WW International (Nasdaq: WW) turns Q2 2026 profit amid high debt
WW International reported Q2 2026 net revenue of $162.3 million and net income of $14.1 million, or $1.41 per diluted share, driven by Behavioral subscription revenue of $121.5 million and Clinical subscription revenue of $39.9 million, with a gross margin of 70.3%.
For the first six months of 2026, revenue was $330.6 million and the company recorded a net loss of $37.9 million, with diluted loss per share of $3.79. Cash and restricted cash totaled $107.3 million at June 30, 2026, against approximately $424 million of long-term debt under a term loan maturing in 2030.
WW, which emerged from Chapter 11 in June 2025 and now operates with a $465.0 million senior secured term loan structure, continues to report as a single segment across Behavioral and Clinical offerings. Management states it does not foresee needing additional liquidity in the next 12 months but notes that the Behavioral reporting unit and trade name intangible are both close to potential impairment thresholds.
Positive
- None.
Negative
- None.
Key Figures
Key Terms
fresh start accounting financial
Chapter 11 Cases regulatory
New Term Loan Facility financial
reorganization items, net financial
valuation allowance financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did WW (WW) perform financially in Q2 2026?
What were WW (WW)'s results for the first six months of 2026?
What is WW (WW)'s liquidity and debt position as of June 30, 2026?
How do WW (WW)'s Behavioral and Clinical businesses contribute to revenue?
What are the key risks around goodwill and intangibles for WW (WW)?
How did bankruptcy emergence change WW (WW)'s capital structure?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
☒ |
|
|
|
|
|
|
|
Non-accelerated filer |
|
☐ |
Smaller reporting company |
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes
The number of shares of common stock outstanding as of July 30, 2026 was
WW INTERNATIONAL, INC.
TABLE OF CONTENTS
|
|
Page No. |
|
|
|
PART I—FINANCIAL INFORMATION |
|
|
|
|
|
Item 1. |
Financial Statements |
2 |
|
|
|
|
Unaudited Consolidated Balance Sheets |
2 |
|
|
|
|
Unaudited Consolidated Statements of Operations |
3 |
|
|
|
|
Unaudited Consolidated Statements of Comprehensive Income (Loss) |
5 |
|
|
|
|
Unaudited Consolidated Statements of Changes in Total Equity (Deficit) |
7 |
|
|
|
|
Unaudited Consolidated Statements of Cash Flows |
9 |
|
|
|
|
Notes to Unaudited Consolidated Financial Statements |
10 |
|
|
|
Cautionary Notice Regarding Forward-Looking Statements |
23 |
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
43 |
|
|
|
Item 4. |
Controls and Procedures |
43 |
|
|
|
PART II—OTHER INFORMATION |
|
|
|
|
|
Item 1. |
Legal Proceedings |
44 |
|
|
|
Item 1A. |
Risk Factors |
44 |
|
|
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
45 |
|
|
|
Item 3. |
Defaults Upon Senior Securities |
45 |
|
|
|
Item 4. |
Mine Safety Disclosures |
45 |
|
|
|
Item 5. |
Other Information |
45 |
|
|
|
Item 6. |
Exhibits |
46 |
|
|
|
Signatures |
47 |
|
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
ASSETS |
|
|
|
|
|
||
CURRENT ASSETS |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Receivables (net of allowances: June 30, 2026 - $ |
|
|
|
|
|
||
Prepaid income taxes |
|
|
|
|
|
||
Prepaid marketing and advertising |
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
||
TOTAL CURRENT ASSETS |
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
||
Operating lease assets |
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
||
Other intangible assets, net |
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
||
Other noncurrent assets |
|
|
|
|
|
||
TOTAL ASSETS |
$ |
|
|
$ |
|
||
LIABILITIES AND EQUITY |
|
|
|
|
|
||
CURRENT LIABILITIES |
|
|
|
|
|
||
Portion of operating lease liabilities due within one year |
$ |
|
|
$ |
|
||
Accounts payable |
|
|
|
|
|
||
Salaries and wages payable |
|
|
|
|
|
||
Accrued marketing and advertising |
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
||
Other accrued liabilities |
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
||
Deferred revenue |
|
|
|
|
|
||
TOTAL CURRENT LIABILITIES |
|
|
|
|
|
||
Long-term debt, net |
|
|
|
|
|
||
Long-term operating lease liabilities |
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
||
Other noncurrent liabilities |
|
|
|
|
|
||
TOTAL LIABILITIES |
|
|
|
|
|
||
EQUITY |
|
|
|
|
|
||
Successor common stock, $ |
|
|
|
|
|
||
Accumulated deficit |
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive (loss) income |
|
( |
) |
|
|
|
|
TOTAL EQUITY |
|
|
|
|
|
||
TOTAL LIABILITIES AND TOTAL EQUITY |
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of the consolidated financial statements.
2
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Subscription revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Other revenue, net |
|
|
|
|
|
|
|
|
|
|||
Revenue, net |
|
|
|
|
|
|
|
|
|
|||
Cost of subscription revenue |
|
|
|
|
|
|
|
|
|
|||
Cost of other revenue |
|
|
|
|
— |
|
|
|
|
|
||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Gross profit |
|
|
|
|
|
|
|
|
|
|||
Marketing expenses |
|
|
|
|
|
|
|
|
|
|||
Product development expenses |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|||
Operating income |
|
|
|
|
|
|
|
|
|
|||
Reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Gain on extinguishment of debt |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
Other (income) expense, net |
|
( |
) |
|
|
|
|
|
|
|
||
Income before income taxes |
|
|
|
|
|
|
|
|
|
|||
Benefit from income taxes |
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
Net income |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Earnings per share |
|
|
|
|
|
|
|
|
|
|||
Basic |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Diluted |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
|
|
|
|
|
|
|
|||
Diluted |
|
|
|
|
|
|
|
|
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
3
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Subscription revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Other revenue, net |
|
|
|
|
|
|
|
|
|
|||
Revenue, net |
|
|
|
|
|
|
|
|
|
|||
Cost of subscription revenue |
|
|
|
|
|
|
|
|
|
|||
Cost of other revenue |
|
|
|
|
— |
|
|
|
|
|
||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|||
Gross profit |
|
|
|
|
|
|
|
|
|
|||
Marketing expenses |
|
|
|
|
|
|
|
|
|
|||
Product development expenses |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|||
Franchise rights acquired impairments |
|
— |
|
|
|
— |
|
|
|
|
|
|
Operating (loss) income |
|
( |
) |
|
|
|
|
|
|
|
||
Reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Gain on extinguishment of debt |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
Other (income) expense, net |
|
( |
) |
|
|
|
|
|
|
|
||
(Loss) income before income taxes |
|
( |
) |
|
|
|
|
|
|
|
||
(Benefit from) provision for income taxes |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
(Net loss) earnings per share |
|
|
|
|
|
|
|
|
|
|||
Basic |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
Diluted |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
|
|
|
|
|
|
|
|||
Diluted |
|
|
|
|
|
|
|
|
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
4
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS)
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Net income |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation (loss) gain |
|
( |
) |
|
|
|
|
|
|
|
||
Income tax expense on foreign currency translation (loss) gain |
|
— |
|
|
|
— |
|
|
|
|
— |
|
Foreign currency translation (loss) gain, net of taxes |
|
( |
) |
|
|
|
|
|
|
|
||
Total other comprehensive (loss) income |
|
( |
) |
|
|
|
|
|
|
|
||
Comprehensive income |
$ |
|
|
$ |
|
|
|
$ |
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
5
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS)
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation (loss) gain |
|
( |
) |
|
|
|
|
|
|
|
||
Income tax expense on foreign currency translation (loss) gain |
|
— |
|
|
|
— |
|
|
|
|
— |
|
Foreign currency translation (loss) gain, net of taxes |
|
( |
) |
|
|
|
|
|
|
|
||
Total other comprehensive (loss) income |
|
( |
) |
|
|
|
|
|
|
|
||
Comprehensive (loss) income |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
The accompanying notes are an integral part of the consolidated financial statements.
6
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED Consolidated Statements of Changes in Total Equity (Deficit)
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|||||||||
|
Successor |
|
|
Predecessor |
|
|
Predecessor |
|
|
Other |
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock |
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Comprehensive |
|
|
Retained |
|
|
|
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
(Loss) Income |
|
|
Earnings |
|
|
Total |
|
|||||||||
Balance at March 29, 2025 (Predecessor) |
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
— |
|
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
Comprehensive income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Issuance of treasury stock under stock plans |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Compensation expense on share-based awards |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Cancellation of Predecessor equity |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Issuance of Successor equity |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at June 24, 2025 (Predecessor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||
Balance at June 25, 2025 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|||
Comprehensive income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Balance at June 30, 2025 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|||||||||
|
Successor |
|
|
Predecessor |
|
|
Predecessor |
|
|
Other |
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock |
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Income |
|
|
Deficit |
|
|
Total |
|
|||||||||
Balance at March 31, 2026 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Comprehensive income (loss) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
||
Compensation expense on share-based awards |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at June 30, 2026 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
7
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED Consolidated Statements of Changes in Total Equity (Deficit)
(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|||||||||
|
Successor |
|
|
Predecessor |
|
|
Predecessor |
|
|
Other |
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock |
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Comprehensive |
|
|
Retained |
|
|
|
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
(Loss) Income |
|
|
Earnings |
|
|
Total |
|
|||||||||
Balance at December 28, 2024 (Predecessor) |
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
— |
|
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
Comprehensive income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Issuance of treasury stock under stock plans |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Compensation expense on share-based awards |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Cancellation of Predecessor equity |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Issuance of Successor equity |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at June 24, 2025 (Predecessor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||
Balance at June 25, 2025 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||
Comprehensive income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Balance at June 30, 2025 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|||||||||
|
Successor |
|
|
Predecessor |
|
|
Predecessor |
|
|
Other |
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock |
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Income (Loss) |
|
|
Deficit |
|
|
Total |
|
|||||||||
Balance at December 31, 2025 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Comprehensive loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Compensation expense on share-based awards |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at June 30, 2026 (Successor) |
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
8
WW INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
|
Successor |
|
|
|
Predecessor |
||||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|
|||
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
||
Adjustments to reconcile net (loss) income to cash (used for) provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|||
Amortization of deferred financing costs and debt (premium) discount, net |
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
Impairment of franchise rights acquired |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
Impairment of long-lived assets |
|
|
|
|
— |
|
|
|
|
|
|
||
Share-based compensation expense |
|
|
|
|
— |
|
|
|
|
|
|
||
Deferred tax (benefit) provision |
|
( |
) |
|
|
— |
|
|
|
|
|
(1) |
|
Allowance for doubtful accounts |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
Foreign currency exchange rate (gain) loss |
|
( |
) |
|
|
|
|
|
|
|
|
||
Non-cash reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Gain on extinguishment of debt |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
Changes in cash due to: |
|
|
|
|
|
|
|
|
|
|
|||
Receivables |
|
|
|
|
|
|
|
|
|
|
|||
Prepaid expenses |
|
|
|
|
|
|
|
|
( |
) |
|
||
Accounts payable |
|
|
|
|
|
|
|
|
( |
) |
|
||
Accrued liabilities |
|
( |
) |
|
|
|
|
|
|
|
|
||
Deferred revenue |
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
Other long-term assets and liabilities, net |
|
( |
) |
|
|
— |
|
|
|
|
( |
) |
|
Income taxes |
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
(1) |
Cash (used for) provided by operating activities |
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Capitalized software and website development expenditures |
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
Other items, net |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Cash used for investing activities |
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|||
Borrowings on revolving credit facility |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
Financing costs |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Payments on long-term debt |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
Taxes paid related to net share settlement of equity awards |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Cash paid for acquisitions |
|
— |
|
|
|
— |
|
|
|
|
( |
) |
|
Cash (used for) provided by financing activities |
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
|
( |
) |
|
|
|
|
|
|
|
|
||
Net (decrease) increase in cash and cash equivalents and restricted cash |
|
( |
) |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents and restricted cash, end of period |
$ |
|
|
$ |
|
|
|
$ |
|
|
|||
The accompanying notes are an integral part of the consolidated financial statements.
