WW International Inc.(WW) - 2025 Q2 - Quarterly Results

Executive Summary & Outlook The company completed a strategic reorganization, reducing debt by $1.15 billion, and reported Q2 2025 results with a 6% revenue decline offset by strong clinical growth, while issuing full-year 2025 guidance Second Quarter 2025 Performance Highlights WeightWatchers successfully completed its strategic reorganization, reducing debt by $1.15 billion, with second quarter 2025 combined revenues declining 6% year-over-year to $189 million due to Behavioral business headwinds, partially offset by 55% growth in the Clinical segment, ending the period with 3.2 million subscribers, a 17% decrease from the prior year, including 127,000 Clinical subscribers - Successfully completed a strategic reorganization, reducing debt by $1.15 billion, with the emergence from this process on June 24, 2025, leading to the quarter being split into 'Predecessor' and 'Successor' periods for accounting purposes[2] Q2 2025 Key Performance Indicators (Combined) | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | Total Revenues | $189 million | -6% | | Clinical Revenues | $31 million | +55% | | End of Period Subscribers | 3.2 million | -17% | | End of Period Clinical Subscribers | 127 thousand | +56.5% | | Predecessor Adjusted EBITDA | $61 million | N/A | | Successor Adjusted EBITDA | $4 million | N/A | - The Clinical business began transitioning subscribers from compounded semaglutide to FDA-approved medications starting May 22nd, in line with FDA guidance[9] Management Commentary Management expressed confidence in the company's future, highlighting a stronger financial footing post-reorganization, with CEO Tara Comonte emphasizing accelerating innovation through an integrated model and CFO Felicia DellaFortuna prioritizing business stabilization, growth investment, and long-term profitability - CEO Tara Comonte stated the company is well-positioned to meet the need for effective weight health support, marking a new chapter with a stronger financial foundation and clear opportunities[3] - CFO Felicia DellaFortuna highlighted that the swift reorganization provides greater financial flexibility, with the immediate focus on business stabilization, investment in growth, and maintaining financial discipline for long-term profitability[3] Full Year Fiscal 2025 Guidance The company has issued its financial guidance for the full fiscal year of 2025, projecting total combined revenues to be in the range of $685 million to $700 million and Adjusted EBITDA between $140 million and $150 million Full Year 2025 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Total Combined Revenues | $685 million - $700 million | | Adjusted EBITDA | $140 million - $150 million | Financial Statements This section presents the company's consolidated financial statements, including the balance sheets reflecting post-reorganization capital structure, statements of operations detailing revenue and net income, and cash flow activities for the period Consolidated Balance Sheets As of June 30, 2025, following reorganization, the company's balance sheet reflects a significant capital structure change, with total assets increasing to $1.03 billion from $550 million, total liabilities decreasing substantially to $652 million from $1.66 billion primarily due to long-term debt reduction, and total equity shifting from a $1.11 billion deficit to a positive $381 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 (Successor) | Dec 28, 2024 (Predecessor) | | :--- | :--- | :--- | | Total Assets | $1,033,118 | $550,276 | | Cash and cash equivalents | $152,379 | $53,024 | | Total Liabilities | $652,149 | $1,664,648 | | Long-term debt, net | $465,518 | $1,430,643 | | Total Equity (Deficit) | $380,969 | $(1,114,372) | Consolidated Statements of Operations For the second quarter, combined revenues were $189.2 million, down from $202.1 million in the prior year, with the Predecessor period reporting a net income of $1.19 billion influenced by a $1.14 billion net reorganization gain, while the Successor period showed a net income of $1.3 million, and six-month combined revenues were $375.7 million compared to $408.6 million in the prior year Q2 Statement of Operations Highlights (in thousands) | Metric | Combined Q2 2025 | Q2 2024 (Predecessor) | | :--- | :--- | :--- | | Revenues, net | $189,164 | $202,073 | | Gross profit | $139,417 | $137,294 | | Operating income | $43,990 | $35,933 | | Reorganization items, net | $(1,143,918) | $0 | | Net income | $1,191,942 | $23,269 | Six Months Statement of Operations Highlights (in thousands) | Metric | Combined YTD 2025 | YTD 2024 (Predecessor) | | :--- | :--- | :--- | | Revenues, net | $375,735 | $408,621 | | Operating income (loss) | $23,789 | $(233,399) | | Reorganization items, net | $(1,143,918) | $0 | | Net income (loss) | $1,119,357 | $(324,633) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, combined cash used for operating activities was $22.9 million, an improvement from the prior year, with $6.5 million used for investing activities and $153.9 million provided by financing activities, primarily from revolving credit facility borrowings, ending the period with $185.5 million in cash, cash equivalents, and restricted cash Six Months Cash Flow Summary (in thousands) | Cash Flow Activity | Combined YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $(22,915) | $(37,976) | | Cash from Investing Activities | $(6,529) | $(10,111) | | Cash from Financing