Good day, and welcome to the WeightWatchers Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to David Helderman, Senior Director, Investor Relations. Please go ahead.

Thank you for joining us today for the WeightWatchers Fourth Quarter and Full Year 2025 Earnings Conference Call. Earlier this morning, we released a shareholder letter and press release with our fourth quarter and full year 2025 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 the most 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 could 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, the earnings release, the shareholder letter, and is 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 Tara Comonte, President and Chief Executive Officer; and Felicia DellaFortuna, Chief Financial Officer; Jon Volkmann, Chief Operations Officer, will also join for the Q&A.

Thanks, David. Before we get started, I encourage everyone to read our shareholder letter, which we posted on our Investor Relations site earlier this morning. In there, we share our progress against our strategic priorities latest exciting efficacy claims and unique differentiators for the company and our programs. We also share key financial trends, including 2025 results, where we were pleased to beat previously provided revenue and adjusted EBITDA guidance. Felicia will also provide more color on our results later in our call. Two quarters ago, we emerged from Chapter 11 financial reorganization with a mandate to transform our company to lead in a GLP-1 world. There were many legitimate questions to answer at the time, perhaps the loudest of which where the WeightWatchers a brand known the world over, could reinvent itself and successfully compete? As we sit here today, reflecting on how we exited 2025 and have started 2026. We answered that question with the resounding, yes. Our fourth quarter results and the momentum we've experienced already in the first quarter of 2026, provide us with exciting and additional conviction in our future and all that's possible for WeightWatchers in the years ahead. Over the last year or so, more dramatically in the month since exiting Chapter 11, WeightWatchers is beginning to feel different, look different and sound different. We've reduced our legacy debt by more than 70%, freeing capital for investment in the future. We've completely rebuilt the leadership team. We've repositioned and clearly defined our go-forward strategy, refreshed and reintroduced the WeightWatchers brand reset our product and pricing architecture and started the extensive execution against our technology modernization road map. All of this in service of supporting and growing our member base while returning to sustainable profitable growth. In our call last quarter, I shared that…

Thanks, Tara. Q4 marked the end of one of the most significant financial years in the company's history. Our capital structure was reset through a financial reorganization that eliminated over $1.1 billion of debt, allowing the company to refocus on investment and execution for the future. Q4 results were consistent with our strategic and financial objectives, and we are proud to have over delivered on our previously provided 2025 guidance. We maintained strong adjusted gross margins with disciplined cost actions while also strategically reinvesting to support targeted growth initiatives. Note that the year-over-year adjusted EBITDA comparison was impacted by a change in our fiscal reporting calendar end. These additional calendar days included about $10 million of marketing spend from the start of peak season. End-of-period clinical subscribers were 130,000 at the end of Q4, returning to sequential growth following the completion of our transition from our former compounded semaglutide offering. This momentum strengthens further into Q1, even while lapping strong growth from that offering in Q1 2025. We are expecting to end Q1 with approximately 200,000 end-of-period clinical subscribers, which when adjusted for compounded semaglutide last year would be roughly 100% year-over-year growth. In Q1, we leaned into marketing to solidify our Med+ positioning and drive member acquisition during peak season, which was also timed with the Wegovy pill entering the market. While we expect sequential growth for clinical subscribers in the remaining quarters of the year, we also anticipate seasonally lower demand following peak season, lower levels of overall marketing spend and a rebalancing of our spend allocation across behavioral and clinical for the remainder of the year. End of period behavioral subscribers were $2.6 million at the end of Q4 2025. Our behavioral business is further defined by two increasingly different trajectories. Core faces multiyear ongoing secular headwinds…

[Operator Instructions]. The first question today comes from Alex Fuhrman with Lucid Capital Markets.

Congratulations on all you accomplished in 2025. Wanted to ask about some of the changes you're seeing in demand for weight loss medication, it seems like you guys really took the long-term approach you're betting on FDA-approved medications, and that really seems to be paying off now, especially with the lower-priced oral medications coming out. Can you talk about what demand has looked like for the week OV pill and just how we should think about the next 3, 6 months now that you're kind of lapping the last of when you had compounded GLP-1s back when that was allowed per FDA rules.

