Good morning, everyone, and welcome to CJS Securities' 26th Annual New Ideas for the New Year Conference. For those of you who don't know me, I'm Justin Ages, a research analyst here at CJS, and thank you again for joining us today. Our next presentation is from Weight Watchers, a global leader in weight management. It's my pleasure to introduce Tara Comonte, Chief Executive Officer, Felicia DellaFortuna, Chief Financial Officer, Jon Volkmann, Chief Operating Officer, and David Helderman, Director of Investor Relations. We'll start with a 10- to 15-minute overview for management, and following that, I'll kick off Q&A, so feel free to submit questions you might have through the portal. With that, Tara, Felicia, Jon, thanks very much for being with us today, and the floor is yours.
Thanks, Justin. Hi, everyone. Thank you very much to Justin, you, and CJS for having us today. I don't know if we'll take the full 10- 15 minutes, but we'll try and give you an overview of where the business is and where we're going, and then looking forward to taking questions. But this is an exciting time for Weight Watchers , and so we really appreciate the opportunity to share our story today as part of your New Ideas Conference. So I think if we start by maybe looking back and just reflecting on the Weight Watchers history for a moment, I suspect most of us listening today know or have heard of this brand. It's a brand that has been around, at this point, for more than six decades.
It's a brand that has helped millions of people lose weight successfully over that period of time, and that's really for one simple reason: in that the program works. It was a program that was initially created based on human connection and how the power of human beings supporting one another was a catalyst to positive change and increased levels of success when trying to lose weight. Over the years, it has evolved into a comprehensive support system that has been based on ongoing nutritional science, structured behavior change, coaching, accountability, education, and a host of tools, really, over the years and innovations to help people on their weight loss journeys. We've seen tens of millions of people over our history. We still run about 20,000 meetings a month. That is, the meetings piece of our business is one part of our offering.
The majority of those today are still in person, with a new focus, as we talk in a moment about looking forward, on building out our virtual and our digital meeting business. We have about 3,000 coaches around the world still today, and we have a slew of sort of accreditations over the years, from number one best weight loss diet to number one doctor-recommended weight loss program, and all sorts of efficacy claims around the Weight Watchers program and your ability to be more successful in meeting your weight loss goals when on the program. So fast forward to today, we have a huge number of people around the world needing help with their weight and meeting their weight loss goals. In the U.S. alone, we have over 70% of U.S. adults either overweight or living with obesity, so really, really significant numbers.
This issue and opportunity is one that is reflected globally. We, in recent years, have seen the incredible innovation around GLP-1 medications for weight loss coming to the market, really a very meaningful milestone in helping people who have struggled for many, many years and incredible levels of success now being seen with these medications. Weight Watchers reacted quickly to this latest development in the weight loss market. We acquired a telehealth business just coming up three years ago, April 2023, called Sequence, or Weekend Health. We now have, I mentioned, 3,000 clinicians. We now also have about 700—sorry, we have 3,000 coaches, apologies. We now have about 700 clinicians in the U.S. prescribing medications to our members, medications like Ozempic and Wegovy and Zepbound and Mounjaro.
Those clinicians come with rigorous obesity training, not just from a medical standpoint, but in helping people through their full end-to-end weight management journey. The clinical side of our business also helps with some of the behind-the-scenes work that is challenging when it comes to accessing medication, like helping with insurance and fulfillment. And Jon, our COO, who's on here today, I'm sure we'll talk a little bit more about that as we get into Q&A. And when we look at GLP-1 medications as Weight Watchers, we really are embracing them and integrating them into our future because while they're powerful tools and a really exciting piece for the future of obesity care generally and for Weight Watchers as a company, they're also not standalone solutions. They can't replace the need for healthy habits, and people still need to eat nutritious foods. They still need to move their bodies.
They still benefit hugely from the power of community and accountability and education and just that overall human connection piece that really Weight Watchers was founded on over six decades ago in order to help them sustain progress and results. Not to mention that the power of a more comprehensive model continues to be endorsed and validated by leading health organizations like the World Health Organization most recently, and importantly, that the data is really proving out the power of this comprehensive care model.
As we look forward at Weight Watchers today and this next chapter that we're entering, our future is really clear, and it is one where we are very intentionally integrating and pairing clinical care and medication access with those structured nutritional programs, activity, movement, accountability, community support, coaching to come together to deliver our members safe, evidence-based programming that helps them adhere both to treatment if they're on medication and driving differentiated and sustainable weight health outcomes for our members over time. What's super exciting for us is the more data we gather around this comprehensive model, this holistic model of care, the more we see the data proving out its superiority in helping people actually meet their goals. A couple of examples here.