9
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The accompanying consolidated financial statements include the accounts of WW International, Inc., all of its subsidiaries and the variable interest entities of which WW International, Inc. is the primary beneficiary. The terms “Company” and “WW” as used throughout these notes are used to indicate WW International, Inc. and all of its operations consolidated for purposes of its financial statements. The Company’s “Behavioral” business refers to providing subscriptions to the Company’s digital product offerings with the option to add on unlimited access to the Company’s workshops. The Company’s “Clinical” business refers to providing subscriptions to the Company’s clinical product offerings provided by Weight Watchers Clinic and third parties combined with the Company’s digital subscription product offerings and unlimited access to the Company’s workshops.
These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal 2025 filed on March 16, 2026, which includes additional information about the Company, its results of operations, its financial position and its cash flows.
Emergence from Bankruptcy
As previously disclosed, on May 6, 2025 (the “Petition Date”), WW International, Inc. and its subsidiaries WW North America Holdings, LLC, WW Canada Holdco, Inc., WW.com, LLC, W Holdco, Inc., WW Health Solutions, Inc., Weekend Health, Inc. and WW NewCo, Inc. (the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”). Subsequently, on May 30, 2025, the Debtors filed with the Court the First Amended Joint Prepackaged Plan of Reorganization of WW International, Inc. and its Debtor Affiliates, Docket No. 143 (as supplemented, the “Plan”), and on June 24, 2025 (the “Emergence Date”), the Debtors emerged from the Chapter 11 Cases in accordance with the Plan.
Between the Petition Date and the Emergence Date, the Debtors entered into certain first day motions and received approval from the Court to take certain operating actions under the supervision of the Court. The effect of the Debtors’ emergence from bankruptcy has been applied to the financial statements as of the close of business on June 24, 2025.
As used herein, references to “Predecessor” relate to the Company and its operations prior to and including the Emergence Date and references to “Successor” relate to the Company and its operations after the Emergence Date.
In accordance with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets and liabilities based on their estimated fair value. Accordingly, the Successor’s unaudited consolidated financial statements after June 24, 2025 are not comparable with the Predecessor’s unaudited consolidated financial statements as of or prior to that date. The fair value of the assets and liabilities following the reorganization may differ from their recorded values as reflected on the historical balance sheet of the Predecessor.
All estimates, assumptions, valuations and financial projections related to fresh start accounting, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond the Company’s control. Accordingly, no assurances can be provided that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially.
10
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Debtors applied Accounting Standards Codification (“ASC”) 852, Reorganizations, during the period from the Petition Date to the Emergence Date. The prepetition liabilities that are unsecured, under-secured or where it could not be determined that the liabilities are fully secured, were classified to “Liabilities subject to compromise” through the Emergence Date. For the period from the Petition Date to the Emergence Date, the Predecessor prepared the unaudited financial statements by distinguishing transactions associated with the reorganization as separate from activities related to the ongoing operations of the business. Accordingly, certain expenses, realized gains and losses and provisions for losses that were realized or incurred during and directly related to the Chapter 11 Cases, including fresh start valuation adjustments and gains on liabilities subject to compromise, were recorded as reorganization items, net in the unaudited consolidated statements of operations in the Predecessor period.
Due to the lack of comparability with historical financial statements, the Company’s unaudited financial statements and related footnotes are presented with a “black line” that separates the Predecessor and Successor periods to emphasize the lack of comparability between amounts presented after the Emergence Date and amounts presented for all prior periods. The Successor’s financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material.
Liquidity
As noted above, the Debtors voluntarily commenced and completed a prepackaged bankruptcy filing under Chapter 11 of the Bankruptcy Code to restructure the Company’s debt and allow increased operating cash flow for funding its operations and strategic initiatives. The Company has experienced and expects to continue to experience significant market disruption and competitive pressures, and shifts in consumer behavior in the weight loss category. This includes a rapid adoption of GLP-1 and other medications available as weight-loss options, an evolving regulatory landscape, and significantly increased competition from new entrants. These factors have negatively impacted the Company’s business. While the Clinical business is growing, it has not yet been able to offset the declines in the Behavioral business, resulting in decreased revenue overall. Further, the Company has historically had recurring net losses.
The Company’s principal sources of liquidity are cash and cash equivalents and cash flows from operations. The Company’s primary cash needs are funding its operations and global strategic initiatives, meeting debt service requirements and other financing commitments. The Company had unrestricted cash on hand of $
The Company’s lease assets and lease liabilities for its studios and corporate offices were as follows:
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Assets: |
|
|
|
|
|
||
Operating leases |
$ |
|
|
$ |
|
||
Total lease assets |
$ |
|
|
$ |
|
||
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
||
Current |
|
|
|
|
|
||
Operating leases |
$ |
|
|
$ |
|
||
Noncurrent |
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
||
Total lease liabilities |
$ |
|
|
$ |
|
||
11
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The components of the Company’s lease cost were as follows:
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Operating lease cost: |
|
|
|
|
|
|
|
|
|
|||
Fixed lease cost |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Lease termination cost |
|
— |
|
|
|
— |
|
|
|
|
|
|
Variable lease cost |
|
— |
|
|
|
— |
|
|
|
|
|
|
Total operating lease cost |
$ |
|
|
$ |
|
|
|
$ |
|
|||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Operating lease cost: |
|
|
|
|
|
|
|
|
|
|||
Fixed lease cost |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Lease termination cost |
|
— |
|
|
|
— |
|
|
|
|
|
|
Variable lease cost |
|
— |
|
|
|
— |
|
|
|
|
|
|
Total operating lease cost |
$ |
|
|
$ |
|
|
|
$ |
|
|||
The Company recorded sublease income for the three months ended June 30, 2026 (Successor) and the period from March 30, 2025 through June 24, 2025 (Predecessor) of $
The Company’s weighted average remaining lease term and weighted average discount rates were as follows:
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Weighted Average Remaining Lease Term (years) |
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
||
|
|
|
|
|
|
||
Weighted Average Discount Rate |
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
||
The Company’s leases have remaining lease terms of
At June 30, 2026 (Successor), the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:
|
Operating |
|
|
Remainder of fiscal 2026 |
$ |
|
|
Fiscal 2027 |
|
|
|
Fiscal 2028 |
|
|
|
Fiscal 2029 |
|
|
|
Fiscal 2030 |
|
— |
|
Fiscal 2031 |
|
— |
|
Thereafter |
|
— |
|
Total lease payments |
$ |
|
|
Less imputed interest |
|
|
|
Present value of lease liabilities |
$ |
|
|
12
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Supplemental cash flow information related to leases were as follows:
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
|
|
|
|||
Operating cash flows from operating leases |
$ |
|
|
$ |
— |
|
|
|
$ |
|
||
Operating cash flows from finance leases |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
Financing cash flows from finance leases |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|||
Lease assets modified in exchange for modified operating lease liabilities |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
( |
) |
Lease assets obtained in exchange for new finance lease liabilities |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
The following tables present the Company’s revenue disaggregated by revenue source:
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Behavioral Subscription Revenue |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Clinical Subscription Revenue |
|
|
|
|
|
|
|
|
|
|||
Subscription Revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Other Revenue, net |
|
|
|
|
|
|
|
|
|
|||
Revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Behavioral Subscription Revenue |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Clinical Subscription Revenue |
|
|
|
|
|
|
|
|
|
|||
Subscription Revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Other Revenue, net |
|
|
|
|
|
|
|
|
|
|||
Revenue, net |
$ |
|
|
$ |
|
|
|
$ |
|
|||
13
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Information about Contract Balances
For Subscription Revenue, the Company can collect payment in advance of providing services. Any amounts collected in advance of services being provided are recorded in deferred revenue. In the case where amounts are not collected, but the service has been provided and the revenue has been recognized, the amounts are recorded in accounts receivable.
|
Deferred Revenue |
|
|
Deferred Revenue |
|
||
|
Current |
|
|
Long-Term |
|
||
Balance as of December 28, 2024 (Predecessor) |
$ |
|
|
$ |
|
||
Net decrease during the period |
|
( |
) |
|
|
( |
) |
Balance as of June 24, 2025 (Predecessor) |
$ |
|
|
$ |
|
||
Balance as of June 25, 2025 (Successor) |
$ |
|
|
$ |
|
||
Net increase during the period |
|
|
|
|
— |
|
|
Balance as of June 30, 2025 (Successor) |
$ |
|
|
$ |
|
|
Deferred Revenue |
|
|
Deferred Revenue |
|
||
|
Current |
|
|
Long-Term |
|
||
Balance as of December 31, 2025 (Successor) |
$ |
|
|
$ |
|
||
Net decrease during the period |
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2026 (Successor) |
$ |
|
|
$ |
|
||
Revenue recognized from amounts included in current deferred revenue as of December 28, 2024 (Predecessor) was $
Goodwill
The change in the carrying value of goodwill was as follows:
Balance as of December 28, 2024 (Predecessor) |
$ |
|
|
Effect of exchange rate changes |
|
|
|
Balance as of June 24, 2025 (Predecessor) - Prior to fresh start accounting |
$ |
|
|
Fresh start accounting adjustments |
|
( |
) |
Balance as of June 24, 2025 (Predecessor) |
$ |
|
Balance as of June 25, 2025 (Successor) |
$ |
|
|
Goodwill acquired during the period |
|
|
|
Effect of exchange rate changes |
|
|
|
Balance as of December 31, 2025 (Successor) |
$ |
|
|
Effect of exchange rate changes |
|
( |
) |
Balance as of June 30, 2026 (Successor) |
$ |
|
Goodwill Impairment
The Company reviews goodwill for potential impairment on at least an annual basis or more often if events so require. The Company performed its annual fair value impairment testing for fiscal 2026 and fiscal 2025 on May 1, 2026 (Successor) and May 4, 2025 (Predecessor), respectively.
14
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Based on the results of the annual goodwill impairment test performed for the Company’s Behavioral and Clinical reporting units, which held
The Company also conducted an interim goodwill impairment test for its Behavioral and Clinical reporting units during the three months ended March 31, 2026 (Successor) because various qualitative and quantitative factors collectively indicated a triggering event had occurred. Based on the results of the interim impairment test, the Company concluded that no goodwill impairment existed as of March 31, 2026 (Successor).
In performing the annual goodwill impairment test as of May 4, 2025 (Predecessor), the Company determined that the carrying values of its goodwill reporting units did not exceed their respective fair values and, therefore, no impairment existed.
The Company also conducted an interim goodwill impairment test for its Behavioral and Clinical reporting units during the three months ended March 29, 2025 (Predecessor) because various qualitative and quantitative factors collectively indicated a triggering event had occurred. Based on the results of the interim impairment test, the Company concluded that no goodwill impairment existed as of March 29, 2025 (Predecessor).
Other Intangible Assets, Net
The components of other intangible assets, net as of June 30, 2026 (Successor) and December 31, 2025 (Successor) were as follows:
|
Successor |
|
|||||||||||
|
June 30, |
|
|||||||||||
|
2026 |
|
|||||||||||
|
|
|
Gross |
|
|
|
|
|
Net |
|
|||
|
Useful |
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|||
|
Life |
|
Value |
|
|
Amortization |
|
|
Value |
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|||
Trade name |
Indefinite |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|||
Database |
|
|
|
|
|
|
|
|
|
||||
Developed technology |
|
|
|
|
|
|
|
|
|
||||
Customers/subscribers |
|
|
|
|
|
|
|
|
— |
|
|||
Customer relationships |
|
|
|
|
|
|
|
|
|
||||
Capitalized software and website development costs |
|
|
|
|
|
|
|
|
|
||||
Total other intangible assets |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
Successor |
|
|||||||||||
|
December 31, |
|
|||||||||||
|
2025 |
|
|||||||||||
|
|
|
Gross |
|
|
|
|
|
Net |
|
|||
|
Useful |
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|||
|
Life |
|
Value |
|
|
Amortization |
|
|
Value |
|
|||
Indefinite-lived intangible asset: |
|
|
|
|
|
|
|
|
|
|
|||
Trade name |
Indefinite |
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|||
Database |
|
|
|
|
|
|
|
|
|
||||
Developed technology |
|
|
|
|
|
|
|
|
|
||||
Customers/subscribers |
|
|
|
|
|
|
|
|
|
||||
Customer relationships |
|
|
|
|
|
|
|
|
|
||||
Capitalized software and website development costs |
|
|
|
|
|
|
|
|
|
||||
Total other intangible assets |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
15
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $
Estimated amortization expense of existing finite-lived intangible assets for the next five fiscal years and thereafter is as follows:
Remainder of fiscal 2026 |
$ |
|
|
Fiscal 2027 |
$ |
|
|
Fiscal 2028 |
$ |
|
|
Fiscal 2029 |
$ |
|
|
Fiscal 2030 |
$ |
|
|
Fiscal 2031 |
$ |
|
|
Thereafter |
$ |
— |
|
Other Indefinite-Lived Intangible Assets Impairment
The Company reviews other indefinite-lived intangible assets for potential impairment on at least an annual basis or more often if events so require. As discussed above, the Company performed its annual fair value impairment testing for fiscal 2026 and fiscal 2025 on May 1, 2026 (Successor) and May 4, 2025 (Predecessor), respectively.
