Ww International, Inc. (WW) September 2026 Conference Transcript

Great. Good afternoon, everyone. Thank you so much for joining us. My name is Nathan Feather. I'm Morgan Stanley's small and mid-cap internet analyst. I'm just doing one presentation here at the healthcare conference. I'm pleased to be joined today by Felicia De La Fortuna and John Volkman, Weight Watchers Office of the CEO. Thank you so much for joining us today.

Well, thank you for having us.

Before we begin, a few quick housekeeping items for important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morgansanley.com. If you have any questions, please reach out to your Morgan Stanley sales representative. And without looking at off, I think a lot of investors are familiar with Weight Watchers as a brand, but not necessarily what the business looks like today. Can you give us an overview of where Weight Watchers is and how that's changed since GLP 1's have really gained adoption?

No, it's a fantastic question and very appreciative of it. So over the last two years, there has been a lot of change at Weight Watchers. I'm going to start first with the balance sheet and then just a bit with how much our business has changed with the introduction of GLP-1s. So one of the things with the balance sheet and for a business that has, you know, existed for 63 years, it had acquired a lot of debt over the years. And so in 2025, beginning of 2025, it had accumulated about $1.6 billion of debt. And so what had always been a very cash-accreative business across our subscription services was definitely using quite a bit of cash flow because it was covering approximately $100 million of interest expense on an annual basis. And so it did create just a very hard way of allowing for Weight Watchers to scale. So in June of 2025, we were able to negotiate with our lenders, and we were able to reduce the debt infrastructure pretty materially. It went from about $1.6 billion down to approximately $465 million. And so as part of that, we were also able to half our interest expense, and we went from about $100 million to $50 million. And now this year, we do expect Weight Watchers to be free cash flow positive, which has allowed us to now start to reinvest in the business. and really take shape in terms of this exciting GLP-1 stage. So just to give a bit of an overview on our products, so we have two business lines, behavioral and clinical. Within our behavioral line, we have two products. So for those of you that aren't familiar with Weight Watchers, we have a core product and a core plus product. Our core product is access to our digital app, And most importantly, our points nutrition program. So this is the most studied diet program, you know, across the world. And it does incorporate a lot of different factors into one easy points number to allow for, like, more seamless food tracking for members. This is a business that has been in decline, and that has been one of the things that has been, you know, most material and also an overhang to Weight Watchers. Post-bankruptcy, we did very much focus on our core plus offering. So historically, people, when they think of Weight Watchers, they think of our core plus offering, which is individuals going to meetings and getting advice from a coach that sits in a room. We had a hypothesis internally that there was still a need for community and support. It just needed to follow the new age. And so people were going to be less likely to drive to workshops, but they could maybe attend one virtually. And so we are very proud now that we have launched virtual experiences. And so whether people are looking for emotional support, whether people are looking for more details on GLP-1s, or they're looking for just utility, like how to cook for a family of four, if you go on the app at any point in time, you will see that there's like a virtual experience that you can attend. and it's been a fantastic way of us curating community in this day and age. The other thing that we were also interested in is, are people still interested in structured behavioral programs for weight loss? And so what we were able to do is kind of up-level our overall general points program, and we launched a GLP-1 success program as well as a menopause program in our Core Plus SKU. So on our GLP-1 success program, whether you are on meds with or without Weight Watchers, and I'll get to that in a moment, you can engage with our GLP-1 success program, and that has been a fantastic uptick across our members. And we also have a menopause program that more specifically focuses on menopausal weight gain and fiber intake to also assist individuals. The one thing I will mention on Core Plus, because we have been a business in decline, our Core Plus revenue line within our behavioral business has shown now three sequential quarters of growth in our subscriber count, which has happened only one other time in the last 15 years. So we are definitely changing the way that our financial profile looks, and we are so proud of showing the growth in this Core Plus SKU overall, and it's very important because it is showing us that people do still want the accountability and the ease and the support that Weight Watchers is always provided. They just want it to be, you know, in this day and age, right? And so that's exciting. The last is that we also have a clinical business where we do prescribe GLP-1s. And I'll let John touch on that in just a moment. But this has also been an area of business that has shown accelerated growth. So in Q2 alone, we were able to grow our subscriber count by almost 56%. So I think it was like 55.7, but very material growth. And this is a business line that has gone from 10% of our revenue in 2024 to an anticipated 25 to 30% of our revenue in 2026. So we now have multiple product lines that stay true to Weight Watchers and that diversified support, but are also introducing GLP-1s. And so we are very excited about that. And John can touch a bit more on our clinical offering?

