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What changed in WW INTERNATIONAL, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WW INTERNATIONAL, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+453 added−470 removedSource: 10-K (2025-02-28) vs 10-K (2023-12-30)

Top changes in WW INTERNATIONAL, INC.'s 2024 10-K

453 paragraphs added · 470 removed · 324 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

67 edited+17 added−30 removed43 unchanged
Biggest changeNews & World Report in the “Best Diets” rankings, including ranking #1 for “Best Weight-Loss Diets” for the fourteenth consecutive year and again ranking #1 for “Best Diet Programs.” 7 Marketing and Promotion Our communications with consumers and other promotional efforts enhance our brand image and awareness, and motivate both former and potential new customers to join WW.
Biggest changeMarketing and Promotion Our communications with consumers and other promotional efforts enhance our brand image and awareness and motivate both former and potential new customers to join WW. We utilize a data-driven approach to our media placements, promotional offers, and website and app store presence to enhance marketing efficiency, drive conversion, and maximize subscription value.
We offer forums and formal training programs for our employees to enable them to continue their education and share best practices and experiences, which creates an ongoing evolution and community with respect to diversity and inclusion and belonging in the workplace. Training and Development We develop our personnel by offering in-house learning and development resources.
We offer forums and formal training programs for our employees to enable them to continue their education and share best practices and experiences, which creates an ongoing evolution and community with respect to diversity and inclusion and belonging in the workplace. Training and Development We develop our employees by offering in-house learning and development resources.
The weight management and health and wellness industries include commercial weight management programs; the pharmaceutical industry and prescription and over the counter weight management and weight loss injectables, pills and appetite suppressants as well as compounded drug formulations; online and clinical prescription services; weight loss and wellness apps and monitoring solutions, such as wearable trackers; surgical procedures; the genetics and biotechnology industry; self-help weight management regimens and other self-help weight management products, services and publications, such as books, magazines, websites, and social media influencers and groups; dietary supplements and meal replacement products; healthy living services, coaching, products, content and publications; weight management services administered in-person or virtually by doctors, nutritionists, dieticians and other clinicians; government agencies and non-profit groups that offer weight management services; fitness centers; and national drug store chains.
The weight management and health and wellness industries include commercial weight management programs; online and clinical prescription services; weight management services administered in-person or virtually by doctors, nutritionists, dietitians and other clinicians; the pharmaceutical industry and prescription and over-the-counter weight management and weight loss injectables, pills and appetite suppressants as well as compounded drug formulations; weight loss and wellness apps and monitoring solutions, such as wearable trackers; surgical procedures; the genetics and biotechnology industry; self-help weight management regimens and other self-help weight management products, services and publications, such as books, magazines, websites, and social media influencers and groups; dietary supplements and meal replacement products; healthy living services, coaching, products, content and publications; government agencies and non-profit groups that offer weight management services; fitness centers; and national drug store chains.
We compete with several other companies in the commercial weight management industry, although we believe that in certain cases their businesses are not comparable to ours. For example, we believe our prominence as one of the most clinically-studied commercial weight management programs differentiates us from many of our competitors.
We compete with many other companies in the commercial weight management industry, although we believe that in certain cases their businesses are not comparable to ours. For example, we believe our prominence as one of the most clinically-studied commercial weight management programs differentiates us from many of our competitors.
For example, in 2022, a randomized controlled trial conducted by research teams at the University of North Carolina - Chapel Hill, University of British Columbia, and University of Leeds and funded by us was published in JAMA Network Open and found that study participants assigned to WW for 12 months had over two times more weight loss compared to participants who were assigned to a do-it-yourself weight loss approach.
As one example, in 2022, a randomized controlled trial conducted by research teams at the University of North Carolina - Chapel Hill, University of British Columbia, and University of Leeds and funded by us was published in JAMA Network Open and found that study participants assigned to WW for 12 months had over two times more weight loss compared to participants who were assigned to a do-it-yourself weight loss approach.
Regulation A number of laws and regulations govern our advertising and marketing, services, products, operations and PCs and Affiliated Professionals (both as defined below) and relations with consumers, licensees, franchisees, strategic and other contractual partners, coaches, guides, employees and government authorities in the countries in which we operate. Certain federal, state and foreign agencies, such as the U.S.
Regulation A number of laws and regulations govern our advertising and marketing, services, products, operations and PCs and Affiliated Professionals (both as defined below) and relations with consumers, licensees, franchisees, health plans, strategic and other contractual partners, coaches, guides, employees and government authorities in the countries in which we operate. Certain federal, state and foreign agencies, such as the U.S.
Clinical members also have access to medication management, from dosage, to refilling prescriptions, to tracking weight loss and mitigating any potential side-effects, with the assistance of their clinician. Licensing and Consumer Product Sales We continue to license our trademarks and other intellectual property in certain categories of food, beverages and other weight health-relevant consumer products and services.
Clinical members also have access to medication management, from dosage, to refilling prescriptions, to tracking weight loss and mitigating any potential side-effects, with the assistance of their clinician. 5 Licensing and Consumer Product Sales We continue to license our trademarks and other intellectual property in certain categories of food, beverages and other weight management-relevant consumer products and services.
We also make available at that site the Section 16 reports filed electronically by our officers, directors and 10 percent shareholders. We use our corporate website at corporate.ww.com and certain social media channels such as our Instagram account (Instagram.com/weightwatchers), corporate Facebook page (www.facebook.com/weightwatchers), X (formerly Twitter) account (@ww_us) and LinkedIn page (www.linkedin.com/company/weightwatchers) as channels of distribution of Company information.
We also make available at that site the Section 16 reports filed electronically by our officers, directors and 10 percent shareholders. 12 We use our corporate website at corporate.ww.com and certain social media channels such as our Instagram account (Instagram.com/weightwatchers), corporate Facebook page (www.facebook.com/weightwatchers), X account (@ww_us) and LinkedIn page (www.linkedin.com/company/weightwatchers) as channels of distribution of Company information.
Winfrey’s proposed charitable donation, the Company declined to exercise its rights of first offer and first refusal discussed above and waived any remaining transfer restrictions applicable to the shares proposed to be donated and, to the extent the net proceeds of the sale of such shares are donated to the Museum, the shares issuable under either of the Winfrey Option or the Winfrey Amendment Option.
Winfrey’s proposed and consummated charitable donations, the Company declined to exercise its rights of first offer and first refusal discussed above and waived any remaining transfer restrictions applicable to the shares donated or proposed to be donated and, to the extent the net proceeds of the sale of such shares are donated to the Museum, the shares issuable under either of the Winfrey Option or the Winfrey Amendment Option.
As healthcare costs continue to be a significant concern for these stakeholders, we believe that our broad range of offerings uniquely positions us to serve the market and help them reduce their healthcare costs and improve the overall weight health of their constituents.
As healthcare and GLP-1 medication costs continue to be a significant concern for these stakeholders, we believe that our broad range of offerings uniquely positions us to serve the market and help them reduce their healthcare costs and improve the overall weight health of their constituents.
Our new GLP-1 Program, which launched in the U.S., U.K. and Germany in December 2023, is our first-ever nutrition and activity program to complement a weight loss journey for those who are taking GLP-1 medications, whether provided through WeightWatchers Clinic (as described below) or prescribed by their medical provider.
Our GLP-1 Program, which launched in the U.S., U.K. and Germany in December 2023, is our first nutrition and activity program to complement a weight loss journey for those who are taking GLP-1 medications, whether provided through WeightWatchers Clinic (as described below) or prescribed by another medical provider.
The efficacy and the value of our offerings are also well-acknowledged in the marketplace. For instance, in 2024, we again were recognized by U.S.
The efficacy and the value of our offerings are also well-acknowledged in the marketplace. In 2025, we again were recognized by U.S.
Our work model, called W ork from W herever (WfW), is designed to enhance productivity and foster innovation by allowing our corporate employees and their leaders to work together in determining when, where and how they work to achieve the best possible results.
Our work model is designed to enhance productivity and foster innovation by allowing our corporate employees and their leaders to work together in determining when, where and how they work to achieve the best possible results.
The shares issuable upon exercise of the Winfrey Amendment Option were previously subject to certain transfer restrictions and a right of first offer and right of first refusal held by the Company, as discussed further below. 10 In fiscal 2020, as permitted under the Winfrey Purchase Agreement and the Winfrey Option Agreement transfer provisions, Ms.
The shares issuable upon exercise of the Winfrey Amendment Option were previously subject to certain transfer restrictions and a right of first offer and right of first refusal held by the Company, as discussed further below. 10 In fiscal 2024, Ms.
Competition among commercial weight management programs is largely based on program recognition and reputation; the effectiveness, ease of use, safety, personalization and price of the program; and the related digital platform, content and user experience.
Competition among commercial weight management programs and online and clinical prescription services is largely based on program recognition and reputation; the effectiveness, ease of use, safety, personalization and price of the program and services; the range of offerings and services; and the related digital platform, content and user experience.
Effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reporting segments changed to one segment based on total revenue for the purpose of making operational and resource decisions and assessing financial performance.
Business Organization As previously disclosed, effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reportable segments changed to one segment for the purpose of making operational and resource decisions and assessing financial performance.
As of December 31, 2023, we had approximately 4,850 employees, a majority of whom were part-time employees. In addition, in certain of our international markets, our coaches and guides are self-employed and are not included in this total.
As of December 31, 2024, we had approximately 3,700 employees in 11 countries, a majority of whom were part-time employees. In addition, in certain of our international markets, our coaches and guides are self-employed and are not included in this total.
Members provide each other inspiration and support by sharing their experiences with, and by providing encouragement and empathy to, other people on weight health journeys. As of the end of fiscal 2023, we had approximately 0.7 million Workshops + Digital subscribers. We have franchisees in a limited number of territories. In fiscal 2023, revenues from our franchisees were immaterial.
Our interactive communities remain the cornerstone of our workshops. Members provide each other inspiration and support by sharing their experiences with, and by providing encouragement and empathy to, other people on weight health journeys. As of the end of fiscal 2024, we had approximately 0.5 million Workshops + Digital subscribers. We have franchisees in a limited number of territories.
As of the end of fiscal 2023, we had approximately 67 thousand Clinical subscribers. WeightWatchers for Business Offering Via our WeightWatchers for Business offering, we are leveraging our organizational capability to serve employers, payers and health plans with the offerings of our Digital, Workshops + Digital and Clinical businesses.
As of the end of fiscal 2024, we had approximately 0.1 million Clinical subscribers. WeightWatchers for Business Offering Through our WeightWatchers for Business offering, we are leveraging our organizational capability to serve employers, payers and health plans with the offerings of our Digital, Workshops + Digital and Clinical businesses.
As part of this offering, each Clinical member has a care team to assist them in their weight health journey. The care team not only offers support but also guidance on how to meet these challenges, including those related to insurance coordination. Clinical members have access to check-ins with their respective clinicians to assist them with their medication as needed.
As part of this offering, each Clinical member has a care team to assist them in their weight health journey. The care team not only offers support but also guidance on how to meet weight health challenges, including those related to insurance coordination.
In addition, throughout the Second Term, except as otherwise prohibited by applicable law, the Company intended to cause Ms. Winfrey to be nominated as a director of the Company. However, Ms. Winfrey has informed us she is not seeking to be re-nominated as a director of the Company at the Company’s upcoming 2024 annual meeting of shareholders. Ms.
In addition, throughout the Second Term, except as otherwise prohibited by applicable law, the Company intended to cause Ms. Winfrey to be nominated as a director of the Company. However, Ms. Winfrey did not seek re-election as a director of the Company at the Company’s 2024 annual meeting of shareholders. Ms.
This program supports these members by helping them to prioritize nutritious foods while appetite is significantly reduced by the medication and to maintain muscle mass while losing weight on the medication by focusing on protein dense food and promoting activity. Our app supplements our programs by providing tools to help our members on their weight health journey.
This program supports these members by helping them to prioritize nutritious foods while appetite is significantly reduced by the medication and to maintain muscle mass while losing weight on the medication by focusing on protein dense food and promoting activity.
Winfrey has announced her intention to donate all shares of common stock that she currently owns, as well as the net proceeds from any exercise and sale of the Winfrey Option and the Winfrey Amendment Option, to the National Museum of African American History and Culture (the “Museum”). In connection with Ms.
Winfrey donated all shares of common stock that she owned to the National Museum of African American History and Culture (the “Museum”). In February 2024, Ms. Winfrey announced her intention to donate the net proceeds from any subsequent exercise and sale of the Winfrey Option and the Winfrey Amendment Option, if any, to the Museum. In connection with Ms.
For details on our reportable segments in fiscal 2023, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Annual Report on Form 10-K. Our Offerings Our Programs and App Our weight loss and weight management programs are rooted in nutritional and behavior change science.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Annual Report on Form 10-K. 4 Our Offerings Our Behavior Change Programs Our weight loss and weight management programs are rooted in nutritional and behavior change science.
We entered into a consent order with the FTC in March 2022 settling all contested issues raised in the complaint filed against us, and determined in the second quarter of fiscal 2022 to exit the Kurbo business in the third quarter of fiscal 2022 as part of our strategic plan. 11 In addition, we, our PCs, and Affiliated Professionals are subject to other laws and regulations in the United States and internationally, as applicable.
We entered into a consent order with the FTC in March 2022 settling all contested issues raised in the complaint filed against us, and determined in the second quarter of fiscal 2022 to exit the Kurbo business in the third quarter of fiscal 2022 as part of our strategic plan.
Our “Workshops + Digital” business refers to providing unlimited access to our workshops combined with our digital subscription product offerings. Our “Clinical” business refers to providing subscriptions to our clinical product offerings provided by WeightWatchers Clinic (formally referred to as Sequence). For additional details on certain of our historic offerings, see “Item 7.
Our “Workshops + Digital” business refers to providing subscriptions for unlimited access to our workshops combined with our digital subscription product offerings. Our “Clinical” business refers to providing subscriptions to our clinical product offerings provided by WeightWatchers Clinic (formerly referred to as Sequence) combined with our digital subscription product offerings and unlimited access to our workshops.
We continually innovate our Digital offerings to maximize the design, usability, features and capabilities of our app to support our weight loss and weight management programs and community.
We continually innovate our Digital offerings to maximize the design, usability, features and capabilities of our app to support our weight loss and weight management programs and community. As of the end of fiscal 2024, we had approximately 2.7 million Digital subscribers.
After a proprietary, personal assessment takes into account a member’s metabolic rate, members receive a tailored daily and weekly Points Budget to guide them towards healthy foods and appropriate portion sizes, forming the foundation of a healthy eating pattern.
After a proprietary, personal assessment takes into account a member’s metabolic rate, members receive a tailored daily and weekly Points Budget to guide them towards healthy foods and appropriate portion sizes, forming the foundation of a healthy eating pattern. Members can take advantage of over 350 ZeroPoint foods (nutritious foods which do not need to be weighed, measured, or tracked).
Federal Trade Commission (the “FTC”) and the FDA regulate and enforce such laws and regulations relating to advertising and marketing, promotions, packaging, labeling, privacy, consumer pricing and billing arrangements and other consumer protection matters.
Federal Trade Commission (the “FTC”) and the FDA regulate and enforce such laws and regulations relating to advertising and marketing, promotions, packaging, labeling, privacy, consumer pricing and billing arrangements and other consumer protection matters. Additionally, the FDA and state agencies and licensing boards regulate and enforce laws and regulations relating to certain of the products offered through our Clinical business.
The scope of these laws and interpretations of them vary by jurisdiction and are enforced by courts and governmental and regulatory authorities, each with broad discretion. See “Risk Factors—Risks Related to Our Acquisition of Weekend Health, Inc.
The scope of these laws and interpretations of them vary by jurisdiction and are enforced by courts and governmental and regulatory authorities, each with broad discretion.
In conjunction with our flexible, healthy food plan and emphasis on behavior change education, we believe that the power of our communities -- via our online social network, Connect, and workshops -- increases accountability and provides our members with inspiration, human connection, and support, which motivates them and enables them to build healthier and more fulfilling food, activity and lifestyle habits. 8 Our Clinical business is part of the emerging market for healthcare and technology, which is increasingly competitive, subject to rapid change, and significantly affected by new product and technological introductions and other market activities of industry participants.
In conjunction with our flexible, healthy food plan and emphasis on behavior change education, we believe that the power of our communities -- via our online social network, Connect, and workshops -- increases accountability and provides our members with inspiration, human connection, and support, which motivates them and enables them to build healthier and more fulfilling food, activity and lifestyle habits.
As the number of people with overweight and obesity worldwide continues to grow, the need for effective, scalable and consumer-friendly weight management programs and access to weight-loss medication continues to increase. We believe our global presence and brand awareness uniquely position us to impact the weight health market.
As the number of people with overweight and obesity worldwide continues to grow, the need for effective, scalable, consumer-friendly and tailored weight management programs and access to weight-loss medication continues to increase.
Historically, we experience our highest level of recruitment during the first quarter of the year, which is supported with the highest concentration of advertising spending.
Seasonality Our business is seasonal due to the importance of the winter season to our overall member recruitment environment. Historically, we experience our highest level of recruitment during the first quarter of the year, which is supported with the highest concentration of advertising spending.
(formerly known as Weight Watchers International, Inc.) was incorporated as a Virginia corporation in 1974 and succeeded to the business started in New York in 1963. Heinz acquired us in 1978.
(formerly known as Weight Watchers International, Inc.) was incorporated as a Virginia corporation in 1974 and succeeded to the business started in New York in 1963. Heinz acquired us in 1978. Artal Luxembourg S.A. acquired us from Heinz in 1999, and fully sold its remaining shares of our common stock in 2023.
WfW continues to positively contribute to employee engagement and gives WW a competitive advantage in the external talent market. As always, protecting the privacy and security of our data is one of our top priorities, and we continue to enhance an advanced industry standard Zero-Trust software-defined network, coupled with multi-factor authentication, to secure our environment from unauthorized access.
As always, protecting the privacy and security of our data is one of our top priorities, and we continue to enhance an advanced industry standard Zero-Trust software-defined network, coupled with multi-factor authentication, to secure our environment from unauthorized access. Total Rewards We provide competitive compensation and benefits programs for our employees.
Conversely, increased attention by consumers and the media to recent developments, innovations, and approvals of chronic weight management drug therapies, the evolving use of compounded drug formulations, and the perception of their safety, effectiveness and ease of use, may also delay or prevent consumer engagement in our non-Clinical businesses.
Conversely, increased attention by consumers and the media to recent developments, innovations, and approvals of chronic weight management drug therapies, the increase in compounded drug formulations, and the perception of their safety, effectiveness and ease of use, may also delay or prevent consumer engagement in our Behavioral businesses. 8 Trademarks, Patents and Other Proprietary Rights We own numerous domestic and international trademarks, patents, domain names and other proprietary rights that are valuable assets and are important to our business.
These resources also help subscribers adopt a healthier and more active lifestyle, a helpful mindset, and healthy habits, with a view toward long-term behavior modification — a key aspect of the WW approach toward achieving lasting weight health. Our app provides subscribers with content, functionality, and nutrition and wellness resources.
Our behavior change programs help members adopt a healthier and more active lifestyle, a helpful mindset, and healthy habits, with a view toward long-term behavior modification — a key aspect of our approach toward achieving lasting weight loss and management.
Patent protection extends for varying periods according to the date of patent filing or grant and the legal term of patents in the jurisdiction in which the patent is granted.
Depending upon the jurisdiction, trademarks are valid as long as they are used in the regular course of trade and/or their registrations are properly maintained. Patent protection extends for varying periods according to the date of patent filing or grant and the legal term of patents in the jurisdiction in which the patent is granted.
Subsequent to our 2018 acquisition of Kurbo Health, Inc., (“Kurbo”), we engaged in discussions with the FTC regarding online privacy obligations associated with that program. In February 2022, the FTC filed a complaint and proposed settlement order to resolve allegations that Kurbo violated the Children’s Online Privacy Protection Act.