Based on the results of the annual impairment test performed for the Company’s trade name indefinite-lived intangible asset, the Company concluded that no impairment existed as of May 1, 2026 (Successor). However, the Company identified its trade name indefinite-lived intangible asset as being at risk for impairment, as the estimated fair value of this asset exceeded its respective carrying value by less than
As discussed above, based on the triggering event indicated during the three months ended March 31, 2026 (Successor), the Company performed an interim impairment test for its trade name indefinite-lived intangible asset. Based on the results of the interim impairment test, the Company concluded that no impairment existed as of March 31, 2026 (Successor).
In performing the annual impairment test as of May 4, 2025 (Predecessor) for the Company’s franchise rights acquired indefinite-lived intangible asset, the Company determined that the carrying value did not exceed its respective fair value and, therefore, no impairment existed.
As discussed above, based on the triggering event indicated during the three months ended March 29, 2025 (Predecessor), the Company performed an interim impairment test for its franchise rights acquired indefinite-lived intangible asset. Based on the results of the interim impairment test, the Company determined that the carrying value of its United States indefinite-lived franchise rights acquired unit of account, which held
16
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The components of the Company’s long-term debt were as follows:
|
Successor |
|
|||||||||||||||||||||||||||||
|
June 30, |
|
|
December 31, |
|
||||||||||||||||||||||||||
|
2026 |
|
|
2025 |
|
||||||||||||||||||||||||||
|
Principal |
|
|
Unamortized |
|
|
Unamortized |
|
|
Effective |
|
|
Principal |
|
|
Unamortized |
|
|
Unamortized |
|
|
Effective |
|
||||||||
New Term Loan Facility due June 24, 2030 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
% |
||||||
Total |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
% |
||||||
Less: Current portion |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Less: Unamortized deferred financing costs |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||||
Plus: Unamortized debt premium |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total long-term debt |
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
||||||||
Total interest expense on long-term debt, inclusive of amortization of deferred financing costs and debt premium, amounted to $
As of June 30, 2026 (Successor) and December 31, 2025 (Successor), the Company’s debt consisted of variable-rate instruments. The weighted average interest rate (which includes amortization of deferred financing costs and debt premium) on the Company’s outstanding debt was approximately
Senior Secured Credit Agreement
In connection with the Company’s emergence from bankruptcy, on June 24, 2025 the Company, as borrower, the lenders party thereto, and Wilmington Savings Fund Society, FSB (“WSFS”), as administrative agent, entered into a senior secured credit agreement (the “Senior Secured Credit Agreement”) which provides for a five-year term loan in an aggregate principal amount of $
The New Term Loan Facility bears a variable interest rate based on either (1) the sum of (x) a base rate determined by reference to the highest of (a)
All obligations under the Senior Secured Credit Agreement are guaranteed by, subject to certain exceptions, each of the Company’s current and future material subsidiaries. All obligations under the Senior Secured Credit Agreement, and the guarantees of those obligations, are or will be secured by substantially all of the assets of the Company and each guarantor organized in the United States, the United Kingdom and the Netherlands (each, a “Secured Guarantor”).
In May 2026, the Company made a voluntary prepayment of $
17
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company is required to prepay (a)
Prepetition Liabilities
On April 13, 2021, the Company, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent and an issuing bank, entered into a credit agreement (the “Prepetition Credit Agreement”). The Prepetition Credit Agreement provided for senior secured financing of $
On April 13, 2021, the Company issued $
Basic earnings (net loss) per share is calculated utilizing the weighted average number of common shares outstanding during the periods presented. Diluted earnings (net loss) per share is calculated utilizing the weighted average number of common shares outstanding during the periods presented adjusted for the effect of dilutive common stock equivalents.
18
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth the computation of basic and diluted earnings (net loss) per share:
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|
|||
Net income |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Denominator: |
|
|
|
|
|
|
|
|
|
|||
Weighted average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|||
Effect of dilutive common stock equivalents |
|
|
|
|
— |
|
|
|
|
|
||
Weighted average diluted common shares outstanding |
|
|
|
|
|
|
|
|
|
|||
Earnings per share |
|
|
|
|
|
|
|
|
|
|||
Basic |
$ |
|
|
$ |
|
|
|
$ |
|
|||
Diluted |
$ |
|
|
$ |
|
|
|
$ |
|
|||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|
|||
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
Denominator: |
|
|
|
|
|
|
|
|
|
|||
Weighted average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|||
Effect of dilutive common stock equivalents |
|
— |
|
|
|
— |
|
|
|
|
|
|
Weighted average diluted common shares outstanding |
|
|
|
|
|
|
|
|
|
|||
(Net loss) earnings per share |
|
|
|
|
|
|
|
|
|
|||
Basic |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
Diluted |
$ |
( |
) |
|
$ |
|
|
|
$ |
|
||
The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted earnings (net loss) per share was
The Company historically calculated its interim provision for income taxes by applying an estimated annual effective tax rate (“AETR”) to year-to-date ordinary income or loss. However, for the three and six months ended June 30, 2026 (Successor), the Company determined that small variations in estimated full-year ordinary loss would result in significant, unreliable fluctuations in the estimated AETR. Consequently, pursuant to ASC 740-270, the income tax benefit for the three and six months ended June 30, 2026 (Successor) was computed using a discrete effective tax rate method applied to actual year-to-date results.
For the three and six months ended June 30, 2026 (Successor), the Company recorded a tax benefit of $
19
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Company recorded a tax benefit of $
The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduced a global minimum tax of
The following table presents the Company’s cash and cash equivalents and restricted cash by balance sheet location:
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Total cash and cash equivalents and restricted cash |
$ |
|
|
$ |
|
||
The Company’s restricted cash at June 30, 2026 (Successor) and December 31, 2025 (Successor) consisted of cash held in escrow accounts in connection with letters of credit and processor payments.
Due to the nature of the Company’s activities, it is, at times, subject to pending and threatened legal actions that arise out of the ordinary course of business. In the opinion of management, the disposition of any such matters is not expected, individually or in the aggregate, to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.
The Company operates as
Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
20
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
When measuring fair value, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs.
Fair Value of Financial Instruments
The fair value of the Company’s New Term Loan Facility was determined by utilizing average bid prices on or near the end of each fiscal quarter (Level 2 input). As of June 30, 2026 (Successor) and December 31, 2025 (Successor), the fair value of the Company’s New Term Loan Facility was approximately $
The Company did not have any transfers into or out of Levels 1 and 2 and did not maintain any assets or liabilities classified as Level 3 during the three and six months ended June 30, 2026 (Successor).
Amounts reclassified out of accumulated other comprehensive income (loss) were as follows:
Changes in Accumulated Other Comprehensive Income (Loss) by Component (1)
|
(Loss) Gain on |
|
|
Balance as of December 28, 2024 (Predecessor) |
$ |
( |
) |
Other comprehensive income, net of tax |
|
|
|
Fresh start accounting adjustments |
|
|
|
Balance as of June 24, 2025 (Predecessor) |
$ |
— |
|
|
|
|
|
|
|
|
|
Balance as of June 25, 2025 (Successor) |
$ |
— |
|
Other comprehensive income, net of tax |
|
|
|
Balance as of June 30, 2025 (Successor) |
$ |
|
|
|
Gain (Loss) on |
|
|
Balance as of December 31, 2025 (Successor) |
$ |
|
|
Other comprehensive loss, net of tax |
|
( |
) |
Balance as of June 30, 2026 (Successor) |
$ |
( |
) |
2025 Plan
As previously disclosed, in the fourth quarter of fiscal 2025 (Successor), the Company committed to a plan of reduction in force that has resulted in the elimination of certain positions and the termination of employment for certain employees worldwide in order to further streamline the Company’s operations (the “2025 Plan”). The cumulative amount incurred as of June 30, 2026 (Successor) related to the aggregate 2025 Plan is $
21
WW INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the three and six months ended June 30, 2026 (Successor), the components of the Company’s restructuring charges for the 2025 Plan were as follows:
|
Successor |
|
|||||
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
June 30, 2026 |
|
|
June 30, 2026 |
|
||
Restructuring charges: |
|
|
|
|
|
||
Employee termination benefit costs |
$ |
|
|
$ |
|
||
Other cash restructuring charges |
|
|
|
|
|
||
Total restructuring charges |
$ |
|
|
$ |
|
||
For the three and six months ended June 30, 2026 (Successor), restructuring charges for the 2025 Plan were recorded in the Company’s consolidated statements of operations as follows:
|
Successor |
|
|||||
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
June 30, 2026 |
|
|
June 30, 2026 |
|
||
Cost of revenue |
$ |
— |
|
|
$ |
( |
) |
Selling, general and administrative expenses |
|
|
|
|
|
||
Total restructuring charges |
$ |
|
|
$ |
|
||
The following table presents a roll-forward of cash restructuring-related liabilities, which is included within accrued expenses on the Company’s consolidated balance sheets:
|
Employee termination benefit costs |
|
|
Other cash restructuring charges |
|
|
Total |
|
|||
Balance as of June 25, 2025 (Successor) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Charges |
|
|
|
|
|
|
|
|
|||
Payments |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of December 31, 2025 (Successor) |
$ |
|
|
$ |
— |
|
|
$ |
|
||
Charges |
|
|
|
|
|
|
|
|
|||
Payments |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in estimate |
|
|
|
|
— |
|
|
|
|
||
Balance as of June 30, 2026 (Successor) |
$ |
|
|
$ |
— |
|
|
$ |
|
||
At June 30, 2026 (Successor), the Company expects the remaining employee termination benefit liability to be paid in full by the end of fiscal 2026.
22
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Except for historical information contained herein, this Quarterly Report on Form 10-Q includes “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, in particular, the statements about our plans, strategies, objectives, initiatives, and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have generally used the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “aim” and similar expressions in this Quarterly Report on Form 10-Q to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Actual results could differ materially from those projected in these forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things:
23
You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause our results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, we do not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events or otherwise.
24
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
WW International, Inc. is a Virginia corporation with its principal executive offices in New York, New York. In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, “we,” “us,” “our,” the “Company,” “Weight Watchers” and “WW” refer to WW International, Inc. and all of its operations consolidated for purposes of its financial statements. We have one reportable segment for the purpose of making operational and resource decisions and assessing financial performance. Our “Behavioral” business refers to providing subscriptions to our digital product offerings with the option to add on unlimited access to our workshops. Our “Clinical” business refers to providing subscriptions to our clinical product offerings provided by Weight Watchers Clinic and third parties combined with our digital subscription product offerings and unlimited access to our workshops.
Following our emergence from bankruptcy as described below, we changed our previous 52- or 53-week fiscal year ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. We made the fiscal year change on a prospective basis and prior periods were not adjusted. The Company’s quarterly results are now presented for quarterly periods ending March 31, June 30 and September 30 of each year. In this Quarterly Report on Form 10-Q:
The following terms used in this Quarterly Report on Form 10-Q are our trademarks: Weight Watchers® and the Weight Watchers logo.
You should read the following discussion in conjunction with our Annual Report on Form 10-K for fiscal 2025 that includes additional information about us, our results of operations, our financial position and our cash flows, and with our unaudited consolidated financial statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q (collectively referred to as the “Consolidated Financial Statements”).
Emergence from Bankruptcy
On May 6, 2025 (the “Petition Date”), we and certain of our subsidiaries (the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”). Subsequently, on May 30, 2025, the Debtors filed with the Court the First Amended Joint Prepackaged Plan of Reorganization of WW International, Inc. and its Debtor Affiliates, Docket No. 143 (as supplemented, the “Plan”), and on June 24, 2025 (the “Emergence Date”), we emerged from the Chapter 11 Cases in accordance with the Plan. Since the Petition Date and through the Emergence Date, we operated our businesses as debtors-in-possession under the jurisdiction of the Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court.