At 12 months, Weight Watchers Med Plus members, so Med Plus is our clinical offering or our medical access offering where you access clinicians. So at 12 months, our Weight Watchers Med Plus members on GLP-1s lost an average of 21% of weight in the first year, which is over 30% more than a number of our competitors who also publish research. And equally as exciting, when we just compare, not to the competition, but now we compare different levels of engagement in different parts of the programming, and we see those Weight Watchers Med Plus members at 12 months. And we compare those who were taking the medication and engaging in the rest of the programming and that behavioral support system, and we compare them to others who were not engaging.
And we see that our Med Plus members who engaged in what we call our GLP-1 Success Program, which is our behavioral support system, those members who engaged with that Success Program, on average, lost almost 30% more weight than those who were on medication alone. And so the more data we get, the more compelling it becomes that this holistic model of care and that everything Weight Watchers spent six decades building as it relates to human connection, structured behavior change, nutritional support, coaching, and so much more digital tools, as it comes together now with these incredible innovations in the form of GLP-1s, that the combination of these tools is incredibly effective in helping people both meet and sustain their goals.
So before we go into Q&A, I think Felicia's maybe going to just give us a few minutes on some of the financial transitions the business has gone through, particularly over the last year, and then happy to open it up to questions.
Thank you, Tara, and great to be here with you all. I joined Weight Watchers as CFO about a year ago, and I came to Weight Watchers very much to work through the financial reorganization that we did in 2025, which was an opportunity for us to really strengthen our balance sheet and provide Weight Watchers and the company with more flexibility to invest. As part of the financial reorganization, we were able to reduce our debt from $1.6 billion to a debt burden of $465 million. We were able to almost half our interest expense and our interest cash payments, freeing up about $50 million annually in interest payments, and also, as part of that transaction, we were able to retain nearly $175 million of cash from our former credit facility.
At the end of Q3 2025, the Weight Watchers balance sheet looked very different than it had historically. At Q3 2025, we had $465 million of debt on the balance sheet, approximately $170 million of cash, and we also guided 2025 to $145-$150 million of Adjusted EBITDA for the 2025 year. Our business model is one that is a highly cash-generative model with two main revenue lines. As Tara mentioned, we have a behavioral revenue line and a clinical revenue line. Our behavioral revenue line is the digital app where you are able to track food, track points, engage with our community, and that also includes access to our workshops, whether that's in real life or virtual. And our clinic business is access to our clinicians, as Tara mentioned, as well as access to medications like GLP-1.
We do have a fairly low capital intensity, with the majority of our CapEx being in capitalized software for the building of our digital app, and we also are a fairly high gross margin business. In 2025 and in Q3, our adjusted gross margins for the business were around 75%, giving you a sense of the cash generation from that revenue, and our full-year adjusted EBITDA margins were guided to at around 20% on our Q3 earnings call. In addition, as a business, we have taken significant cost actions to make sure that we are managing our costs effectively to allow for areas to invest and improve profitability, as well as being able to more variabilize our cost structure so that it better aligns with revenue. We were able to enact $100 million of cost savings across Weight Watchers.
We were able to reduce our real estate footprint as part of the financial restructure, and we've also right-sized headcount across the year. We've also moved a lot of our fixed cost structure to that of a variable, and so in Q3 2025, we've also mentioned that as it relates to our cost of revenue, about 70% of our cost of revenue is now variabilized, allowing us to scale more efficiently in the business. And historically, we've spent about 30% of our revenue on a full-year basis on marketing, with the largest spend happening in Q1 in lockstep with New Year's resolutions. As we look into 2026, we are very excited. We remain focused on executing on our strategic priorities, which include revamping our member experience, modernizing the brand, as well as scaling our clinical offering, all in an effort to really bend the curve on our top-line revenue.
However, with the recurring nature of our subscription model, we do continue to be impacted by some of the financial reorganization headlines that existed in 2025 in the first half of 2026, but we are very excited for this upcoming year and committed to delivering. So with that, I am very happy to get into Q&A.
All right. That's great. Thank you, Tara. Thank you, Felicia. We'll start on the medication side of the business. It seems very competitive. You have many telehealth companies advertising medications, including those selling compounded versions. There's also traditional primary care. So maybe you could delve a little into what your competitive advantages are and how you position those.
