX to expect operating down to million,

expect benefit launches road as acquisition, approach to enhanced improve to we through from product we operations member on member deliver map. following to streamlined and operating our increased efficiency experience trends we mentioned, as our performance the As an year upcoming from our data-informed

However, guidance acquisition completion we line on our integrated for annual will and providing practice not today. the following Sequence be We provide guidance hope to our can our providing a sight of of we when of expectations year offering. of the deeper resume full

our payment Turning plus ended purchase to the capital With our to we undrawn capital our position and our revolving in-year actions, the of million working facility, plus cash Sequence. our restructuring cash than cash sufficient for revolver. more cash of our have structure. servicing outlays liquidity related approximately for needs with XXXX debt credit including $XXX an We

from to X.Xx ratio EBITDA up end QX. adjusted At at of was leverage net the year-end, debt Xx our

increase to full be XXXX. We time, expense $XX At to expected expect our trailing XX is this approximately ratio months year during interest leverage further million.

us due range variable Therefore, which primarily debt and our on software in $XXX XXXX. floating. notes XX% $XX capitalized against CapEx, protect to million the $XXX is of amortization $XXX rising expected both we in our have fixed million million total term loan that for and full of to are be rate. year to and rate are interest is hedged million Note depreciation a the our rates

In execution upon summary, we milestones. our on our are and delivering key focused improving

cost an and implement future to for that we Company efforts reading into streamline a we back the the confident improved basis growth is key Our turn capabilities the year to XXXX through business, centralize are the trajectory. and and our for are

I call to back the Sima. will now turn

Sima Sistani

Heather. Thanks,

creating month, product are retention. is We their of trajectory keeps trends encouraged decisions our strong resultantly drives back during we know that which during digital to year, first food activation on a and community members' members XXXX. by indicative and positive is enabling focus This connected Weight Watchers. A community coming the subscriber glue

workshop To chat a functionality existing they early in member network, relationships even members, beta will about, community you to wish in along in better them people for are Chat be will QX. enable these with this members expected other, rich the your your craft. with if We each interest an believe on excited based lay foundation allow is create digital groups, coaches connections, to journey. bring to members

behaviors to dedicated allowing weight and their progress. spaces including Want decisions recipes more, support management also activity are app, and members see will to guides space Eat members' developing eating our in between a improved connection core help new which it to streamlined better to a trends tab, as mill planning, We to like relates finder, including tracking a the weight comment and restaurant challenges, and food, progress

to improvements friction them in digitally. we real remove And algorithm the scenes, as life our coaches Then improve mechanism to we are search will of our platform members from our with launch better for to behind well accountability as and experience, new help plan central our tracking foundational program. that engage the database making to a coach flows through

second experience to tool evolving As before, are is to screen device match premium I've digital-first workshop our experience features digital for premium community truly highlighted a from opportunities from to enhanced integrations, our a counterpart. there significant with us a being app

would returning second focused half we strong for cost year-over-year trends weight are of including retention, believe management, which our list of drivers summary, growth, in executing growth and are clinical all drive sign-up for the which exercising entrance to Company priorities, to improving returning activation year, a the In a narrow into discipline our and throughout improving the rate, of on member gains organization interventions the trajectory. we the for critical on

today, your Thanks and for happy joining take questions. are now to we us

Operator

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

Alex Fuhrman

acquisition especially your involved from could get here, announcements you're we Some market here, guess pharmaceutical like weight who really of interesting I about to moves certainly you program, to management industry start deciding envision seems Sequence a do been this going How if to? with here. there's more approach in the that, in lot the

who out in remarks, clinical numbers think, sketched mentioned I in would than some criteria Sima, you think describing be half your adults presumably eligible of of for of about even the the America But your the of the are in I neighborhood half and you prepared approach. kind membership. something more own

to So give of the in and just that? And get as acquisition? going are half for after your into be go us can sense opportunity? will you membership this who targeted base back you of the that closed a How you year