On April 13, 2021, we, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent and an issuing bank, entered into a credit agreement (the “Prepetition Credit Agreement”). The Prepetition Credit Agreement provided for senior secured financing of $1,175.0 million in the aggregate, consisting of (1) $1,000.0 million in aggregate principal amount of senior secured tranche B term loans maturing on April 13, 2028 (the “Prepetition Term Loan Facility”) and (2) a $175.0 million senior secured revolving credit facility (which included borrowing capacity available for letters of credit) maturing on April 23, 2026 (the “Prepetition Revolving Credit Facility” and, together with the Prepetition Term Loan Facility, the “Prepetition Credit Facilities”). On April 13, 2021, we issued $500.0 million in aggregate principal amount of our 4.500% Senior Secured Notes due 2029 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of April 13, 2021 (the “Indenture”), among us, the guarantors named therein and The Bank of New York Mellon, as trustee and notes collateral agent.
Upon emergence from bankruptcy, all outstanding liabilities of approximately $1,116.0 million under the Prepetition Credit Facilities and the Prepetition Credit Agreement, and all outstanding obligations of $500.0 million under the Notes and the Indenture were discharged and the liens and mortgages related thereto were released. Additionally, on the Emergence Date we (A) executed the senior secured credit agreement (“the Senior Secured Credit Agreement”) by and between us, as borrower, the lenders party thereto, and Wilmington Savings Fund Society, FSB (“WSFS”), as administrative agent, providing for a five-year term loan (the “New Term Loan Facility”) in an aggregate principal amount of $465.0 million, maturing on June 24, 2030, to (i) refinance first lien claims and (ii) provide working capital and liquidity post-emergence, (B) distributed 9.1 million shares of our common stock to the holders of prepetition first lien claims and 0.9 million shares of our common stock to the holders of prepetition common stock, and (C) issued four letters of credit of $3.7 million in the aggregate, all maturing in 2026.
25
Beginning on the Emergence Date, we applied fresh start accounting which resulted in Successor and Predecessor financial statement presentation. As used herein, references to “Predecessor” relate to us and our operations prior to and including the Emergence Date and references to “Successor” relate to us and our operations after the Emergence Date. Refer to Note 1 “Basis of Presentation” to our Consolidated Financial Statements for further details.
NON-GAAP FINANCIAL MEASURES
To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. We present within this Quarterly Report on Form 10-Q the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization expenses and share-based compensation expense (“EBITDA”); and EBITDA adjusted for goodwill and other indefinite-lived intangible asset impairments, reorganization items, net, gain on extinguishment of debt, transaction costs related to strategic alternatives and Chapter 11 financial reorganization, net restructuring charges, non-recurring expenses in connection with the management of certain executive matters, and other items as indicated in the reconciliations below that management believes are not indicative of ongoing operations, as applicable, (“Adjusted EBITDA”). See “—Liquidity and Capital Resources—EBITDA and Adjusted EBITDA” for the reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure in each case.
Our management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the performance of our business and are useful for period-over-period comparisons of the performance of our business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.
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. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a constant currency basis as one measure to evaluate our performance. In this Quarterly Report on Form 10-Q, we calculate constant currency by calculating current-year results using prior-year foreign currency exchange rates. We generally refer to such amounts calculated on a constant currency basis as excluding or adjusting for the impact of foreign currency or being on a constant currency basis. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP and are not meant to be considered in isolation. 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.
CRITICAL ACCOUNTING ESTIMATES
Information concerning our critical accounting policies is set forth in “Note 1. Basis of Presentation and Summary of Significant Accounting Policies” of our audited consolidated financial statements contained in our Annual Report on Form 10-K for fiscal 2025. Our critical accounting policies and estimates have not changed since the end of fiscal 2025, except as discussed below.
Goodwill and Other Intangible Assets Impairment Tests
We review goodwill and other indefinite-lived intangible assets for potential impairment on at least an annual basis or more often if events so require. We performed our annual fair value impairment testing for fiscal 2026 on May 1, 2026 (Successor). Impairment is assessed by examining underlying assumptions used to determine fair value including projections of future cash flows, revenue growth rates, operating income margins and discount rates. We also considered the trading value of both our equity and debt. If we determine that it is more likely than not that our intangible assets may be impaired, we use a quantitative approach to assess the asset’s fair value and the amount of the impairment, if any.
Based on the results of the annual goodwill impairment test performed for our Behavioral and Clinical reporting units, which held 81.0% and 19.0% of our goodwill as of May 1, 2026 (Successor), respectively, we concluded that no goodwill impairment existed as of May 1, 2026 (Successor). However, we identified our Behavioral reporting unit as being at risk for impairment, as the estimated fair value of this reporting unit exceeded its respective carrying value by less than 10% as of May 1, 2026 (Successor).
26
Based on the results of the annual impairment test performed for our trade name indefinite-lived intangible asset, we concluded that no impairment existed as of May 1, 2026 (Successor). However, we identified our trade name indefinite-lived intangible asset as being at risk for impairment, as the estimated fair value of this asset exceeded its respective carrying value by less than 10% as of May 1, 2026 (Successor).
During the three months ended March 31, 2026 (Successor), we identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred. These factors included changes in macroeconomic conditions and declines in our stock price. As a result of these factors, we performed interim quantitative goodwill and other indefinite-lived intangible assets impairment assessments in the first quarter of fiscal 2026 (Successor).
Based on the results of the interim goodwill impairment test performed for our Behavioral and Clinical reporting units and the interim impairment test performed for our trade name indefinite-lived intangible asset, we concluded that no impairments existed as of March 31, 2026 (Successor).
The fair value estimates for our reporting units are sensitive to changes in key assumptions. Adverse changes in the macroeconomic environment, discount rates, forecasted operating results, or other valuation assumptions, as well as further declines in our stock price or market capitalization, could result in goodwill and other indefinite-lived intangible assets impairments in future periods. We continue to monitor our reporting units for interim impairment indicators. These risks are further described in “Item 1A. Risk Factors” of our 2025 Annual Report on Form 10‑K. For additional information regarding our goodwill and other indefinite-lived intangible assets impairment testing methodology and key assumptions, refer to the Critical Accounting Estimates section included in Item 7 of our Annual Report on Form 10‑K for the fiscal year ended December 31, 2025 (Successor).
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. We also believe that these key performance indicators are useful to both management and investors for forecasting purposes and to facilitate comparisons to our historical operating results. These metrics are supplemental to our GAAP results and include operational measures.
27
RESULTS OF OPERATIONS
The table below sets forth selected financial information from our consolidated statements of operations for the periods presented:
|
(In millions, except per share amounts and percentages) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Revenue, net |
$ |
162.3 |
|
|
$ |
12.2 |
|
|
|
$ |
177.0 |
|
Cost of revenue |
|
48.2 |
|
|
|
3.3 |
|
|
|
|
46.5 |
|
Gross profit |
|
114.1 |
|
|
|
8.9 |
|
|
|
|
130.5 |
|
Gross Margin % |
|
70.3 |
% |
|
|
73.2 |
% |
|
|
|
73.7 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Marketing expenses |
|
47.9 |
|
|
|
2.8 |
|
|
|
|
32.1 |
|
Product development expenses |
|
6.4 |
|
|
|
0.7 |
|
|
|
|
14.2 |
|
Selling, general & administrative expenses |
|
50.4 |
|
|
|
2.9 |
|
|
|
|
42.9 |
|
Operating income |
|
9.5 |
|
|
|
2.6 |
|
|
|
|
41.4 |
|
Operating Income Margin % |
|
5.8 |
% |
|
|
21.3 |
% |
|
|
|
23.4 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
(1,143.9 |
) |
Interest expense |
|
11.6 |
|
|
|
0.9 |
|
|
|
|
11.1 |
|
Gain on extinguishment of debt |
|
(4.6 |
) |
|
|
— |
|
|
|
|
— |
|
Other (income) expense, net |
|
(0.4 |
) |
|
|
0.9 |
|
|
|
|
4.5 |
|
Income before income taxes |
|
2.9 |
|
|
|
0.7 |
|
|
|
|
1,169.8 |
|
|
|
|
|
|
|
|
|
|
|
|||
Benefit from income taxes |
|
(11.2 |
) |
|
|
(0.5 |
) |
|
|
|
(20.9 |
) |
Net income |
$ |
14.1 |
|
|
$ |
1.3 |
|
|
|
$ |
1,190.7 |
|
|
|
|
|
|
|
|
|
|
|
|||
Weighted average diluted shares outstanding |
|
10.0 |
|
|
|
10.0 |
|
|
|
|
81.2 |
|
Diluted earnings per share |
$ |
1.41 |
|
|
$ |
0.13 |
|
|
|
$ |
14.67 |
|
Note: Totals may not sum due to rounding.
Included within the operating results are the impact of transaction costs related to strategic alternatives and Chapter 11 financial reorganization, the impact of depreciation and amortization expenses, the net impact of restructuring charges, the impact of share-based compensation expense, and the impact of non-recurring expenses in connection with the management of certain executive matters, as applicable, which are further detailed below.
Transaction Costs
Certain non-recurring transaction costs related to strategic alternatives and Chapter 11 financial reorganization are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Transaction costs: |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
$ |
— |
|
|
$ |
0.2 |
|
|
|
$ |
10.0 |
|
Total transaction costs |
$ |
— |
|
|
$ |
0.2 |
|
|
|
$ |
10.0 |
|
28
Depreciation and Amortization Expenses
Depreciation and amortization expenses are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Depreciation and amortization expenses: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
5.3 |
|
|
$ |
0.3 |
|
|
|
$ |
4.1 |
|
Product development expenses |
|
— |
|
|
|
0.0 |
|
|
|
|
0.1 |
|
Selling, general and administrative expenses |
|
20.6 |
|
|
|
1.3 |
|
|
|
|
3.1 |
|
Total depreciation and amortization expenses |
$ |
25.9 |
|
|
$ |
1.7 |
|
|
|
$ |
7.3 |
|
Note: Totals may not sum due to rounding.
Restructuring Charges
Restructuring charges consist of expenses associated with the reduction in headcount as a result of certain strategic re-alignments. Restructuring charges include our previously disclosed 2025 restructuring plan (the “2025 Plan”), our previously disclosed 2024 restructuring plan (the “2024 Plan”) and our previously disclosed 2023 restructuring plan (the “2023 Plan”). The restructuring charges are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Restructuring charges: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
— |
|
|
$ |
— |
|
|
|
$ |
(2.1 |
) |
Selling, general and administrative expenses |
|
(0.2 |
) |
|
|
— |
|
|
|
|
1.0 |
|
Total restructuring charges |
$ |
(0.2 |
) |
|
$ |
— |
|
|
|
$ |
(1.1 |
) |
Note: Totals may not sum due to rounding.
Share-based Compensation Expense
Share-based compensation expense is included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Share-based compensation expense: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
0.0 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Marketing expenses |
|
0.2 |
|
|
|
— |
|
|
|
|
— |
|
Product development expenses |
|
0.1 |
|
|
|
— |
|
|
|
|
— |
|
Selling, general and administrative expenses |
|
0.5 |
|
|
|
— |
|
|
|
|
3.2 |
|
Total share-based compensation expense |
$ |
0.7 |
|
|
$ |
— |
|
|
|
$ |
3.2 |
|
Note: Totals may not sum due to rounding.
29
Executive Related One-Time Costs
Certain non-recurring expenses in connection with the management of certain executive matters are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Three Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Executive related one-time costs: |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
$ |
3.8 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Total executive related one-time costs |
$ |
3.8 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Consolidated Results of Operations
Revenue
Revenue was $162.3 million for the three months ended June 30, 2026 (Successor), $12.2 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $177.0 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency positively impacted our revenue for the three months ended June 30, 2026 (Successor) by $0.8 million. The change in revenue was driven by a decline in Behavioral Subscription Revenue, partially offset by an increase in Clinical Subscription Revenue. The decline in Behavioral Subscription Revenue was primarily due to a lower number of Incoming Behavioral Subscribers compared to the prior year period. The increase in Clinical Subscription Revenue was primarily due to an increase in the number of Incoming Clinical Subscribers compared to the prior year period. Refer to the “Operating Results” section for further details.
Cost of Revenue
Cost of revenue was $48.2 million for the three months ended June 30, 2026 (Successor), $3.3 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $46.5 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency increased cost of revenue for the three months ended June 30, 2026 (Successor) by $0.1 million. The change in cost of revenue was primarily driven by a decrease in revenue and operational efficiency gains across our business offerings from actions taken to reduce our fixed cost base resulting in a more variable cost structure, partially offset by an increase in depreciation and amortization expenses.