In February 2022, the FTC filed a complaint and proposed settlement order to resolve allegations that Kurbo violated the Children’s Online Privacy Protection Act.
These include trackers for food, water, activity and weight (and, for members on our diabetes-tailored plan, a tracker for blood sugar) as well as progress against personal weight health goals and content regarding behavioral techniques for building healthy habits.
These include trackers for food, water, activity and weight (and, for members on our Diabetes Program, a tracker for blood sugar) as well as progress against personal goals and content regarding behavioral techniques for building healthy habits. In addition to tracking Points, members can also track macronutrient data, including calories, protein, carbohydrates, fat, fiber and sodium.
Wellness, Health and Safety We are focused on promoting the total wellness of our employees, and offer resources, programs and services to support our employees’ physical, mental, financial and social wellness.
Wellness, Health and Safety We are focused on promoting the total wellness of our employees, and offer resources, programs and services to support our employees’ physical, mental, financial and social wellness. For example, in 2024 we expanded coverage for mental health support through a robust global digital employee assistance program and expanded weight management services in the United States.
As part of this offering, we present our program in workshops of 30 to 45 minutes in duration, conveniently scheduled throughout the day, offered virtually and, where available, in person. Our interactive communities remain the cornerstone of our workshops. Coaches facilitate interactive workshops that encourage learning and inspire members to make positive changes towards their individual goals.
Members can supplement their app experience with group workshops, delivered virtually through the app or, where available, in-person, of 30-45 minutes in duration, conveniently scheduled throughout the day. WW-trained coaches facilitate these interactive workshops that encourage learning and inspire members to make positive changes towards their individual goals.
Pursuant to these plans, a member typically selects the program which best meets them on their personal weight health journey, commits to a minimum term and is then automatically charged on a monthly basis until the member elects to cancel. With any subscription, members are granted access to one of our programs and our app with its functionality and tools.
Pursuant to these subscription plans, a member typically selects the behavior change program which best meets them on their personal weight health journey and may elect to participate in our WeightWatchers Clinic offering as well, commits to a minimum term and is automatically charged on a monthly basis until the member elects to cancel.
WW’s Connect platform, a members-only social network accessed through our app, fosters meaningful relationships by helping people find communities based on shared interests including food preferences, identity cohorts, wellness journey, activity, mindset, hobbies, locations, events and workshops. 5 WeightWatchers Clinic WeightWatchers Clinic is our new clinical offering in the United States which provides members who medically qualify access to clinicians who can prescribe weight management medications when clinically appropriate.
Our Connect platform, a members-only social network accessed through our app, fosters meaningful relationships by helping people find communities based on shared interests including food preferences, identity cohorts, wellness journey, activity, mindset, hobbies, locations, events and workshops.
Members can also take advantage of over 200 ZeroPoint foods (nutritious foods which do not need to be weighed, measured, or tracked). Our Diabetes Program also takes into account the dietary needs of those living with diabetes by tracking blood sugar levels and tailoring their plans towards those foods that are less likely to impact such levels.
Our Diabetes Program takes into account the dietary needs of those living with diabetes by tracking blood sugar levels and tailoring their plans towards those foods that are less likely to impact such levels, and members can connect certain continuous glucose monitor data to our app for additional insights.
The increased popularity and acceptance of medication as a weight loss tool has introduced new competitors in the weight management and health and wellness market and increased competition from certain of our existing competitors. We compete directly not only with telehealth providers but also traditional healthcare providers, pharmacies and other technology companies entering into the health and wellness industry.
The increased popularity and acceptance and rapid adoption of medication as a weight loss tool has introduced new competitors in the weight management and health and wellness market and increased competition from certain of our existing competitors.
For additional information on this acquisition, see Note 6 “Acquisitions” of the notes to the audited consolidated financial statements contained in this Annual Report on Form 10-K.
For additional information on this acquisition, see Note 6 “Acquisitions” of the notes to the audited consolidated financial statements contained in this Annual Report on Form 10-K. 9 Winfrey Transaction On October 18, 2015, we entered into a Strategic Collaboration Agreement with Ms. Winfrey (as amended, the “Strategic Collaboration Agreement”), pursuant to which Ms.
(d/b/a Sequence)—We may be subject to extensive fraud, waste, and abuse laws that may give rise to federal and state audits and investigations, including actions for false and other improper claims.” Human Capital Management At WW our vision is to “Be the global leader in Weight Health—a worldwide community connected by healthy habits.” We believe that our workforce plays an integral role in achieving our vision.
See “Risk Factors—Risks Related to Laws and Regulations, Litigation, and Our International Operations—We may be subject to extensive fraud, waste, and abuse laws that may give rise to federal and state audits and investigations, including actions for false and other improper claims.” 11 Human Capital Management At WeightWatchers we believe that our workforce plays a vital role in our success.
Pursuant to long-standing agreements, we and our franchisees typically pay each other royalties and other fees. We have enjoyed a mutually beneficial relationship with our franchisees over many years. Most franchise agreements are perpetual and can be terminated only upon a material breach or bankruptcy of the franchisee.
In fiscal 2024, revenue from our franchisees were immaterial. Pursuant to long-standing agreements, we and our franchisees typically pay each other royalties and other fees. We have enjoyed a mutually beneficial relationship with our franchisees over many years.
Over 160 scientific, peer reviewed studies (including from over 55 randomized controlled trials) have been published on WeightWatchers. This body of research showcases the breadth of WeightWatchers scientific evaluation and implementation across clinical and community settings, diverse participant populations, and comparisons to other weight management programs or standards of care.
With over 180 peer-reviewed scientific studies (including over 63 randomized controlled trials) published on WeightWatchers, we are one of the most extensively studied commercial weight management programs. This robust body of research underscores the scientific rigor of our approach, demonstrating its effectiveness across clinical and community settings, and in comparisons to other weight management programs or standards of care.
Clinical Business In our Clinical business, which we launched in 2023 following the acquisition of Sequence, we offer a subscription for medically-qualified members to access a clinician who can prescribe weight management medications when clinically appropriate, as well as access to any of our behavior change programs, including our GLP-1 Program, via our digital subscription product (which is discussed in more detail above).
Most franchise agreements are perpetual and can be terminated only upon a material breach or bankruptcy of the franchisee. 6 Clinical Business In our Clinical business, which we launched in 2023 following the acquisition of Sequence, we offer a subscription for clinically eligible members to access a clinician who can prescribe weight management medications when clinically appropriate, as well as to access the benefits of our Workshops + Digital subscription described above.
Members may then elect to supplement their membership with access to our group workshops. WeightWatchers Clinic members receive the benefits of our behavior change programs and virtual workshops along with our app as part of their subscription. Within the three channels of membership subscription described below, members can find services and tools that best meet their preferences and needs.
With any subscription, members are granted access to one of our programs and our app with its functionality and tools. Digital members may elect to supplement their subscription with access to our group workshops. WeightWatchers Clinic members receive the benefits of our group workshops as part of their subscription.
We utilize a data-driven approach to our media placements, promotional offers, and website and app store presence to enhance marketing efficiency, drive conversion, and maximize subscription value. Our advertising campaigns are supported across multiple platforms (e.g., television, YouTube, social media, programmatic, audio, search, affiliate, branded content, electronic customer relationship marketing (eCRM), direct mail, and public relations).
Our advertising campaigns are supported across multiple platforms (e.g., television, YouTube, social media, programmatic, audio, search, affiliate, branded content, electronic customer relationship marketing (eCRM), direct mail, and public relations). We develop and maintain a high level of engagement with current and potential customers on various social media platforms including Facebook, Instagram and TikTok.
Diversity and Inclusion We believe that a diverse and inclusive workforce helps us to explore and realize the many different paths to health and wellness for our members, which leads to better execution of our strategic initiatives. For example, 75% of our executive officers, including our Chief Executive Officer and our Chief Financial Officer, are women.
Diversity and Inclusion We believe that a diverse and inclusive workforce creates an environment where we’re able to leverage the range and breadth of experience needed to achieve lasting results for our members while enabling better execution of our strategic initiatives. All of our current executive officers, including our Chief Executive Officer and our Chief Financial Officer, are women.
Clinical members are also able to attend dedicated virtual workshops to connect with other members who are also on a clinical weight health journey. Members provide each other inspiration and support by sharing their experiences, and by providing encouragement and empathy to, other people on clinical weight health journeys.
Members provide each other inspiration and support by sharing their experiences with, and by providing encouragement and empathy to, other people on weight health journeys. In addition, through WeightWatchers Clinic, all members are able to schedule visits with registered dietitians, clinicians expert in nutrition, lifestyle and habit-building.
In addition to the above advertising channels, we take advantage of other channels for which we are uniquely positioned given our long history and network of WW coaches and members. The word of mouth generated by our current and former members, combined with our strong brand and reputation for effectiveness, enable us to attract new and returning members.
Also, at times, we utilize brand ambassadors, spokespersons and social media influencers, including celebrities, as part of our advertising and marketing. 7 In addition to the above advertising channels, we take advantage of other channels for which we are uniquely positioned given our long history and network of WW coaches and members.
We also carry out key public relations initiatives through the efforts of current and former WW members, social media influencers, and, from time to time, celebrity brand ambassadors. In October 2015, we entered into a Strategic Collaboration Agreement with Oprah Winfrey, pursuant to which, among other things, Ms.
The word of mouth generated by our current and former members, combined with our strong brand and reputation for effectiveness, enable us to attract new and returning members. We also carry out key public relations initiatives through the efforts of current and former WW members, social media influencers, and, from time to time, celebrity brand ambassadors.
In addition, those assigned to WW were more likely to achieve clinically significant weight loss of five percent at three and twelve months. In 2021, a six-month clinical trial conducted by the University of Connecticut and funded by us found that participants on WW experienced clinically significant benefits, including weight loss.
In addition, those assigned to WW were more likely to achieve clinically significant weight loss of five percent at three and twelve months. WW also has demonstrated efficacy among individuals with diabetes.
If deemed eligible following completion of a medical eligibility questionnaire, a licensed clinician may prescribe weight management medications for Clinical members. They are guided by a multidisciplinary care team comprised of a care coordinator to facilitate the insurance process, registered dietitians, fitness specialists, and a board-certified clinician.
Food and Drug Administration (“FDA”)-approved medications for chronic weight management, including GLP-1s, and, beginning in October 2024 compounded semaglutide. Through our telehealth platform, members are guided by a multidisciplinary care team comprised of a care coordinator to facilitate insurance coverage, if applicable, registered dietitians, fitness specialists, and a board-certified clinician.
We made a strategic decision to wind down this lower-margin consumer products business, which we completed at the end of fiscal 2023. Our Subscription Businesses The payment structure for our weight health and weight management programs and WeightWatchers Clinic is through subscription plans and in some cases, includes a one-time initiation fee.
We made a strategic decision to close this lower-margin consumer products business, which we completed at the end of fiscal 2023.
Our Clinical Efficacy and Reputation in the Marketplace Throughout the years our science-backed programs have evolved alongside nutritional and behavior change science, resulting in WW being one of the most clinically-studied commercial weight management programs.
Our Clinical Efficacy and Reputation in the Marketplace We are grounded in decades of proven scientific research and we have continued to evolve our science-backed programs alongside advancements in nutritional and behavior change research.
Digital Business In our Digital business, we offer a digital subscription product based on the WW approach to weight loss and weight management. Our app provides interactive and personalized resources that allow subscribers to follow one of our three weight health and weight management programs.
Within the three channels of membership subscription described below, members can find services and tools that best meet their preferences and needs. Digital Business In our Digital business, we offer a digital subscription product based on weight loss and weight management.
The consent order required us to comply with certain procedures and disclosures in connection with our advertisements of services and products and expired by its terms in 2017. From time to time, we have been in discussions with the FTC regarding such matters.
From time to time, we have been in discussions with the FTC regarding advertisements of services and products. Subsequent to our 2018 acquisition of Kurbo Health, Inc., (“Kurbo”), we engaged in discussions with the FTC regarding online privacy obligations associated with that program.
Our business has gone through a significant shift to a digital subscription model over the past several years and our primary sources of revenue are subscriptions for our digital, workshop, and clinical offerings. Our “Digital” business refers to providing subscriptions to our digital product offerings.
We believe the combination of our effective programs, global presence, active community and brand awareness uniquely position us to attract new and returning members and impact the weight management market. Our primary sources of revenue are subscriptions for our digital, workshop, and clinical offerings. Our “Digital” business refers to providing subscriptions to our digital product offerings.
We believe this investment not only contributes to gender balance and equity in care-taking, but is also linked to improved health and economic outcomes of women, children, and families. 12 As a wellness company, we believe in creating a work environment that supports our employees’ wellbeing, while still maintaining our commitment to our members.
We continue to strive to be an advocate for participants and a fiduciary of the plan. We believe in creating a work environment that supports our employees’ wellbeing, while still maintaining our commitment to our members.
As of the end of fiscal 2023, we had approximately 3.1 million Digital subscribers. 6 Workshops + Digital Business In our Workshops + Digital business, we offer a subscription for unlimited access to our workshops in addition to our digital subscription product described above.
Workshops + Digital Business In our Workshops + Digital business, we offer a subscription for unlimited access to our workshops in addition to our digital subscription product described above. As part of this offering, we present our program in group workshops. Coaches lead these interactive workshops that encourage learning and inspire members to make positive changes towards their individual goals.
The segment information presented in this Annual Report on Form 10-K does not reflect this change in reportable segments as the change did not take effect internally until our first quarter of fiscal 2024. We will begin reporting segment information based on the new segment in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2024.
The segment information presented in this Annual Report on Form 10-K for fiscal 2023 and fiscal 2022 has been updated to reflect this reportable segment structure. For details on our reportable segment in fiscal 2024, see “Item 7.
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Item 1. B usiness Overview We are a technology company at the forefront of weight health, grounded in nutritional and behavior change science.
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Item 1. B usiness Overview We are a global leader in weight management, combining science and community, to help our millions of members live their healthiest lives. With over six decades of weight management experience, expertise and know-how, we are the most recognized brand name in the field of weight loss.
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We are powered by our weight loss and weight management programs, our award-winning app and our commitment to tailoring solutions for our members to improve their weight health, including providing medical weight management treatment via access to clinician-prescribed weight management medications and related support through the WeightWatchers Clinic affiliated practices.
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Our unique portfolio, including clinical solutions in the United States, empowers people to achieve their weight management goals and sustain their results.
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Our portfolio of solutions empowers people to adopt healthy habits to help achieve lasting weight health. With six decades of weight management experience, expertise and know-how, we are one of the most recognized and trusted brand names among weight-conscious consumers.
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We are powered by our proprietary digital platform that provides members with access to our science-backed behavioral weight loss and weight management programs – our Points Program, Diabetes Program and GLP-1 Program – and our virtual and in-person community. We believe our community increases accountability and provides our members with inspiration, human connection, and support.
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We educate our members and provide them with guidance, digital tools, and inspiring communities – via our exclusive social network, Connect, and our workshops -- to enable them on their personal weight health journeys. We also offer our science-backed behavior change GLP-1 Program.
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In the United States, our digital platform also provides our members access to a network of licensed, specialized healthcare professionals who can provide clinical weight management support, including prescribing medications to those clinically eligible, through WeightWatchers Clinic-affiliated practices.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” in Part II of this Annual Report on Form 10-K. We believe that the power of our communities increases accountability and provides our members with inspiration, human connection, and support. Our brands enjoy high awareness and credibility among all types of consumers.
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We also refer to our Workshops + Digital business and Digital business collectively as our “Behavioral” business.
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We have built our business by helping millions of people around the world lose weight and build healthy habits through a sensible, sustainable and livable approach to weight loss and weight management.
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We offer tailored versions of the Points Program for individuals living with diabetes and individuals taking GLP-1s.
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As of the end of fiscal 2023, we had a total of approximately 3.8 million subscribers, of which approximately 3.1 million were Digital subscribers, approximately 0.7 million were Workshops + Digital subscribers, and approximately 67 thousand were Clinical subscribers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our revolving credit facility includes a maintenance covenant that requires compliance with a first lien secured net leverage ratio when the aggregate principal amount of all revolving loans plus available, undrawn letters of credit and unreimbursed letters of credit (subject to customary exceptions and thresholds) as of the end of a fiscal quarter exceeds 35% of the amount of the lenders’ revolving commitments.
Biggest changeIn addition, if the aggregate principal amount of extensions of credit (inclusive of outstanding letters of credit) under the Revolving Credit Facility as of any fiscal quarter end exceeds 35%, or $61.3 million, of the aggregate revolving commitments, we are required to be in compliance with a consolidated first lien secured net leverage ratio of 5.25:1.00 through and including the first fiscal quarter of 2025 and 5.00:1.00 thereafter.
Our competitors include: commercial weight management programs; the pharmaceutical industry and prescription and over the counter weight management and weight loss injectables, pills and appetite suppressants as well as compounded drug formulations; online and clinical prescription services; weight loss and wellness apps and monitoring solutions, such as wearable trackers; surgical procedures; the genetics and biotechnology industry; self-help weight management regimens and other self-help weight management products, services and publications, such as books, magazines, websites, and social media influencers and groups; dietary supplements and meal replacement products; healthy living services, coaching, products, content and publications; weight management services administered in-person or virtually by doctors, nutritionists, dieticians and other clinicians; government agencies and non-profit groups that offer weight management services; fitness centers; and national drug store chains.
Our competitors include: commercial weight management programs; online and clinical prescription services; weight management services administered in-person or virtually by doctors, nutritionists, dieticians and other clinicians; the pharmaceutical industry and prescription and over the counter weight management and weight loss injectables, pills and appetite suppressants as well as compounded drug formulations; weight loss and wellness apps and monitoring solutions, such as wearable trackers; surgical procedures; the genetics and biotechnology industry; self-help weight management regimens and other self-help weight management products, services and publications, such as books, magazines, websites, and social media influencers and groups; dietary supplements and meal replacement products; healthy living services, coaching, products, content and publications; government agencies and non-profit groups that offer weight management services; fitness centers; and national drug store chains.
Our high degree of debt leverage could have significant consequences, including the following: • requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates because certain of our borrowings, including the borrowings under our credit facilities, are at variable rates of interest; • making it more difficult for us to make payments and otherwise satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default; • restricting our ability and flexibility to make strategic acquisitions and to take advantage of other strategic opportunities to grow our business funded by significant additional indebtedness or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and other general corporate purposes; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged or may have greater financial resources than us; • increasing our vulnerability to general adverse economic and industry conditions; and • limiting, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds on commercially reasonable terms, if at all. 23 Our credit facilities and the indenture governing our notes permit us to incur additional indebtedness in the future.
Our high degree of debt leverage could have significant consequences, including the following: • requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; • exposing us to the risk of increased interest rates because certain of our borrowings, including the borrowings under our credit facilities, are at variable rates of interest; • making it more difficult for us to make payments and otherwise satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default; • restricting our ability and flexibility to make strategic acquisitions and to take advantage of other strategic opportunities to grow our business funded by significant additional indebtedness or causing us to make non-strategic divestitures; • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and other general corporate purposes; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged or may have greater financial resources than us; • increasing our vulnerability to general adverse economic and industry conditions; and • limiting, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds on commercially reasonable terms, if at all. 24 Our credit facilities and the indenture governing our notes permit us to incur additional indebtedness in the future.
Additionally, a number of laws and regulations govern the business of advertising, promoting, dispensing, and marketing services and products, including generic and branded pharmaceuticals. These regulatory regimes are overseen by governmental bodies, including the FDA, the U.S. Department of Health and Human Services (“HHS”), the FTC and several state and local government agencies in the United States.
Additionally, a number of laws and regulations govern the business of advertising, promoting, dispensing, and marketing services and products, including compounded, generic and branded pharmaceuticals. These regulatory regimes are overseen by governmental bodies, including the FDA, the U.S. Department of Health and Human Services (“HHS”), the FTC and several state and local government agencies in the United States.