Sima Sistani

Alex, biological and to opportunity more people lot we noted, underpinnings say, your with chronic of and there's weight think let's our of as question. provide management I chronic really really not excited And a I members dealing hype provide why been they're from lead of to medications in the Hi, even about around for address point medications, clinical conversation who reason the that's able for are everyone, amazing a these mean, condition to intervention. a responsibility, being need media, I we're a a the with Yes, obesity. thanks

insurance -- decision is really weight tech clinician interesting platform, the taken experience UX subscription-based it is the seamless the put and authorization and around the on very I the meaning terms both a and being patient. about tech parts they it of the end market, at a aspects of that truly between rails. And the it a patient management platform complex a it look, the the they've the for of complex and in is have outside This is the clinician day, think

to And way space companies a in so to qualify. medically that scale access the unlike in allows really other and those increase who us that is

Alex Fuhrman

Okay. on page all then to just That's here. the really interesting. we're make And same sure

And to mentioned the in I in of being half a growth that Can the think third quarter? the or that fourth year-over-year prepared Or growth your return year. as stands we the that in is to acquire get second remarks, expectation with that you business of Sequence growth? you will help to position in today? is after mean the interpret it you to revenue that

Sima Sistani

So to acquisition around Sequence. year all was that the was always year. that announcement and in half sign-ups top the We've ahead expected the of year this of the grow meaning year of last stabilizing line, the that see about we second was

this with update understand the Now future impact, after to we have do some something we closing. that acquisition, but in to that's work expect to the

improving NPS, activation, our that have we that all the growth seeing not around been can see second that position us year. giving current to of the of half in part So, engagement the and of indications expect sign is all

Operator

Please The from next Brian Nagel with Oppenheimer. ahead. question is go

Brian Nagel

just So in to my the first question, marketing. shift respect with

impact that answer. so here you -- know early you I year, 'XX. this with now an had upon and look focus of to more a But if subscriber marketing in later is at growth the in So shifted difficult

to in growth idea any guess early that how of I held you like question the the year? back has here do shift is, I I much So, subscriber there have have mean,

you the comments, marketing of that the most you're is working year, the different in second to Watchers after normalize like mentioned marketing subscriber your then early in push Weight part But year? going let of is experience message mean, through Or historically, later you type I year. sign-ups growth, would to prepared of the you kind its a of in And the that same? as the the be

Sima Sistani

Thanks your Brian. Yes. question, for

of were mean, than improve higher bringing really XX% focused on were So able XXXX. we and January we as in LTV noted, I efficiencies, CAC we January, to

more a -- intentional of had to made very to we push so, the to not And to decision to efficient but to second we launches. spend the product align align spend, only that key year half

think media even spend outperformed XX% the efficient so to I and we both the expect year. our with spend second just January, at in improve the more And total in we half being internal signups ratios use year-over-year expectations, the down and for

our think performance are a more more believe, standpoint, I both From culturally I are through -- marketing breaking really with messaging. marketing brand mean, modern and to have and reasons

You might have noticed let's of affinity. type to an in we it, that moved versus entertainment increase approach celebrities, a, four-point versus call to influencers led brand more

we're on we're our to and indications that the the seeing same. appeal. here path a lot our So, target modernizing of right remains brand the increasing But

Heather Stark

that. This I Heather. to is would just add

We full year-over-year. year are modeling flat to marketing for the be

as well the Sequence with spend in the road -- and the So, with the expecting to alignment to our acquisition in second of we product spend spend, shift are map the and overall quarter. efficiency of closing improvement and an

Sima Sistani

point just marketing for to product the loss the a to around come. do to the and Weight saying I big I -- new word-of-mouth keep add is want And product the to do of launches features our is experience. we product needs improving expect very us. the a

points We we loss. XX NPS. as noted, And it the connection, drives NPS the come for X on so, for And higher want higher. expect to them people the the weight points workshops, community digital was we on success to the stay and ultimately was

all as are increase the organic well as the to funnels those we're direction indicators headed acquisition paid. So, right in that

Brian Nagel

just follow-up. unrelated if ask I can That's And helpful. one very

Weight acquisition, going think one-off or time actively what's with offering? out has So is space more Watchers Obviously, opportunities this. that to respect while health seeking Watchers the the product made if in the about build time it but a this we for acquisition as -- mean, Weight on, it's an to unique with the now a I should apology I first I'm incorrectly, like acquisition thinking about

