Fourth Quarter 2024 Financial Highlights
- Total End of Period Subscribers of 3.3 million, including 92 thousand End of Period Clinical Subscribers
- Revenues of $184.4 million; Subscription Revenues down 7.3% vs. prior year period, including Clinical Subscription Revenues of $20.5 million, up 57.9% vs. prior year period
- Gross Margin of 69.7%, up 906 basis points vs. prior year period; Adjusted Gross Margin of 69.1%, up 771 basis points vs. prior year period
- Operating Income of $36.2 million; Operating Income Margin of 19.6%, up 2,256 basis points vs. prior year period; Adjusted Operating Income of $36.9 million; Adjusted Operating Income Margin of 20.0%, up 967 basis points vs. prior year period
- Net Income of $25.1 million; Net Income Margin of 13.6%, up 5,642 basis points vs. prior year period; Adjusted EBITDAS of $50.4 million; Adjusted EBITDAS Margin of 27.4%, up 1,109 basis points vs. prior year period
- Revenues of $785.9 million; Subscription Revenues down 5.6% vs. prior year, including Clinical Subscription Revenues of $78.0 million
- Gross Margin of 67.8%, up 833 basis points vs. prior year; Adjusted Gross Margin of 68.5%, up 659 basis points vs. prior year
- Operating Loss of $236.2 million, including $315.0 million of non-cash impairment charges; Operating Loss Margin of 30.1%; Adjusted Operating Income of $104.8 million; Adjusted Operating Income Margin of 13.3%, up 328 basis points vs. prior year
- Net Loss of $345.7 million, including $293.2 million of non-cash impairment charges; Adjusted EBITDAS of $149.3 million; Adjusted EBITDAS margin of 19.0%, up 254 basis points vs. prior year
"We are pleased with the momentum in our Clinical business in the Fourth Quarter, reflecting the increasing demand for comprehensive weight management solutions. As more people seek sustainable approaches-including those using or transitioning off medication-our unique combination of science-backed behavioral support, clinical care, and engaged global community allows us to deliver the right solutions at the right time. I am grateful for the Board's trust in me to lead WeightWatchers through this next phase, and I look forward to building on our progress, working alongside our incredible team, and driving meaningful impact for our members," said Tara Comonte, President and CEO.
"At the same time, WeightWatchers is in a period of significant transition as we navigate industry shifts and reposition our business for long-term growth. For more than six decades, we have led innovation in weight management, continuously evolving to meet the changing needs of our members. While we see clear opportunities ahead, executing on them will require careful prioritization as we balance investment in growth with the realities of our capital structure."
"I'm excited to join WeightWatchers at this pivotal time," said Felicia DellaFortuna, CFO. "In Q4, we continued to demonstrate disciplined and strategic cost management, which not only drove our year-over-year improvement in Q4'24 Adjusted EBITDAS, but also keeps us on track to achieve our $100 million run-rate cost savings target by the end of 2025. As we look ahead, our focus remains on strengthening our financial foundation to position WeightWatchers for sustained, long-term success."
Fourth Quarter 2024 Consolidated Results
|
% Change | % Change Adjusted for Constant Currency(1) | ||||||||||
| Three Months Ended | |||||||||||
| December 28, 2024 | December 30,
2023 | ||||||||||
| (in millions except percentages and per share amounts)
| |||||||||||
| Subscription Revenues, net | $181.7 | $196.1 | (7.3 | %) | (7.2 | %) | |||||
| Other Revenues, net(2) | 2.7 | 9.9 | (72.8 | %) | (72.8 | %) | |||||
| Revenues, net | $184.4 | $206.0 | (10.5 | %) | (10.4 | %) | |||||
| Gross Profit | $128.5 | $124.9 | 2.9 | % | 3.0 | % | |||||
| Non-GAAP Adjustments(1) | |||||||||||
| Net Restructuring Charges(3) | (1.1 | ) | 1.5 | ||||||||
| Adjusted Gross Profit(1) | $127.4 | $126.4 | 0.8 | % | 0.9 | % | |||||
| Operating Income (Loss) | $36.2 | ($6.0 | ) | (100.0 | %)* | (100.0 | %)* | ||||
| Non-GAAP Adjustments(1) | |||||||||||
| Franchise Rights Acquired and Goodwill Impairments | - | 3.6 | |||||||||
| Net Restructuring Charges(3) | 0.7 | 23.6 | |||||||||
| Adjusted Operating Income(1) | $36.9 | $21.3 | 73.5 | % | 73.8 | % | |||||
| Net Income (Loss) | $25.1 | ($88.1 | ) | (100.0 | %)* | (100.0 | %)* | ||||
| EPS | $0.31 | ($1.11 | ) | (100.0 | %)* | (100.0 | %)* | ||||
| Non-GAAP Adjustments(1) | |||||||||||
| Franchise Rights Acquired Impairments | - | 0.05 | |||||||||
| Net Restructuring Charges(3) | 0.01 | 0.22 | |||||||||