Gross Profit
Gross profit was $114.1 million for the three months ended June 30, 2026 (Successor), $8.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $130.5 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency positively impacted gross profit for the three months ended June 30, 2026 (Successor) by $0.7 million.
Gross margin was 70.3% for the three months ended June 30, 2026 (Successor), 73.2% for the period from June 25, 2025 through June 30, 2025 (Successor) and 73.7% for the period from March 30, 2025 through June 24, 2025 (Predecessor). The gross margin change was primarily due to a mix shift of our subscriber base to Clinical and an increase in depreciation and amortization expenses.
Marketing Expenses
Marketing expenses were $47.9 million for the three months ended June 30, 2026 (Successor), $2.8 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $32.1 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency had a de minimis impact on marketing expenses for the three months ended June 30, 2026 (Successor). The change in marketing expenses was primarily due to a deliberate reduction in advertising spend in the prior year period during our financial reorganization.
Product Development Expenses
Product development expenses were $6.4 million for the three months ended June 30, 2026 (Successor), $0.7 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $14.2 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency had no impact on product development expenses for the three months ended June 30, 2026 (Successor). The change in product development expenses was due to an increase in the capitalization rate associated with product and technology initiatives aligned with our website and app rebuild.
30
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $50.4 million for the three months ended June 30, 2026 (Successor), $2.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $42.9 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). Foreign currency increased selling, general and administrative expenses for the three months ended June 30, 2026 (Successor) by $0.1 million. The change in selling, general and administrative expenses was due to an increase in depreciation and amortization expenses, partially offset by a decline in transaction costs related to strategic alternatives and the Chapter 11 financial reorganization of the Company and continued expense discipline.
Reorganization Items, Net
The net reorganization gain of $1,143.9 million for the period from March 30, 2025 through June 24, 2025 (Predecessor) related to our emergence from Chapter 11 bankruptcy and primarily consisted of the gain on settlement of liabilities subject to compromise and the impacts of fresh start valuation adjustments.
Interest Expense
Interest expense was $11.6 million for the three months ended June 30, 2026 (Successor), $0.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $11.1 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). The change in interest expense was driven by the Chapter 11 financial reorganization and the reduction in Successor debt under the New Term Loan Facility relative to Predecessor debt. The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt premium or discount, as applicable) and our average borrowings during each of the respective periods, was 10.48% per annum for the three months ended June 30, 2026 (Successor), 11.09% per annum for the period from June 25, 2025 through June 30, 2025 (Successor) and 7.12% per annum for the period from March 30, 2025 through June 24, 2025 (Predecessor). See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon.
Gain on Extinguishment of Debt
During the three months ended June 30, 2026 (Successor), we recorded a $4.6 million gain on extinguishment of debt resulting from the voluntary retirement of $14.6 million in principal under our New Term Loan Facility. The debt was prepaid in May 2026 for a cash payment of $10.0 million, or 68.5% of par value. For additional details, see “—Liquidity and Capital Resources—Long-Term Debt”.
Other (Income) Expense, Net
Other (income) expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, was $0.4 million of income for the three months ended June 30, 2026 (Successor), $0.9 million of expense for the period from June 25, 2025 through June 30, 2025 (Successor) and $4.5 million of expense for the period from March 30, 2025 through June 24, 2025 (Predecessor).
Benefit from Income Taxes
We historically calculated our interim provision for income taxes by applying an estimated annual effective tax rate (“AETR”) to year-to-date ordinary income or loss. However, for the three months ended June 30, 2026 (Successor), we determined that small variations in estimated full-year ordinary loss would result in significant, unreliable fluctuations in the estimated AETR. Consequently, pursuant to ASC 740-270, the income tax benefit for the three months ended June 30, 2026 (Successor) was computed using a discrete effective tax rate method applied to actual year-to-date results.
We recorded a tax benefit of $11.2 million for the three months ended June 30, 2026 (Successor) compared to a tax benefit of $0.5 million for the period from June 25, 2025 through June 30, 2025 (Successor) and a tax benefit of $20.9 million for the period from March 30, 2025 through June 24, 2025 (Predecessor). The primary difference between the U.S. federal statutory tax rate and our consolidated effective tax rate for the three months ended June 30, 2026 (Successor) was our valuation allowance on our interest limitation carryforward. For the three months ended June 30, 2025, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was our valuation allowance on our deferred tax assets as well as discrete items related to our bankruptcy proceedings during both the Predecessor (ending June 24, 2025) and Successor (ending June 30, 2025) periods.
The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduced a global minimum tax of 15% applicable to large multinational corporations, did not have an impact during the three months ended June 30, 2026 (Successor). In addition, the One Big Beautiful Bill Act that was signed into law on July 4, 2025 in the U.S., which contains a broad range of tax reform provisions affecting businesses, did not have a material impact on our consolidated financial statements.
31
Operating Results
Although GAAP requires that we report our results for the period from March 30, 2025 through June 24, 2025 (Predecessor) and the period from June 25, 2025 through June 30, 2025 (Successor) separately, management views certain metric and revenue information for the three months ended June 30, 2025 by combining the results of the applicable Predecessor and Successor periods because management believes such presentation provides the most meaningful comparison of our results to the current period. Although the Predecessor and Successor periods generally are not comparable as they are impacted by fresh start accounting, there are no fresh start adjustments affecting revenue and therefore revenue information has been combined to provide a meaningful understanding of operating trends, which would be consistent with a pro forma calculation under Article 11 of Regulation S-X. Nevertheless, the combined operating results do not reflect the actual results we would have achieved absent our emergence from the Chapter 11 Cases and may not be indicative of future results.
We cannot adequately benchmark the operating results of the period from June 25, 2025 through June 30, 2025 (Successor) against any of the previous periods reported in our Consolidated Financial Statements without combining it with the period from March 30, 2025 through June 24, 2025 (Predecessor) and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics such as Subscription Revenue, Incoming and End of Period Subscribers and Monthly Subscription Revenue Per Average Subscriber for the Successor period when combined with the Predecessor period provides more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, the tables below present the combined results for the second quarter of fiscal 2025.
Metrics and Business Trends
The following tables set forth key metrics for the second quarter of fiscal 2026 and the percentage change in those metrics versus the combined second quarter of fiscal 2025:
|
Subscription Revenue (in millions except percentages) |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
||||||
Q2 2026 |
$ |
121.5 |
|
|
$ |
120.7 |
|
|
$ |
39.9 |
|
|
$ |
39.9 |
|
|
$ |
161.4 |
|
|
$ |
160.6 |
|
Combined Q2 2025 |
$ |
157.3 |
|
|
$ |
157.3 |
|
|
$ |
30.6 |
|
|
$ |
30.6 |
|
|
$ |
187.9 |
|
|
$ |
187.9 |
|
% Change |
|
(22.7 |
%) |
|
|
(23.3 |
%) |
|
|
30.4 |
% |
|
|
30.4 |
% |
|
|
(14.1 |
%) |
|
|
(14.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Subscribers (in thousands except percentages) |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Incoming |
|
|
End of Period |
|
|
Incoming |
|
|
End of Period |
|
|
Incoming |
|
|
End of Period |
|
||||||
Q2 2026 |
|
2,462.6 |
|
|
|
2,291.3 |
|
|
|
196.6 |
|
|
|
197.3 |
|
|
|
2,659.2 |
|
|
|
2,488.6 |
|
Combined Q2 2025 |
|
3,299.4 |
|
|
|
3,040.5 |
|
|
|
134.8 |
|
|
|
126.7 |
|
|
|
3,434.1 |
|
|
|
3,167.2 |
|
% Change |
|
(25.4 |
%) |
|
|
(24.6 |
%) |
|
|
45.9 |
% |
|
|
55.7 |
% |
|
|
(22.6 |
%) |
|
|
(21.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Monthly Subscription Revenue Per Average Subscriber |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
||||||
Q2 2026 |
$ |
17.04 |
|
|
$ |
16.92 |
|
|
$ |
67.55 |
|
|
$ |
67.55 |
|
|
$ |
20.90 |
|
|
$ |
20.80 |
|
Combined Q2 2025 |
$ |
16.54 |
|
|
$ |
16.54 |
|
|
$ |
78.00 |
|
|
$ |
78.00 |
|
|
$ |
18.97 |
|
|
$ |
18.97 |
|
% Change |
|
3.0 |
% |
|
|
2.3 |
% |
|
|
(13.4 |
%) |
|
|
(13.4 |
%) |
|
|
10.2 |
% |
|
|
9.6 |
% |
Operating Performance
The decline in Behavioral Subscription Revenue was primarily due to the lower number of Incoming Behavioral Subscribers versus the prior year period and ongoing Behavioral recruitment challenges reflecting secular headwinds. These were partially offset by higher Monthly Subscription Revenue Per Average Subscriber and subscriber growth within our Core+ membership tier compared to the prior year period. The increase in Clinical Subscription Revenue was primarily due to increased consumer awareness of our Med+ membership tier, strong demand for access to lower priced GLP-1 options including the Wegovy pill, and focused marketing investments.
End of Period Clinical Subscribers in the combined second quarter of fiscal 2025 included our former compounded GLP-1 offering, which was discontinued on May 22, 2025.
32
The change in Total Monthly Subscription Revenue Per Average Subscriber was driven primarily by a shift in mix of our subscriber base to the Clinical business and Core+ membership tier, which have a higher Monthly Subscription Revenue Per Average Subscriber. Clinical Monthly Subscription Revenue Per Average Subscriber declined primarily driven by a shift to longer term commitment plans, which commit members for longer periods, but at a lower rate per month, coupled with the discontinuation of our former compounded semaglutide offering and additional discount promotions within the period.
RESULTS OF OPERATIONS
The table below sets forth selected financial information from our consolidated statements of operations for the periods presented:
|
(In millions, except per share amounts and percentages) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Revenue, net |
$ |
330.6 |
|
|
$ |
12.2 |
|
|
|
$ |
363.6 |
|
Cost of revenue |
|
97.8 |
|
|
|
3.3 |
|
|
|
|
100.2 |
|
Gross profit |
|
232.8 |
|
|
|
8.9 |
|
|
|
|
263.4 |
|
Gross Margin % |
|
70.4 |
% |
|
|
73.2 |
% |
|
|
|
72.4 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Marketing expenses |
|
140.8 |
|
|
|
2.8 |
|
|
|
|
110.9 |
|
Product development expenses |
|
14.5 |
|
|
|
0.7 |
|
|
|
|
25.3 |
|
Selling, general & administrative expenses |
|
98.4 |
|
|
|
2.9 |
|
|
|
|
78.5 |
|
Franchise rights acquired impairments |
|
— |
|
|
|
— |
|
|
|
|
27.5 |
|
Operating (loss) income |
|
(21.0 |
) |
|
|
2.6 |
|
|
|
|
21.2 |
|
Operating (Loss) Income Margin % |
|
(6.3 |
%) |
|
|
21.3 |
% |
|
|
|
5.8 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
(1,143.9 |
) |
Interest expense |
|
23.1 |
|
|
|
0.9 |
|
|
|
|
38.7 |
|
Gain on extinguishment of debt |
|
(4.6 |
) |
|
|
— |
|
|
|
|
— |
|
Other (income) expense, net |
|
(1.2 |
) |
|
|
0.9 |
|
|
|
|
6.7 |
|
(Loss) income before income taxes |
|
(38.3 |
) |
|
|
0.7 |
|
|
|
|
1,119.8 |
|
|
|
|
|
|
|
|
|
|
|
|||
(Benefit from) provision for income taxes |
|
(0.3 |
) |
|
|
(0.5 |
) |
|
|
|
1.7 |
|
Net (loss) income |
$ |
(37.9 |
) |
|
$ |
1.3 |
|
|
|
$ |
1,118.1 |
|
|
|
|
|
|
|
|
|
|
|
|||
Weighted average diluted shares outstanding |
|
10.0 |
|
|
|
10.0 |
|
|
|
|
81.0 |
|
Diluted (net loss) earnings per share |
$ |
(3.79 |
) |
|
$ |
0.13 |
|
|
|
$ |
13.80 |
|
Note: Totals may not sum due to rounding.