Sima Sistani

that So look, full our leader of a to address ultimately build-versus-buy stack a felt this we solution. We was here represents to the way that's the that realize solution. in -- advances that we did clinical behavior as to weight it that provide provide analysis holistic management paradigm was and important with one shift pathways change ability industry loss and the to solutions, a unique needed as something alongside that gives us our include spectrum in program and

do script change out medically you it else the lifestyle know, one we for we you do get a And program. change medications, can a behavior are to what advised can it number program. nobody is When doctor-recommended behavior do. And these as alongside there

outcomes. are combined And so, two what consumers have things people the help have better --

going this so, to our core on that is an is what of I programs. solution, with be and we do and premium a think it And offering top already ad first-of-its-kind

Operator

The next D.A. Davidson. from ahead. go Linda Bolton-Weiser question is Please with

Linda Bolton-Weiser

Yes.

that's merge a want you now side more is that? weight with loss aspect? just give at in over years different what really wondering makes that existing your on I'm aspect here, this insurance coming drugs Is can drug of really it have it you there different? color drugs business? time, So, points new the is little it available to What on Like in. the different the things Or been that's

Sima Sistani

build And market our chronic an that Happy strongly in where our management weight we in by capabilities foundational reinforced thank point at these our represent medications today. Linda, we're can innovation to this mean, our to you. believe strengths. space pivotal latest we prescription in obviously Yes, I advancements expand and new

taking they medications. the GLP-Xs, And a as help limited this our to side access this financial more come up haven't newness, for expect care challenges preauthorization insurance effects is through the thing significant particularly their help engine. the to And due yes, partner members been with these that real see a adopted yet. to people the gain we broadly holistic we with future these expense navigate and opportunity be And and the availability,

add space, Weight what's might interest the I Linda, if the in track they the to look the XXXX in here general other. and interest actually, Watchers, loss weight note, just to in each you at used interesting you and on if --

medications. these in the interest Weight interest over and Over in the the XX we've decade, real a last Watchers been that -- seen loss. interest weight from Well, rise the last months, in popularity there's in diverging

an all drug that are have Access the resolved more these And science-backed challenges is choice and opportunity are success, the all the matter. to for increase, supply to insurance being clinical the effects provider reasons covering or limited plans expected ultimately, lifestyle for detailed functional market now pathways, and that continue will medications. on companies us whether but to of expand be and for or be chain and leader and across the that side that

Linda Bolton-Weiser

Is there several fourth is right going -- And in going little more almost Like, just of other color Can confidence mentioned improving, is month-by-month kind it But in that words, to bit a that year-to-date less give? you I new quarter. can than just better member in direction? the it's ask, could you we're any much I year-over-year, guess in interested are sign-ups. you direction. anything KPIs Or right give can is -- along? give us as quarter down first go you the there you've

Sima Sistani

to spend. the people to we into we to just over media trend want the improve chose trend I improving. now we peak. as pointing QX Yes. -- the the QX that intentionally QX well saw as And noted and fact local, as and in that keep And drop our QX mean I is

more expect good the to call. update So, that about feeling next and we're in

Heather Stark

and a to a CAC second QX ratio, do to I to improved would expect that LTV half. as return see expect do well. efficient trends we We the to spend add into more in to at

Operator

with The next question go is Lasser UBS. from ahead. Please Michael

Michael Lasser

in your you than think acquisition, do pharmacological the behind because the it's rationale is been different up weight loss On strategic in making the today that new past. of what is signing the degree solutions to difficulty members

existential you facing so time. And been to so, how an Weight over of than take. part might culture challenge a has about And effect Watchers because that and rather to that, be long, Watchers an risk that integrating as the uphill do manage message businesses behavioral hedge these is this for two trying Weight like cultural all the of fix modification