Alex, it's Tara. Thanks for the question. Listen, I think we are seeing a consistent trend of increasing consumer interest increasing consumer openness and increasing consumer adoption of GLP-1 medication. Sure the price comes down, but also more and more people are seeing incredible results on these medications and as new forms come to market. So we are definitely very focused there, as you rightly point out, and as you can see in our Q1, both strategy and subscriber estimates and expectations. But again, just to reinforce that with this increased demand for medication, our position is not to shift this business to be a prescription-only telehealth business. Our strategy here is very much to lean into this part of the weight loss ecosystem and this part of innovation in the field, but to be building on and integrating everything we've spent 6 years building. Our focus, #1, 2 and 3 is driving superior long-term member outcomes. And so the more we see data around we've had some of it in the call and then the prepared documents today and in our white paper last week, if you saw the more we have conviction in the power of this model. So yes, leaning in the clinic, yes, we're seeing the consumer do the same thing. But really, our unique positioning is in the form of the power of the integration. But Jon, maybe you want to just touch on [indiscernible].

Yes. Yes. Thanks, Tara. Regarding the [indiscernible], I mean we're incredibly pleased with the launch. So as we previously highlighted, our platform empowers trained obesity clinicians to work directly with patients to identify the treatment path that's right for them. And thus, the addition of a new option and particularly one with such clear clinical differentiation is a significant tailwind for our business. And demand has exceeded our initial projections. And more importantly, we're seeing as expanding our total addressable market. We're seeing a higher percentage of patients who are entirely new to obesity medicine interested in this treatment option. And this confirms our thesis that a needle-free oral option significantly lowers the psychological barrier to entry for millions of prospective members. And from an operations standpoint, with the launch, we were ready on day 1. So through our integration with Novo Care we were able to onboard interested patients to this new format seamlessly. And then regarding patient access, the market at launch was primarily cash pay, and that was supported by those lower cash paid prices than previous branded GLP-1 launches that you mentioned. However, we have seen in subsequent weeks a steady increase in prior authorization approval rates as more formularies adopt and our dual track ability to support members, whether they want to cash pay or utilize insurance remains a core competitive advantage of ours. And so overall, we really view this launch as validating our position as the leader in the wait health space. Our clinical infrastructure is medication agnostic. So we're built to evolve alongside the science. We view moments like these when new medications and new form factors come to market as an opportunity to truly shine in an increasingly complex landscape. Consumers are looking for a trusted authority to help them navigate treatment options safely and effectively. And to bring it back to member outcomes, as Tara said, our real-world data where we've demonstrated 19.4% weight loss at 12 months is significantly higher than competitors. And this proves that the combination of our high-quality clinical support when paired with behavioral support nutritional guidance is really a long-term winning strategy.

I would also just add a couple of points on the first part of your question as well. So, as you know, our ARPU on the clinic is 4x higher than that of behavioral. And last year, in the first half of 2025, we were seeing approximately 50% growth in end-of-period subscribers when we were compounding. If you strip out that impact of compounding in Q1 2025, our estimate for Q1 2026 is showing 100% growth year-over-year.

Okay. That's really helpful. All three of you for that. And then -- Sorry, you mentioned in your prepared remarks that about 50% of the Med+ members that have been joining lately are new to the brand. That sounds pretty high. How does that compare to the last couple of years of growth for clinical and curious how that compares to your new subs on the behavioral side? And what's driving the new interest in the brand from those that are new to it.