Included within the operating results are the impact of transaction costs related to strategic alternatives and Chapter 11 financial reorganization, the impact of depreciation and amortization expenses, the net impact of restructuring charges, the impact of share-based compensation expense, and the impact of non-recurring expenses in connection with the management of certain executive matters, as applicable, which are further detailed below.
33
Transaction Costs
Certain non-recurring transaction costs related to strategic alternatives and Chapter 11 financial reorganization are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Transaction costs: |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
$ |
— |
|
|
$ |
0.2 |
|
|
|
$ |
20.9 |
|
Total transaction costs |
$ |
— |
|
|
$ |
0.2 |
|
|
|
$ |
20.9 |
|
Depreciation and Amortization Expenses
Depreciation and amortization expenses are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Depreciation and amortization expenses: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
10.5 |
|
|
$ |
0.3 |
|
|
|
$ |
8.7 |
|
Product development expenses |
|
— |
|
|
|
0.0 |
|
|
|
|
0.1 |
|
Selling, general and administrative expenses |
|
41.3 |
|
|
|
1.3 |
|
|
|
|
5.4 |
|
Total depreciation and amortization expenses |
$ |
51.8 |
|
|
$ |
1.7 |
|
|
|
$ |
14.2 |
|
Note: Totals may not sum due to rounding.
Restructuring Charges
Restructuring charges consist of expenses associated with the reduction in headcount as a result of certain strategic re-alignments. Restructuring charges include the 2025 Plan, the 2024 Plan and the 2023 Plan. The restructuring charges are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Restructuring charges: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
(0.1 |
) |
|
$ |
— |
|
|
|
$ |
(2.5 |
) |
Selling, general and administrative expenses |
|
0.4 |
|
|
|
— |
|
|
|
|
2.3 |
|
Total restructuring charges |
$ |
0.3 |
|
|
$ |
— |
|
|
|
$ |
(0.1 |
) |
Note: Totals may not sum due to rounding.
34
Share-based Compensation Expense
Share-based compensation expense is included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Share-based compensation expense: |
|
|
|
|
|
|
|
|
|
|||
Cost of revenue |
$ |
0.0 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Marketing expenses |
|
0.3 |
|
|
|
— |
|
|
|
|
— |
|
Product development expenses |
|
0.2 |
|
|
|
— |
|
|
|
|
— |
|
Selling, general and administrative expenses |
|
0.9 |
|
|
|
— |
|
|
|
|
4.0 |
|
Total share-based compensation expense |
$ |
1.4 |
|
|
$ |
— |
|
|
|
$ |
4.0 |
|
Note: Totals may not sum due to rounding.
Executive Related One-Time Costs
Certain non-recurring expenses in connection with the management of certain executive matters are included in applicable line items on the unaudited consolidated statements of operations:
|
(in millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Executive related one-time costs: |
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses |
$ |
5.4 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Total executive related one-time costs |
$ |
5.4 |
|
|
$ |
— |
|
|
|
$ |
— |
|
Consolidated Results of Operations
Revenue
Revenue was $330.6 million for the six months ended June 30, 2026 (Successor), $12.2 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $363.6 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency positively impacted our revenue for the six months ended June 30, 2026 (Successor) by $5.1 million. The change in revenue was driven by a decline in Behavioral Subscription Revenue, partially offset by an increase in Clinical Subscription Revenue. The decline in Behavioral Subscription Revenue was primarily due to a lower number of Incoming Behavioral Subscribers compared to the prior year period. The increase in Clinical Subscription Revenue was primarily due to an increase in the number of Incoming Clinical Subscribers compared to the prior year period. Refer to the “Operating Results” section for further details.
Cost of Revenue
Cost of revenue was $97.8 million for the six months ended June 30, 2026 (Successor), $3.3 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $100.2 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency increased cost of revenue for the six months ended June 30, 2026 (Successor) by $0.7 million. The change in cost of revenue was primarily driven by a decrease in revenue and operational efficiency gains across our business offerings from actions taken to reduce our fixed cost base resulting in a more variable cost structure, partially offset by an increase in depreciation and amortization expenses.
Gross Profit
Gross profit was $232.8 million for the six months ended June 30, 2026 (Successor), $8.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $263.4 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency positively impacted gross profit for the six months ended June 30, 2026 (Successor) by $4.4 million.
35
Gross margin was 70.4% for the six months ended June 30, 2026 (Successor), 73.2% for the period from June 25, 2025 through June 30, 2025 (Successor) and 72.4% for the period from December 29, 2024 through June 24, 2025 (Predecessor). The gross margin change was primarily due to a mix shift of our subscriber base to Clinical and an increase in depreciation and amortization expenses.
Marketing Expenses
Marketing expenses were $140.8 million for the six months ended June 30, 2026 (Successor), $2.8 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $110.9 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency increased marketing expenses for the six months ended June 30, 2026 (Successor) by $1.0 million. The change in marketing expenses was primarily due to a deliberate reduction in advertising spend in the prior year period during our financial reorganization.
Product Development Expenses
Product development expenses were $14.5 million for the six months ended June 30, 2026 (Successor), $0.7 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $25.3 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency had a de minimis impact on product development expenses for the six months ended June 30, 2026 (Successor). The change in product development expenses was due to a reduction in labor costs and an increase in the capitalization rate associated with product and technology initiatives aligned with our website and app rebuild.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $98.4 million for the six months ended June 30, 2026 (Successor), $2.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $78.5 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). Foreign currency increased selling, general and administrative expenses for the six months ended June 30, 2026 (Successor) by $0.3 million. The change in selling, general and administrative expenses was due to an increase in depreciation and amortization expenses, partially offset by a decline in transaction costs related to strategic alternatives and the Chapter 11 financial reorganization of the Company and continued expense discipline.
Franchise Rights Acquired Impairments
In performing our interim impairment analysis as of March 29, 2025 (Predecessor), we determined that the carrying value of our United States indefinite-lived franchise rights acquired unit of account exceeded its respective fair value and, as a result, we recorded an impairment charge for our United States unit of account of $27.5 million in the first quarter of fiscal 2025 (Predecessor).
Reorganization Items, Net
The net reorganization gain of $1,143.9 million for the period from December 29, 2024 through June 24, 2025 (Predecessor) related to our emergence from Chapter 11 bankruptcy and primarily consisted of the gain on settlement of liabilities subject to compromise and the impacts of fresh start valuation adjustments.
Interest Expense
Interest expense was $23.1 million for the six months ended June 30, 2026 (Successor), $0.9 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $38.7 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). The change in interest expense was driven by the Chapter 11 financial reorganization and the reduction in Successor debt under the New Term Loan Facility relative to Predecessor debt. The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt premium or discount, as applicable) and our average borrowings during each of the respective periods, was 10.47% per annum for the six months ended June 30, 2026 (Successor), 11.09% per annum for the period from June 25, 2025 through June 30, 2025 (Successor) and 7.14% per annum for the period from December 29, 2024 through June 24, 2025 (Predecessor). See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon.
Gain on Extinguishment of Debt
During the six months ended June 30, 2026 (Successor), we recorded a $4.6 million gain on extinguishment of debt resulting from the voluntary retirement of $14.6 million in principal under our New Term Loan Facility. The debt was prepaid in May 2026 for a cash payment of $10.0 million, or 68.5% of par value. For additional details, see “—Liquidity and Capital Resources—Long-Term Debt”.
36
Other (Income) Expense, Net
Other (income) expense, net, which consists primarily of the impact of foreign currency on intercompany transactions, was $1.2 million of income for the six months ended June 30, 2026 (Successor), $0.9 million of expense for the period from June 25, 2025 through June 30, 2025 (Successor) and $6.7 million of expense for the period from December 29, 2024 through June 24, 2025 (Predecessor).
(Benefit from) Provision for Income Taxes
We historically calculated our interim provision for income taxes by applying an estimated AETR to year-to-date ordinary income or loss. However, for the six months ended June 30, 2026 (Successor), we determined that small variations in estimated full-year ordinary loss would result in significant, unreliable fluctuations in the estimated AETR. Consequently, pursuant to ASC 740-270, the income tax benefit for the six months ended June 30, 2026 (Successor) was computed using a discrete effective tax rate method applied to actual year-to-date results.
We recorded a tax benefit of $0.3 million for the six months ended June 30, 2026 (Successor) compared to a tax benefit of $0.5 million for the period from June 25, 2025 through June 30, 2025 (Successor) and tax expense of $1.7 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). The primary difference between the U.S. federal statutory tax rate and our consolidated effective tax rate for the six months ended June 30, 2026 (Successor) was our valuation allowance on our interest limitation carryforward. For the six months ended June 30, 2025, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was our valuation allowance on our deferred tax assets as well as discrete items related to our bankruptcy proceedings during both the Predecessor (ending June 24, 2025) and Successor (ending June 30, 2025) periods.
The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduced a global minimum tax of 15% applicable to large multinational corporations, did not have an impact during the six months ended June 30, 2026 (Successor). In addition, the One Big Beautiful Bill Act that was signed into law on July 4, 2025 in the U.S., which contains a broad range of tax reform provisions affecting businesses, did not have a material impact on our consolidated financial statements.
Operating Results
Although GAAP requires that we report our results for the period from December 29, 2024 through June 24, 2025 (Predecessor) and the period from June 25, 2025 through June 30, 2025 (Successor) separately, management views certain metric and revenue information for the six months ended June 30, 2025 by combining the results of the applicable Predecessor and Successor periods because management believes such presentation provides the most meaningful comparison of our results to the current period. Although the Predecessor and Successor periods generally are not comparable as they are impacted by fresh start accounting, there are no fresh start adjustments affecting revenue and therefore revenue information has been combined to provide a meaningful understanding of operating trends, which would be consistent with a pro forma calculation under Article 11 of Regulation S-X. Nevertheless, the combined operating results do not reflect the actual results we would have achieved absent our emergence from the Chapter 11 Cases and may not be indicative of future results.
We cannot adequately benchmark the operating results of the period from June 25, 2025 through June 30, 2025 (Successor) against any of the previous periods reported in our Consolidated Financial Statements without combining it with the period from December 29, 2024 through June 24, 2025 (Predecessor) and do not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding our overall operating performance. Management believes that the key performance metrics such as Subscription Revenue, Incoming and End of Period Subscribers and Monthly Subscription Revenue Per Average Subscriber for the Successor period when combined with the Predecessor period provides more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, the tables below present the combined results for the first six months of fiscal 2025.
37
Metrics and Business Trends
The following tables set forth key metrics for the first six months of fiscal 2026 and the percentage change in those metrics versus the combined first six months of fiscal 2025:
|
Subscription Revenue (in millions except percentages) |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
||||||
First Six Months of Fiscal 2026 |
$ |
250.0 |
|
|
$ |
245.0 |
|
|
$ |
78.7 |
|
|
$ |
78.7 |
|
|
$ |
328.7 |
|
|
$ |
323.7 |
|
Combined First Six Months of Fiscal 2025 |
$ |
313.0 |
|
|
$ |
313.0 |
|
|
$ |
60.1 |
|
|
$ |
60.1 |
|
|
$ |
373.0 |
|
|
$ |
373.0 |
|
% Change |
|
(20.1 |
%) |
|
|
(21.7 |
%) |
|
|
31.1 |
% |
|
|
31.1 |
% |
|
|
(11.9 |
%) |
|
|
(13.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Subscribers (in thousands except percentages) |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Incoming |
|
|
End of Period |
|
|
Incoming |
|
|
End of Period |
|
|
Incoming |
|
|
End of Period |
|
||||||
First Six Months of Fiscal 2026 |
|
2,630.6 |
|
|
|
2,291.3 |
|
|
|
130.2 |
|
|
|
197.3 |
|
|
|
2,760.8 |
|
|
|
2,488.6 |
|
Combined First Six Months of Fiscal 2025 |
|
3,244.0 |
|
|
|
3,040.5 |
|
|
|
91.7 |
|
|
|
126.7 |
|
|
|
3,335.7 |
|
|
|
3,167.2 |
|
% Change |
|
(18.9 |
%) |
|
|
(24.6 |
%) |
|
|
41.9 |
% |
|
|
55.7 |
% |
|
|
(17.2 |
%) |
|
|
(21.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Monthly Subscription Revenue Per Average Subscriber |
|
|||||||||||||||||||||
|
Behavioral |
|
|
Clinical |
|
|
Total |
|
|||||||||||||||
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
|
Nominal |
|
|
Constant |
|
||||||
First Six Months of Fiscal 2026 |
$ |
16.91 |
|
|
$ |
16.57 |
|
|
$ |
75.13 |
|
|
$ |
75.13 |
|
|
$ |
20.76 |
|
|
$ |
20.45 |
|
Combined First Six Months of Fiscal 2025 |
$ |
16.33 |
|
|
$ |
16.33 |
|
|
$ |
85.01 |
|
|
$ |
85.01 |
|
|
$ |
18.77 |
|
|
$ |
18.77 |
|
% Change |
|
3.6 |
% |
|
|
1.5 |
% |
|
|
(11.6 |
%) |
|
|
(11.6 |
%) |
|
|
10.6 |
% |
|
|
8.9 |
% |
Operating Performance
The decline in Behavioral Subscription Revenue was primarily due to the lower number of Incoming Behavioral Subscribers versus the prior year period and ongoing Behavioral recruitment challenges reflecting secular headwinds. These were partially offset by higher Monthly Subscription Revenue Per Average Subscriber and subscriber growth within our Core+ membership tier compared to the prior year period. The increase in Clinical Subscription Revenue was primarily due to increased consumer awareness of our Med+ membership tier, strong demand for access to lower priced GLP-1 options including the Wegovy pill, focused marketing investments during peak season, and the migration of existing Behavioral Subscribers into our Clinical business.