In addition, any deterioration in our performance may result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness or our ability to refinance our debt obligations on favorable terms or at all. Additionally, our liquidity is impacted by our cash usage, including cash payments related to strategic initiatives and acquisitions.
In addition, any deterioration in our performance may result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness or our ability to refinance our debt obligations on favorable terms or at all. 25 Additionally, our liquidity is impacted by our cash usage, including cash payments related to strategic initiatives and acquisitions.
Our failure to comply with these covenants could result in an acceleration of our debt, cause cross-defaults under our other debt, lead to the foreclosure on assets collateralizing secured debt (and the lenders and holders of that secured debt would rank ahead of the holders of unsecured debt in the proceeds of those assets) and result in our lenders terminating all commitments to extend further credit.
Our failure to comply with covenants could result in an acceleration of our debt, cause cross-defaults under our other debt, lead to the foreclosure on assets collateralizing secured debt (and the lenders and holders of that secured debt would rank ahead of the holders of unsecured debt in the proceeds of those assets) and result in our lenders terminating all commitments to extend further credit.
Any dilution of, decrease in or delay of any accretion to, our earnings per share could cause the price of shares of our common stock to decline or grow at a reduced rate. 31 We have limited experience in the telehealth industry, which may hinder our ability to achieve the anticipated benefits of the Acquisition.
Any dilution of, decrease in or delay of any accretion to, our earnings per share could cause the price of shares of our common stock to decline or grow at a reduced rate. We have limited experience in the telehealth industry, which may hinder our ability to achieve the anticipated benefits of the Acquisition.
We have integrated, and plan to further integrate, AI capabilities into certain components of our product offerings, and we have begun to use AI in our operations. Such integration and use of AI may become more material to our product offerings and operations over time and developing, testing, and deploying resource-intensive AI systems may require additional investment.
We have integrated, and plan to further integrate, AI capabilities into certain components of our product offerings, and we use AI in our operations. Such integration and use of AI may become more material to our product offerings and operations over time and developing, testing, and deploying resource-intensive AI systems may require additional investment.
We cannot be certain that we will be able to enter and successfully compete in additional foreign markets or that we will be able to continue to compete in the foreign markets in which we currently operate. We are exposed to foreign currency risks from our international operations that could adversely affect our financial results.
We cannot be certain that we will be able to enter and successfully compete in additional foreign markets or that we will be able to continue to compete in the foreign markets in which we currently operate. 33 We are exposed to foreign currency risks from our international operations that could adversely affect our financial results.
Failure to comply with laws and regulations may subject us, the PCs or the Affiliated Professionals to civil or criminal penalties, licensing or other sanctions, that limit our ability to operate our business or their ability to provide telehealth services. 32 Changes to laws and regulations pose additional risks.
Failure to comply with laws and regulations may subject us, the PCs or the Affiliated Professionals to civil or criminal penalties, licensing or other sanctions, that limit our ability to operate our business or their ability to provide telehealth services. Changes to laws and regulations pose additional risks.
Any negative publicity associated with these actions or these third parties would adversely affect our reputation and may result in decreased recruitment, product subscriptions, workshop attendance and third party product sales and, as a result, lower revenues and profits. 18 Through our Clinical business, we are now associated with, and may in the future become associated with, managed professional corporations, professional associations or equivalent entities, which are legal entities organized under state laws that employ or contract with healthcare professionals in one or more states to provide telehealth services (collectively, “PCs”).
Any negative publicity associated with these actions or these third parties would adversely affect our reputation and may result in decreased recruitment, product subscriptions, workshop attendance and third party product sales and, as a result, lower revenues and profits. 19 Through our Clinical business, we are now associated with, and may in the future become associated with, managed professional corporations, professional associations or equivalent entities, which are legal entities organized under state laws that employ or contract with healthcare professionals in one or more states to provide telehealth services (collectively, “PCs”).
If these or other factors limit our ability to successfully execute our strategic initiatives, our business activities, financial condition or results of operations may be adversely affected. 16 We continually innovate our offerings to best serve our members.
If these or other factors limit our ability to successfully execute our strategic initiatives, our business activities, financial condition or results of operations may be adversely affected. We continually innovate our offerings to best serve our members.
New iterations of our workshop format may not develop as rapidly alongside the evolving science of weight management to provide the latest in science-backed community support initiatives, or alongside evolving consumer tastes and preferences, which could negatively impact our business, brand, or financial results. 17 Our business depends on the effectiveness and efficiency of our advertising and marketing programs across multiple platforms, including the strength of our social media presence, to attract and retain members and subscribers.
New iterations of our workshop format may not develop as rapidly alongside the evolving science of weight management to provide the latest in science-backed community support initiatives, or alongside evolving consumer tastes and preferences, which could negatively impact our business, brand, or financial results. 18 Our business depends on the effectiveness and efficiency of our advertising and marketing programs across multiple platforms, including the strength of our social media presence, to attract and retain members and subscribers.
We may also issue additional equity in connection with these transactions and partnerships, which would dilute our existing shareholders. 21 Our business may decline as a result of, or uncertainties related to, a downturn in general economic conditions or consumer confidence, including as a result of the existing inflationary environment, rising interest rates, the potential impact of political and social unrest and increased volatility in the credit and capital markets.
We may also issue additional equity in connection with these transactions and partnerships, which would dilute our existing shareholders. 22 Our business may decline as a result of, or uncertainties related to, a downturn in general economic conditions or consumer confidence, including as a result of the existing inflationary environment, rising interest rates, the potential impact of political and social unrest and increased volatility in the credit and capital markets.
There can be no assurance that we will not be subject to state, federal or foreign government actions or class action lawsuits, which could harm our business, financial condition and results of operations. 19 We have in the past and may in the future be required to recognize asset impairment charges for indefinite- and definite-lived assets.
There can be no assurance that we will not be subject to state, federal or foreign government actions or class action lawsuits, which could harm our business, financial condition and results of operations. 20 We have in the past and may in the future be required to recognize asset impairment charges for indefinite- and definite-lived assets.
Our new virtual care Clinical offering, WeightWatchers Clinic, may be unable to achieve and sustain high levels of demand, consumer acceptance, and market adoption.
Our virtual care Clinical offering, WeightWatchers Clinic, may be unable to achieve and sustain high levels of demand, consumer acceptance, and market adoption.
To do so will require us to continue to evolve our subscription model, user experience and digital platforms; address changing consumer demands and developments in science and technology; and improve our services and products while continuing to provide our members with guidance, compelling content, personalization and an inspiring community to enable them to develop healthy habits.
To do so will require us to continue to evolve our subscription model, user experience and digital platform; address changing consumer demands and developments in science and technology; and improve our services and products while continuing to provide our members with guidance, compelling content, personalization and an inspiring community to enable them to develop healthy habits.
The occurrence of any event that discourages people from gathering with others or impedes their ability to access our services and products could adversely affect our business, financial condition or results of operations. 22 Early termination by us of leases could have an adverse impact on our financial results.
The occurrence of any event that discourages people from gathering with others or impedes their ability to access our services and products could adversely affect our business, financial condition or results of operations. 23 Early termination by us of leases could have an adverse impact on our financial results.
As a result of such possible defects, failures, interruptions or other problems, our services and products could be rendered unreliable or be perceived as unreliable by customers, which could result in harm to our reputation and brands. Any failure of our technology or systems could result in an adverse impact on our business.
As a result of such possible defects, failures, interruptions, system downtime or other problems, our services and products could be rendered unreliable or be perceived as unreliable by customers, which could result in harm to our reputation and brands. Any failure of our technology or systems could result in an adverse impact on our business.
We have experienced and expect to continue to experience fluctuations in our quarterly results of operations due to the seasonal nature of our business. Historically, the first quarter of the fiscal year, known as our winter season, is the most important quarter for recruitments.
We have experienced and expect to continue to experience fluctuations in our quarterly results of operations due to the seasonal nature of our business. Historically, the first quarter of the fiscal year, known as our winter or peak season, is the most important quarter for recruitments.
Additional risks relating to integration of Sequence into our business, include, among others, the following: • our inability to successfully integrate Sequence in a manner that permits us to achieve the full revenue and other benefits anticipated to result from the Acquisition; • our ability to compete effectively in the telehealth industry; • disruption to our and Sequence’s business and operations and relationships with service providers, customers, employees and other partners; • negative effects on our business from the changes and potential disruption that may follow the Acquisition; • diversion of significant resources from our non-Clinical businesses; • our inability to retain the service of key management and other personnel of Sequence; • increased regulatory oversight of our business; • potential limitations placed on our business by regulatory authorities; • our inability to successfully integrate Sequence into our internal control over financial reporting, which could compromise the integrity of our financial reporting; and • greater than anticipated costs related to the integration of Sequence’s business and operations into ours.
Additional risks relating to integration of Sequence into our business, include, among others, the following: • our inability to successfully integrate Sequence in a manner that permits us to achieve the full revenue and other benefits anticipated to result from the Acquisition; • our ability to compete effectively in the telehealth industry; • disruption to our and Sequence’s business and operations and relationships with service providers, customers, employees and other partners; • negative effects on our business from the changes and potential disruption that may follow the Acquisition; • diversion of significant resources from our Behavioral business line; • our inability to retain the service of key management and other personnel of Sequence; • increased regulatory oversight of our business; • potential limitations placed on our business by regulatory authorities; • our inability to successfully integrate Sequence into our internal control over financial reporting, which could compromise the integrity of our financial reporting; and • greater than anticipated costs related to the integration of Sequence’s business and operations into ours.
Such changes could be disruptive to our daily operations or relationships with customers, partners, suppliers, and employees, make it more difficult to hire and retain key employees, impact our public or market perception or result in a loss of institutional knowledge, any of which could have a negative impact on our business or stock price. In October 2015, Ms.
Such changes could be disruptive to our daily operations or relationships with customers, partners, suppliers, and employees, make it more difficult to hire and retain key employees, impact our public or market perception or result in a loss of institutional knowledge, any of which could have a negative impact on our business or stock price.
Additionally, our Workshops + Digital members may choose our new Clinical offering, which could further decrease the demand for our workshop offering and negatively impact revenues for our Workshops + Digital business. These revenue declines may be accelerated by evolving consumer tastes and preferences regarding in-person or virtual communities.
Additionally, our Workshops + Digital members may choose our Clinical offering, which could further decrease the demand for our stand-alone workshop offering and negatively impact revenues for our Workshops + Digital business. These revenue declines may be accelerated by evolving consumer tastes and preferences regarding in-person or virtual communities.
Risks Related to Our Liquidity Our substantial amount of debt and our debt service obligations, as well as our exposure to variable rate indebtedness, could adversely affect our financial condition, and the restrictions of our debt covenants could impede our operations and flexibility. As of December 30, 2023, our total debt was $1,445.0 million.
Risks Related to Our Liquidity Our substantial amount of debt and our debt service obligations, as well as our exposure to variable rate indebtedness, could adversely affect our financial condition, and the restrictions of our debt covenants could impede our operations and flexibility. As of December 28, 2024, our total debt was $1,445.0 million.
This competition may reduce demand for our services and products. Our Clinical business is part of the emerging market for healthcare and technology, which is increasingly competitive, subject to rapid change, and significantly affected by new product and technological introductions and other market activities of industry participants.
This competition may reduce demand for our services and products. Our Clinical business is part of the emerging market at the confluence of healthcare and technology, which is increasingly competitive, subject to rapid change, and significantly affected by new product and technological introductions, the evolving regulatory landscape and other market activities of industry participants.
Also, our revenue from our non-Clinical businesses has been and may continue to be adversely affected by the popularity and expanding availability of pharmacotherapy treatments (offered either in-person by medical providers or through other telehealth platforms), as well as apps, activity monitors and other free or low-cost “do-it-yourself” alternatives.
Also, our revenue from our Behavioral business line has been and may continue to be adversely affected by the popularity and expanding availability of pharmacotherapy treatments (offered either in-person by medical providers or through other telehealth platforms), as well as apps, activity monitors and other free or low-cost “do-it-yourself” alternatives.
In the event we experience significant disruptions, we may be unable to repair our systems in an efficient and timely manner, which could have an adverse impact on our business.
In the event we experience significant disruptions, we may be unable to repair our systems in an efficient and timely manner, and such system downtime could have an adverse impact on our business.
For example, in fiscal 2022, we recorded $393.6 million of impairment charges for our franchise rights acquired related to our United States, Canada, United Kingdom, New Zealand and Australia units of account. We may incur additional impairment charges in the future, which would have an adverse impact on our results of operations. See “Item 7.
For example, in fiscal 2024, we recorded $315.0 million of impairment charges for our franchise rights acquired related to our United States, Australia, United Kingdom and New Zealand units of account. We may incur additional impairment charges in the future, which would have an adverse impact on our results of operations. See “Item 7.
Regardless of the outcome of any legal action or regulatory proceeding, such actions and proceedings could result in substantial costs and may require that our management devote substantial time and resources to defend us. Our business is subject to legislative and regulatory restrictions.
Regardless of the outcome of any legal action or regulatory proceeding, such actions and proceedings could result in substantial costs and may require that our management devote substantial time and resources to defend us.
As we continue to embrace an “always on” innovation strategy across multiple areas of our offerings, programs and technological capabilities, these innovations may not be successful in meeting the needs or preferences of many of our current or potential members. As a result, we may experience decreases in our recruitment and retention of members, or increased member cancellations.
As we continue to innovate across multiple areas of our offerings, programs and technological capabilities, these innovations may not be successful in meeting the needs or preferences of many of our current or potential members. As a result, we may experience decreases in our recruitment and retention of members, or increased member cancellations.
If adverse laws or regulations are adopted, if patients prove unwilling to adopt the telehealth services offered by the PCs and the Affiliated Professionals as rapidly or in the numbers that we anticipate, or if any claims challenging the provision of services via telehealth are successful, and we were unable to adapt our business model accordingly, our operations in such states would be disrupted or negatively impacted, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
If adverse laws or regulations are adopted, if patients prove unwilling to adopt the telehealth services offered by the PCs and the Affiliated Professionals as rapidly or in the numbers that we anticipate, or if any claims challenging the provision of services via telehealth are successful, and we were unable to adapt our business model accordingly, our operations in such states would be disrupted or negatively impacted, which could have a material adverse effect on our business, financial condition, cash flows and results of operations. 30 We may also be subject to changes in laws, regulations, and enforcement trends governing the marketing and prescribing of pharmaceutical products.
HIPAA also created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
A determination that we have violated these laws could have a material adverse effect on our business. 31 HIPAA also created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
In addition, a change of control of our company may be delayed or deterred as a result of our having three classes of directors. These provisions could limit the price that certain investors might be willing to pay in the future for shares of our common stock. 36 Item 1B. Unresolv ed Staff Comments None.
In addition, a change of control of our company may be delayed or deterred as a result of our having three classes of directors. These provisions could limit the price that certain investors might be willing to pay in the future for shares of our common stock.
Conversely, increased attention by consumers and the media to recent developments, innovations, and approvals of chronic weight management drug therapies, the evolving use of compounded drug formulations, and the perception of their safety, effectiveness and ease of use, may also delay or prevent consumer engagement in our non-Clinical businesses.
Conversely, increased attention by consumers and the media to recent developments, innovations, and approvals of chronic weight management drug therapies, the increase in compounded drug formulations, and the perception of their safety, effectiveness and ease of use, may also delay or prevent consumer engagement in our Behavioral business line .
While we believe that Sequence has structured its agreements and operations in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment.
While we believe that agreements and operations of the PCs are in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment.
Additionally, if the market negatively perceives our business or financial condition, we may not be a partner of choice for such transactions or partnerships, which could adversely affect our ability to enter into such transactions or partnerships and the terms thereof.
We may not be able to effect other transactions or partnerships on commercially reasonable terms or at all. Additionally, if the market negatively perceives our business or financial condition, we may not be a partner of choice for such transactions or partnerships, which could adversely affect our ability to enter into such transactions or partnerships and the terms thereof.
If we fail to retain the existing management of Sequence, or we fail to successfully compete in the telehealth industry, our ability to realize the anticipated benefits of the Acquisition may be adversely affected.
If we fail to successfully compete in the telehealth industry, our ability to realize the anticipated benefits of the Acquisition may be adversely affected.
For example, to complete our acquisition of Sequence, we made a significant purchase price cash payment in fiscal 2023, and will be required to make additional payments in each of fiscal 2024 and fiscal 2025.
For example, to complete our acquisition of Sequence, we made a significant purchase price cash payment in fiscal 2023 and an additional payment in fiscal 2024, and will be required to make a final payment of $16.0 million in fiscal 2025.
Although beneficial for our Clinical business, the growing acceptance of the use of medication to manage weight could negatively impact the popular appeal of our Digital and Workshops + Digital businesses.
Although beneficial for our Clinical business, the growing acceptance of the use of medication to manage weight could negatively impact the popular appeal of our Behavioral business line.
In the long term, the Acquisition may be less accretive than expected, or may continue to be dilutive, to our earnings per share. Estimates of our earnings per share in the future are based on assumptions that may materially change.
The Acquisition has been dilutive to our earnings per share, largely driven by the costs associated with the Acquisition itself. In the long term, the Acquisition may be less accretive than expected, or may continue to be dilutive, to our earnings per share. Estimates of our earnings per share in the future are based on assumptions that may materially change.
Our failure to develop new, innovative services and products and to enhance our existing services and products, the failure of our services, products or brands to continue to appeal to the market or respond to consumer trends or sentiment, or the failure to expand into appealing new channels of distribution could have an adverse impact on our ability to attract and retain members and subscribers and thus adversely affect our business, financial condition or results of operations.
Our failure to develop new, innovative services and products and to enhance our existing services and products, the failure of our services, products or brands to continue to appeal to the market or respond to consumer trends or sentiment, or the failure to expand into appealing new channels of distribution could have an adverse impact on our ability to attract and retain members and subscribers and thus adversely affect our business, financial condition or results of operations. 16 Our new compounded GLP-1 offering exposes us to a variety of risks that could result in an adverse impact on our reputation, business and ability to effectively compete.
While we have invested, including by maintaining cybersecurity insurance coverage, and developed systems and processes designed to protect proprietary content and confidential information, these measures are costly, and there can be no assurance that our efforts will prevent service interruptions or security breaches and other malicious acts. 26 Existing, proposed or new data privacy legislation and regulations, including interpretations thereof, could also significantly affect our business.
While we have invested, including by maintaining cybersecurity insurance coverage, and developed systems and processes designed to protect proprietary content and confidential information, these measures are costly, and there can be no assurance that our efforts will prevent service interruptions or security breaches and other malicious acts.
On April 10, 2023, we completed our previously announced acquisition of Sequence (the “ Acquisition”), with the expectation that the Acquisition would result in various benefits, including, among other things, revenue synergies with our existing business and operating efficiencies.
(d/b/a Sequence) The Acquisition may not achieve its intended results. On April 10, 2023, we completed our previously announced acquisition of Sequence (the “Acquisition”), with the expectation that the Acquisition would result in various benefits, including, among other things, revenue synergies with our existing business and operating efficiencies.
If we fail to appropriately manage and motivate our coaches, guides and customer service team members, we may not be able to adequately service our customers which could negatively impact our sales of services and products.
We also depend heavily upon our coaches, guides and members of our customer service teams to support our customers in their weight management efforts. If we fail to appropriately manage and motivate our coaches, guides and customer service team members, we may not be able to adequately service our customers which could negatively impact our sales of services and products.
Collateral consequences of a violation of the FCA include administrative penalties and the imposition of settlement, monitoring, integrity or other agreements. Many states have similar FCA laws to which we may be subject. A determination that we have violated these laws could have a material adverse effect on our business.
Collateral consequences of a violation of the FCA include administrative penalties and the imposition of settlement, monitoring, integrity or other agreements. Many states have similar FCA laws to which we may be subject.
In addition, the market price of our common stock may decline if our assumptions regarding the anticipated benefits of the Acquisition are not accurate or we do not achieve the anticipated benefits of the Acquisition as rapidly or to the extent anticipated by financial or industry analysts or at all.