Yes. Great question. I mean, 50% is certainly a number that we're pleased about, particularly as we think about this brand coming back to market. We also are bringing more lapsed members back into the Med+ offering, which is really interesting to see. So just continued increases there. And I think, again, some of that goes to here sort of multiple factors. The strength and awareness of the WeightWatchers brand generally. And we have a lot of people around the world who know this brand. However, we have less who know that we are in the clinical space. and that we offer access to physicians who can prescribe these medications. So as we really think about peak and sort of some of those success metrics repositioning this brand for people who have not engaged before, repositioning this brand as a leader, not just in wait health, but in medically centric weight health. Repositioning this brand is not one that is either behavioral of the past or medication only of the future but really one that is an integrated whole-person support platform that can help you throughout your entire journey and building on everything that we've always sort of led within the market is how we're approaching this sort of next chapter for the company. So it's really twofold. Yes, we need to be bringing new members to the brand, and that's where things like brand relevance modernization perceptions, all these types of metrics are really important leading indicators and signals, for our conviction that the brands can play and lead in this next chapter, but also the reconsideration of people who have members who have been with us in the past, but it's exciting to see them coming back, but coming back into some of these newer offerings. So early days, but very positive trends across all signs of this of this brand and the shift that we're very intentionally trying to make. But again, as I also said in my prepared remarks, you don't reposition a 63-year-old brands over 4 weeks in January. So this is just the beginning of this, but Q1 gives us a lot of conviction in our ability to be successful over the long term.

The next question comes from Justin Ages with CJS Securities.

Good morning. So clearly, it looks like the marketing spend is working with the 2000 clinical members. Just wanted to see if we could dig in a little bit and see if the profile of the ads is changing. So is the demographic of new people coming to WeightWatchers. Is that different than the demographic that's been in the past?

It's getting there. Thanks for the question. I mean I think as we talked about -- we are seeing new members come back. We're seeing lapsed members come back. We're also seeing younger members start to come into the brand. So, yes, I think slowly but surely, we are seeing that expand. But again, we're talking about a pretty short period of time here. So I would expect demographics to continue to expand over time as we really continue in these efforts to make this a brand that can truly meet you where you are, whether you are thinking about medication, whether you are on medication but getting it from your physician, whether you are looking for access to medication from one of our clinicians or will come off -- ramp off medication but maintain the weight or none of the above, but do that in an environment where you have human connection, real-life support and all the behavioral and additional tools that can support you. So I think that we would expect to see demographics continue to widen as time goes on, but some interesting early signs.

I would also add this is, as you could see in our Q1 marketing spend, this was us very much focusing on a full funnel marketing strategy. And so we were across a spectrum of offerings as across television and out-of-home as a way of very much expanding our reach with the intent to improve customer acquisition costs overall in the future.

All right. Very helpful. I appreciate that. And then along similar lines and obviously, early days of the whole reorganization. But are you seeing any indications in how members are signing up in terms of length of contract? Are you seeing more longer term? Or is it shifting month-to-month?

I mean, we've mentioned in our previous calls, specifically with clinics that we were seeing greater adoption of 12-month LTCs relative to the other plans. We are also seeing a similar trend in our behavioral business with folks adopting longer plans. So all positive trends as it relates to looking out past 2026.

And just to remind -- yes, we're also sort of in the early stages is going to be a common theme of we reset our pricing product architecture for peak. And you should expect us to continue to test and learn there as it relates to how that product architecture continues to evolve. So as Felicia said, we are continuing to evolve not just the product offerings, but the payment structures, the subscription models to meet those needs in the marketplace. But again, I would just I would just say expect us to continue to be testing and learning as we go.

Yes. And if you're looking specifically at the clinical business, we see both retention and adherence very significantly across the individual patient level. And it's well documented that there are a number of reasons that folks might discontinue or cycle off medication from side effects to cost considerations to just reaching their goals. And that's why we've really taken the approach of providing a high-quality holistic care system. As mentioned, we have 72% of our Med+ members reported that the GLP-1 success program helped them minimize their side effects, which is critical to maintain the adherence. So we view our goal as supporting people wherever they are in their way health journey. And we don't see that journey ending, particularly when the prescription stops. So our model is built to help members when appropriate. Transition seamlessly from medication-assisted treatment back to our core and behavioral programs to ensure that we can support their long-term health goals and weight management, even if they stop clinical therapy.