Sure. So GLP-1s are obviously one of the most significant clinical breakthroughs of our lifetime. And we at Weight Watchers have embraced them, but we've aimed to do so in a way that feels true to our roots. And so we have a telehealth business today that we call Weight Watchers Med Plus, where we have hundreds of clinicians providing specialized obesity care to patients across the country. And we really feel that it's important to go beyond the prescription and ensure that people are getting a high level of support and care in order to be successful while they're on that medication. And our members get unlimited access to their clinical team to help guide them through this process, which often can include things like side effects, dose titration. We want to make sure that members and clinicians have a high level of touch and communication as they go through that process. We also do guide people through the insurance process. And these medications have come down in price recently, which is great to see. But they still are very expensive if you're paying out of pocket. And so through our EHR, we're able to file prior authorizations at scale on behalf of our members and help get them covered for medication, such that if they do have insurance coverage, they're paying the lowest possible price out of pocket. And then with all of that clinical care, we pair it with our Weight Watchers behavioral programs to make sure that people are getting the behavioral support they need to build healthy habits to help them be successful, potentially if they ever do transition off of medication. And so they get access to our diet tracking app. They get access to the virtual workshops that Felicia just mentioned. And it's great to see people go through this, something like a new medical offering with the care and the support of other people who are going through the same journey as they are, and they're able to share that experience. And so we're very excited about GLP-1s and we're very excited about our MedPlus business and we feel like it's going to be an important cornerstone for us to build around.

A lot in there I want to unpack, but before we get into the core business, you just hired a new CEO. Can you break down why was the right fit and how it impacts your strategic direction from here?

Yes, so we just announced a new CEO, what, last week? I think it was. We are very excited for him to join. What you hear from John and I is a lot of work that has been done kind of strategically over the past couple of years in really setting Weight Watchers up for a bright future, and we're very excited about that. And I think a lot of what he brings to the table is that operational excellence and subscription revenue growth. And so we are excited for someone to be able to accelerate, you know, what we have been able to set the groundwork for in this next phase for Weight Watchers.

Now, let's dig into the clinic business. For investors that are unfamiliar with what you offer today in MedPlus, what do you explicitly offer for consumers, and how does that fit into the broader GLP-1 ecosystem?

Yeah, so what we offer is access to a telehealth business to clinicians who can prescribe GLP-1s and manage care. And as I mentioned during the intro, we also help them go through the insurance process to make sure they're paying the lowest possible price for medication. There are a lot of people that are coming out to play in this space. GLP-1s are obviously very, very popular right now. But a lot of people are focused on just one part of the journey, just on how to onboard people onto medication. And we really feel like there is a bit of a false narrative out there that you could just give someone these medications and send them on their way and have them have a successful journey. And I think that shows up most prominently in the adherence data that you hear from Big Pharma, that people on average are staying on these medications for about six months. And, you know, within those averages, there's people that are coming on and stopping right away because they're experiencing side effects. There's people who can't afford to stay on the medication or experience, you know, a work disruption and no longer have insurance coverage. And so what we're really about is providing people with the support they need to be successful while on the program. You know, one stat that we'd love to talk about is our digital GLP-1 success program that's included in our MedPlus offering. When members engage with that, 72% of them have noted that they've been able to better manage their side effects, and that is really, really impactful. And so we really feel like with our MedPlus program, we're going beyond the prescription and providing wraparound care so folks can be successful and build successful habits to maintain long-term health benefits.

You touched on it a little bit there, but why should a consumer choose your clinical offering over a primary care provider, a different telehealth provider? Incredibly, how do you tell that message to consumers to help open up the top of the funnel?