Sima Sistani

medications, for is a see AOMs impact that The -- believe again, in significant the we using was expense. financial have our injectable business people formulation, of had mean relatively I XXXX, about low limited people opportunity future. This number on particularly an far. thus meaningful don't So such availability, GLP-Xs I actually

managing that weight guidance, lifestyle loss, an helping healthy, done with we our that medications provide these have and of to programs are journeys nutrient-dense may because lack prioritize Weight program, medications because sustainable our that muscle understanding holistic are ensure signs, our care a a of against loss a support you these these we Watchers of lifelong have in ability partner and members -- to where foods, commitment change members be, cases, Again, nutritional some behavior way. in and program, service mentioned, areas can alongside these our them

the right science as the when that the think algorithm fiber-rich obesity. again, so or solution. science started our evolution, actually lot this unsaturated that messaging. a this to understanding And advances, we those in versus the been I who way in to we saturated our science alongside always think advanced. are And should the has update of we food is into We've noted, of where consideration, I the ways same with food, this that that is is take fat backed And struggling

are In factors alone isn't those to are obesogens and some factors, genetic you there. there get cases, willpower biological going

to -- membership. over So, And to I the the lead to to medically their that these dietary what the those it's honestly, the discussion have were opportunity members, intervention with and to know qualified, manage managed right it people are, a those issues if over how administered they clinical drugs. -- ensure choose course the associated and their think who options works responsibly take real what they for who it's help of a they

Michael Lasser

next order have the covenants need is quarters few situation. you any the question met your that in Do contractual have be follow-up conditions you debt. or with leverage any on trip to obligations to that over My other

Sima Sistani

into came with and the service we is expect this very with. on any favorable limited debt and So, even XXXX needs very have issue acquisition, And with debt. with our $XXX operating to revolver. liquidity ample we meet don't to our balance to itself sheet, access And million our our covenants, but we

Operator

The with Sachs. next English Please Jason ahead. Goldman question from go is

Jason English

A couple of questions.

based guidance subscriber is that, revenue quarter on? end-of-period QX first revenue that $XXX the of what figure the million, is count First,

Heather Stark

million end expect of subscribers the We at end-of-period X QX.

Jason English

Can but gave The lot this specifics -- you there's more restructuring restructuring for initiatives the cash earlier. you apologize, Thank you track me the the I it. as deal. the of call. number I for and you. number you if few outlay through a the of ran that sorry on give of a through -- restructuring can walked lost outlay I'm the get transcript, I'm I back a well? what What's cash on year acquisition total and is also, out sure

Heather Stark

is So, the to outlay the in I'll speak in total first current acquisition Jason. cash. $XX cash year million The question,

Jason English

then And this outlays for year? restructuring the cash

Heather Stark

$XX million year. in approximately It's the current

Jason English

on alone. all if But leaving seeing loved I bias And your are stats frankly, you how engagement, you very I more material would health et dropped the loyal, more for brand cetera. who the weren't it's improvement the customers disappointed engaged, franchise. Presumably, survivor satisfy not be

So what have if it noise that is go and survivor out tease you? And you so, able through telling to bias? been from the

Heather Stark

member rate, activation the is Jason, in a actually, XX So of measure new days. first a

up that think don't that. is year-over-year. noted survivor bias in So, that And is I X% there we've

Jason English

three were members. gave But -- surveys metrics existing related to that other of you least at Yes.

Heather Stark

tenure, all cohorts by That's true. it's those split and And similar. we very

reasonable So we true cohorts. very being about being brand is at affinity think and But up our yes, no, and thing the across and that consider is certainly, of look NPS to all that. a the up

higher in new changes actually in fact, seeing these hard. coming they sometimes into having some to are our can the simplified for be a experience and them program where really cases, members, members be newer because great In existing some we're

Operator

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

Sima Sistani

of to achieve their of in about way. millions recommended healthy, impact many so people Watchers goals positively and future We our scientifically sustainable and Weight to loss are excited the extremely weight ability a

Our more to will else holistic people with one move space allow a can into the program deliver. us clinical help even no

same coaching, to already community and to significant time, going to even accountability we take excellent very the an offerings our make higher At are level. across improvements

our in these are but from improvements dramatic help of will members improvements coming. ability even improvement efforts, XXXX We in are to already goals. seeing engagement achieve be a their year bigger

Thank speaking at to Stanley on keeping forward including many you updated to underway. us on We'll Wednesday. Morgan with for initiatives Technology have forward look Conference you we today, you, joining looking of the

Thank you.

Operator

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

You may now disconnect.

WW International (WW) 6 Mar 232022 Q4 Earnings call transcript