The next question comes from William Reuter with Bank of America.

I have two questions. The first, on your general pricing strategy, where are you at this point and thoughts on how promotional you may be in 2026, whether you're going to be pulsing different offerings throughout the year and thoughts upon the importance of average revenue per user versus increased numbers.

Yes. So as we look out to kind of 2026 and specifically as it relates to our pricing and promotional structure, one of the big shifts that we have made kind of leading into the 2026 year was allowing members to renew from a long-term commitment to another long-term commitment. Historically, once the long-term commitment had ended, members would have to wait until the next big promotion to rejoin WeightWatchers. And so we are very excited about giving folks the opportunity specifically on our behavioral offering to renew from an LTC to LTC. This is one of kind of the first steps. We do anticipate that this has a slight impact to ARPU overall because what we -- as I just mentioned before, do see folks joining the 12-month LTC, which is at a lower price than our 1-month. However, I would note that we are using promotional activity more deliberately in the 2026 year and as well as in the past in the 2025 year. So for example, in Q3 2025, we provided specific clinical promotional activity as we were moving to try to migrate as many members who are part of our compounding semaglutide offering. To our other branded Med+ that we offer. And so that was a very calculated choice that we have since kind of resumed back to more normal pricing on our clinic offerings. So see us being out there. And then just to kind of remind on the ARPUs, like overall, the corp less ARPU SKU is about 2x that of the or only SKU. And so as we kind of see the mix shift happening to clinic and also seeing core plus stabilize relative to core, we do anticipate that, that over time will increase ARPU and create for ARPU expansion.

Yes. And with our clinical pricing specifically, we feel very confident looking across the landscape that our price to value for our membership is very strong. We have one of the lower entry points to a clinical telehealth program in the space. And when you consider the holistic support system that we provide with that membership, we feel very strong about our price-to-value ratio.

Got it. That's very helpful. And then my second question, you guys referenced the B2B initiative. I'm wondering if you could share any data points on your success there, the size of the program and what type of growth you might expect or hope for this year?

Yes. So on our B2B business, this was an area that we had discussed having a disproportionate impact by bankruptcy just because it has a much longer sales cycle. And we were going through Chapter 11 during what was prime B2B sales cycle season. However, since then, we are very enthused about our pipeline and pleased about the activity. We have taken a much more active effort in our B2B efforts overall. And so this -- like we do see as a really important initiative for us. It's still a small percentage of total revenue. However, B2B subscribers are included in our behavioral and clinic business lines in the subscriber counts. But we are pleased with the momentum here and are happy with the diversification that it provides both on acquisition as well as with employer relationships.

Yes. And to speak to a couple of the initiatives on that front, we're really excited about expanding our partnership with UnitedHealth really across multiple lines of business, including their hub, total weight support, UHD store and the pilot for fully insured members and broadly just looking to continue expanding our collaboration with them to meet -- to reach more employers. And then to speak a little bit to the RxFlexFund, which was something that we announced on our last call, I believe. We did that based on the express needs of our clients, and we've seen others fast follow, which we view as evidence of demand for this type of offering. And with that, we offer -- we enable a partial subsidy from employers for GLP-1 costs to reduce the cost burden for members versus paying the full direct-to-consumer medication costs. And one of the key differentiators for that program are that we embedded that plus offering within the RxFlexFund solution for comprehensive care in the program that's easy to add and implement. And as a part of that, as we speak to that price to value, members get access to our GLP-1 success program. as part of the overall offering to ensure they're getting wraparound support versus just contributing money to GLP-1.

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

Thanks, everyone. I appreciate you all joining us today. Very much appreciate you also your support and continued interest in the company, particularly at this really important time of transition for WeightWatchers. We have a huge opportunity ahead of us, and we are working very hard to deliver on our mandate of transforming this company to meet it. So it's early days. We know we've got plenty of work ahead but we believe we're very much on the right track, and we have a high level of confidence and conviction in our future. So we look forward to following up with some of you after the call, and thank you again for joining us today.

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