Yeah, that's a great question. So, you know, you think about your last primary care appointment, it was probably about 12 to 15 minutes, and the clinician was probably trying to pack in a lot of clinical care on a number of topics within that visit, and then you probably didn't go back to see that person again for another year. What we're providing is really high-touch, high-quality, obesity-focused care within a clinical setting. And so our members have unlimited access to their clinician to do the video, the telehealth appointments that they need to do that are solely focused on weight care and then able to follow up with them. They're able to log side effects. They're able to meet with registered dietitians. So the way you can look at it is it's really an obesity and weight care focused offering in a clinical setting versus just a clinical setting that's meant to get someone a prescription and send them on their way. And so we, in terms of how we tell that message, it is a, I would say, a more nuanced message than, you know, a lot of people are competing on price right now. And, you know, if you're trying to reach people through D2C and they're scrolling through a social platform, price is obviously an easy thing to communicate, to try to get people interested in your platform. But what we're really trying to do is let people know that we are the place, you know, We've been in business for over 60 years solely focused on weight care and that we are the place to come if you want to have a successful and supportive clinical weight care journey.

Now, in terms of the backwards looking, what that's actually translated to from a ClinicNetAds perspective is relatively volatile, as you've seen, a competitive and ever-changing environment. On an ongoing basis, what's the quarterly pace or what's the right way to think about subscriber growth in the clinical segment?

I think overall, you know, we are trying to manage across our portfolio of Weight Watchers, and like I mentioned, we have three product offerings, and, you know, they have differing margin profiles, and it's very important for us to be agnostic to where a member is in their weight loss journey. I do think as, like, the next wave of individuals who are interested in GLP-1 start to engage with GLP-1, you know, they are looking for more information, right? They are hearing stories of, you know, I was not able to drink a glass of wine at dinner because I was having side effects and I don't want this to impact my social life or, you know, I want to be successful on the meds and I want to be able to like lose the weight and all of that. And so I do think with all of the things that like John had mentioned, that is really at the crux of where our model is differentiated because it is about guided support from experts. And in that, I do you think while our subscriber count has been volatile, we have shown consistent increases in our overall revenue. And so just as I mentioned earlier, going from, you know, clinic revenue being about 10% of our total in 2024 to that being about 25 to 30% of our revenue in terms of expectation for 2026 does show that we are still able to acquire members, you know, kind of in this ever-changing ecosystem, but what really matters is the adherence to the meds and the wraparound of care, and that is really where we feel like our differentiation is.

You spent heavily on marketing the clinic offering in OneQ, really the first time you were able to go full thread on that. What are the learnings that you gained from that spend, and how did that inform your willingness to apply incremental marketing dollars here going forward?

So overall, I did note, you know, kind of in 2025, we had a debt negotiation. And the way that we were able to effectuate that transaction is we did do a prepackaged Chapter 11 that was about a month and a half. So we entered into that at the beginning of May. We exited, you know, before the end of June in 2025. And so what was coming up in Q1 of 2026 was this was our first opportunity really to let folks know that Weight Watchers is still here and that GLP-1s didn't kill Weight Watchers. We actually do prescribe GLP-1s. And so in Q1, we did index more heavily into spend than what we normally do overall for marketing. So we spent around 40% to 45% of our total anticipated spend where in previous years, we would spend about 30% to 35% of that. I think it was really important for us in terms of overall learnings. People know Weight Watchers. People know the brand of Weight Watchers, but just like we're sitting here today, the business has so materially changed that there is an education we need to do of what Weight Watchers today offers versus when people have last thought of Weight Watchers and what that looks like. And so one of the things that has impacted our business the most is we have very, very high brand awareness, but we don't have a lot of brand awareness that we offer GLP-1s, and we definitely wanted to get that into market in Q1. I think we did it in the traditional sense, in that we invested in television and we invested in top-of-funnel marketing, and we were anticipating that that would continue to create halo for us as we moved through the year, as more people adopted our Weight Watchers Med Plus offering. And what we had noticed is that that overall brand awareness had stagnated, and that we stayed around 30% brand awareness, which is very different from the overall Weight Watchers brand awareness. So what we have learned from that is we do need to be more focused on how we create a steady drumbeat that we do offer meds, and we do have multiple GLP-01 offerings, even if an individual doesn't want to engage with meds with Weight Watchers. And so, you see things coming from us along that spectrum. So, one thing we just announced is our expansion with Sam's Club and that being a way for our brand awareness to get out there in terms of offering GLP-1s. And we've also done a lot with, you know, influencers that are happy to tell their story of how they lost weight with Weight Watchers. And so, I think overall, you know, it's a great opportunity for Weight Watchers to, you know, cut through the noise and to really allow for our model to differentiate relative to others, and I think that's our biggest learning from Q1. Okay, great.