In addition, the market price of our common stock may decline if our assumptions regarding the anticipated benefits of the Acquisition are not accurate or we do not achieve the anticipated benefits of the Acquisition as rapidly or to the extent anticipated by financial or industry analysts or at all. 34 The Acquisition may not be accretive, and may continue to be dilutive, to our earnings per share, which may negatively affect the market price of shares of our common stock.
For example, in the Company’s continued pursuit to evolve alongside advancements in science, in fiscal 2023, we acquired Sequence, a subscription telehealth platform, which is now known as WeightWatchers Clinic, to meet the increasing consumer demand for prescription weight management medications. Later that year, we launched a new program to provide tailored behavioral support for individuals on GLP-1 medications.
For example, in the Company’s continued pursuit to evolve alongside advancements in science, in fiscal 2023, we acquired Sequence, a subscription telehealth platform, which is now known as WeightWatchers Clinic, to meet the increasing consumer demand for prescription weight management medications.
In the ordinary course of business, we provide proprietary content and we collect, store and use confidential information (including, but not limited to, personal customer information and data) in connection with providing our products and engaging our employees and contractors, and it is critical that we do so in a secure manner to protect the confidentiality and integrity of such confidential information and maintain the trust and confidence of our members, business partners, employees, contractors and shareholders, as well as comply with applicable regulatory requirements and contractual obligations.
In the ordinary course of business, we provide proprietary content and we collect, store and use confidential information (including, but not limited to, personal customer information and data) in connection with providing our products and engaging our employees and contractors, and it is critical that we do so in a secure manner to protect the confidentiality and integrity of such confidential information and maintain the trust and confidence of our members, business partners, employees, contractors and shareholders, as well as comply with applicable regulatory requirements and contractual obligations. 26 We also have outsourced significant elements of our information technology infrastructure and, as a result, we are managing many independent vendor relationships with third parties who may or could have access to our confidential information and website content.
Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. 34 In addition, federal healthcare laws prohibit the offer or transfer to a federal healthcare program beneficiary, of any remuneration, including free services, and waivers of beneficiary cost sharing that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of federal healthcare program items or services unless there has been a good faith determination of the beneficiary’s financial need.
In addition, federal healthcare laws prohibit the offer or transfer to a federal healthcare program beneficiary, of any remuneration, including free services, and waivers of beneficiary cost sharing that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of federal healthcare program items or services unless there has been a good faith determination of the beneficiary’s financial need.
We may also be subject to changes in laws, regulations, and enforcement trends governing the marketing and prescribing of pharmaceutical products. Such products are subject to regulation by the FDA, FTC, and other governmental agencies, and over time, the regulatory landscape for pharmaceutical products approved for weight management may become more complex with increasingly strict requirements.
Such products are subject to regulation by the FDA, FTC, and other governmental agencies, and over time, the regulatory landscape for pharmaceutical products approved for weight management may become more complex with increasingly strict requirements.
Accordingly, changes in currency exchange rates will cause our revenues, operating costs, net income and shareholders’ equity to fluctuate. For example, these changes had a positive impact on our fiscal 2023 financial results, increasing our revenues for fiscal 2023 by $0.7 million. 29 Outcomes of litigation or regulatory actions could adversely impact our financial condition.
Accordingly, changes in currency exchange rates will cause our revenues, operating costs, net income and shareholders’ equity to fluctuate. For example, these changes had a positive impact on our fiscal 2024 financial results, increasing our revenues for fiscal 2024 by $0.7 million. Risks Related to Our Acquisition of Weekend Health, Inc.
These restrictions may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI.
Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These restrictions may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our product offerings or business practices, or prevent or limit our use of AI.
Member access to clinicians and other care team providers through WeightWatchers Clinic may expose us to other types of claims and litigation or regulatory actions. For additional information regarding these types of claims or actions, see “—Risks Related to Our Acquisition of Weekend Health, Inc. (d/b/a Sequence)”.
Member access to clinicians and other care team providers through WeightWatchers Clinic may expose us to other types of claims and litigation or regulatory actions. For additional information regarding these types of claims or actions, see our other Risk Factors regarding our Clinical business.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
While we have and continue to execute certain cost-savings initiatives, including our previously disclosed 2024 restructuring plan, to continue to proactively manage our liquidity, if our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
Although we and the PCs strive to comply with all applicable laws and regulations, our operations and the operations of the PCs may not be in compliance with certain laws or regulations as they may be interpreted by governmental, judicial, law enforcement or regulatory authorities or their agents.
Federal and state laws permit private parties to bring “qui tam” or whistleblower lawsuits on behalf of the federal government against companies for violations of fraud and abuse laws. 29 Although we and the PCs strive to comply with all applicable laws and regulations, our operations and the operations of the PCs may not be in compliance with certain laws or regulations as they may be interpreted by governmental, judicial, law enforcement or regulatory authorities or their agents.
If interest rates increase, our debt service obligations on the variable rate indebtedness may increase even though the amount borrowed remains the same, if our then-effective swaps, if any, do not reduce our exposure. LIBOR was previously the benchmark rate used for certain of our variable rate indebtedness, including our Credit Facilities.
Additionally, borrowings under our credit facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness may increase even though the amount borrowed remains the same, if our then-effective swaps, if any, do not reduce our exposure.
We also obtain consent and/or offer new controls to existing and new users in Europe before processing data for certain aspects of our services and products. In addition, the GDPR requires submission of personal data breach notifications to our designated European privacy regulator. The GDPR also includes significant penalties for non-compliance with any of several requirements of the regulation.
In addition, the GDPR requires submission of personal data breach notifications to our designated European privacy regulator. The GDPR also includes significant penalties for non-compliance with any of several requirements of the regulation.
To the extent federal or other requirements regarding safety, prescribing, and claims change in the future, such changes could result in increased costs, recalls, increased cancelations of member subscriptions, decreased interest from potential members or other adverse impacts or additional risks. 33 We may be subject to extensive fraud, waste, and abuse laws that may give rise to federal and state audits and investigations, including actions for false and other improper claims.
To the extent federal or other requirements regarding safety, prescribing, and claims change in the future, such changes could result in increased costs, recalls, increased cancelations of member subscriptions, decreased interest from potential members or other adverse impacts or additional risks.
While there is no net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) leverage ratio maintenance requirement on the debt outstanding under our credit facilities (other than when the aggregate principal amount of our outstanding revolving loans plus non-cash collateralized letters of credit exceeds 35% of the amount of the lenders’ revolving commitments, as further discussed below), our credit facilities and the indenture governing our notes contain customary covenants for a non-investment grade company, including covenants that in certain circumstances restrict our ability to incur additional indebtedness and liens, pay dividends on and redeem capital stock, make investments, sell our assets and enter into acquisitions, mergers and transfers of all or substantially all of our assets, prepay subordinated debt and enter into transactions with affiliates, in each case subject to baskets, thresholds and other exceptions.
Our credit facilities and the indenture governing our notes contain customary covenants for a non-investment grade company, including covenants that in certain circumstances restrict our ability to incur additional indebtedness and liens, pay dividends on and redeem capital stock, make investments, sell our assets and enter into acquisitions, mergers and transfers of all or substantially all of our assets, prepay subordinated debt and enter into transactions with affiliates, in each case subject to baskets, thresholds and other exceptions.
Any of these results could reduce our revenues or our ability to compete effectively, increase our costs or harm our business. 28 Risks Related to Our International Operations, Litigation, Laws and Regulations Our international operations expose us to regulatory, economic, political, social and intellectual property risks in the countries in which we operate, which risks may be exacerbated as a result of war and terrorism.
Our international operations expose us to regulatory, economic, political, social and intellectual property risks in the countries in which we operate, which risks may be exacerbated as a result of war and terrorism.
Although we completed the wind down of our consumer products business at the end of fiscal 2023, we continue to license our trademarks to third parties for the manufacture and sale in retail stores by such parties of a variety of goods, including food products, and also co-brand or endorse third-party branded consumer services and products.
Our franchisees operate their businesses under our brands. Although we completed the closure of our consumer products business at the end of fiscal 2023, we continue to license our trademarks to third parties across a range of consumer products, including food products, and also co-brand or endorse third-party branded consumer services and products.
We currently, and may in the future, seek to manage our exposure to interest rates through interest rate swaps. At the end of fiscal 2023, we had in effect interest rate swaps with an aggregate notional amount of $500.0 million.
At the end of fiscal 2024 we had no interest rate swaps in effect, but we may in the future seek to manage our exposure to changing interest rates through interest rate swaps.
The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern our contractual relationships and arrangements with healthcare professionals and vendors, our marketing activities, and other aspects of our operations and the operations of PCs and vendors.
Comprehensive statutes and regulations govern our contractual relationships and arrangements with healthcare professionals, health plans and vendors, our marketing activities, and other aspects of our operations and the operations of PCs and vendors.
We may not be able to successfully implement our strategic initiatives and realize the intended business opportunities, growth prospects, including new business channels, and competitive advantages. Our efforts to capitalize on business opportunities may not bring the intended results. Assumptions underlying expected financial results or consumer demand and receptivity may not be met or economic or consumer conditions may deteriorate.
Our efforts to capitalize on business opportunities may not bring the intended results. Assumptions underlying expected financial results or consumer demand and receptivity may not be met or economic or consumer conditions may deteriorate. We also may be unable to attract and retain highly qualified and skilled personnel, or engage with partners of choice, to implement our strategic initiatives.
In addition, if we incur additional debt in the future, we may be subject to additional covenants, which may be more restrictive than those to which we are currently subject. Additionally, borrowings under our credit facilities are at variable rates of interest and expose us to interest rate risk.
In addition, if we incur additional debt in the future, we may be subject to additional covenants, which may be more restrictive than those to which we are currently subject.
The increased popularity and acceptance of medication as a weight loss tool has introduced new competitors in the weight management and health and wellness market and increased competition from certain of our existing competitors. We compete directly not only with telehealth providers but also traditional healthcare providers, pharmacies and other technology companies entering into the health and wellness industry.
The increased popularity and acceptance and rapid adoption of medication as a weight loss tool has introduced new competitors in the weight management and health and wellness market and increased competition from certain of our existing competitors.
The consequences of the transition from LIBOR to SOFR could include an increase in the cost of our variable rate indebtedness. 24 We may not be able to generate sufficient cash to service all of our debt and satisfy our other liquidity requirements.
As of December 28, 2024, our variable rate indebtedness used SOFR as the benchmark for establishing the interest rate. We may not be able to generate sufficient cash to service all of our debt and satisfy our other liquidity requirements.
We may not be able to successfully implement our strategic initiatives, which could adversely impact our business, financial conditions or results of operations. We are continually evaluating the changing consumer environment and the competitive environment of the weight management and health and wellness marketplaces and seeking out opportunities to improve our performance through the implementation of selected strategic initiatives.
We are continually evaluating the changing consumer environment and the competitive environment of the weight management and health and wellness marketplaces and seeking out opportunities to improve our performance through the implementation of selected strategic initiatives. The goal of these efforts is to develop and implement a comprehensive and competitive business strategy that addresses those changes.
For example, the European General Data Protection Regulation (“GDPR”) includes increased privacy and security requirements for companies that receive or process personal data of residents of Europe. As a result, we have implemented measures to comply with these requirements, including, among other things, documenting our data processing activities and informing users about how we use their personal data.
As a result, we have implemented measures to comply with these requirements, including, among other things, documenting our data processing activities and informing users about how we use their personal data. We also obtain consent and/or offer new controls to existing and new users in Europe before processing data for certain aspects of our services and products.
As part of our strategic initiatives, we may pursue selected acquisitions, collaborations or joint ventures, such as our 2023 acquisition of Weekend Health, Inc., doing business as Sequence (the “Acquisition”). We may not be able to effect other transactions or partnerships on commercially reasonable terms or at all.
We may not successfully make acquisitions or enter into collaborations or joint ventures and we may not successfully integrate, operate or realize the anticipated benefits of such businesses. As part of our strategic initiatives, we may pursue selected acquisitions, collaborations or joint ventures, such as our 2023 acquisition of Weekend Health, Inc., doing business as Sequence (the “Acquisition”).
Claims filed with private insurers can lead to criminal and civil penalties, including, but not limited to, penalties relating to violations of federal mail and wire fraud statutes, as well as penalties under the healthcare fraud provisions of HIPAA. 35 Risks Related to Ownership of Our Common Stock Our articles of incorporation and bylaws and Virginia corporate law contain provisions that may discourage a takeover attempt.
Claims filed with private insurers can lead to criminal and civil penalties, including, but not limited to, penalties relating to violations of federal mail and wire fraud statutes, as well as penalties under the healthcare fraud provisions of HIPAA. 32 Outcomes of litigation or regulatory actions could adversely impact our financial condition.
If we are responsible for liabilities not covered by insurance, we could suffer severe consequences that could have a material adverse effect on our financial condition and results of operations. We, the PCs and the Affiliated Professionals are subject to extensive and complex healthcare laws and regulations.
If we are responsible for liabilities not covered by insurance, we could suffer severe consequences that could have a material adverse effect on our financial condition and results of operations. 35 Risks Related to Ownership of Our Common Stock Our articles of incorporation and bylaws and Virginia corporate law contain provisions that may discourage a takeover attempt.
Therefore, it is possible that our results of operations, financial condition or cash flows could be adversely affected by the unfavorable resolution of one or more legal or regulatory actions. As we build our Clinical business and further expand into the telehealth space, consumers may misconstrue our non-Clinical businesses as providing medical advice.
Therefore, it is possible that our results of operations, financial condition or cash flows could be adversely affected by the unfavorable resolution of one or more legal or regulatory actions. In December 2024, we began offering to all members in the United States access to registered dietitians for personalized nutrition counseling.
For example, on October 30, 2023, the Biden administration issued an Executive Order to, among other things, establish extensive new standards for AI safety and security. Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging.
For example, in October 2023, the Biden administration issued an Executive Order to, among other things, establish extensive new standards for AI safety and security, and in August 2024 the European Union AI Act entered into force with the aim of fostering responsible AI development and deployment in the EU.
Additionally, our inability to attract and retain qualified coaches, guides and customer service team members could delay or hinder our successfully executing our strategic initiatives. We may not successfully make acquisitions or enter into collaborations or joint ventures and we may not successfully integrate, operate or realize the anticipated benefits of such businesses.
Additionally, our inability to attract and retain qualified coaches, guides and customer service team members could delay or hinder our successfully executing our strategic initiatives. 21 We are undergoing a chief executive officer transition, which could cause disruption to our business or have an adverse impact on our operations and business strategy as well as the public or market perception of our business.
The goal of these efforts is to develop and implement a comprehensive and competitive business strategy that addresses those changes. Over the past several years, we have expanded our offerings in health and wellness, including, most recently, introducing our Clinical offering.
Over the past several years, we have expanded our offerings in health and wellness, including introducing our Clinical offering and more recently, offering our U.S.-based members access to registered dieticians. We may not be able to successfully implement our strategic initiatives and realize the intended business opportunities, growth prospects, including new business channels, and competitive advantages.
Removed
The COVID-19 pandemic increased utilization of virtual care services, but it is uncertain whether such increase in demand will continue.
Added
We compete directly not only with telehealth providers but also traditional healthcare providers, pharmacies, pharmaceutical companies, and other technology companies entering into the weight management and health and wellness industry.
Removed
We also may be unable to attract and retain highly qualified and skilled personnel, or engage with partners of choice, to implement our strategic initiatives.
Added
In October 2024, we began offering to our eligible Clinical members access to compounded semaglutide, a GLP-1 prescription medication, sourced via a 503B outsourcing facility (the “Manufacturing Supplier”) and dispensed by a licensed 503A pharmacy (“Dispensing Pharmacy”).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−1 removed18 unchanged
Biggest changeThe CTO holds a master’s degree in microengineering and has served in various leadership roles in computer engineering for more than 20 years. 38 While we have experienced cybersecurity incidents in the past, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, financial condition, cash flows or reputation.
Biggest changeHe has also attained multiple cybersecurity-related professional certifications and licenses, including Certified Information Systems Security Professional, and is an adjunct professor of cybersecurity at New York University and Fordham University. 38 While we have experienced cybersecurity incidents in the past, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, financial condition, cash flows or reputation.
Such plans also dictate notification responses to Company management based on the severity of the incident. The CISO and Director of Security Operations has worked in the information security field for over 15 years and holds an undergraduate degree in computer systems management and master’s degrees in both cybersecurity and technology management.
Such plans also dictate notification responses to Company management based on the severity of the incident. The CISO has worked in the information security field for over 15 years and holds an undergraduate degree in computer systems management and master’s degrees in both cybersecurity and technology management.
The Audit Committee routinely meets with our Chief Technology Officer (“CTO”) and CISO as well as outside experts as appropriate to assess cybersecurity risks and to evaluate the status of the Company’s cybersecurity efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our businesses.
The Audit Committee routinely meets with our Chief Legal and Regulatory Officer (“CLRO”) and CISO as well as outside experts as appropriate to assess cybersecurity risks and to evaluate the status of the Company’s cybersecurity efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our businesses.
The Company regularly engages third parties to perform assessments on certain of our cybersecurity measures, including audits and penetration testing. For example, we annually engage qualified third-party auditors to independently assess and attest to and/or provide certifications of compliance with the HIPAA Security and Privacy Rule, SOC2 Type 2, the Payment Card Industry Data Security Standard (PCI-DSS), and UK CyberEssentials.
For example, we annually engage qualified third-party auditors to independently assess and attest to and/or provide certifications of compliance with the HIPAA Security and Privacy Rule, SOC2 Type 2, the Payment Card Industry Data Security Standard (PCI-DSS), UK CyberEssentials, and HITRUST.
Our cybersecurity management team includes our CISO and Director of Security Operations, Data Privacy Officer, CTO, Chief Financial Officer, General Counsel, and Head of Internal Audit.
Our cybersecurity management team includes our CISO, Data Privacy Officer, CLRO, Chief Financial Officer, and Head of Internal Audit .
Removed
He has also attained multiple cybersecurity-related professional certifications and licenses, including Certified Information Systems Security Professional, and is an adjunct professor of cybersecurity at New York University and Fordham University.
Added
The Company regularly engages third parties to perform assessments on certain of our cybersecurity measures, including audits and penetration testing.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

22 edited+16 added−19 removed11 unchanged
Biggest changeFrom 1980 to 1991, Mr. Kelly held various positions at Merrill Lynch, including Managing Director of Mergers and Acquisitions and Managing Director of Merchant Banking. Mr. Kelly began his investment banking career at Lehman Brothers in 1974. Mr. Kelly received a B.A. from Amherst College and an M.B.A. from the Wharton School of Business of the University of Pennsylvania.
Biggest changeKelly began his investment banking career at Lehman Brothers in 1974. Mr. Kelly received a B.A. from Amherst College and an M.B.A. from the Wharton School of Business of the University of Pennsylvania. He was previously a director of MSC Industrial Direct Co., Inc. 42 William H. Shrank, M.D. Dr. Shrank has been a director since August 2023.
He previously served as a consultant to the University of Miami Health Care System from September 2017 through December 2017, the Chief Executive Officer of University of Miami Health Care System and Executive Vice President for Healthcare at the University of Miami from January 2016 to September 2017, and the Chief Executive Officer of The Children’s Hospital of Philadelphia (CHOP) from April 2000 until June 2015.
He previously served as a consultant to the University of Miami Health Care System from September 2017 through December 2017, the Chief Executive Officer of the University of Miami Health Care System and Executive Vice President for Healthcare at the University of Miami from January 2016 to September 2017, and the Chief Executive Officer of The Children’s Hospital of Philadelphia (CHOP) from April 2000 until June 2015.
She previously served as Chief Financial Officer at McCann Worldgroup, the world's largest marketing communications business, from October 2010 to April 2010.
She previously served as Chief Financial Officer at McCann Worldgroup, the world’s largest marketing communications business, from October 2010 to April 2013.