End of Period Clinical Subscribers in the combined first six months of fiscal 2025 included our former compounded GLP-1 offering, which was discontinued on May 22, 2025.
The change in Total Monthly Subscription Revenue Per Average Subscriber was driven primarily by a shift in mix of our subscriber base to the Clinical business and Core+ membership tier, which have a higher Monthly Subscription Revenue Per Average Subscriber. Clinical Monthly Subscription Revenue Per Average Subscriber declined primarily driven by a shift to longer term commitment plans, which commit members for longer periods, but at a lower rate per month, coupled with the discontinuation of our former compounded semaglutide offering and additional discount promotions within the period.
LIQUIDITY AND CAPITAL RESOURCES
We have experienced and expect to continue to experience significant market disruption and competitive pressures, and shifts in consumer behavior in the weight loss category. This includes a rapid adoption of GLP-1 and other medications available as weight-loss options, an evolving regulatory landscape, and significantly increased competition from new entrants. These factors have negatively impacted our business. While the Clinical business is growing, it has not yet been able to offset the declines in the Behavioral business, resulting in decreased revenue overall. Further, we have historically had recurring net losses.
Our principal sources of liquidity are cash and cash equivalents and cash flows from operations. Our primary cash needs are funding our operations and global strategic initiatives, meeting debt service requirements and other financing commitments. We had unrestricted cash on hand of $101.5 million as of June 30, 2026. Given our current and forecasted liquidity position, we do not foresee needing access to additional sources of liquidity in the next 12 months.
38
Balance Sheet Working Capital
The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents, as of:
|
(In millions) |
|
|||||
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Total current assets |
$ |
146.9 |
|
|
$ |
213.6 |
|
Total current liabilities |
|
106.1 |
|
|
|
126.5 |
|
Working capital surplus |
|
40.8 |
|
|
|
87.1 |
|
Cash and cash equivalents |
|
101.5 |
|
|
|
160.3 |
|
Working capital deficit, excluding cash and cash equivalents |
$ |
(60.7 |
) |
|
$ |
(73.2 |
) |
Note: Totals may not sum due to rounding.
The following table sets forth a summary of the primary factors contributing to our balance sheet working capital deficit, excluding cash and cash equivalents, as of:
|
(In millions) |
|
|||||
|
Successor |
|
|||||
|
June 30, |
|
|
December 31, |
|
||
|
2026 |
|
|
2025 |
|
||
Portion of operating lease liabilities due within one year |
$ |
1.0 |
|
|
$ |
1.3 |
|
Accrued interest |
|
0.9 |
|
|
|
1.1 |
|
Income taxes payable |
|
2.3 |
|
|
|
6.0 |
|
Deferred revenue |
|
25.2 |
|
|
|
28.6 |
|
Operational liabilities and other, net of assets |
|
37.9 |
|
|
|
44.3 |
|
Prepaid income taxes |
|
6.6 |
|
|
|
8.1 |
|
Working capital deficit change, excluding cash and cash equivalents |
$ |
(60.7 |
) |
|
$ |
(73.2 |
) |
Note: Totals may not sum due to rounding.
Cash Flows
The following table sets forth a summary of our cash flows for the periods presented:
|
(In millions) |
|
||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||
|
|
|
|
Period from |
|
|
|
Period from |
|
|||
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
December 29, 2024 |
|
|||
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|||
Net cash (used for) provided by operating activities |
$ |
(9.3 |
) |
|
$ |
11.5 |
|
|
|
$ |
(34.4 |
) |
Net cash used for investing activities |
$ |
(11.9 |
) |
|
$ |
(0.2 |
) |
|
|
$ |
(6.3 |
) |
Net cash (used for) provided by financing activities |
$ |
(36.8 |
) |
|
$ |
— |
|
|
|
$ |
153.9 |
|
Operating Activities
Net cash used for operating activities was $9.3 million for the six months ended June 30, 2026 (Successor), net cash provided by operating activities was $11.5 million for the period from June 25, 2025 through June 30, 2025 (Successor) and net cash used for operating activities was $34.4 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). The change in net cash (used for) provided by operating activities, excluding the impact of the non-cash reorganization items, net, was primarily attributable to a decrease in accounts payable due to the timing of payments.
Investing Activities
Net cash used for investing activities was $11.9 million for the six months ended June 30, 2026 (Successor), $0.2 million for the period from June 25, 2025 through June 30, 2025 (Successor) and $6.3 million for the period from December 29, 2024 through June 24, 2025 (Predecessor). The change in net cash used for investing activities was primarily attributable to an increase in capitalized software and website development expenditures.
39
Financing Activities
Net cash used for financing activities was $36.8 million for the six months ended June 30, 2026 (Successor), which was attributable to the debt prepayments made in May 2026 and June 2026 as discussed below. There were no financing cash flows for the period from June 25, 2025 through June 30, 2025 (Successor). Net cash provided by financing activities was $153.9 million for the period from December 29, 2024 through June 24, 2025 (Predecessor), which was primarily attributable to borrowings on the Prepetition Revolving Credit Facility.
Long-Term Debt
We currently plan to meet our long-term debt obligations by using cash flows provided by operating activities and opportunistically using other means to repay or refinance our obligations as we determine appropriate.
The following schedule sets forth our long-term debt obligations as of June 30, 2026 (Successor):
(In millions)
|
Successor |
|
|
|
June 30, |
|
|
|
2026 |
|
|
New Term Loan Facility due June 24, 2030 |
$ |
423.6 |
|
Less: Current portion |
|
— |
|
Less: Unamortized deferred financing costs |
|
(1.0 |
) |
Plus: Unamortized debt premium |
|
1.4 |
|
Total long-term debt |
$ |
424.0 |
|
Note: Totals may not sum due to rounding.
Total interest expense on long-term debt, inclusive of amortization of deferred financing costs and debt premium, amounted to $12.0 million and $24.2 million for the three and six months ended June 30, 2026 (Successor), respectively. In the period from June 25, 2025 through June 30, 2025 (Successor), total interest expense on long-term debt, inclusive of amortization of deferred financing costs, amounted to $0.9 million. Total interest expense on long-term debt, inclusive of amortization of deferred financing costs and debt discounts, amounted to $11.1 million and $38.7 million for the period from March 30, 2025 through June 24, 2025 (Predecessor) and the period from December 29, 2024 through June 24, 2025 (Predecessor), respectively.
As of June 30, 2026 (Successor) and December 31, 2025 (Successor), our debt consisted of variable-rate instruments. The weighted average interest rate (which includes amortization of deferred financing costs and debt premium) on our outstanding debt was approximately 10.47% and 10.91% per annum at June 30, 2026 (Successor) and December 31, 2025 (Successor), respectively, based on interest rates on these dates.
Senior Secured Credit Agreement
In connection with our emergence from bankruptcy, on June 24, 2025 we, as borrower, the lenders party thereto, and WSFS, as administrative agent, entered into a senior secured credit agreement (the “Senior Secured Credit Agreement”) which provides for the New Term Loan Facility.
The New Term Loan Facility bears a variable interest rate based on either (1) the sum of (x) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate (as defined in the Senior Secured Credit Agreement), (b) the prime rate announced by WSFS and (c) one-month Term SOFR plus 1.00%; provided that such rate is not lower than a floor of 1.50%, plus (y) 5.80% per annum, or (2) the sum of (x) Term SOFR plus (y) 6.80% per annum, provided that Term SOFR is not lower than a floor of 0.50%.
All obligations under the Senior Secured Credit Agreement are guaranteed by, subject to certain exceptions, each of our current and future material subsidiaries. All obligations under the Senior Secured Credit Agreement, and the guarantees of those obligations, are or will be secured by substantially all of the assets of the Company and each guarantor organized in the United States, the United Kingdom and the Netherlands (each, a “Secured Guarantor”).
In May 2026, we made a voluntary prepayment of $10.0 million in cash to prepay a portion of our New Term Loan Facility at 68.5% of par, thus reducing the outstanding principal on our New Term Loan Facility by $14.6 million. As a result of this prepayment, we recorded a gain on extinguishment of debt of $4.6 million in the second quarter of fiscal 2026.
40
We are required to prepay (a) 100% of the unrestricted cash held by us and our subsidiaries in excess of $100.0 million applicable to the last 10 calendar days of the first quarter of each fiscal year, (b) 100% of the proceeds from the sale of certain assets and proceeds of certain casualty events, and (c) 100% of incurrence of any new debt proceeds unless such incurrence is permitted under the credit agreement. Other than the mandatory prepayments of excess unrestricted cash as described above, we are also required to pay a prepayment premium of: (a) for the first eighteen months following the Emergence Date, 2.00% of the aggregate principal amount of prepayments or refinancings of the New Term Loan Facility in excess of $200.0 million, (b) from the eighteen-month anniversary of the Emergence Date to the second anniversary of the Emergence Date, 2.00% of the aggregate principal amount of prepayments or refinancings of the New Term Loan Facility, and (c) from the second anniversary of the Emergence Date to the third anniversary of the Emergence Date, 1.00% of the aggregate principal amount of prepayments or refinancings of the New Term Loan Facility. All prepayments of the principal balance of outstanding loans under the New Term Loan Facility are subject to customary “breakage” costs with respect to Term SOFR loans under the New Term Loan Facility. Accordingly, in June 2026, we made our annual cash sweep prepayment of $26.8 million to prepay a portion of our New Term Loan Facility at par.
Refer to “—Emergence from Bankruptcy” for additional information.
Dividends and Stock Transactions
We do not currently pay a dividend and we have no current plans to pay dividends in the foreseeable future. Any future determination to declare and pay dividends will be made at the sole discretion of our Board of Directors, after taking into account our financial condition and results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, the provisions of Virginia law affecting the payment of distributions to shareholders and such other factors our Board of Directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants in our existing indebtedness, including the Senior Secured Credit Agreement, and may be limited by the agreements governing other indebtedness we or our subsidiaries incur in the future.
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, which allows for shares to be purchased from time to time in the open market or through privately negotiated transactions and has no expiration date. On each of June 13, 2005, May 25, 2006 and October 21, 2010, our Board of Directors authorized, and we announced, the addition of $250.0 million to this program, of which $208.9 million remained unutilized as of June 30, 2026 (Successor). During the six months ended June 30, 2026 (Successor), the period from June 25, 2025 through June 30, 2025 (Successor) and the period from December 29, 2024 through June 24, 2025 (Predecessor), we repurchased no shares of our common stock under this program. Notwithstanding the foregoing terms, we do not expect to conduct any repurchases of our common stock under this pre-bankruptcy authorized share repurchase program. We expect future share repurchases, if any, to be made under a new or modified share repurchase program authorized by our Board of Directors. Any future determination to enact a share repurchase program will be made at the sole discretion of our Board of Directors, after taking into account our financial condition and results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, the applicable provisions of Virginia law and such other factors our Board of Directors may deem relevant. In addition, our ability to repurchase shares of our common stock may be limited by covenants in our existing indebtedness agreements and may be limited by the agreements governing other indebtedness we or our subsidiaries incur in the future.