Well, one more question on the clinic segment. You know, zooming out, you've grown the clinic business from effectively zero a few years ago to about 200,000 subscribers today. How should we think about translating the program quality and the competitive advantages you do have into the path from growth from here, and what are your levers you're able to pull to continue to drive that revenue growth on a multi-year basis?

I mean, I think one of the levers that we have is because we've been in business for 60-plus years, we do have a huge database of customers that have engaged previously with Weight Watchers. And so what we had noticed, you know, kind of while for Q1 2026 is that overall consumer interest is increasing in GLP ones, right? That is a fact. And being able to more specifically message to past members of Weight Watchers that we do now have this offering available, I think is a continuation of the way that we are going to be able to scale. I would also say that we have a wide spectrum of product offerings. It's not just important for us, for you to engage with meds with us. We want to be wherever you are on your weight loss journey, and we want you to be able to maintain your weight loss. So we are comfortable, right, if someone was a Weight Watchers Clinic subscriber downgrading to a Weight Watchers Core Plus subscriber, or if someone was a Core Plus subscriber upgrading to that. So I do think overall we have multiple levers that are available to us, not just in the marketing front but also in the consumer database in being able to continue to scale that business.

Yeah, and in addition, we've also, you know, direct-to-consumer is an effective acquisition channel, and it's one where you can add a lot of scale quickly, but during periods of heightened competition, it can be expensive, and so we've taken a lot of steps over the past 12 months to diversify our acquisition base, and that's come through our B2B offering, which, while still is small compared to the rest of our business, does bring in clinical members. Obviously, employers want their employees to be healthy, and they want to contribute funds to this type of endeavor. But they want to make sure that if they are going to contribute funds to GLP-1 access, that their employees are getting them from a reputable clinician who's going to provide high-quality care and ensure that they're building healthy habits. We also went live as a preferred telehealth prescriber on Lilly Direct during the first half of the year, which was really exciting for us as well. So now when patients are Googling ZepBound or FoundAO and going to Lilly Direct, they'll see us on there as a preferred telehealth provider. So, you know, direct-to-consumer is always going to be a significant acquisition channel, as well as tapping into our existing base of behavioral members. But we've made a lot of strides as well in establishing footing elsewhere to generate, you know, economically viable sign-ups over time.

Okay, great. Really interesting on the clinic side. Let's switch over to the behavioral piece of the business. This has been an area with larger headwinds, seeing the revenue base contract for the past several years. What would you identify as the key macro headwinds you've been facing? And do you see a path for those to soften over time?

I mean, overall, right, there has just been a lot of introduction in the space as it relates to nutrition, right? In our behavioral program, if you just think about core, right, it's offering nutrition guidance. and you think about core plus it's offering nutrition guidance alongside support and accountability and so we're happy about the trend dynamic that we're showing in core plus because it does mean a member is willing to pay for that incremental support and accountability for core though you know we've always said do it yourself has always been a competitor ai is a competitor right there is a lot of places for people to get information about their nutrition I think for us, though, it is in the points program easier to track, you know, one thing versus tracking caloric intake versus protein versus fiber and all of the macros that people are saying is very important. I would also say that one of the ways for us to kind of stem that bleed on core is we have upleveled our technology. So one of the hard parts, right, of having a debt burden like we had at Weight Watchers for so long is that we weren't able to invest in the tech. And so the tools became dated. And if you have, like, a new app that is immediately, like, giving you all of this information, it's like, why Weight Watchers? Well, the program works, right? That is fantastic, and check on that. But we did need to make a lot of the tools more easily usable. So we have introduced quite a bit in terms of AI in our app. So now if you take a photo of your food, we are able to give you the points value just in one click. So some of the things we talk about, right, it's, like, very hard to, if you have, like, a bowl, like a salad or whatever, to get all of the ingredients in there. I will say our AI is pretty amazing, and it can figure that out and give you the points. We've also introduced voice tracking. so you can just talk into your phone and that is available to you. We have our code scanning now, so if you're at Trader Joe's and you just want to scan a product, that immediately tells you the points intake. And so all of these tools we do think are going to be very impactful in getting folks then able to track, right, and then getting the best on their weight loss journey.