He previously served as Chief Medical Officer of Humana Inc. (Humana), a leading care delivery and health plan administration company, from April 2019 to August 2022. He also served as Humana’s Chief Medical and Corporate Affairs Officer from July 2019 to July 2021 during which time he oversaw its government affairs function. Prior to joining Humana, Dr.
(Humana), a leading care delivery and health plan administration company, from April 2019 to August 2022. He also served as Humana’s Chief Medical and Corporate Affairs Officer from July 2019 to July 2021 during which time he oversaw its government affairs function. Prior to joining Humana, Dr.
He holds an A.B. in Electrical Engineering and Computer Science from Dartmouth College and a dual M.S. in Management and Electrical Engineering from the Massachusetts Institute of Technology. Steven M. Altschuler, M.D. Dr. Altschuler has been a director since September 2012. Since May 2018, Dr.
He holds an A.B. in Electrical Engineering and Computer Science from Dartmouth College and a dual M.S. in Management and Electrical Engineering from the Massachusetts Institute of Technology. 41 Steven M. Altschuler, M.D. Dr. Altschuler has been a director since September 2012. Dr.
Earlier in her career, she was a founding member and Global Chief Financial Officer & Chief Operating Officer of Mediabrands, part of Interpublic Group, and held various roles at publicly-traded companies and Ernst & Young where she qualified as a Chartered Accountant. Ms. Comonte earned a B.A. in Accounting and Finance from Heriot-Watt University. Denis F. Kelly. Mr.
Earlier in her career, she was a founding member and Global Chief Financial Officer & Chief Operating Officer of Mediabrands, part of Interpublic Group, and held various roles at publicly- traded companies and Ernst & Young where she qualified as a Chartered Accountant. Ms. Comonte earned a B.A. in Accounting and Finance from Heriot-Watt University. Ms.
Since May 2019, Mr. Semmelbauer has served as Managing Director of Insight Partners, a global private equity and venture capital firm, where he previously served as a Senior Advisor from 2017 to 2019 and a Venture Partner from 2015 to 2017.
Semmelbauer has served as Managing Director of Insight Partners, a global private equity and venture capital firm, where he previously served as a Senior Advisor from 2017 to 2019 and a Venture Partner from 2015 to 2017.
Set forth below are the names, ages as of December 30, 2023 and current positions of our executive officers and directors. Directors are elected at the annual meeting of shareholders. Executive officers are appointed by, and hold office at, the discretion of our Board of Directors.
Set forth below are the names, ages as of December 28, 2024 and current positions of our executive officers and directors. Directors are elected at the annual meeting of shareholders. Executive officers are appointed by, and hold office at, the discretion of our Board of Directors.
Brown held various roles at RAPP Dallas (a part of the Omnicom Group), Direct Impact, Advanced Micro Devices, Peppers & Rogers Group, Dell, American Express, Exxon and Procter & Gamble. Ms. Brown earned a Bachelor of Chemical Engineering from the University of Delaware and an M.B.A. from Columbia Business School. Ms.
Brown held various roles at RAPP Dallas (a part of the Omnicom Group), Direct Impact, Advanced Micro Devices, Peppers & Rogers Group, Dell, American Express, Exxon and Procter & Gamble. Ms. Brown earned a Bachelor of Chemical Engineering from the University of Delaware and an M.B.A. from Columbia Business School. Ms. Brown was previously a director of YETI Holdings, Inc.
Altschuler is Chairman of the Board of Directors of 89bio, Inc. and Lexeo Therapeutics, Inc. and a director of Orchard Therapeutics plc. He previously served as Chair of the Board of Directors of Spark Therapeutics, Inc. and a director of Adtalem Global Education Inc. 41 Julie Bornstein. Ms. Bornstein has been a director since February 2019. Until January 2023, Ms.
Altschuler is Chairman of the board of directors of 89bio, Inc. and Lexeo Therapeutics, Inc. He previously served as a director of Adtalem Global Education Inc. and Orchard Therapeutics plc. Julie Bornstein. Ms. Bornstein has been a director since February 2019. Since July 2023, Ms.
Comonte served as Chief Executive Officer of TMRW Life Sciences, Inc., a life sciences technology company focused on the in vitro fertilization (IVF) sector, from May 2021 to July 2023, and as a member of its board of directors from December 2018 to September 2023.
Comonte has navigated a broad range of industries and complex business transitions. She served as Chief Executive Officer of TMRW Life Sciences, Inc., a life sciences technology company focused on the in vitro fertilization (IVF) sector, from May 2021 to July 2023, and as a member of its board of directors from December 2018 to September 2023.
Kelly is a Hearing Officer for National Arbitration and Mediation (NAM), one of the leading dispute resolution institutions in the United States. From 1993 to 2001, he was a Managing Director of Prudential Securities Incorporated. Previously, he served as the President and Chief Executive Officer of Denbrook Capital Corporation, a merchant banking firm, from 1991 to 1993.
Kelly is a Hearing Officer for National Arbitration and Mediation (NAM), one of the leading dispute resolution institutions in the United States. He previously served as a Senior Advisor to TM Capital Corp., a private investment banking firm, from 2022 to 2024. From 1993 to 2001, he was a Managing Director of Prudential Securities Incorporated.
Kelly has been a director since May 2015. Mr. Kelly is affiliated with, and has served as a Managing Partner of, Scura Partners Securities LLC, a private investment banking firm which he co-founded, since 2001. Mr. Kelly has served as a Senior Advisor to TM Capital Corp., a private investment banking firm, since 2022. In addition, Mr.
She also previously served as a director of our Company from February 2019 to January 2022. Denis F. Kelly. Mr. Kelly has been a director since May 2015. Mr. Kelly is affiliated with, and has served as a Managing Partner of, Scura Partners Securities LLC, a private investment banking firm which he co-founded, since 2001. In addition, Mr.
Brown (1)(3) 56 Director Tara Comonte (2)(3) 49 Director Denis F. Kelly (3) 74 Director Julie Rice (1) 53 Director William H. Shrank, M.D. 52 Director Oprah Winfrey 69 Director (1) Member of Nominating and Corporate Governance Committee. (2) Member of Compensation and Benefits Committee. (3) Member of Audit Committee. Sima Sistani. Ms.
Brown (1)(2) 57 Director Denis F. Kelly (2) 75 Director William H. Shrank, M.D. 53 Director (1) Member of Nominating and Corporate Governance Committee. (2) Member of Audit Committee. (3) Member of Compensation and Benefits Committee. Tara Comonte . Ms.
Bornstein served as Senior Vice President and Chief Shopping Officer of Pinterest, Inc., a digital visual inspiration platform. Ms. Bornstein joined Pinterest when it acquired The Yes Platform, Inc., an AI-powered online shopping platform she co-founded and for which she served as Chief Executive Officer from February 2018 until its acquisition in June 2022.
Bornstein joined Pinterest when it acquired The Yes Platform, Inc., an AI-powered online shopping platform she co-founded and for which she served as Chief Executive Officer from February 2018 until its acquisition in June 2022. From March 2015 to September 2017, Ms. Bornstein served as Chief Operating Officer at Stitch Fix, Inc., an online styling services company.
From March 2015 to September 2017, Ms. Bornstein served as Chief Operating Officer at Stitch Fix, Inc., an online styling services company. Prior to that, Ms. Bornstein served as Chief Digital Officer at Sephora, a cosmetic retail company and subsidiary of LVMH Moët Hennessy Louis Vuitton SE, from August 2007 to March 2015. Ms.
Prior to that, Ms. Bornstein served as Chief Digital Officer at Sephora, a cosmetic retail company and subsidiary of LVMH Moët Hennessy Louis Vuitton SE, from August 2007 to March 2015. Ms. Bornstein received a B.A. in Government from Harvard College and an M.B.A. from Harvard Business School. Ms. Bornstein is a director of Redfin Corporation and Sweetgreen, Inc.
Shrank received a B.A. in Psychology from Brown University and an M.D. from Cornell University Medical College. He also holds a M.S. in Health Services from the University of California, Los Angeles. Oprah Winfrey. Ms. Winfrey has been a director since October 2015. Most recently, Ms.
Shrank received a B.A. in Psychology from Brown University and an M.D. from Cornell University Medical College. He also holds a M.S. in Health Services from the University of California, Los Angeles. Dr. Shrank is a director of Walgreens Boots Alliance, Inc. 43 PART II
Bornstein received a B.A. in Government from Harvard College and an M.B.A. from Harvard Business School. Ms. Bornstein is a director of Redfin Corporation and Sweetgreen, Inc. Tracey D. Brown. Ms. Brown has been a director since May 2023. Since March 2023, Ms. Brown has served as Executive Vice President and President of Walgreens Retail and U.S.
Tracey D. Brown. Ms. Brown has been a director since May 2023. Since March 2023, Ms. Brown has served as Executive Vice President and President of Walgreens Retail and U.S.
Tolleson received a B.A. in Psychology from Stanford University and an M.B.A. from Harvard Business School. Thilo Semmelbauer. Mr. Semmelbauer has been the Chairman of our Board of Directors since May 2023 and a director since September 2016. He served as a member of our former Interim Office of the Chief Executive Officer from September 2016 to July 2017.
He served as a member of our former Interim Office of the Chief Executive Officer from September 2016 to July 2017. Since May 2019, Mr.
Altschuler has served as a Managing Director, Healthcare Ventures, of Ziff Capital Partners, a private investment firm.
Altschuler has served as the Chief Executive Officer and Chair of the board of directors of Corner Therapeutics, Inc., a private immunotherapy company, since September 2020, and as Managing Director, Healthcare Ventures of Ziff Capital Partners, a private investment firm, since May 2018.
Name Age Position Sima Sistani 44 Chief Executive Officer, Director Heather Stark 50 Chief Financial Officer Pierre-Olivier Latour 44 Chief Technology Officer Amanda Tolleson 43 Chief Marketing Officer Thilo Semmelbauer (1) 58 Chairman of the Board of Directors Steven M. Altschuler, M.D. (2) 70 Director Julie Bornstein (2) 53 Director Tracey D.
Name Age Position Tara Comonte 50 President and Chief Executive Officer, Director Felicia DellaFortuna 41 Chief Financial Officer Donna Boyer 54 Chief Product Officer Jacqueline Cooke 46 Chief Legal and Regulatory Officer and Secretary Thilo Semmelbauer (1)(2) 59 Chairman of the Board of Directors Steven M. Altschuler, M.D. (3) 71 Director Julie Bornstein (3) 54 Director Tracey D.
Brown is a director of YETI Holdings, Inc. and was previously a director of our Company from February 2019 to January 2022. Tara Comonte. Ms. Comonte has been a director since June 2023. Ms.
Comonte is a director of Peloton Interactive, Inc. 40 Felicia DellaFortuna . Ms. DellaFortuna has served as our Chief Financial Officer since January 2025. Prior to joining us, she was Chief Financial Officer of Enthusiast Gaming Holdings Inc., a gaming media and entertainment company, from November 2023 to December 2024.
Removed
Sistani has served as a director and our Chief Executive Officer since March 2022.
Added
Comonte has served as our President and Chief Executive Officer since February 2025 and has been a director since June 2023. She previously served as our Interim President and Chief Executive Officer from September 2024 to February 2025. With over two decades of executive leadership experience across corporate and digital strategy, technology, operations and finance, Ms.
Removed
Until February 2022, she worked at Epic Games, Inc., a video game and software developer and publisher, where she served as Chief Executive Officer of Houseparty, a face-to-face synchronous social network, and also was the senior executive leading social gameplay and feature development for Epic’s gaming products, including Fortnite. Prior to Epic’s acquisition of Houseparty in June 2019, Ms.
Added
Prior to that, she served as Chief Financial Officer of BuzzFeed, Inc., a digital media company, from December 2021 to November 2023. Ms.
Removed
Sistani was the Chief Executive Officer at Houseparty and served on its Board of Directors, having been one of its original co-founders prior to its February 2016 launch. She previously led mobile growth operations at Yahoo!
Added
DellaFortuna previously served in several finance leadership positions at BuzzFeed’s predecessor company, including as its Chief Financial Officer from February 2020 to December 2021, Senior Vice President of Finance from May 2019 to February 2020, Vice President of Finance from June 2017 to May 2019, and Senior Director of Finance from October 2015 to June 2017.
Removed
Inc., a technology company, from November 2011 to May 2015, and from the time Yahoo! acquired Tumblr she served as Tumblr’s first Head of Media. Prior to that time, Ms. Sistani held positions at Goldman Sachs and Creative Artists Agency. Ms. Sistani received a B.A. from Duke University and an M.B.A. from the Kellogg School of Management at Northwestern University.
Added
Prior to that time, Ms. DellaFortuna held corporate finance positions with Viant Technology Inc. and XIX Entertainment Limited, and provided assurance services at Ernst & Young LLP. She holds a Certified Public Accountant license in New York. Ms. DellaFortuna received a B.S. in Accounting from Lehigh University. Donna Boyer . Ms.
Removed
Ms. Sistani is a director of Best Buy Co., Inc. 40 Heather Stark. Ms. Stark has served as our Chief Financial Officer since May 2023. Ms. Stark previously served as our Interim Principal Financial Officer from December 2022 to May 2023 and Head of Finance, North America from April 2022 to December 2022.
Added
Boyer has served as our Chief Product Officer since May 2024. Prior to joining us, Ms. Boyer served as Chief Product Officer at Teladoc Health, Inc., a virtual healthcare services company, from May 2021 to April 2024, after serving as SVP Product Management & Design from November 2020 to May 2021.
Removed
Prior to that time, she served as Vice President Finance & Commercial Development from July 2018 to April 2022, Vice President Finance from May 2015 to July 2018 and Director Finance from December 2010 to May 2015, all for our Canadian business. Prior to joining us, Ms.
Added
From January 2018 to November 2020, she served as Vice President of Product Management and Design at Stitch Fix, Inc., an online styling services company. Prior to that, Ms.
Removed
Stark was with Bacardi Limited, the world’s largest privately held spirits business, where she served as Controller of the Canadian business from September 2005 to November 2010. She also previously served as the Corporate Controller of Opta Minerals Inc., a Canadian publicly traded processor, distributor and seller of industrial minerals, from 2004 to 2005. Ms.
Added
Boyer was with Airbnb, Inc., an online lodging platform, where she served as Head of Airbnb Plus from July 2017 to January 2018 and Head of Product, Host & Homes from February 2016 to July 2017.
Removed
Stark was a Chartered Accountant for PricewaterhouseCoopers LLP from 1999 through 2004. Ms. Stark received a B.A. in Canadian Studies from the University of Toronto and her Chartered Accountant and Chartered Professional Accountant designation from CPA Ontario. Pierre-Olivier Latour. Mr.
Added
She previously served as Chief Product Officer at Blurb, Inc., a self-publishing platform, from March 2012 to February 2016 (including also acting as Interim Chief Marketing Officer from February 2015 to February 2016). Prior to joining Blurb, Ms. Boyer held various product roles at Callaway Digital Arts, RMG Networks, Yahoo! Inc., DigitalThink Inc., Personify and Hyperion Solutions. Ms.
Removed
Latour has served as our Chief Technology Officer since June 2023, after serving as our Head of Engineering from April 2023 to June 2023. Prior to joining us, Mr. Latour was an Engineering Executive at Epic Games, Inc., a video game and software developer and publisher, having served in several senior engineering management roles from September 2019 to April 2023.
Added
Boyer received a B.A. in Economics from Swarthmore College. Jacqueline Cooke . Ms. Cooke has served as our Chief Legal and Regulatory Officer and Secretary since August 2024, prior to which she served as our General Counsel and Secretary from March 2024 to July 2024. Prior to joining us, Ms.
Removed
Beginning in November 2016, he served as the Chief Technology Officer at Houseparty, a face-to-face synchronous social network, prior to its acquisition by Epic Games in 2019. Previously, Mr. Latour held various engineering leadership positions with mid-stage Silicon Valley startup companies and sold several companies and technologies, including one to Apple in 2003. Mr.
Added
Cooke most recently served as General Counsel & Privacy Officer at 23andMe Holding Co. (“23andMe”), a genetics-led consumer healthcare and therapeutics company, from February 2022 to January 2024.
Removed
Latour received a master’s degree in Microengineering from EPFL (École polytechnique fédérale de Lausanne). Amanda Tolleson. Ms. Tolleson has served as our Chief Marketing Officer since August 2022. Prior to joining us, Ms. Tolleson served as Chief Customer Officer at Maisonette, a curated baby and kid’s marketplace, from March 2020 to August 2022.
Added
She previously served as 23andMe’s Deputy General Counsel from March 2018 to February 2022 (including also acting as Privacy Officer from February 2020 on) and Associate General Counsel from April 2015 to February 2018. Prior to joining 23andMe, Ms.
Removed
She previously held several roles at Birchbox, a subscription beauty service, most recently serving as Chief Customer Officer from March 2018 to March 2020 and Chief Marketing Officer from March 2016 to March 2018, after joining the company in January 2014. Prior to that, Ms. Tolleson held several positions at various brand and marketing strategy consultancies. Ms.
Added
Cooke served as legal counsel at Genomic Health, Inc., a provider of genomic-based diagnostic tests that help optimize cancer care, from 2012 to 2015. She previously worked as an attorney at Latham & Watkins LLP from 2006 to 2012. Ms.
Removed
He was previously a director of MSC Industrial Direct Co., Inc. Julie Rice. Ms. Rice has been a director since August 2018.
Added
Cooke received a B.A. in Ethnic Studies and Public Policy from the University of California, Berkeley, a M.P.P. from the John F. Kennedy School of Government at Harvard University and a J.D. from the Georgetown University Law Center. Thilo Semmelbauer. Mr. Semmelbauer has been the Chairman of our Board of Directors since May 2023 and a director since September 2016.
Removed
Since February 2021, she has served as the Co-Founder and Co-Chief Executive Officer of Peoplehood LLC, a connection and wellness company, and since June 2016, she has served as the Co-Founder of LifeShop LLC, an advising and investing company. From November 2017 to March 2019, Ms. Rice served as a Partner at WeWork, a shared workspace company.
Added
Bornstein has served as Chief Executive Officer of Daydream, an AI-powered search and discovery shopping platform she co-founded. Until January 2023, Ms. Bornstein served as Senior Vice President and Chief Shopping Officer of Pinterest, Inc., a digital visual inspiration platform. Ms.
Removed
After co-founding SoulCycle Inc., a fitness company, in 2006, Ms. Rice served as Co-Chief Executive Officer from 2006 to 2015, Chief Talent and Creative Officer from 2015 to 2016 and a member of the board of directors from 2010 to 2018. Previously, Ms. Rice was a Talent Manager at Handprint Entertainment from 1997 to 2004. Ms.
Added
Prior to that, he served as the President and Chief Executive Officer of Denbrook Capital Corporation, a merchant banking firm, from 1991 to 1993. From 1980 to 1991, Mr. Kelly held various positions at Merrill Lynch, including Managing Director of Mergers and Acquisitions and Managing Director of Merchant Banking. Mr.
Removed
Rice received a B.A. in English and Theater from the State University of New York at Binghamton. 42 William H. Shrank, M.D. Dr. Shrank has been a director since August 2023. Since January 2023, Dr. Shrank has been a venture partner to the Bio + Health team of Andreessen Horowitz, a private venture capital firm.
Added
Since November 2024, Dr. Shrank has served as Chief Executive Officer of a benefits enablement company that he founded. Prior to that, Dr. Shrank was a venture partner to the Bio + Health team of Andreessen Horowitz, a private venture capital firm, from January 2023 to November 2024. He previously served as Chief Medical Officer of Humana Inc.
Removed
Winfrey served as the Chairman and Chief Executive Officer of her cable network, OWN: Oprah Winfrey Network.
