WW International, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you for joining us today for the Weight Watchers second quarter 2026 earnings conference call.

We also released a shareholder letter and press release with our second quarter 2026 results, which are available on the company's corporate website, located at corporate.ww.com. The purpose of this call is to provide investors with some further details regarding the company's financial results, as well as to provide a general update on the company's progress. Reconciliations of non-GAAP measures disclosed on this conference call to those directly comparable GAAP financial measures are also available as part of the shareholder letter and press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that can cause actual results to differ materially from those discussed here today.

These risk factors are explained in detail in the company's latest annual report on Form 10-K, quarterly reports on Form 10-Q, the earnings release, the shareholder letter, and as updated by the company's other filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today, and except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Joining today's call are Felicia DellaFortuna, Chief Financial Officer, and Jon Volkmann, Chief Operations Officer. Both are members of the interim office of the Chief Executive.

Thanks, Anna Kate. Good afternoon, everyone. Thank you all for joining us. Before we get started, I encourage everyone to look at our shareholder letter, which we posted on our corporate website. While the market today is increasingly filled with companies offering prescriptions without expert guidance and support, Weight Watchers provides the best of both worlds. Not only do our members have access to the most effective FDA-approved GLP-1 medications, they also benefit from the backing of an extraordinary team of experts who can guide them at every step along the way. That includes clinicians trained to support people with obesity, who are actively helping members understand and navigate the benefits and challenges of GLP-1 therapy. It includes registered dieticians who help members build tailored nutrition plans that balance caloric goals with protein, fiber, and healthy muscle preservation.

It includes expert coaches who lead workshops and experiences where members learn from one another on topics like dining out while on a GLP-1 and exchange practical advice, like the best healthy midnight snacks. Perhaps most important of all, they remind each other they're not in this alone. Underscoring all of this human guidance is a reimagined digital experience that combines decades of science-led expertise with new technology to give members a clearer, more personalized view of their weight health and help them be more successful in reaching and sustaining their goals. With more than one in 10 Americans currently taking GLP-1 medications for weight loss, these therapies have fundamentally redefined our industry and transformed what is possible in obesity care. We are continuing to evolve our offering to help expand medication access and remove friction for those eligible for clinical weight loss.

Patients can now access Weight Watchers Med+ seamlessly through LillyDirect, creating another meaningful channel for prospective members to discover our offering. In addition, Weight Watchers Med+ now supports eligible beneficiaries through the new Medicare GLP-1 Bridge Program, unlocking $50 per month branded GLP-1 medication coverage through late 2027. We recently launched a new strategic collaboration with Sam's Club, bringing Weight Watchers to one of America's most trusted brands. These initiatives build on our broader commitment to help members find the best medication for them, whether they're using insurance or paying out of pocket. While medication is a powerful tool, for many it is not the whole answer. Even with these medications, people still need to eat nutritious foods, they still need to move their bodies, and they still benefit from community, accountability, and education to support progress and sustain results.

We believe Weight Watchers' people-first, technology-powered offering is more relevant than ever as we support those navigating their journey with medication. Weight Watchers Med+ members prescribed GLP-1 medications reported over 30% more body weight lost on average at 12 months than select industry competitors. In addition, Weight Watchers Med+ members who are prescribed GLP-1 medication and also regularly engage with our GLP-1 Success Program lose 29% more body weight at 12 months on average than those who use medication without engaging with our structured behavioral support program. Studies indicate that Weight Watchers members reduce their calories from ultra-processed foods by 29%, a tangible marker of the real behavioral shifts from our approach. These powerful results reinforce our position as the most trusted brand in weight loss. This foundation has enabled us to create an integrated ecosystem that supports members at every stage of their journey, on or off medication.

For members looking for our proven behavioral program, we offer Core, our base behavioral offering, anchored by Weight Watchers' signature points program. For members who want more guidance, we offer Core+, our higher-value behavioral offering that adds unlimited workshops, coaching, and our GLP-1 Success Program, which is available to members prescribed GLP-1s through an outside provider. For members who qualify for clinical care, we offer Med+, our clinical offering that combines the above tools, including our GLP-1 Success Program, with access to clinicians and GLP-1 prescriptions for qualified members. The important point is this: people's needs change over time, we've built a platform which enables our members to move seamlessly between levels of support, choosing the program that best fits their lives at any given time.

Weight Watchers' unique combination of clinical care, behavioral support, and user-friendly technology, all guided by actual people who are experts in the field, is becoming an even stronger competitive advantage in this rapidly growing market. We're seeing compelling evidence that this approach is building momentum within our business. As we look ahead, our opportunity has never been clearer. Losing weight is deeply personal, and it rarely follows a straight line. People need expertise, they need accountability, they need encouragement. That is why we're confident in our ability to create lasting value for both our members and our shareholders. We'll continue to invest thoughtfully to make sure that every person who comes to Weight Watchers gets something that's becoming harder and harder to find elsewhere: real people, real expertise, real support, and a partner for the entire journey.

With that, I'll turn it over to Felicia to cover the financials.

Thanks, John. Our financial performance in the second quarter demonstrated ongoing progress against our multi-year transformation. Our financial footing continues to improve as two of our three subscription tiers showed either stable or growing subscriber bases. The company also generated positive, meaningful operating cash flow and delivered on last quarter's commitment to reduce our debt load. These results demonstrate the earnings power of our more disciplined operating model and give us confidence in our ability to deliver against our full-year guidance. As we build for the future of Weight Watchers, we are reaffirming our full-year guidance for both revenue and adjusted EBITDA. Now let's take a closer look at the numbers, starting with subscribers. Total end-of-period subscribers were 2.5 million. Core+, our higher-value behavioral tier, ended the quarter at 541,000 subscribers, an increase of 13.9% year-over-year.

That is our third consecutive quarter of sequential growth in the tier, a trend we have only seen occur one other time in the past 15 years, which offers encouraging signs that our approach is resonating with consumers. We closed Q2 with 2.3 million end-of-period behavioral subscribers, which reflects a 24.6% decline year-over-year, with the decline concentrated in our Core tier. However, we continue to see progress towards the higher-value mix shift we have been targeting. End-of-period clinical subscribers were 197,000, up 55.7% year-over-year, compared to 127,000 in the second quarter of 2025. This number held steady from Q1, following a significant reduction in marketing spend coming out of peak, when this spend was more heavily focused on our clinical offering. In Q2, we deliberately recalibrated our investment allocation across our portfolio.

ARPU increased 10.2% year-over-year, reflecting a mix shift in our subscriber base to clinical and Core+ membership tiers. Revenue in Q2 was $162.3 million, compared to $189.2 million in the second quarter of 2025. Foreign exchange was about a $1 million benefit in the quarter, compared with the $4 million benefit in Q1. Clinical subscription revenue grew 30.4% to $39.9 million, compared to $30.6 million in the second quarter of 2025, despite Q2 2025 reflecting significant contributions from our former compounded semaglutide offering. Clinical accounted for 24.6% of total revenue for Q2 2026, an increase from 15.9% for full year 2025 revenue. Behavioral subscription revenue was $121.5 million, down 22.7% compared to $157.3 million a year ago, with the decline concentrated in our Core tier.