| Adjusted EPS(1) | $0.32 | ($0.84 | ) | (100.0 | %)* | (100.0 | %)* | ||||
|
Total Paid Weeks | 45.5 | 50.4 | (9.9 | %) | N/A | ||||||
| Digital(4) Paid Weeks | 37.6 | 41.0 | (8.3 | %) | N/A | ||||||
| Workshops + Digital(5) Paid Weeks | 6.8 | 8.7 | (22.3 | %) | N/A | ||||||
| Clinical(6) Paid Weeks | 1.1 | 0.7 | 53.3 | % | N/A | ||||||
| End of Period Subscribers(7) | 3.3 | 3.8 | (12.2 | %) | N/A | ||||||
| Digital Subscribers | 2.7 | 3.1 | (11.0 | %) | N/A | ||||||
| Workshops + Digital Subscribers | 0.5 | 0.7 | (22.7 | %) | N/A | ||||||
| Clinical Subscribers | 0.1 | 0.1 | 37.8 | % | N/A | ||||||
| ___________________________________ Note: Totals may not sum due to rounding. *Note: Percentage in excess of 100.0% and not meaningful (1) See "Reconciliation of Non-GAAP Financial Measures” attached to this release for further detail on adjustments to GAAP financial measures. (2) "Other Revenues, net” (formerly known as "Product Sales and Other, net”) consist of revenues from licensing, franchise fees with respect to commitment plans and royalties, publishing and other revenues. Prior to fiscal 2024, "Other Revenues, net” included sales of consumer products. (3) See "Reconciliation of Non-GAAP Financial Measures” attached to this release for further detail on the Company's previously disclosed 2024, 2023, and 2022 restructuring plans, and the reversal of certain of the charges associated therewith. (4) "Digital” refers to providing subscriptions to the Company's digital product offerings. (5) "Workshops + Digital” refers to providing subscriptions for unlimited access to the Company's workshops combined with the Company's digital subscription product offerings. (6) "Clinical” refers to providing subscriptions to the Company's clinical product offerings provided by WeightWatchers Clinic (formerly referred to as Sequence) combined with the Company's digital subscription product offerings and unlimited access to the Company's workshops. (7) "Subscribers” refers to Digital subscribers, Workshops + Digital subscribers, and Clinical subscribers who participate in recurring bill programs in Company-owned operations. | |||||||||||
- End of Period Subscribers in Q4 2024 were 3.3 million, down 12.2% versus the prior year period, driven by declines in the Digital and Workshops + Digital businesses. End of Period Clinical Subscribers of 92 thousand increased 37.8% versus the prior year period.
- Total Paid Weeks in Q4 2024 were down 9.9% versus the prior year period, driven by declines in the Digital and Workshops + Digital businesses. The decline in Total Paid Weeks was partially offset by growth in Clinical Paid Weeks, which increased 53.3%.
- Revenues in Q4 2024 were $184.4 million. On a constant currency basis, Q4 2024 revenues decreased 10.4% versus the prior year period.
- Subscription Revenues in Q4 2024 were $181.7 million. On a constant currency basis, these revenues decreased 7.2% versus the prior year period primarily driven by lower recruitments and incoming subscribers in the Company's non-Clinical businesses. Subscription Revenues benefited from $20.5 million of Clinical Subscription Revenues, which increased 57.9% versus the prior year period. Additionally, Subscription Revenues were negatively impacted by the continued mix shift from the Workshops + Digital business to the Digital business and a higher mix of non-Clinical Subscribers within their initial, lower-priced commitment periods.
- Other Revenues in Q4 2024 were $2.7 million. On a constant currency basis, these revenues decreased 72.8% versus the prior year period driven by the closure of the consumer products business at the end of fiscal 2023.
- Subscription Revenues in Q4 2024 were $181.7 million. On a constant currency basis, these revenues decreased 7.2% versus the prior year period primarily driven by lower recruitments and incoming subscribers in the Company's non-Clinical businesses. Subscription Revenues benefited from $20.5 million of Clinical Subscription Revenues, which increased 57.9% versus the prior year period. Additionally, Subscription Revenues were negatively impacted by the continued mix shift from the Workshops + Digital business to the Digital business and a higher mix of non-Clinical Subscribers within their initial, lower-priced commitment periods.
- Gross Profit in Q4 2024 was $128.5 million, compared to $124.9 million in the prior year period. Adjusted Gross Profit, which excluded the net reversal of $1.1 million of restructuring charges related to prior years, was $127.4 million. Adjusted Gross Profit in Q4 2023, which excluded the net impact of $1.5 million of restructuring charges, was $126.4 million.