Yeah, I'm happy to take that one. So Jon Volkmann, Chief Operating Officer. We really believe that the future of long-term weight care is about helping people succeed while they're on these medications. And not only do we provide a convenient and fast process for a consumer to see an obesity-trained clinician and to get their medication, but we also bring kind of what we view as the power of the Weight Watchers, the Weight Watchers membership, to drive better results. So our members have access to a truly unparalleled level of comprehensive weight care support. So everything from help with insurance processing, access to registered dietitians, a dedicated care team to answer all of their questions, but also GLP-1 workshops, specific GLP-1 social groups. And we really view that as a comprehensive care model that's designed for this specific purpose and made for real life.
We also recently kind of relaunched and made dramatic improvements to our GLP-1 Success Program, which helps members stay engaged and manage side effects and really achieve meaningfully better results than just being on the medication alone with no support system, and you really see that clearly in the data that we've spoken to, so 72% of members who are given our GLP-1 Success Program say that it minimized their side effects, which is really impactful for these medications. And we've also seen a 53% increase in quality of life for members given our GLP-1 Success Program. As we look to the future of this space with something like employer coverage, for example, this is what we feel that we're going to be aligned with them on and what they're going to be looking for, and that's patient outcomes, and that's really what we're optimizing for here.
When you speak to competition, too, just looking at something like customer acquisition, we've been in this space for 60 years. We have a trusted brand and really also a member base that reflects how long we've been a leader in this space. We've referenced before on these types of calls that 30% of our clinical signups come from our current behavioral members. That's a much more efficient path to acquire folks than going out into the very competitive GLP-1 advertising landscape. They come directly to us through our app experience that over time is going to be even more seamless in terms of highlighting and upselling these folks. As Felicia has referenced before, the ARPU, the average revenue per user of a clinical member, is about four to five X a behavioral member. That upsell is a trade that we're excited to make.
And lastly, highlighting that we're also leveraging the power when it comes to acquisition of our community offering. So we're offering more GLP-1 focused workshops. We're offering a GLP-1 curious workshop very soon. We have 1,000 people who are going to be attending our first one of those. So we really have a multifaceted comprehensive offering to help support people, whether they're on medication today, whether they're interested in medication. And we feel that while this is, as you mentioned, a very competitive space, it's also a really exciting time with a lot of development in this space. And we feel that our approach and our history leaves us well-positioned to not only succeed today, but also in the long term.
Appreciate that thoughtful answer, Jon. Looking at recent developments, especially in the context of what you just outlined, one of the key things has been the actual price of the medication. So how do you think those price changes impact your business?
Yeah, great question. Obviously, a lot of development. It's been a highly dynamic marketplace. And we view that lower prices are really a tailwind for our business because it's going to help increase access to medications. If you look back to even just last year, those without insurance coverage, we're looking at almost $500 a month for the injectable versions of these GLP-1 medications. And today, folks can start the injections without insurance coverage for $299. And then the Wegovy pill, folks can start that for $149. And so obviously, that's going to help really increase the TAM and increase the number of people that can afford to be on these medications who don't have insurance coverage. But secondarily, it's going to help level the playing field versus compounders. We've seen in the history of our business, we've always seen healthy growth when we've had competitively priced medication.
And so looking at the $149 price point in particular is kind of right on par with what we're seeing in the compounded space right now. And then thinking a little bit more long-term and downstream from the current landscape, as prices come down, as I kind of alluded to above, we believe that stakeholders like employers and insurance companies are going to be more willing to cover these medications. And they're really going to value the quality of care and the support that people are getting while they're on these medications, which we really think further supports our competitive differentiation.
Maybe just Jon mentioned the oral Wegovy coming to market. So we are in our second week of that. And I mean, that's another really exciting development that goes along with price. That $149 is the starting dose for the Wegovy pill. And it's going to be another interesting next chapter as we see the extent to which the pill can expand the addressable market further for people who don't want an injectable solution. So a lot of change. And I think, generally speaking, we're right at the beginning of this next chapter for this whole weight loss landscape with all these different moving pieces.
Yeah, that makes a lot of sense, and I want to stay on the Wegovy pill for just another question or two. Have you done work around how much the TAM would be expanded by people who are hesitant to get an injection and now this is open to them? Just want to size that opportunity of people who are interested in medication, but for one reason or another, were not interested in the injectable form.
Yeah, we have done some sizing, and we do believe that it's going to increase the addressable market. We do have data within our member community of folks who are resistant to needles. It's tough to tell exactly how much it's going to increase. The oral medications, from an effectiveness standpoint, are slightly less effective than the injectable versions of these medications. It's also a little bit of a different ritual for folks to take every day versus generally the once-a-week injectable. So it's tough to tell from an exact standpoint how much it's going to increase the overall TAM of this marketplace. But we are very confident that it is going to increase the TAM of the marketplace, not only because of the form factor, but things like it's obviously a little more convenient.