Removed
Previously, she founded Harpo, Inc. in 1986, under which she has launched numerous media and entertainment businesses, including OWN: Oprah Winfrey Network, Oprah Daily, O, The Oprah Magazine, and Harpo Films, in addition to hosting and producing the award-winning talk show ‘The Oprah Winfrey Show’ for 25 years. Ms. Winfrey is a global media leader, philanthropist, producer, actress and author.
Removed
She also has been serving as a member of the Smithsonian’s advisory council since 2004. 43 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−5 removed1 unchanged
Biggest changeOur common stock has traded on Nasdaq under the symbol “WW” since April 22, 2019, prior to which it traded under the symbol “WTW.” On October 9, 2003, our Board of Directors authorized, and we announced, a program to repurchase up to $250.0 million of our outstanding common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on Nasdaq under the symbol “WW.” On October 9, 2003, our Board of Directors authorized, and we announced, a program to repurchase up to $250.0 million of our outstanding common stock.
This number does not include beneficial owners of our securities held in the name of nominees. Dividends We do not currently pay a dividend and we have no current plans to pay dividends in the foreseeable future.
This number does not include beneficial owners of our securities held in the name of nominees. Dividends We do not currently pay a dividend and we have no current plans to pay dividends in the foreseeable future. Ite m 6. [Reserved] 44
During fiscal 2023 and fiscal 2022, we repurchased no shares of our common stock under this program. As of the end of fiscal 2023, $208.9 million remained available to purchase shares of our common stock under the repurchase program. Holders The approximate number of holders of record of our common stock as of February 1, 2024 was 269.
During fiscal 2024 and fiscal 2023, we repurchased no shares of our common stock under this program. As of the end of fiscal 2024, $208.9 million remained available to purchase shares of our common stock under the repurchase program. Holders The approximate number of holders of record of our common stock as of February 3, 2025 was 258.
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Item 5. Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on Nasdaq.
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Stock Performance Graph The following graph sets forth the cumulative return on our common stock from December 28, 2018, the last trading day of our 2018 fiscal year, through December 29, 2023, the last trading day of our 2023 fiscal year, as compared to the cumulative return of each of the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the Russell 2000 Index.
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We selected the S&P 500 Index because it is a broad index of equity markets.
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We selected the Russell 2000 Index, which is generally comprised of issuers having a similar market capitalization with the Company at the times presented and of which we are currently a member, because we believe that there are no other lines of business or published industry indices or peer groups that provide a more meaningful comparison of the cumulative return of our stock.
Removed
The graph assumes that $100 was invested on December 28, 2018 in each of (1) our common stock, (2) the S&P 500 Index, and (3) the Russell 2000 Index, and that all dividends, as applicable, were reinvested. 44 Cumulative Total Return ($) Company/Index 12.28.18 12.27.19 12.31.20 12.31.21 12.30.22 12.29.23 WW International, Inc. 100.00 91.10 59.08 39.05 9.34 21.18 S&P 500 Index 100.00 132.97 157.02 202.09 165.49 209.00 Russell 2000 Index 100.00 126.50 151.79 174.28 138.66 162.14 Ite m 6. [Reserved] Not applicable. 45

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

143 edited+42 added−57 removed47 unchanged
Biggest changeGross profit, gross margin, operating income (loss), operating income (loss) margin and components thereof are discussed in this Annual Report on Form 10-K both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) fiscal 2023 to exclude (a) the net impact of (w) charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”), (x) charges associated with our previously disclosed 2022 restructuring plan (the “2022 plan”) or the reversal of certain of the charges associated with the 2022 plan, as applicable, (y) charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”) or the reversal of certain of the charges associated with the 2021 plan, as applicable, and (z) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”), (b) the impact of certain non-recurring transaction costs in connection with the acquisition of Sequence, and (c) the impact of the impairment charges for our goodwill related to our Republic of Ireland and Northern Ireland reporting units and the impairment charge for our franchise rights acquired related to our Northern Ireland unit of account; and (ii) fiscal 2022 to exclude (a) the impact of impairment charges for our franchise rights acquired related to our United States, Canada, United Kingdom, New Zealand and Australia units of account and impairment charges for our goodwill related to our Republic of Ireland reporting unit and our wholly-owned subsidiary Kurbo, Inc.
Biggest changeGross profit, gross margin, operating (loss) income, operating (loss) income margin and components thereof are discussed in this Annual Report on Form 10-K both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) fiscal 2024 to exclude (a) the impact of impairment charges for our franchise rights acquired related to our United States, Australia, United Kingdom and New Zealand units of account, (b) the net impact of (x) charges associated with our previously disclosed 2024 restructuring plan (the “2024 plan”), (y) charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”) and (z) charges associated with our previously disclosed 2022 restructuring plan (the “2022 plan”) or the reversal of certain of the charges associated with the 2022 plan, as applicable, and (c) the impact of certain non-recurring expenses in connection with the separation from the Company of our former Chief Executive Officer (“CEO”); and (ii) fiscal 2023 to exclude (a) the net impact of (w) charges associated with the 2023 plan, (x) charges associated with the 2022 plan or the reversal of certain of the charges associated with the 2022 plan, as applicable, (y) charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”) or the reversal of certain of the charges associated with the 2021 plan, as applicable, and (z) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”), (b) the impact of certain non-recurring transaction costs in connection with the acquisition of Sequence, and (c) the impact of the impairment charges for our goodwill related to our Republic of Ireland and Northern Ireland reporting units and the impairment charge for our franchise rights acquired related to our Northern Ireland unit of account.
Subject to any applicable limitations contained in the agreements governing, or terms of, our indebtedness, any such purchases made by us may be funded by the use of cash on our balance sheet, the incurrence of new secured or unsecured debt, the issuance of our equity or the sale of assets.
Subject to any applicable limitations contained in the agreements governing, or terms of, our indebtedness, any such purchases made by us may be funded by the issuance of equity, the use of cash on our balance sheet, the incurrence of new secured or unsecured debt or the sale of assets.
On or after April 15, 2024, we may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026.
Commencing April 15, 2024, we may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026.
Operating costs primarily consist of salary expense paid to operations management, commissions and expenses paid to our employees, coaches and guides, studio room rent, customer service costs (both in-house and third-party), program material expenses, depreciation and amortization associated with field automation, credit card and fulfillment fees and training and other expenses.
Operating costs primarily consist of salary expense paid to operations management, commissions and expenses paid to our employees, coaches and guides, clinicians, studio room rent, customer service costs (both in-house and third-party), program material expenses, depreciation and amortization associated with field automation, credit card and fulfillment fees and training and other expenses.
Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. Components of our Results of Operations Revenues We derive our revenues principally from: • Subscription Revenues.
Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. 46 Components of our Results of Operations Revenues We derive our revenues principally from: • Subscription Revenues.
The cash flows for the Workshops + Digital and the Digital businesses were discounted utilizing rates which were calculated using the weighted average cost of capital, which included the cost of equity and the cost of debt. Goodwill In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach.
The cash flows for the Workshops + Digital and the Digital businesses were discounted utilizing rates which were calculated using the weighted average cost of capital, which included the cost of equity and the cost of debt. 51 Goodwill In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach.
Further information regarding our interest rate swaps can be found in Part IV, Item 15 of this Annual Report on Form 10-K under Note 19 “Derivative Instruments and Hedging” of the notes to the audited consolidated financial statements.
Further information regarding our use of interest rate swaps can be found in Part IV, Item 15 of this Annual Report on Form 10-K under Note 19 “Derivative Instruments and Hedging” of the notes to the audited consolidated financial statements.
A change in these underlying assumptions could cause a change in the results of the impairment assessments and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of those assets. In the event such a result occurred, we would be required to record a corresponding charge, which would impact earnings.
A change in these underlying assumptions could cause a change in the results of the impairment assessments and, as such, could cause fair value to be less than the carrying values and result in an impairment of those assets. In the event such a result occurred, we would be required to record a corresponding charge, which would impact earnings.
In June 2023, in connection with the planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with Term SOFR as the benchmark rate under the Credit Agreement, which will be calculated to include a credit spread adjustment of 0.11448%, 0.26161%, 0.42826%, or 0.71513% for 1, 3, 6, or 12 months period, respectively, in addition to the Term SOFR Screen Rate (as defined in the Credit Agreement) and the margin (which was not amended).
In June 2023, in connection with the planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with Term SOFR as the benchmark rate under the Credit Agreement, which is calculated to include a credit spread adjustment of 0.11448%, 0.26161%, 0.42826%, or 0.71513% for 1, 3, 6, or 12 months period, respectively, in addition to the Term SOFR Screen Rate (as defined in the Credit Agreement) and the margin (which was not amended).
(1) Due to the fact that a portion of our debt is variable rate based, we have assumed for purposes of this table that the interest rate on all of our debt as of the end of fiscal 2023 remains constant for all periods presented.
(1) Due to the fact that a portion of our debt is variable rate based, we have assumed for purposes of this table that the interest rate on all of our debt as of the end of fiscal 2024 remains constant for all periods presented.
Selling, general and administrative expenses also include amortization expense of certain of our intangible assets and certain one-time transaction expenses. 49 Gross Margin The following table sets forth our gross profit and gross margin for the past two fiscal years, as adjusted for fiscal 2023 and fiscal 2022 to exclude the net impact of restructuring charges.
Selling, general and administrative expenses also include amortization expense of certain of our intangible assets and certain one-time transaction expenses. Gross Margin The following table sets forth our gross profit and gross margin for the past two fiscal years, as adjusted for fiscal 2024 and fiscal 2023 to exclude the net impact of restructuring charges.
Recruitment and retention are key drivers for this metric. • Gross profit and operating expenses as a percentage of revenue. Market Trends We believe that our revenues and profitability can be sensitive to major trends in the weight management and health and wellness industries.
Recruitment and retention are key drivers for this metric. • Gross profit and operating expenses as a percentage of revenue. Market Trends Our revenues and profitability can be sensitive to major trends in the weight management and health and wellness industries.
We would also be required to reduce the carrying amounts of the related assets on our balance sheet. We continue to evaluate these assumptions and believe that these assumptions are appropriate. 53 In performing our impairment analyses, we also considered the trading value of both our equity and debt.
We would also be required to reduce the carrying values of the related assets on our balance sheet. We continue to evaluate these assumptions and believe that these assumptions are appropriate. In performing our impairment analyses, we also considered the trading value of both our equity and debt.
In our hypothetical start-up approach analysis for fiscal 2023, we assumed that the year of maturity was reached after 7 years. Subsequent to the year of maturity, we estimated future cash flows for the Workshops + Digital business in each country based on assumptions regarding revenue growth and operating income margins.
In our hypothetical start-up approach analyses for fiscal 2024, we assumed that the year of maturity was reached after 7 years. Subsequent to the year of maturity, we estimated future cash flows for the Workshops + Digital business in each country based on assumptions regarding revenue growth and operating income margins.
As of December 30, 2023, we had $945.0 million in an aggregate principal amount of loans outstanding under our Credit Facilities, with $173.8 million of availability and $1.2 million in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below.
As of December 28, 2024, we had $945.0 million in an aggregate principal amount of loans outstanding under our Credit Facilities, with $173.8 million of availability and $1.2 million in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below.
As market conditions warrant, we may, from time to time, seek to purchase our outstanding debt securities or loans, including the Senior Secured Notes and borrowings under the Credit Facilities (each as defined below). Such transactions could be privately negotiated or open market transactions, pursuant to tender offers or otherwise.
We may, from time to time, seek to acquire our outstanding debt securities or loans, including the Senior Secured Notes and borrowings under the Credit Facilities (each as defined below). Such transactions could be privately negotiated or open market transactions, pursuant to tender offers or otherwise.
In particular, we believe that our business could be adversely impacted by: • the development of more effective or more favorably perceived weight management methods or technologies, including by the pharmaceutical, genetics and biotechnology industries; 51 • the rapidly evolving and increasingly competitive clinical weight management and weight loss market and increasing consumer interest in weight management medications and the failure of our offerings to compete in such market and environment; • reduced consumer interest in commercial weight loss and diet programs; • increased competition from weight loss and wellness apps; • a failure to develop and market new, innovative services and products, to enhance our existing services and products, or to successfully expand into new channels of distribution or respond to consumer trends or sentiment, including the failure of new services or products to appeal to evolving consumer sentiment; • a failure to successfully implement new strategic initiatives; • a decrease in the effectiveness of our marketing, advertising, and social media programs or an increase in the effectiveness of our competitors’ similar programs; • an impairment of our brands and other intellectual property; • a failure of our technology or systems to perform as designed; • any event or condition that impedes people from accessing resources or discourages or impedes people from gathering with others; and • a downturn in general economic conditions or consumer confidence.
In particular, we believe that our business could be adversely impacted by: • the development of more effective or more favorably perceived weight management methods or technologies, including by the pharmaceutical, genetics and biotechnology industries; • the rapidly evolving and increasingly competitive clinical weight management and weight loss market and increasing consumer interest in weight management medications and the failure of our offerings to compete in such market and environment; • the rapidly evolving regulatory landscape applicable to GLP-1s and the implications for our new compounded GLP-1 offering; • reduced consumer interest in commercial weight loss and diet programs; • increased competition from weight loss and wellness apps; • a failure to develop and market new, innovative services and products, to enhance our existing services and products, or to successfully expand into new channels of distribution or respond to consumer trends or sentiment, including the failure of new services or products to appeal to evolving consumer sentiment; • a failure to successfully implement new strategic initiatives; • a decrease in the effectiveness of our marketing, advertising, and social media programs or an increase in the effectiveness of our competitors’ similar programs; • an impairment of our brands and other intellectual property; • a failure of our technology or systems to perform as designed; 50 • any event or condition that impedes people from accessing resources or discourages or impedes people from gathering with others; and • a downturn in general economic conditions or consumer confidence.
As of December 30, 2023, we were in compliance with the covenants under the Indenture that were in effect on such date. The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029.
As of December 28, 2024, we were in compliance with the covenants under the Indenture that were in effect on such date. The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029.
Costs to operate our digital products include salaries and related benefits, depreciation and amortization of capitalized software and website development, credit card processing fees and other costs incurred in developing our digital offerings.
Costs to operate our products include salaries and related benefits, depreciation and amortization of capitalized software and website development, credit card processing fees and other costs incurred in developing our offerings, as applicable.
Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021.
Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year.
As of December 30, 2023, we were in compliance with the covenants under the Credit Agreement that were in effect on such date. The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios.
As of December 28, 2024, we were in compliance with the covenants under the Credit Agreement that were in effect on such date. The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios.
In our relief from royalty approach analysis for fiscal 2023, the cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms.
In our relief from royalty approach analyses for fiscal 2024, the cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms.
The tax expense for fiscal 2023 was impacted by a tax expense due to a valuation allowance and a tax expense related to income earned in foreign jurisdictions at rates higher than the U.S., partially offset by a tax benefit related to state tax and a tax benefit related to foreign-derived intangible income (“FDII”).
The tax expense for fiscal 2023 was impacted by a tax expense due to a valuation allowance and a tax expense related to income earned in foreign jurisdictions at rates higher than the U.S., partially offset by a tax benefit related to state tax and a tax benefit related to FDII.
(1) The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for fiscal 2023 to exclude the net impact of the $21.1 million ($15.8 million after tax) of 2023 plan restructuring charges, the reversal of $4 thousand ($3 thousand after tax) of 2022 plan restructuring charges, the $0.1 million ($0.1 million after tax) of 2021 plan restructuring charges and the reversal of $21 thousand ($16 thousand after tax) of 2020 plan restructuring charges, and for fiscal 2022 to exclude the net impact of the $1.8 million ($1.3 million after tax) of 2023 plan restructuring charges, the $6.5 million ($4.9 million after tax) of 2022 plan restructuring charges, the reversal of $0.6 million ($0.4 million after tax) of 2021 plan restructuring charges and the reversal of $0.7 million ($0.5 million after tax) of 2020 plan restructuring charges.
(1) The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for fiscal 2024 to exclude the net impact of the $2.5 million ($1.9 million after tax) of 2024 plan restructuring charges, the $2.5 million ($1.9 million after tax) of 2023 plan restructuring charges and the $26 thousand ($19 thousand after tax) of 2022 plan restructuring charges, and for fiscal 2023 to exclude the net impact of the $21.1 million ($15.8 million after tax) of 2023 plan restructuring charges, the reversal of $4 thousand ($3 thousand after tax) of 2022 plan restructuring charges, the $0.1 million ($0.1 million after tax) of 2021 plan restructuring charges and the reversal of $21 thousand ($16 thousand after tax) of 2020 plan restructuring charges.
See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the fiscal year ended December 30, 2023 which have been adjusted.
See “Non-GAAP Financial Measures” above. The table below sets forth a reconciliation of certain of those components of our selected financial data for the fiscal year ended December 28, 2024 which have been adjusted.
See “—Non-GAAP Financial Measures” herein for an explanation of our use of these non-GAAP financial measures. Contractual Obligations We are obligated under non-cancelable agreements primarily for office and rent facilities operating leases. Consolidated rent expense charged to operations under all our leases for fiscal 2023 was approximately $34.1 million.
See “—Non-GAAP Financial Measures” herein for an explanation of our use of these non-GAAP financial measures. Contractual Obligations We are obligated under non-cancelable agreements primarily for office and rent facilities operating leases. Consolidated rent expense charged to operations under all our leases for fiscal 2024 was approximately $15.5 million.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. Certain results for fiscal 2022 are adjusted to exclude the impact of franchise rights acquired and goodwill impairments and the net impact of restructuring charges. See “Non-GAAP Financial Measures” above.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. Certain results for fiscal 2023 are adjusted to exclude the net impact of restructuring charges, the impact of acquisition transaction costs, and the impact of franchise rights acquired and goodwill impairments. See “Non-GAAP Financial Measures” above.
Given we completed our acquisition of Sequence in April 2023 after the beginning of the second quarter of fiscal 2023, we have no incoming subscribers with respect to our Clinical business for fiscal 2023.
Given we completed our acquisition of Sequence in April 2023 after the beginning of the second quarter of fiscal 2023, we have incoming subscribers with respect to our Clinical business for fiscal 2024, but not for fiscal 2023.
The table below sets forth a reconciliation of certain of those components of our selected financial data for the fiscal year ended December 31, 2022 which have been adjusted.
The table below sets forth a reconciliation of certain of those components of our selected financial data for the fiscal year ended December 30, 2023 which have been adjusted.
As of December 30, 2023, the applicable margins for the Term SOFR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 3.50% and 2.75%, respectively.
As of December 28, 2024, the applicable margins for the Term SOFR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 3.50% and 2.75%, respectively.
For the discussion of the financial condition and results of operations for the year ended December 31, 2022 compared to the year ended January 1, 2022, refer to "Part II—Item 7.
For the discussion of the financial condition and results of operations for the year ended December 30, 2023 compared to the year ended December 31, 2022, refer to "Part II—Item 7.
Indefinite-Lived Franchise Rights Acquired and Goodwill Impairment Tests We review indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for potential impairment on at least an annual basis or more often if events so require.
Indefinite-Lived Franchise Rights Acquired and Goodwill Impairment Tests We review indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require.
Effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reporting segments changed to one segment based on total revenue for the purpose of making operational and resource decisions and assessing financial performance.
As previously disclosed, effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reportable segments changed to one segment for the purpose of making operational and resource decisions and assessing financial performance.
We also present within this Annual Report on Form 10-K the non-GAAP financial measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, and certain non-recurring transaction costs in connection with the acquisition of Sequence (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio.
We also present within this Annual Report on Form 10-K the non-GAAP financial measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, former CEO separation expenses, and acquisition transaction costs (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio.
(in millions except percentages) Fiscal 2023 Fiscal 2022 Gross Profit $ 529.3 $ 621.4 Gross Margin 59.5 % 59.8 % Adjustments to Reported Amounts (1) 2023 plan restructuring charges 21.1 1.8 2022 plan restructuring charges (0.0 ) 6.5 2021 plan restructuring charges 0.1 (0.6 ) 2020 plan restructuring charges (0.0 ) (0.7 ) Gross Profit, as adjusted (1) $ 550.5 $ 628.4 Gross Margin impact from above adjustments (1) (2.4 %) (0.7 %) Gross Margin, as adjusted (1) 61.9 % 60.4 % Note: Totals may not sum due to rounding.