41
EBITDA and Adjusted EBITDA
The table below sets forth the reconciliations for EBITDA and Adjusted EBITDA, each a non-GAAP financial measure, to net income (loss), the most comparable GAAP financial measure, for the periods presented:
|
(In millions) |
|
||||||||||||||||||
|
Successor |
|
|
|
Predecessor |
|
||||||||||||||
|
|
|
|
|
|
|
Period from |
|
|
|
Period from |
|
|
Period from |
|
|||||
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 25, 2025 |
|
|
|
March 30, 2025 |
|
|
December 29, 2024 |
|
|||||
|
June 30, 2026 |
|
|
June 30, 2026 |
|
|
through June 30, 2025 |
|
|
|
through June 24, 2025 |
|
|
through June 24, 2025 |
|
|||||
Net income (loss) |
$ |
14.1 |
|
|
$ |
(37.9 |
) |
|
$ |
1.3 |
|
|
|
$ |
1,190.7 |
|
|
$ |
1,118.1 |
|
Interest |
|
11.6 |
|
|
|
23.1 |
|
|
|
0.9 |
|
|
|
|
11.1 |
|
|
|
38.7 |
|
Taxes |
|
(11.2 |
) |
|
|
(0.3 |
) |
|
|
(0.5 |
) |
|
|
|
(20.9 |
) |
|
|
1.7 |
|
Depreciation and amortization expenses |
|
25.9 |
|
|
|
51.8 |
|
|
|
1.7 |
|
|
|
|
7.3 |
|
|
|
14.2 |
|
Share-based compensation expense |
|
0.7 |
|
|
|
1.4 |
|
|
|
— |
|
|
|
|
3.2 |
|
|
|
4.0 |
|
EBITDA |
$ |
41.2 |
|
|
$ |
38.0 |
|
|
$ |
3.3 |
|
|
|
$ |
1,191.3 |
|
|
$ |
1,176.7 |
|
Franchise rights acquired impairments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
27.5 |
|
Reorganization items, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(1,143.9 |
) |
|
|
(1,143.9 |
) |
Gain on extinguishment of debt |
|
(4.6 |
) |
|
|
(4.6 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Transaction costs |
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
|
|
10.0 |
|
|
|
20.9 |
|
Restructuring charges |
|
(0.2 |
) |
|
|
0.3 |
|
|
|
— |
|
|
|
|
(1.1 |
) |
|
|
(0.1 |
) |
Executive related one-time costs |
|
3.8 |
|
|
|
5.4 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Other (1) |
|
(0.4 |
) |
|
|
(1.2 |
) |
|
|
0.9 |
|
|
|
|
4.5 |
|
|
|
6.7 |
|
Adjusted EBITDA |
$ |
39.8 |
|
|
$ |
37.9 |
|
|
$ |
4.4 |
|
|
|
$ |
60.8 |
|
|
$ |
87.7 |
|
Note: Totals may not sum due to rounding.
We present EBITDA and Adjusted EBITDA because we consider them to be useful supplemental measures of our performance and useful for period-over-period comparisons. In addition, we believe EBITDA and Adjusted EBITDA are useful to investors and analysts. See “—Non-GAAP Financial Measures” herein for an explanation of our use of these non-GAAP financial measures.
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.
SEASONALITY
Our business is seasonal due to the importance of the winter season to our overall member recruitment environment. Historically, we have experienced our highest level of recruitment during the first quarter of the year, which is supported with the highest concentration of advertising spending. Therefore, our number of End of Period Subscribers in the first quarter of the year has been typically higher than the number in other quarters of the year, historically reflecting a decline over the course of the year.
AVAILABLE INFORMATION
Corporate information and our press releases, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments thereto, are available free of charge on our corporate website at corporate.ww.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We also make available at that site the Section 16 reports filed electronically by our officers, directors and 10 percent shareholders.
42
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. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website and social media channels shall not be deemed to be incorporated herein by reference.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of June 30, 2026 (Successor), the market risk disclosures appearing in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for fiscal 2025 have not materially changed from December 31, 2025 (Successor).
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officers (members of the Interim Office of the Chief Executive) and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officers (members of the Interim Office of the Chief Executive) and our principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026, the end of the second quarter of fiscal 2026. Based upon that evaluation and subject to the foregoing, our principal executive officers (members of the Interim Office of the Chief Executive) and our principal financial officer concluded that, as of the end of the second quarter of fiscal 2026, the design and operation of our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
43
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information called for by this item is incorporated herein by reference to Note 9 “Legal” of the Notes to the Consolidated Financial Statements.
ITEM 1A. RISK FACTORS
There have been no material changes in the risk factors from those detailed in our Annual Report on Form 10-K for fiscal 2025 other than as set forth below.
We are undergoing a chief executive officer transition, which could cause disruption to our business, and our failure to appoint a new chief executive officer with the required level of experience and expertise in a timely manner could have an adverse impact on our operations and business strategy as well as the public or market perception of our business.
In March 2026, Tara Comonte resigned as President and Chief Executive Officer of the Company. Effective April 3, 2026, the Company’s Board of Directors appointed Felicia DellaFortuna, our Chief Financial Officer, and Jonathan Volkmann, our Chief Operations Officer, to serve as members of the Interim Office of the Chief Executive until such time as the Company appoints a permanent President and Chief Executive Officer. We are in the process of searching for a new chief executive officer. However, if we are unsuccessful in appointing a chief executive officer with the required level of experience and expertise in a timely manner, our operations and business strategy could be materially and adversely affected. Any significant leadership change or executive management transition involves inherent risk and can be difficult to manage. It may involve a diversion of resources and management attention, be disruptive to our daily operations, make it more difficult to hire and retain key employees, impact public or market perception or hinder progress on key strategic initiatives, any of which could have a negative impact on our business or stock price.
Any failure of our technology or systems to perform satisfactorily could result in an adverse impact on our business.
We rely on software, hardware, network systems and similar technology, including cloud-based technology, that is either developed by us or licensed from or maintained by third parties to operate our websites and platforms, subscription product offerings, and other services and products such as the recurring billing system associated with our commitment plans, and to support our business operations. As much of this technology is complex, there may be future errors, defects or performance problems, including when we update our technology or integrate new technology to expand and enhance our capabilities. Our technology may malfunction or suffer from defects or misconfigurations, and such vulnerabilities may only become apparent after extended use. The integrity of our technology may also be compromised as a result of third-party cyber-attacks, such as hacking, spear phishing campaigns and denial of service (DOS) attacks, which are negatively impacting companies. Cyber threats and the techniques used in cyber-attacks are becoming more sophisticated and evolving rapidly, particularly through the use of advanced artificial intelligence techniques, which are already accelerating vulnerability discovery, social engineering, and attack automation. While longer-term risks may emerge from advances in computational capabilities such as quantum computing, these are not expected to impact our systems in the near term. Cyber-attacks can originate from a variety of sources, including third-parties affiliated with foreign governments, organized crime or terrorist organizations, and malicious individuals both outside and inside a targeted company. In addition, our operations depend on our ability to protect our information technology systems against damage from third-party cyber-attacks, fire, power loss, water, earthquakes, telecommunications failures and similar unexpected adverse events. Disruptions in our websites, apps, services and products or network systems could result from a number of factors, including unknown technical defects, insufficient capacity, the failure of our third-party providers to provide continuous and uninterrupted service and unusual volume in traffic for our platforms. Such disruptions would be most impactful if they occurred during peak activity periods and may impact accessibility to our services and products. While we maintain disaster recovery capabilities to return to normal operation in a timely manner, and we deploy multiple parallel instances of our applications across multiple computer resources, we do not have a fully redundant system that includes an instantaneous recovery capability. 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.
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.
44
Our business depends on the effectiveness and efficiency of our advertising and marketing programs across multiple platforms, including digital marketing and social media platforms, to attract and retain members and subscribers.
Our business success depends on our ability to attract and retain members and subscribers, which depends significantly on the effectiveness and efficiency of our advertising and marketing practices across multiple platforms. For example, if our advertising and marketing programs are not effective and fail to attract sufficient recruitments during the first quarter of the fiscal year, our most important period for recruitments, it could have, and in the past has had, an outsized negative impact on our performance for the remainder of the year. Our competitors may create more compelling marketing campaigns or marketing campaigns that appeal to more diverse audiences, or may devote greater financial and other resources to marketing and advertising, which could drive our current and potential members and subscribers to our competitors.
We rely significantly on paid digital marketing channels, primarily Google and Meta (Facebook and Instagram), to acquire new members and subscribers. These platforms regularly update their proprietary algorithms, ad placement criteria, and content guidelines. Any changes to their algorithms, indexing methods, or policies could adversely impact the effectiveness of our advertising campaigns, thereby decreasing traffic to our platform and significantly increasing our customer acquisition costs.
Additionally, our marketing initiatives may become increasingly expensive and generating a meaningful return on those initiatives may be difficult. In addition, from time-to-time, we use the success stories of our members and subscribers, and utilize brand ambassadors, spokespersons and social media influencers, including in some cases celebrities, in our advertising and marketing programs to communicate on a personal level with consumers. Actions taken by these individuals that harm their personal reputation or image, or include the cessation of using our services and products, could have an adverse impact on the advertising and marketing campaigns in which they are featured. We and our brand ambassadors, spokespersons and social media influencers also use social media channels as a means of communicating with consumers. Unauthorized or inappropriate use of, or content on, these channels could result in harmful publicity or negative consumer experiences, which could have an adverse impact on the effectiveness of our marketing in these channels, our reputation and our ability to attract and retain members, subscribers and strategic partners. In addition, any resulting substantial negative commentary by others, whether on traditional or social media platforms, could have an adverse impact on our reputation and ability to attract and retain members, subscribers and strategic partners. If our advertising and marketing campaigns do not generate a sufficient number of members and subscribers, or fail to develop a high level of engagement with current and potential members and subscribers on various platforms, our business, financial condition and results of operations will be adversely affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
There were no sales of unregistered securities during the period covered by this Quarterly Report on Form 10-Q.
Purchases of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There is nothing to report under this item.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
No contracts, instructions or written plans for the purchase or sale of Company securities were
45
ITEM 6. EXHIBITS
Exhibit Number |
|
Description |
|
|
|
**Exhibit 2.1 |
|
First Amended Joint Prepackaged Plan of Reorganization, dated May 30, 2025 (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, as filed on June 2, 2025 (File No. 001-16769), and incorporated herein by reference). |
|
|
|
**Exhibit 2.2 |
|
Amended Plan Supplement, dated June 12, 2025 (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, as filed on June 12, 2025 (File No. 001-16769), and incorporated herein by reference). |
|
|
|
**Exhibit 2.3 |
|
Confirmation Order, dated June 17, 2025 (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed on June 18, 2025 (File No. 001-16769), and incorporated herein by reference). |
|
|
|
†*Exhibit 10.1 |
|
Form of Term Sheet for Non-Employee Director Restricted Stock Unit Awards and Form of Terms and Conditions for Non-Employee Director Restricted Stock Unit Awards. |
|
|
|
†*Exhibit 10.2 |
|
Settlement Agreement and General Release and Waiver of Claims, dated May 14, 2026, by and between WW International, Inc. and Tara Comonte. |
|
|
|
†*Exhibit 10.3 |
|
Letter Agreement, dated February 26, 2025, by and between WW International, Inc. and Jonathan Volkmann. |
|
|
|
†*Exhibit 10.4 |
|
Form of WW International, Inc. Non-Executive Key Leader Severance Plan (Jonathan Volkmann). |
|
|
|
†*Exhibit 10.5 |
|
Letter Agreement, dated November 4, 2025, by and between WW International, Inc. and Jonathan Volkmann. |
|
|
|
*Exhibit 31.1 |
|
Rule 13a-14(a) Certification by Felicia DellaFortuna, Chief Financial Officer and Member, Interim Office of the Chief Executive. |
|
|
|
*Exhibit 31.2 |
|
Rule 13a-14(a) Certification by Jonathan Volkmann, Chief Operations Officer and Member, Interim Office of the Chief Executive. |
|
|
|
*Exhibit 32.1 |
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
*Exhibit 101 |
|
|
|
|
|
*EX-101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
*EX-101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
|
*Exhibit 104 |
|
The cover page from WW International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
* Filed herewith.
** Previously filed.
† Represents a management arrangement or compensatory plan.
46
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 5, 2026 |
By: |
/s/ Felicia DellaFortuna |
|
|
Felicia DellaFortuna |
|
|
Chief Financial Officer and Member, Interim Office of the Chief Executive (Principal Executive Officer and Principal Financial Officer) |
47