Digital weight loss has always been a competitive industry. How would you say your behavioral offerings are differentiated from peers? and how can you translate that to stabilizing the revenue base over time?

I would say the differentiation point across the spectrum is the fact that the points are calculated based on scientific research. And so this isn't just necessarily like just about caloric intake. If it was just caloric intake, right, it would be very easy kind of across the board to figure out what is best for your body and what is best for long-term nutrition guidance. And so this is a program that has been studied. This is a program that has had a lot of hours of research going into each of the individual points programs or points numbers, and I think that's one. I also think there's very few places that support the emotional journey of weight loss. A lot of people don't want to tell their friends that they're embarking on a weight loss journey, but they definitely want to tell a friend afterwards when they've lost the weight where to do that. And I do think, you know, just with our millions of members, this is another area where we have locked in and have continued to honor our heritage of community support and accountability. And I think there's very few places that provide all of that, which is where I do think we are also differentiated.

Okay, great. Now, I want to touch on one of the great points, certainly, from your recent results, which has been Core Plus. A lot of success here in driving adoption. This is the more premium tier with three consecutive quarters of sequential growth. What's led to that improvement? How do you continue to expand adoption?

So this one's fun for me. I think overall, you know, when you're thinking about just the amount of information that people can consume, right, across all of the social platforms, AI, I mean, there is no shortage to information being available at your fingertips. And I do think we found a very interesting way of creating communities through these virtual experiences that are included in our core plus offering. So for example, if you're a midnight snacker and that is where you always go sideways in terms of your weight loss goals, we have an experience for that. So you can meet other midnight snackers and learn tools of the trade from others that are kind of going through something similar. So that for me, just having that available to our consumers and having them select the things that are most important to them, I do think has been a very important driver of our growth. And I would also say just this up-leveling of what we've been able to do in terms of, like, behavioral-structured programs with our GLP-1 success program and menopause, those have also helped as well drive that growth. And so I do think that that's an area of sustainability for us. And, you know, the proof is in the stats, right? For our GLP-1 success program, if you do engage with our program, which does focus on protein, people have shown 29% more weight loss than if they didn't engage with the program. And I think that's pretty impactful when you're thinking about why us.

Now, I want to talk a little bit on your B2B business. This has been something that's evolved a lot over the past few years, giving employers options across the weight loss spectrum. What do you see as the value you can deliver for your employers? Where are you in scaling that business? and when might we start to see greater contribution to the P&L here?

Yeah, so I think from a value standpoint, as we talked about before, employers devote a lot of money to the health and the well-being of their employees, and they always want to make sure that those dollars are well spent and are going to drive the outcomes that they want to drive. And so obviously GLP-1s are something that are still fairly expensive and the care around them is expensive. And so employers want to make sure that they are driving people towards platforms and towards clinicians where they're going to get proper clinical support and the wraparound care needed to have a successful journey on the medication. And we really feel like that positions us very, very well to be somebody that an employer wants to partner with. We obviously launched a really exciting partnership with UnitedHealthcare last year, and it's been great to see that continue to progress. We obviously had Sam's Club go live recently, which was exciting. And I'd say for the longer term, as we look ahead, what we want to do is look for more of these big opportunities to partner with a large health system, a large company that is like-minded in our approach that we can look to drive positive results for either their members or employees.

You touched on the Sam's Club partnership. That's a recent launch. Give us a new review of what's happening here, the potential you see for this partnership, and then zooming out, can you help us think more broadly about your partnership strategy and where you think there might be gaps in that portfolio?