(in millions except percentages) Fiscal 2024 Fiscal 2023 Gross Profit $ 533.1 $ 529.3 Gross Margin 67.8 % 59.5 % Adjustments to Reported Amounts (1) 2024 plan restructuring charges 2.5 — 2023 plan restructuring charges 2.5 21.1 2022 plan restructuring charges 0.0 (0.0 ) 2021 plan restructuring charges — 0.1 2020 plan restructuring charges — (0.0 ) Gross Profit, as adjusted (1) $ 538.1 $ 550.5 Gross Margin impact from above adjustments (1) (0.6 %) (2.4 %) Gross Margin, as adjusted (1) 68.5 % 61.9 % Note: Totals may not sum due to rounding.
In performing the impairment analysis for goodwill, for all of our reporting units, we estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operations less capital expenditures) attributable to that country and then applied expected future operating income growth rates for such country.
In performing the impairment analysis for goodwill, for all of our reporting units, we estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operations less capital expenditures) attributable to each of the Behavioral and Clinical reporting units and then applied expected future operating income growth rates for the respective reporting unit.
(2) The “Adjusted EBITDAS” measure is a non-GAAP financial measure that (i) adjusts the consolidated statements of operations for fiscal 2023 to exclude the net impact of the $53.7 million of 2023 plan restructuring charges, the $1.1 million of 2022 plan restructuring charges, the $0.1 million of 2021 plan restructuring charges and the reversal of $21 thousand of 2020 plan restructuring charges, the impact of $8.6 million of acquisition transaction costs, and the impact of $3.6 million of franchise rights acquired and goodwill impairments; and (ii) adjusts the consolidated statements of operations for fiscal 2022 to exclude the impact of the $396.7 million of franchise rights acquired and goodwill impairments and the net impact of the $13.6 million of 2023 plan restructuring charges, the $27.2 million of 2022 plan restructuring charges, the reversal of $0.3 million of 2021 plan restructuring charges and the reversal of $0.7 million of 2020 plan restructuring charges.
(2) The “Adjusted EBITDAS” measure is a non-GAAP financial measure that (i) adjusts the consolidated statements of operations for fiscal 2024 to exclude the impact of the $315.0 million of franchise rights acquired impairments, the net impact of the $17.0 million of 2024 plan restructuring charges, the $5.1 million of 2023 plan restructuring charges and the $8 thousand of 2022 plan restructuring charges, and the impact of the $3.9 million of former CEO separation expenses ; and (ii) adjusts the consolidated statements of operations for fiscal 2023 to exclude the impact of $3.6 million of franchise rights acquired and goodwill impairments, the net impact of the $53.7 million of 2023 plan restructuring charges, the $1.1 million of 2022 plan restructuring charges, the $0.1 million of 2021 plan restructuring charges and the reversal of $21 thousand of 2020 plan restructuring charges, and the impact of $8.6 million of acquisition transaction costs.
Excluding the net impact of the $33.7 million of restructuring charges in fiscal 2023, the impact of the $8.6 million of acquisition transaction costs in fiscal 2023 and the net impact of the $32.7 million of restructuring charges in fiscal 2022, selling, general and administrative expenses for fiscal 2023 would have decreased by 3.7%, both as adjusted and as adjusted on a constant currency basis, versus the prior year.
Excluding the net impact of the $17.1 million of restructuring charges in fiscal 2024, the $3.9 million of former CEO separation expenses in fiscal 2024, the net impact of the $33.7 million of restructuring charges in fiscal 2023 and the impact of the $8.6 million of acquisition transaction costs in fiscal 2023, selling, general and administrative expenses for fiscal 2024 would have decreased by 11.6%, both as adjusted and as adjusted on a constant currency basis, versus the prior year.
Operating Income (Loss) Operating income for fiscal 2023 was $22.3 million compared to operating loss for fiscal 2022 of $284.0 million. Operating income for fiscal 2023 was positively impacted by $2.0 million of foreign currency.
Operating (Loss) Income Operating loss for fiscal 2024 was $236.2 million compared to operating income for fiscal 2023 of $22.3 million. Operating loss for fiscal 2024 was positively impacted by $0.4 million of foreign currency.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. 50 Material Trends Performance Indicators Our management team regularly reviews and analyzes a number of financial and operating metrics, including the key performance indicators listed below, in order to manage our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and assess the quality and potential variability of our cash flows and earnings.
Material Trends Performance Indicators Our management team regularly reviews and analyzes a number of financial and operating metrics, including the key performance indicators listed below, in order to manage our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and assess the quality and potential variability of our cash flows and earnings.
Prior to fiscal 2024, “product sales and other” included sales of consumer products. • Paid Weeks—The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for our digital subscription products, which formerly included Digital 360 (as applicable); (ii) “Workshops + Digital Paid Weeks” is the sum of total paid commitment plan weeks which include workshops and digital offerings and formerly included total “pay-as-you-go” weeks; (iii) “Clinical Paid Weeks” is the total paid subscription weeks for our Clinical subscription products; and (iv) “Total Paid Weeks” is the sum of Digital Paid Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. • Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers and Clinical subscribers who participate in recurring bill programs in Company-owned operations.
Prior to fiscal 2024, “Other Revenues” included sales of consumer products. 49 • Paid Weeks—The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for our Digital offerings; (ii) “Workshops + Digital Paid Weeks” is the total paid subscription weeks for our Workshops + Digital offerings; (iii) “Clinical Paid Weeks” is the total paid subscription weeks for our Clinical offerings; and (iv) “Total Paid Weeks” is the sum of Digital Paid Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks. • Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers and Clinical subscribers who participate in recurring bill programs in Company-owned operations.
(1) The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for fiscal 2023 to exclude the net impact of the $53.7 million ($40.3 million after tax) of 2023 plan restructuring charges, the $1.1 million ($0.9 million after tax) of 2022 plan restructuring charges, the $0.1 million ($43 thousand after tax) of 2021 plan restructuring charges and the reversal of $21 thousand ($16 thousand after tax) of 2020 plan restructuring charges, the impact of the $8.6 million ($7.5 million after tax) of acquisition transaction costs, and the impact of the $3.6 million ($3.6 million after tax) of franchise rights acquired and goodwill impairments, and for fiscal 2022 to exclude the net impact of the $13.6 million ($10.2 million after tax) of 2023 plan restructuring charges, the $27.2 million ($20.4 million after tax) of 2022 plan restructuring charges, the reversal of $0.3 million ($0.3 million after tax) of 2021 plan restructuring charges and the reversal of $0.7 million ($0.5 million after tax) of 2020 plan restructuring charges, and the impact of the $396.7 million ($301.3 million after tax) of franchise rights acquired and goodwill impairments.
(1) The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for fiscal 2024 to exclude the impact of the $315.0 million ($293.2 million after tax) of franchise rights acquired impairments, the net impact of the $17.0 million ($12.8 million after tax) of 2024 plan restructuring charges, the $5.1 million ($3.8 million after tax) of 2023 plan restructuring charges and the $8 thousand ($6 thousand after tax) of 2022 plan restructuring charges, and the impact of the $3.9 million ($2.9 million after tax) of former CEO separation expenses , and for fiscal 2023 to exclude the impact of the $3.6 million ($3.6 million after tax) of franchise rights acquired and goodwill impairments, the net impact of the $53.7 million ($40.3 million after tax) of 2023 plan restructuring charges, the $1.1 million ($0.9 million after tax) of 2022 plan restructuring charges, the $0.1 million ($43 thousand after tax) of 2021 plan restructuring charges and the reversal of $21 thousand ($16 thousand after tax) of 2020 plan restructuring charges, and the impact of the $8.6 million ($7.5 million after tax) of acquisition transaction costs.
The table below sets forth the reconciliations for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net loss, the most comparable GAAP financial measure, for the fiscal years ended: (in millions) December 30, 2023 December 31, 2022 Net loss $ (112.3 ) $ (256.9 ) Interest 95.9 81.1 Taxes 38.6 (109.9 ) Depreciation and amortization 45.6 42.3 Stock-based compensation 11.3 13.0 EBITDAS $ 79.2 $ (230.4 ) 2023 plan restructuring charges 53.7 13.6 2022 plan restructuring charges 1.1 27.2 2021 plan restructuring charges 0.1 (0.3 ) 2020 plan restructuring charges (0.0 ) (0.7 ) Acquisition transaction costs 8.6 (1) — Franchise rights acquired and goodwill impairments 3.6 396.7 Adjusted EBITDAS (2) $ 146.4 $ 206.1 67 Note: Totals may not sum due to rounding.
The table below sets forth the reconciliations for EBITDAS and Adjusted EBITDAS, each a non-GAAP financial measure, to net loss, the most comparable GAAP financial measure, for the fiscal years ended: (in millions) December 28, 2024 December 30, 2023 Net loss $ (345.7 ) $ (112.3 ) Interest 109.0 95.9 Taxes 0.5 38.6 Depreciation and amortization 37.8 45.6 Stock-based compensation 6.7 11.3 EBITDAS $ (191.8 ) $ 79.2 Franchise rights acquired and goodwill impairments 315.0 3.6 2024 plan restructuring charges 17.0 — 2023 plan restructuring charges 5.1 53.7 2022 plan restructuring charges 0.0 1.1 2021 plan restructuring charges — 0.1 2020 plan restructuring charges — (0.0 ) Former CEO separation expenses 3.9 — Acquisition transaction costs (1) — 8.6 Adjusted EBITDAS (2) $ 149.3 $ 146.4 Note: Totals may not sum due to rounding.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. Reducing leverage is a capital structure priority for the Company. As of December 30, 2023, our total debt less unamortized deferred financing costs and unamortized debt discount/net loss ratio was (12.7)x. As of December 30, 2023, our net debt/Adjusted EBITDAS ratio was 9.0x.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. Reducing leverage is a capital structure priority for the Company. As of December 28, 2024, our total debt less unamortized deferred financing costs and unamortized debt discount/net loss ratio was (4.1)x.
EBITDAS, Adjusted EBITDAS and Net Debt We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges and certain non-recurring transaction costs in connection with the Acquisition.
EBITDAS, Adjusted EBITDAS and Net Debt We define EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation and Adjusted EBITDAS, a non-GAAP financial measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired and goodwill impairments, net restructuring charges, former CEO separation expenses and acquisition transaction costs.
Off-Balance Sheet Arrangements As part of our ongoing business, we do not participate in arrangements that generate relationships with unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured finance or special purpose entities.
These are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. 67 Off-Balance Sheet Arrangements As part of our ongoing business, we do not participate in arrangements that generate relationships with unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured finance or special purpose entities.
Other Expense, Net Other expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, decreased by $1.6 million for fiscal 2023 to $0.1 million of expense as compared to $1.7 million of expense for fiscal 2022. Tax Our effective tax rate for fiscal 2023 was (52.5%) compared to 30.0% for fiscal 2022.
Other (Income) Expense, Net Other (income) expense, net, which consists primarily of the negative impact of foreign currency on intercompany transactions, changed by $0.1 million for fiscal 2024 to $0.0 million of income as compared to $0.1 million of expense for fiscal 2023. Tax Our effective tax rate for fiscal 2024 was (0.2%) compared to (52.5%) for fiscal 2023.
Balance Sheet Working Capital The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents at: December 30, December 31, Increase/ 2023 2022 (Decrease) (in millions) Total current assets $ 179.5 $ 281.3 $ (101.9 ) Total current liabilities 205.5 196.6 8.9 Working capital (deficit) surplus (26.0 ) 84.8 110.8 Cash and cash equivalents 109.4 178.3 (69.0 ) Working capital deficit, excluding cash and cash equivalents $ (135.4 ) $ (93.6 ) $ 41.8 Note: Totals may not sum due to rounding. 62 The following table sets forth a summary of the primary factors contributing to the $41.8 million increase in our working capital deficit, excluding cash and cash equivalents: Impact to December 30, December 31, Increase/ Working 2023 2022 (Decrease) Capital Deficit (in millions) Portion of operating lease liabilities due within one year $ 9.6 $ 18.0 $ (8.3 ) $ (8.3 ) Prepaid income taxes $ 25.4 $ 19.4 $ 5.9 $ (5.9 ) Income taxes payable $ 1.6 $ 1.6 $ — $ — Accrued interest $ 5.3 $ 5.3 $ 0.1 $ 0.1 Deferred revenue $ 34.0 $ 32.2 $ 1.8 $ 1.8 Derivative receivable $ 3.6 $ 11.7 $ (8.2 ) $ 8.2 Operational liabilities and other, net of assets $ 113.7 $ 67.8 $ 45.9 $ 45.9 Working capital deficit change, excluding cash and cash equivalents $ 41.8 Note: Totals may not sum due to rounding.
Balance Sheet Working Capital The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents at: December 28, December 30, Increase/ 2024 2023 (Decrease) (in millions) Total current assets $ 102.6 $ 179.5 $ (76.8 ) Total current liabilities 173.3 205.5 (32.1 ) Working capital deficit (70.7 ) (26.0 ) 44.7 Cash and cash equivalents 53.0 109.4 (56.3 ) Working capital deficit, excluding cash and cash equivalents $ (123.7 ) $ (135.4 ) $ (11.6 ) Note: Totals may not sum due to rounding. 61 The following table sets forth a summary of the primary factors contributing to the $11.6 million decrease in our working capital deficit, excluding cash and cash equivalents: Impact to December 28, December 30, Increase/ Working 2024 2023 (Decrease) Capital Deficit (in millions) Operational liabilities and other, net of assets $ 81.8 $ 113.7 $ (31.9 ) $ (31.9 ) Deferred revenue $ 31.7 $ 34.0 $ (2.3 ) $ (2.3 ) Portion of operating lease liabilities due within one year $ 8.2 $ 9.6 $ (1.4 ) $ (1.4 ) Income taxes payable $ 2.3 $ 1.6 $ 0.7 $ 0.7 Derivative receivable $ — $ 3.6 $ (3.6 ) $ 3.6 Accrued interest $ 11.3 $ 5.3 $ 6.0 $ 6.0 Prepaid income taxes $ 11.7 $ 25.4 $ (13.7 ) $ 13.7 Working capital deficit change, excluding cash and cash equivalents $ (11.6 ) Note: Totals may not sum due to rounding.
The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of the swaps then in effect, was approximately 7.64% and 5.45% per annum at December 30, 2023 and December 31, 2022, respectively, based on interest rates on these dates.
The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of any applicable interest rate swaps, was approximately 7.75% and 7.64% per annum at December 28, 2024 and December 30, 2023, respectively, based on interest rates on these dates.
Risk Factors” of this Annual Report on Form 10-K. As a result of the inherent uncertainty associated with forming the estimates within our goodwill and franchise rights acquired impairment tests, actual results could differ from those estimates.
As a result of the inherent uncertainty associated with forming the estimates within our goodwill and franchise rights acquired impairment tests, actual results could differ from those estimates.
Recruitment and retention are key drivers for this metric. • End of Period Subscribers—The “End of Period Subscribers” metric reports WW subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital, including former Digital 360 (as applicable), subscribers; (ii) “End of Period Workshops + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; (iii) “End of Period Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “End of Period Subscribers” is the sum of End of Period Digital Subscribers, End of Period Workshops + Digital Subscribers and End of Period Clinical Subscribers.
Recruitment and retention are key drivers for this metric. • End of Period Subscribers—The “End of Period Subscribers” metric reports Subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital subscribers; (ii) “End of Period Workshops + Digital Subscribers” is the total number of Workshops + Digital subscribers; (iii) “End of Period Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “End of Period Subscribers” is the sum of End of Period Digital Subscribers, End of Period Workshops + Digital Subscribers and End of Period Clinical Subscribers.
(in millions except percentages) Fiscal 2023 Fiscal 2022 Operating Income (Loss) $ 22.3 $ (284.0 ) Operating Income (Loss) Margin 2.5 % (27.3 %) Adjustments to Reported Amounts (1) 2023 plan restructuring charges 53.7 13.6 2022 plan restructuring charges 1.1 27.2 2021 plan restructuring charges 0.1 (0.3 ) 2020 plan restructuring charges (0.0 ) (0.7 ) Acquisition transaction costs 8.6 — Franchise rights acquired and goodwill impairments 3.6 396.7 Operating Income, as adjusted (1) $ 89.5 $ 152.5 Operating Income Margin impact from above adjustments (1) (7.5 %) (42.0 %) Operating Income Margin, as adjusted (1) 10.1 % 14.7 % Note: Totals may not sum due to rounding.
(in millions except percentages) Fiscal 2024 Fiscal 2023 Operating (Loss) Income $ (236.2 ) $ 22.3 Operating (Loss) Income Margin (30.1 %) 2.5 % Adjustments to Reported Amounts (1) Franchise rights acquired and goodwill impairments 315.0 3.6 2024 plan restructuring charges 17.0 — 2023 plan restructuring charges 5.1 53.7 2022 plan restructuring charges 0.0 1.1 2021 plan restructuring charges — 0.1 2020 plan restructuring charges — (0.0 ) Former CEO separation expenses 3.9 — Acquisition transaction costs — 8.6 Operating Income, as adjusted (1) $ 104.8 $ 89.5 Operating Income Margin impact from above adjustments (1) (43.4 %) (7.5 %) Operating Income Margin, as adjusted (1) 13.3 % 10.1 % Note: Totals may not sum due to rounding.
In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies. 47 Use of Constant Currency As exchange rates are an important factor in understanding period-to-period comparisons, we believe in certain cases the presentation of results on a constant currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods.
Use of Constant Currency As exchange rates are an important factor in understanding period-to-period comparisons, we believe in certain cases the presentation of results on a constant currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods.
The “Incoming Subscribers” metric reports WW subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital, including former Digital 360 (as applicable), subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of commitment plan subscribers that have access to combined workshops and digital offerings; (iii) “Incoming Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “Incoming Subscribers” is the sum of Incoming Digital Subscribers and Incoming Workshops + Digital Subscribers.
The “Incoming Subscribers” metric reports Subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of Workshops + Digital subscribers; (iii) “Incoming Clinical Subscribers” is the total number of Clinical subscribers; and (iv) “Incoming Subscribers” is the sum of Incoming Digital Subscribers, Incoming Workshops + Digital Subscribers and Incoming Clinical Subscribers, as applicable.
We performed our annual fair value impairment testing as of May 7, 2023 and May 8, 2022, each the first day of fiscal May, on our indefinite-lived intangible assets and goodwill.
We performed our annual fair value impairment testing as of May 5, 2024 and May 7, 2023, each the first day of fiscal May, on our indefinite-lived franchise rights acquired and goodwill.
Excluding the impact of foreign currency, which decreased cost of revenues in fiscal 2023 by $0.6 million, cost of revenues for fiscal 2023 would have decreased 13.8% versus the prior year.
Cost of Revenues Cost of revenues for fiscal 2024 decreased $107.4 million, or 29.8%, versus fiscal 2023. Excluding the impact of foreign currency, which increased cost of revenues in fiscal 2024 by $0.1 million, cost of revenues for fiscal 2024 would have decreased 29.8% versus the prior year.
The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during fiscal 2023 and fiscal 2022 and excluding the impact of our interest rate swaps then in effect, increased to 7.64% per annum at the end of fiscal 2023 from 5.45% per annum at the end of fiscal 2022.
The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during fiscal 2024 and fiscal 2023 and excluding the impact of any applicable interest rate swaps, increased to 7.74% per annum for fiscal 2024 from 7.64% per annum for fiscal 2023.
In performing our interim impairment analysis as of October 1, 2022, we determined that the carrying amounts of our United States, Canada and New Zealand franchise rights acquired with indefinite-lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our United States, Canada and New Zealand units of account of $298.3 million, $13.3 million and $1.1 million, respectively, in the third quarter of fiscal 2022.