Activities | $153,898 | $(17,132) | | Net Change in Cash | $129,000 | $(66,657) | | Cash at End of Period | $185,484 | $42,709 | Key Business Metrics & Non-GAAP Reconciliations This section analyzes key business metrics, including detailed revenue and subscriber performance, ARPU trends, and reconciliations of non-GAAP financial measures such as Adjusted EBITDA Revenue Analysis In Q2 2025, combined total revenues fell 6.4% year-over-year to $189.2 million, driven by a 12.7% decline in Behavioral Subscription Revenues partially mitigated by a 55.1% increase in Clinical Subscription Revenues, with similar trends for the first six months where total revenues were down 8.0% year-over-year Q2 2025 Combined Revenue Breakdown (in thousands) | Revenue Stream | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Behavioral Subscription | $157,258 | $180,233 | -12.7% | | Clinical Subscription | $30,593 | $19,723 | +55.1% | | Total Subscription Revenues | $187,851 | $199,956 | -6.1% | | Other Revenues | $1,312 | $2,117 | -38.0% | | Total Revenues | $189,163 | $202,073 | -6.4% | Six Months 2025 Combined Revenue Breakdown (in thousands) | Revenue Stream | YTD 2025 | YTD 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Behavioral Subscription | $312,981 | $365,537 | -14.4% | | Clinical Subscription | $60,051 | $38,475 | +56.1% | | Total Subscription Revenues | $373,032 | $404,012 | -7.7% | | Other Revenues | $2,703 | $4,609 | -41.4% | | Total Revenues | $375,735 | $408,621 | -8.0% | Subscriber & ARPU Analysis The company ended Q2 2025 with 3.17 million subscribers, a 17.4% decrease year-over-year reflecting Behavioral segment recruitment challenges, as Behavioral subscribers declined 19.0% to 3.04 million while Clinical subscribers grew 56.5% to 127,000, and overall Monthly Subscription Revenue Per Average Subscriber (ARPU) increased by 11.6% to $18.97 Q2 2025 End of Period Subscribers (in thousands) | Subscriber Type | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Behavioral | 3,040 | 3,756 | -19.0% | | Clinical | 127 | 81 | +56.5% | | Total Subscribers | 3,167 | 3,837 | -17.4% | Q2 2025 Monthly Subscription Revenue Per Average Subscriber (ARPU) | ARPU Type | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Behavioral | $16.54 | $15.66 | +5.6% | | Clinical | $78.00 | $78.37 | -0.5% | | Overall | $18.97 | $17.00 | +11.6% | Adjusted EBITDA Reconciliation The company provides a reconciliation from Net Income (Loss) to Adjusted EBITDA, where the Predecessor period's Net Income of $1.19 billion was adjusted for a $1.14 billion net reorganization gain resulting in $60.8 million Adjusted EBITDA, and the Successor period's Net Income of $1.3 million was adjusted to $4.4 million Adjusted EBITDA, leading to a combined quarterly Adjusted EBITDA of approximately $65.3 million - The largest adjustment to reconcile Net Income to Adjusted EBITDA in the Predecessor period was the exclusion of a $1.14 billion net gain related to the Chapter 11 financial reorganization[61][63] Q2 2025 Adjusted EBITDA Reconciliation Summary (in thousands) | Period | Net Income | Key Adjustments (Reorganization, etc.) | Adjusted EBITDA | | :--- | :--- | :--- | :--- | | Successor (Jun 25-30) | $1,254 | $3,195 | $4,449 | | Predecessor (Mar 30-Jun 24) | $1,190,688 | $(1,129,870) | $60,818 | Notes and Disclosures This section provides important disclosures regarding the accounting treatment of Predecessor and Successor periods post-reorganization, along with explanations of non-GAAP financial measures and forward-looking statement caveats Explanation of Predecessor and Successor Periods Due to the company's emergence from financial reorganization on June 24, 2025, and the application of fresh start accounting, the second quarter is divided into 'Predecessor' and 'Successor' periods for reporting, making financial statements after June 24 not directly comparable to prior periods, though management combines certain metrics for meaningful comparisons - The company's emergence from financial reorganization on June 24, 2025, necessitates splitting Q2 into a 'Predecessor' period and a 'Successor' period[6] - Fresh start accounting has been applied, making consolidated financial statements after June 24, 2025, not comparable with prior periods[6] - Management combines results from the Predecessor and Successor periods for certain metrics (e.g., revenue, subscribers) to offer a more meaningful comparison of operating trends[7][10] Non-GAAP Financial Measures and Forward-Looking Statements The report includes non-GAAP financial measures like Adjusted EBITDA and constant currency results to supplement GAAP, which management believes provide useful period-over-period comparisons by excluding specific items, and also contains forward-looking statements subject to numerous risks and uncertainties including competition, subscriber retention, and regulatory changes - The company uses non-GAAP measures like EBITDA and Adjusted EBITDA, which exclude items such as reorganization costs, transaction costs, and restructuring charges, to better reflect ongoing operations[17][19] - Results are also presented on a constant currency basis to remove the impact of foreign exchange rate fluctuations for better period-to-period comparison[18] - The report contains forward-looking statements that are subject to significant risks, including competition, ability to retain subscribers, regulatory risks associated with clinical offerings, and the impacts of the recent bankruptcy emergence[24][25]