There's no cold storage required, easier from a travel standpoint, and then also from the more accessible price point as well.
Yeah, that makes sense. Switching to relationships and the manufacturers of the medication, how would you say Weight Watchers stands to benefit from its relationship with companies like Novo and Lilly?
Yeah, I mean, another great question. So we're really excited about these relationships, and we feel that there's quite a bit of strategic value in the relationships with these manufacturers. So today, we have direct integrations with both NovoCare and LillyDirect. And when we think about how that directly impacts our business, there's a couple of things I think worth highlighting. So we are today a NovoCare-recognized care provider, and that's based on our ability to deliver FDA-approved medications alongside expert clinical care and something that we really value. So we're listed directly on NovoCare's website, and that directly links to our site. So folks who are interested in these medications, who want to go to NovoCare to learn more about them, can get directly to our website from there. And in addition, it's also really allowed us to collaborate on launches, like most notably the Wegovy pill launch.
We were in lockstep on everything from marketing and logistics, and able to deliver a really high-quality experience to our members who are interested in the Wegovy pill from day one. We have orders that have already been shipped to members. We have prior authorizations that have already been submitted and approved for these medications. And that speed and that access, we feel like, is a real differentiator when you have the direct relationship that we have with a manufacturer like Novo. And lastly, it's also just about the everyday streamlined access. With our integration with NovoCare, for example, members don't need to leave our app in order to start and finish the process. They're not paying. You're not making multiple transactions in multiple places.
I think we're all familiar with a visit to a primary care doctor where you send a prescription, goes through insurance, you go to your local pharmacy to pick it up. Here, we're able to do that all through our platform and just make it really convenient and streamlined and easy for the member. And so I think we saw the benefits of that with the Wegovy pill launch. And we're expecting this to be a pretty exciting year in this space. And as new medications become available, which we expect them to come available later this year, we're super excited to continue to expand the collaboration with these pharma partners who are also interested in bringing convenience and transparency to the member community that we serve.
That makes sense. And staying on this line and maybe moving past the manufacturers, maybe you could discuss your relationship with Amazon and how you think that's going to allow Weight Watchers to expand its growth or attraction of members given ease of access, just any further details there.
Yeah, yeah, certainly, so we obviously have a collaboration with Amazon Pharmacy, and I would say this is fairly similar to the work that we've done with NovoCare and with LillyDirect, and we really view it as another just major step in making medication access faster, simpler, and more affordable for our members, and so we integrate directly with Amazon Pharmacy's infrastructure, so our members can actually see directly in their patient portal on our platform. They can see things like real-time medication availability. They can ensure that coupon cards are getting applied directly at checkout, so no code entering, nothing complex like that, and then obviously, the really fast shipping that Amazon is known for, so folks can get medication delivered as soon as same day.
From a growth standpoint, it's really just about providing access and convenience and allowing our members to focus less on complex pharmacy logistics and more about reaching their health goals.
Okay, appreciate that. Going back to some of the comments you and Tara made at the top just about announcements on products and brands, can you talk about some of the objectives that are underpinning those product announcements or news around the brand, whether it's the revamp of the user experience or the digital platforms? I think that would be helpful.
Yeah, happy to. And it's really all of the above. One of the things the debt reorganization allowed us to do was to start investing back in the business in the form of innovation. And that innovation is in how we go to market and how we acquire customers as well as the product that we ultimately then deliver to our members. So as it relates to our brand, we've recently done a very major refresh around our brand. I think it pays a lot of homage to our legacy and our past and our foundation and the strength of everything that we've been building over the last six decades. But it's also modern, and it's bold, and it leans into Weight Watchers' trusted leadership in this space and its scientific credibility over many, many years.
It incorporates fun new things like a progress bar, recognizing that weight loss journeys have ups and downs and that there's a natural process that our members go through. But beyond even just look and feel, to your question around sort of what is it intended to do, the company has not really invested significantly in what we would call top-of-funnel brand positioning and awareness over recent years. And as a result, we don't have a particularly high level of brand awareness as it relates to this medication offering that is such a core and increasingly central part of how we go to market and how we will serve our members.