Sure. So with Sam's Club, what we're doing with them is essentially all Sam's Club members now will get access to Weight Watchers at a discounted rate. And the discount varies by program, but we're making that available to all Sam's Club members. And what that does is it really aligns two very trusted brands in their space together. And it allows us to offer a benefit to people that many of which fit into our target demo and people that we're used to servicing and that we feel like we can service very well. Sam's Club also has a pharmacy as part of its offering. And so when Sam's Club members sign up and choose our MedPlus program, we can make it very easy for them and have it front and center for them to get their prescription fulfilled right at Sam's Club Pharmacy and really just bring more convenience to their day-to-day health and well-being while getting the Weight Watchers brand name out there to a large group of people. And I think that's something that we're going to look to replicate elsewhere. And it's something that fits neatly into our strategy. So we have the opportunity to not only reach their members digitally through email and through activations on their website, but also to send Weight Watchers coaches and registered dietitians and clinicians to Sam's Club in-person locations. And that's an advantage that we have as a company with the scale that we have and the footprint that we have across the country and across the globe.

Now, you've also been able to significantly reduce the cost, especially SG&A, within the business over the past few years. Do you see more room for optimizations here? And if so, where?

I mean, I'm the finance person, so yes, I always see room for optimization. I would say one of the areas that we have really optimized is in our growth margin. You know, as we have three different product lines all with three different maturities, you know, core being one of the longer maturities, core plus initially in its phase being a very, very long, you know, like revenue line. They were three different margin profiles, and so we were trying to manage kind of across the three. John and his team have done a lot in terms of product improvement and allowing for that execution to be more seamless. And so just as I mentioned, you know, the clinical growth, because we do have to cover the cost of clinicians and they tend to be more expensive, right, than if someone is just engaging with our digital app, we have been able to maintain near record high margins of approximately 73% overall, which I think is pretty remarkable. And it is an area that we have said, you know, this year we do anticipate our adjusted growth margins staying above 72%. And so with all of the improvements John and team have made, we can really be agnostic to what product offering someone joins and really match the product offering for what is best for that person on their weight loss journey.

Well, we started the conversation with it, but post-restructuring, you've been able to reduce the debt load of the business really substantially by about four times. those notes now do in 2030. Given that, what's the cash generation potential of the business today? How do you plan to tackle that over time? And what are your thoughts on doing potentially more voluntary solicitations to reduce the debt faster like you did earlier this year?

No, so our guidance for the 2026 year is, you know, $620 to $635 million of top-line revenue. And our adjusted EBITDA is $105 to $115 million. So as I mentioned, our debt burden had reduced from $1.6 billion down to $465 million. And since then, we have been very opportunistic about lowering that debt balance further. So right now, we're just north of $400 million. We did pay down the debt in a prepayment, and also we did a tender, and we took advantage of where the term loan was trading. And so we were fully subscribed at 68.5% of par. And so this is an area that, you know, we are continuing to make sure that we can lower the overall debt burden. But I do feel pretty good about where we are in terms of adjusted EBITDA relative to our net debt. And just for reference, our Q2 cash balance was slightly above $100 million. So overall, we are in a much healthier position than we were just a year ago and very excited about continuing on that path.

Well, it's been a great conversation. One more question to put a bow on things. What are one or two areas you think investors most underappreciate or misunderstand about the Weight Watchers story?

Oh, that's a good question. I think with the brand awareness, like I mentioned in the beginning, everybody assumes they know what Weight Watchers is. And the two things that I hear the most are frozen foods, which we haven't been in that business for a while. And the second is I don't want to go to a meeting. Like, I don't want to have to drive to a meeting. And I think the thing that people are missing is that we have always been scientifically led, and we are embracing GLP-1s alongside what has allowed Weight Watchers to exist for 63 years. And so I do think that that competitive offering is missed. I also think just the improvements we've made in overall adjusted gross margin and the sustainability of the cash flow long-term is another thing that's missed. And I do think that that is a testament to John and team in terms of all of the improvements that they've made on that overall and that that is sustainable for the go-forward as well.

Yeah, and I would call out our clinical differentiation. You read headlines every day that this company has GLP-1s or this company now has GLP-1s. And, you know, these medications are obviously powerful catalysts for weight loss, but they're not the whole answer. And, you know, it's really, really important for people to get high-quality care while they're on these medications, which are very, very powerful and need to be, you know, taken appropriately. There's also, you know, a multitude of form factors, and there's going to be more coming to the market every day. Obviously, orals were launched. There's two different types of orals out now, each with a differentiated clinical profile. And so it's extremely important that you're working with a clinician who understands you, understands your clinical profile, and can get you the right medication for you to be successful. Well, thank you so much both for being here.

Thank you for having me. Thank you.