In performing our interim impairment analysis as of March 30, 2024, we determined that the carrying values of our United States, Australia, New Zealand and United Kingdom franchise rights acquired with indefinite-lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our United States, Australia, New Zealand and United Kingdom units of account of $251.4 million, $4.1 million, $2.3 million and $0.2 million, respectively, in the first quarter of fiscal 2024.
If the trading values of both our equity and debt were to significantly decline from their levels at the time of testing, we may have to take an impairment charge at the appropriate time, which could be material. For additional information on risks associated with our recognizing asset impairment charges, see “Item 1A.
If the trading values of both our equity and debt were to significantly decline from their levels at the time of testing, we may have to take an impairment charge at the appropriate time, which could be material.
Excluding the net impact of the $21.2 million of restructuring charges in fiscal 2023 and the net impact of the $7.0 million of restructuring charges in fiscal 2022, cost of revenues for fiscal 2023 would have decreased by 17.6%, or 17.4% on a constant currency basis, versus the prior year.
Excluding the net impact of the $5.0 million of restructuring charges in fiscal 2024 and the net impact of the $21.2 million of restructuring charges in fiscal 2023, gross profit for fiscal 2024 would have decreased by 2.2%, or 2.3% on a constant currency basis, versus the prior year.
Including the impact of our interest rate swaps then in effect, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during fiscal 2023 and fiscal 2022, increased to 6.73% per annum at the end of fiscal 2023 from 5.67% per annum at the end of fiscal 2022.
Including the impact of any applicable interest rate swaps, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during fiscal 2024 and fiscal 2023, increased to 7.50% per annum for fiscal 2024 from 6.73% per annum for fiscal 2023.
Cash Flows The following table sets forth a summary of our cash flows for the fiscal years ended: December 30, December 31, 2023 2022 (in millions) Net cash provided by operating activities $ 6.7 $ 76.6 Net cash used for investing activities $ (74.7 ) $ (42.6 ) Net cash used for financing activities $ (2.7 ) $ (4.7 ) Operating Activities Cash flows provided by operating activities of $6.7 million for fiscal 2023 reflected a decrease of $70.0 million from $76.6 million of cash flows provided by operating activities for fiscal 2022.
Cash Flows The following table sets forth a summary of our cash flows for the fiscal years ended: December 28, December 30, 2024 2023 (in millions) Net cash (used for) provided by operating activities $ (16.8 ) $ 6.7 Net cash used for investing activities $ (16.4 ) $ (74.7 ) Net cash used for financing activities $ (17.3 ) $ (2.7 ) Operating Activities Cash flows used for operating activities of $16.8 million for fiscal 2024 reflected a change of $23.5 million from $6.7 million of cash flows provided by operating activities for fiscal 2023.
At the end of fiscal 2023 and fiscal 2022, our debt consisted of both fixed and variable-rate instruments. Interest rate swaps were entered into to hedge a portion of the cash flow exposure associated with our variable-rate borrowings.
At the end of fiscal 2024 and fiscal 2023, our debt consisted of both fixed and variable-rate instruments. We have historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. At December 28, 2024, we did not have any interest rate swaps in effect.
Indefinite-lived franchise rights acquired are tested for potential impairment on at least an annual basis or more often if events so require. 52 In performing the impairment analysis for indefinite-lived franchise rights acquired, the fair value for franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for franchise rights related to our Workshops + Digital business and a relief from royalty methodology for franchise rights related to our Digital business.
In performing the impairment analysis for indefinite-lived franchise rights acquired, the fair value for franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for franchise rights related to our Workshops + Digital business and a relief from royalty methodology for franchise rights related to our Digital business.
Operating income margin for fiscal 2023 was 2.5% compared to operating loss margin for fiscal 2022 of 27.3%.
Operating loss margin for fiscal 2024 was 30.1% compared to operating income margin for fiscal 2023 of 2.5%.
Selling, general and administrative expenses as a percentage of revenue for fiscal 2023 increased to 29.8% from 25.4% for fiscal 2022.
Selling, general and administrative expenses as a percentage of revenue for fiscal 2024 decreased to 27.7% from 29.8% for fiscal 2023.
Excluding the net impact of the $54.9 million of restructuring charges in fiscal 2023, the impact of the $8.6 million of acquisition transaction costs in fiscal 2023, the impact of the $3.6 million of franchise rights acquired and goodwill impairments in fiscal 2023, the impact of the $396.7 million of franchise rights acquired and goodwill impairments in fiscal 2022 and the net impact of the $39.7 million of restructuring charges in fiscal 2022, operating income would have been $89.5 million for fiscal 2023 versus operating income of $152.5 million for fiscal 2022, a decrease of 41.3%, or 42.7% on a constant currency basis.
Excluding the impact of the $315.0 million of franchise rights acquired impairments in fiscal 2024, the net impact of the $22.2 million of restructuring charges in fiscal 2024, the impact of the $3.9 million of former CEO separation expenses in fiscal 2024, the net impact of the $54.9 million of restructuring charges in fiscal 2023, the impact of the $8.6 million of acquisition transaction costs in fiscal 2023, and the impact of the $3.6 million of franchise rights acquired and goodwill impairments in fiscal 2023, operating income would have been $104.8 million, or $104.4 million on a constant currency basis, for fiscal 2024 versus operating income of $89.5 million for fiscal 2023.
Gross Profit Gross profit for fiscal 2023 decreased $92.1 million, or 14.8%, versus fiscal 2022. Excluding the impact of foreign currency, which positively impacted gross profit in fiscal 2023 by $1.4 million, gross profit for fiscal 2023 would have decreased 15.0% versus the prior year.
Gross Profit Gross profit for fiscal 2024 increased $3.8 million, or 0.7%, versus fiscal 2023. Excluding the impact of foreign currency, which positively impacted gross profit in fiscal 2024 by $0.6 million, gross profit for fiscal 2024 would have increased 0.6% versus the prior year.
There were no outstanding borrowings under the Revolving Credit Facility as of December 30, 2023. 64 All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of our current and future wholly-owned material domestic restricted subsidiaries.
All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of our current and future wholly-owned material domestic restricted subsidiaries.
Operating Income (Loss) Margin The following table sets forth our operating income (loss) and operating income (loss) margin for the past two fiscal years, as adjusted for fiscal 2023 and fiscal 2022 to exclude the net impact of restructuring charges, the impact of the acquisition transaction costs, and the impact of franchise rights acquired and goodwill impairments, as applicable.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. 48 Operating (Loss) Income Margin The following table sets forth our operating (loss) income and operating (loss) income margin for the past two fiscal years, as adjusted for fiscal 2024 and fiscal 2023 to exclude the impact of franchise rights acquired and goodwill impairments, the net impact of restructuring charges, the impact of former CEO separation costs, and the impact of the acquisition transaction costs, as applicable.
We generally refer to such non-GAAP measures as follows: (i) with respect to the adjustments for fiscal 2023, as excluding or adjusting for the net impact of restructuring charges, the impact of acquisition transaction costs, and the impact of franchise rights acquired and goodwill impairments; and (ii) with respect to the adjustments for fiscal 2022, as excluding or adjusting for the impact of franchise rights acquired and goodwill impairments and the net impact of restructuring charges.
We generally refer to such non-GAAP measures as excluding or adjusting for the impact of franchise rights acquired and goodwill impairments, the net impact of restructuring charges, the impact of former CEO separation expenses, and the impact of acquisition transaction costs, as applicable.
Cost of Revenues Total cost of revenues primarily consists of expenses to operate our studios and workshops, costs to sell consumer products and costs to develop and operate our digital and clinical products.
Recruitment and retention continue to be a key strategic focus. 47 Cost of Revenues Total cost of revenues primarily consists of expenses to operate our studios and workshops, costs to develop and provide our digital and clinical products and costs to sell consumer products.
This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit.
This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit. We have determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. 56 Consolidated Results Revenues Revenues for fiscal 2023 were $889.6 million, a decrease of $150.3 million, or 14.5%, versus fiscal 2022.
See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures. 55 Consolidated Results Revenues Revenues for fiscal 2024 were $785.9 million, a decrease of $103.6 million, or 11.6%, versus fiscal 2023.
The table below sets forth the reconciliation for net debt, a non-GAAP financial measure, to total debt, the most comparable GAAP financial measure, for the fiscal year ended: (in millions) December 30, 2023 Total debt $ 1,445.0 Less: Unamortized deferred financing costs 8.8 Less: Unamortized debt discount 9.8 Less: Cash on hand 109.4 Net debt $ 1,317.1 Note: Totals may not sum due to rounding.
As of December 28, 2024, our net debt/Adjusted EBITDAS ratio was 9.2x. 66 The table below sets forth the reconciliation for net debt, a non-GAAP financial measure, to total debt, the most comparable GAAP financial measure, for the fiscal year ended: (in millions) December 28, 2024 Total debt $ 1,445.0 Less: Unamortized deferred financing costs 6.9 Less: Unamortized debt discount 7.5 Less: Cash on hand 53.0 Net debt $ 1,377.6 Note: Totals may not sum due to rounding.
Critical Accounting Policies Information concerning our critical accounting policies is set forth in Note 2 “Summary of Significant Accounting Policies” of the notes to the audited consolidated financial statements, contained in Part IV, Item 15 of this Annual Report on Form 10-K. 54 RESULTS OF OPERATIONS FOR FISCAL 2023 (52 weeks) COMPARED TO FISCAL 2022 (52 weeks) The table below sets forth selected financial information for fiscal 2023 from our consolidated statements of operations for fiscal 2023 versus selected financial information for fiscal 2022 from our consolidated statements of operations for fiscal 2022.
Further information regarding the results of our franchise rights acquired and goodwill annual impairment tests and our franchise rights acquired and goodwill interim impairment tests for the first and third quarters of fiscal 2024 can be found in Note 7 “Franchise Rights Acquired, Goodwill and Other Intangible Assets” of the notes to the audited consolidated financial statements, contained in Part IV, Item 15 of this Annual Report on Form 10-K. 52 Critical Accounting Policies Information concerning our critical accounting policies is set forth in Note 2 “Summary of Significant Accounting Policies” of the notes to the audited consolidated financial statements, contained in Part IV, Item 15 of this Annual Report on Form 10-K. 53 RESULTS OF OPERATIONS FOR FISCAL 2024 (52 weeks) COMPARED TO FISCAL 2023 (52 weeks) The table below sets forth selected financial information for fiscal 2024 from our consolidated statements of operations for fiscal 2024 versus selected financial information for fiscal 2023 from our consolidated statements of operations for fiscal 2023.
Excluding the net impact of restructuring charges in fiscal 2023, the impact of acquisition transaction costs in fiscal 2023, the impact of the franchise rights acquired and goodwill impairments in fiscal 2023, the impact of the franchise rights acquired and goodwill impairments in fiscal 2022 and the net impact of restructuring charges in fiscal 2022, operating income margin would have been 10.1% for fiscal 2023 versus operating income margin of 14.7% for fiscal 2022, a decrease of 4.6%, or 4.8% on a constant currency basis.
Excluding the impact of franchise rights acquired impairments in fiscal 2024, the net impact of restructuring charges in fiscal 2024, the impact of former CEO separation expenses in fiscal 2024, the net impact of restructuring charges in fiscal 2023, the impact of acquisition transaction costs in fiscal 2023, and the impact of the franchise rights acquired and goodwill impairments in fiscal 2023, operating income margin would have been 13.3%, both as adjusted and as adjusted on a constant currency basis, for fiscal 2024 versus operating income margin of 10.1% for fiscal 2023.
This decrease in operating income margin was driven by an increase in marketing expenses as a percentage of revenue and an increase in selling, general and administrative expenses as a percentage of revenue, partially offset by an increase in gross margin, versus the prior year. 58 Interest Expense Interest expense for fiscal 2023 increased $14.8 million, or 18.2%, versus fiscal 2022.
This increase in operating income margin was driven primarily by an increase in gross margin, partially offset by an increase in marketing expenses as a percentage of revenue, versus the prior year. 57 Interest Expense Interest expense for fiscal 2024 increased $13.1 million, or 13.6%, versus fiscal 2023.
Excluding the net impact of restructuring charges in fiscal 2023, the impact of acquisition transaction costs in fiscal 2023 and the net impact of restructuring charges in fiscal 2022, selling, general and administrative expenses as a percentage of revenue for fiscal 2023 would have increased by 2.8%, both as adjusted and as adjusted on a constant currency basis, versus the prior year. 57 Impairments During the fourth quarter of fiscal 2023, we had a shift in future strategic priorities and as a result, a triggering event occurred which required us to impair the remaining (i) goodwill balances for our Republic of Ireland and Northern Ireland reporting units, resulting in goodwill impairment charges of $2.4 million and $1.2 million, respectively, and (ii) franchise rights acquired balance for our Northern Ireland unit of account, resulting in a franchise rights acquired impairment charge of $47 thousand.
During the fourth quarter of fiscal 2023, we had a shift in future strategic priorities and as a result, a triggering event occurred which required us to impair the remaining (i) goodwill balances for our Republic of Ireland and Northern Ireland reporting units, resulting in goodwill impairment charges of $2.4 million and $1.2 million, respectively, and (ii) franchise rights acquired balance for our Northern Ireland unit of account, resulting in a franchise rights acquired impairment charge of $47 thousand.
On a quarterly basis, we pay a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon our Consolidated First Lien Leverage Ratio (as defined in the Credit Agreement). 65 The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.
The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+2 added−7 removed0 unchanged
Biggest changeAs a result, substantially all of our revenues and expenses in each jurisdiction in which we operate are in the same functional currency. In general, we are a net receiver of currencies other than the U.S. dollar. Accordingly, changes in exchange rates may negatively affect our revenues and gross margins as expressed in U.S. dollars.
Biggest changeIn general, we are a net receiver of currencies other than the U.S. dollar. Accordingly, changes in exchange rates may negatively affect our revenues and gross margins as expressed in U.S. dollars. In the future, we may enter into forward and swap contracts to hedge transactions denominated in foreign currencies to reduce the currency risk associated with fluctuating exchange rates.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk We are exposed to market risks relating to interest rate changes and foreign currency fluctuations. All of our market risk sensitive instruments were entered into for purposes other than trading. The Company’s exposure to market risk as of the end of fiscal 2023 is described below.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk We are exposed to market risks relating to interest rate changes and foreign currency fluctuations. All of our market risk sensitive instruments were entered into for purposes other than trading. The Company’s exposure to market risk as of the end of fiscal 2024 is described below.
Accordingly, as of December 30, 2023, based on the amount of variable rate debt outstanding and the then-current Term SOFR rate, after giving consideration to the impact of the interest rate swaps and the Term SOFR Floor, a hypothetical 125 basis point increase in interest rates would have increased annual interest expense by approximately $5.6 million and a hypothetical 125 basis point decrease in interest rates would have decreased annual interest expense by approximately $5.6 million.
Accordingly, as of December 28, 2024, based on the amount of variable rate debt outstanding and the then-current Term SOFR rate, after giving consideration to the Term SOFR Floor, a hypothetical 125 basis point increase in interest rates would have increased annual interest expense by approximately $11.8 million and a hypothetical 125 basis point decrease in interest rates would have decreased annual interest expense by approximately $11.8 million.
Other than this transition during the second quarter of fiscal 2023, there have been no material changes to our exposure to market risk from the end of fiscal 2022 as compared to the end of fiscal 2023. 69 Our exposure to market risk for changes in interest rates relates to interest expense of variable rate debt, in particular changes in Term SOFR or the base rates which are used to determine the applicable interest rates for borrowings under the Credit Facilities.
Interest Rate Risk Our exposure to market risk for changes in interest rates relates to interest expense of variable rate debt, in particular changes in Term SOFR or the base rates which are used to determine the applicable interest rates for borrowings under the Credit Facilities.
Revenues and expenses are translated into U.S. dollars at the average exchange rate for the period. The resulting translation adjustments are recorded in shareholders’ equity as a component of accumulated other comprehensive loss. In addition, exchange rate fluctuations will cause the U.S. dollar translated amounts to change in comparison to prior periods.
The assets and liabilities of our non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated into U.S. dollars at the average exchange rate for the period. The resulting translation adjustments are recorded in shareholders’ equity as a component of accumulated other comprehensive loss.
For the Term Loan Facility, the minimum interest rate for Term SOFR applicable to such facility pursuant to the terms of the Credit Agreement was set at 0.50%, referred to herein as the Term SOFR Floor. In addition, as of December 30, 2023, our interest rate swaps in effect had an aggregate notional amount of $500.0 million.
As of December 28, 2024, borrowings under the Credit Facilities bore interest at Term SOFR plus an applicable margin of 3.50%. For the Term Loan Facility, the minimum interest rate for Term SOFR applicable to such facility pursuant to the terms of the Credit Agreement was set at 0.50%, referred to herein as the Term SOFR Floor.
This increase and decrease would have been driven primarily by the interest rate applicable to our Term Loan Facility. Foreign Currency Risk Other than inter-company transactions between our domestic and foreign entities, we generally do not have significant transactions that are denominated in a currency other than the functional currency applicable to each entity.
Foreign Currency Risk Other than inter-company transactions between our domestic and foreign entities, we generally do not have significant transactions that are denominated in a currency other than the functional currency applicable to each entity. As a result, substantially all of our revenues and expenses in each jurisdiction in which we operate are in the same functional currency.
In the future, we may enter into forward and swap contracts to hedge transactions denominated in foreign currencies to reduce the currency risk associated with fluctuating exchange rates. Realized and unrealized gains and losses from any of these transactions may be included in net income for the period.
Realized and unrealized gains and losses from any of these transactions may be included in net income for the period. Fluctuations in currency exchange rates, particularly with respect to the euro, canadian dollar and pound sterling, may impact our shareholders’ equity.
Removed
Interest Rate Risk During the second quarter of fiscal 2023, in connection with the previously announced planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with Term SOFR as the benchmark rate under the Credit Agreement and modified our interest rate swap agreements to transition from LIBOR-indexed to Term SOFR-indexed periodic swap payments to align with interest payments in connection with our Term SOFR-indexed debt.
Added
This change in market risk exposure from the end of fiscal 2023 was primarily due to the termination, pursuant to their respective terms, of our then in effect interest rate swaps in the second quarter of fiscal 2024.
Removed
On June 11, 2018, in order to hedge a portion of our variable rate debt, we entered into a forward-starting interest rate swap (the “2018 swap”) with an effective date of April 2, 2020 and a termination date of March 31, 2024. The initial notional amount of this swap was $500.0 million.
Added
In addition, exchange rate fluctuations will cause the U.S. dollar translated amounts to change in comparison to prior periods. 68
Removed
During the term of this swap, the notional amount decreased from $500.0 million effective April 2, 2020 to $250.0 million on March 31, 2021. Following the transition from LIBOR to Term SOFR, this interest rate swap effectively fixed the variable interest rate on the notional amount of this swap at 3.1513%.
Removed
On June 7, 2019, in order to hedge a portion of our variable rate debt, we entered into a forward-starting interest rate swap (the “2019 swap”, and together with the 2018 swap, the “current swaps”) with an effective date of April 2, 2020 and a termination date of March 31, 2024. The notional amount of this swap is $250.0 million.
Removed
Following the transition from LIBOR to Term SOFR, this interest rate swap effectively fixed the variable interest rate on the notional amount of this swap at 1.9645%. The current swaps qualify for hedge accounting and, therefore, changes in the fair value of the current swaps have been recorded in accumulated other comprehensive loss.
Removed
As of the end of fiscal 2023, we had $945.0 million of variable rate debt, of which $445.0 million remained unhedged. As of December 30, 2023, borrowings under the Credit Facilities bore interest at Term SOFR plus an applicable margin of 3.50%.
Removed
Fluctuations in currency exchange rates, particularly with respect to the euro, canadian dollar and pound sterling, may impact our shareholders’ equity. The assets and liabilities of our non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at the balance sheet date.

Other WW 10-K year-over-year comparisons