And so part of this rebrand and how we show up and who we are when we show up is around driving awareness that we also have doctors and nurse practitioners and care teams that integrate with the rest of your offering, prescribing these GLP-1 medications on an ongoing basis and supporting you through that journey, really to drive up that awareness of us in this fast-evolving new space. So that's sort of one just kind of macro comment. Then I think that the marketing strategy beyond the actual positioning will also increasingly be much more full-funnel, spread across different types of channels for different purposes, where we've typically spent more sort of disproportionately at the bottom of the funnel.
And that may involve leaning much more into social or influencers or using different types of medium at different points in time, whether it's a launch or ongoing awareness or depending on the objective at that point in time. But one of the things that we're also excited to do is really celebrate the authenticity and proof points that we are incredibly proud of in this company and with this program. And so what you're beginning to see in anyone that's in New York or L.A. or Chicago right now, among other parts of the country, but we have a lot of activation and top-of-funnel awareness going on in those markets. And the substance of that marketing is very much around celebrating our real members. We've got this incredible member base with these amazing stories and really impressive results.
And so leaning into using our real members, our real coaches, our real doctors, and then partnering with people who have high levels of alignment and engagement with the program. So that's sort of marketing. And then on the product side, again, this is a fast-moving space, and the product needs to keep up. And Weight Watchers had some technology that had been in place for a fairly extended period of time. And so we're going through this phase now of upgrading a lot of our tech stack, whether it be the back end so that we can innovate and integrate tools like AI much more quickly moving forward, or the front end in terms of how a member actually experiences the product.
And on the front end, that is everything from it looking and feeling more modern and more intuitive to it being more integrated across the set of offerings. Because we've got a lot in this program, and we've touched on a lot of it, but not least integrating the medication piece of the journey with the rest of the Weight Watchers ecosystem, but also integrating outside so that members can come to the Weight Watchers experience with as informed a point of view as is possible. So integrating with a multitude now of third-party data integrations and apps, and then integrating those data points in the form of a proprietary, what we call, WeightHealth Score to help members really have the maximum amount of information personal to them to help them be most successful on their journey.
We're integrating new tools like an AI body scanner to help you measure and track body composition, which is incredibly important, particularly if you're on a GLP-1, where it is extremely important to be maintaining lean muscle mass as one example, and really, all of that to better showcase our programming and better handhold our members, whether you're on a medication and you're in our Med Plus program, you're on a medication, but you may be getting it from a different clinician, and so you're engaging in our GLP-1 Success Program, which is agnostic to where you get your prescription, or you're on one of our behavioral programs outside of medication, but really making the journey as seamless and as intuitive as possible, all in service of making our members as successful as possible.
Thanks for that, Tara. Very thorough and very helpful to understand that kind of shift in marketing strategy. We have time for a couple more questions. So just wanted to talk about one of the major initiatives, which is the menopause initiative that you guys launched on. Hoping you can give us some more detail on how that rollout has been. Have you seen early indications of uptick in subscribers? And if possible, maybe, are you able to move current behavioral or clinic members into this new program as well?
Yeah, happy to take that, and then, Felicia, you may want to piggyback on some of it, so we launched our first sort of official women's health program, our menopause program, in October last year, so still very early days. For a company that had gone through pretty extended media coverage during our debt reorganization, it was a most welcome moment for us to get back out into the world. We launched it with Queen Latifah in the U.S., so in this particular case, we used a celebrity, which is something we will continue to do at appropriate times, and I think there's nothing specific to share today as it relates to results, but what you're hearing, hopefully, us talk to is this just much more rich, substantive, personalized, meet-you-where-you-are set of solutions, and that's really where menopause fits.
We've been hearing from our members for a long time that they needed more help specifically at this life stage. And so the Menopause Program is built on the same foundational pillars as the rest of our programming. It's built on the same foundational pillars as our Med Plus programming. It involves access to coaching and nutritional guidance and programming and in the U.S. medication, where our doctors are also prescribing HRT if appropriate. But those offerings are curated for this life stage. And I think the Menopause Program is a really nice blueprint along with our Med Plus medication program in terms of how and where we're seeing the evolution of these experiences. We're years past, fortunately, the yo-yo diet culture, we're dealing with a much more informed, educated consumer who is much more focused on long-term health.
And that represents a real opportunity for us to build programming that meets them at different life stages and curates those solutions for long-term health. And that's really, menopause is a great, great example in there. So absolutely, it's for our existing members. It's for our new members. And we think it's an important example of the type of programmatic curated innovation that you'll be seeing from the company moving forward.
All right, thanks, Tara. A lot of good detail today. That's all the time we have. So appreciate you, appreciate Felicia, appreciate Jon, and thanks, David. Thanks for presenting today.
Thank you. Appreciate the time.
Thank you.
Thanks.