WW International (WW) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $186.6M, down 9.7% year-over-year, with Clinical Subscription Revenue up 57.1% to $29.5M, while Behavioral revenues declined.

• Adjusted gross margin reached a record 71.0% (up 311 bps), and adjusted EBITDAS margin was 14.4%, the highest Q1 since 2018, due to cost reductions and lower marketing spend.

• Net loss improved to $72.6M from $347.9M year-over-year, with adjusted EBITDAS at $26.9M and diluted net loss per share of $0.91.

• End-of-period subscribers totaled 3.4M, a 14.2% year-over-year decline, but Clinical subscribers grew 55.2% to 135K.

• The company is in advanced talks with lenders for a prepackaged Chapter 11 filing due to anticipated default and high debt load.

Financial highlights

• Revenue for Q1 2025 was $186.6M, down 9.7% year-over-year.

• Adjusted EBITDAS was $26.9M, with a margin of 14.4% compared to 3.5% in the prior year period.

• Adjusted net loss was $37.5M, with an adjusted diluted net loss per share of $0.47.

• GAAP net loss was $72.6M, or $0.91 per share, including significant non-cash and restructuring charges.

• Cash and cash equivalents at quarter-end were $236.3M, including $171.3M in revolver borrowings.

Outlook and guidance

• Management expects an imminent prepackaged bankruptcy filing under Chapter 11 due to anticipated default on the Revolving Credit Facility.

• The company is preparing transition plans for Clinical members as compounded semaglutide offerings will cease after May 22, 2025 due to regulatory changes.

• No full-year fiscal 2025 guidance provided.