- Gross Margin in Q4 2024 was 69.7%, compared to 60.6% in the prior year period. Adjusted Gross Margin in Q4 2024 was 69.1%, up from 61.4% in the prior year period, driven primarily by actions to reduce the fixed cost base within the Workshops + Digital business and the closure of the lower margin consumer products business at the end of fiscal 2023.
- Gross Margin in Q4 2024 was 69.7%, compared to 60.6% in the prior year period. Adjusted Gross Margin in Q4 2024 was 69.1%, up from 61.4% in the prior year period, driven primarily by actions to reduce the fixed cost base within the Workshops + Digital business and the closure of the lower margin consumer products business at the end of fiscal 2023.
- Operating Income in Q4 2024 was $36.2 million, compared to an Operating Loss of $6.0 million in the prior year period. Adjusted Operating Income, which excluded the net impact of $0.7 million of restructuring charges, was $36.9 million and benefited from the Company's previously announced cost savings initiatives. Adjusted Operating Income in Q4 2023, which excluded the net impact of $23.6 million of restructuring charges and non-cash intangible impairment charges of $3.6 million, was $21.3 million.
- Income Tax Benefit in Q4 2024 was $11.7 million, which reflected the impact of a valuation allowance on the Company's full year fiscal 2024 financials. In the prior year period, income tax expense was $57.6 million.
- Net Income in Q4 2024 was $25.1 million compared to a Net Loss of $88.1 million in the prior year period. Adjusted EBITDAS in Q4 2024 was $50.4 million compared to $33.5 million in the prior year period as a result of previously announced cost savings initiatives. Q4 2024 Adjusted EBITDAS margin was 27.4% compared to 16.3% in the prior year period and the highest since the third quarter of 2022.
- Diluted Earnings Per Share in Q4 2024 was $0.31 compared to Diluted Net Loss Per Share of $1.11 in the prior year period. Q4 2024 Adjusted Earnings Per Share, which excluded $0.01 net impact of restructuring charges, was $0.32. In the prior year period, Adjusted Net Loss Per Share, which excluded $0.22 of net impact of restructuring charges and $0.05 of non-cash intangible impairment charges, was $0.84.
- Additionally, certain other items affected year-over-year comparability:
- In Q4 2024, $0.28 per diluted share positive tax impact arising from the impact of a valuation allowance on the Company's full year fiscal 2024 financials.
- In Q4 2023, $0.78 per diluted share negative tax impact due to an increase in the valuation allowance to offset all U.S. deferred tax assets due to the uncertainty of realizing future tax benefits of the assets.
- Additionally, certain other items affected year-over-year comparability:
| % Change | % Change Adjusted for Constant Currency(1) | ||||||||||
| Twelve Months Ended | |||||||||||
| December 28, 2024 | December 30, 2023 | ||||||||||
| (in millions except percentages and per share amounts)
| |||||||||||
| Subscription Revenues, net | $777.0 | $822.8 | (5.6 | %) | (5.6 | %) | |||||
| Other Revenues, net(2) | 8.9 | 66.8 | (86.6 | %) | (86.7 | %) | |||||
| Revenues, net | $785.9 | $889.6 | (11.6 | %) | (11.7 | %) | |||||
| Gross Profit | $533.1 | $529.3 | 0.7 | % | 0.6 | % | |||||
| Non-GAAP Adjustments(1) | |||||||||||
| Net Restructuring Charges(3) | 5.0 | 21.2 | |||||||||
| Adjusted Gross Profit(1) | $538.1 | $550.5 | (2.2 | %) | (2.3 | %) | |||||
| Operating (Loss) Income | ($236.2 | ) | $22.3 | (100.0 | %)* | (100.0 | %)* | ||||
| Non-GAAP Adjustments(1) | |||||||||||
| Franchise Rights Acquired and Goodwill Impairments | 315.0 | 3.6 | |||||||||
| Net Restructuring Charges(3) | 22.2 | 54.9 | |||||||||
| Former CEO Separation Expenses | 3.9 | - | |||||||||
| Acquisition Transaction Costs | - | 8.6 | |||||||||
| Adjusted Operating Income(1) | $104.8 | $89.5 | 17.2 | % | 16.7 | % | |||||
| Net Loss | ($345.7 | ) | ($112.3 | ) | 100.0 | %* | 100.0 | %* | |||
| EPS | ($4.34 | ) | ($1.46 | ) | 100.0 | %* | 100.0 | %* | |||
| Non-GAAP Adjustments(1) | |||||||||||
| Franchise Rights Acquired Impairments | 3.69 | 0.05 | |||||||||
| Net Restructuring Charges(3) | 0.21 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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