WW INTERNATIONAL, INC.

Previous wording

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. Effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of our centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, our reportable segments changed to one segment for the purpose of making operational and resource decisions and assessing financial performance. Our “Digital” business refers to providing subscriptions to our digital product offerings. Our “Workshops + Digital” business refers to providing subscriptions for unlimited access to our workshops combined with our digital subscription product offerings. Our “Clinical” business refers to providing subscriptions to our clinical product offerings provided by WeightWatchers Clinic (formerly referred to as Sequence) combined with our digital subscription product offerings.

Current wording

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 “Digital” business refers to providing subscriptions to our digital product offerings. Our “Workshops + Digital” business refers to providing subscriptions for unlimited access to our workshops combined with our digital subscription product offerings. Our “Clinical” business refers to providing subscriptions to our clinical product offerings provided by WeightWatchers Clinic (formerly referred to as Sequence) combined with our digital subscription product offerings and unlimited access to our workshops. We also refer to our Workshops + Digital business and Digital business collectively as our “Behavioral” business.

Previous wording

“fiscal 2020” refers to our fiscal year ended January 2, 2021 (included a 53 rd week);

Current wording

“fiscal 2030” refers to our fiscal year ended December 28, 2030.

Previous wording

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. Gross profit, gross margin, operating (loss) income, operating (loss) income margin and components thereof are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) the third quarter of fiscal 2024 to exclude (x) the impact of impairment charges for our franchise rights acquired related to our United States and United Kingdom units of account, (y) the net impact of (a) charges associated with our previously disclosed 2024 restructuring plan (the “2024 plan”), (b) charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”) or the reversal of certain of the charges associated with the 2023 plan, as applicable and (c) the reversal of certain of the charges associated with our previously disclosed 2022 restructuring plan (the “2022 plan”), and (z) the impact of certain non-recurring expenses in connection with the separation from the Company of our former Chief Executive Officer (“CEO”); (ii) the first nine months of fiscal 2024 to exclude (x) the impact of impairment charges for our franchise rights acquired related to our United States, Australia, United Kingdom and New Zealand units of account, (y) the net impact of charges associated with the 2024 plan, the 2023 plan and the 2022 plan, and (z) the impact of certain non-recurring expenses in connection with the separation from the Company of our former CEO; (iii) the third quarter of fiscal 2023 to exclude the net impact of charges associated with the 2023 plan and the reversal of certain of the charges associated with the 2022 plan; and (iv) the first nine months of fiscal 2023 to exclude (x) the net impact of (a) charges associated with the 2023 plan, (b) charges associated with the 2022 plan or the reversal of certain of the charges associated with the 2022 plan, as applicable, (c) charges associated with our previously disclosed 2021 organizational restructuring plan (the “2021 plan”) or the reversal of certain of the charges associated with the 2021 plan, as applicable, and (d) the reversal of certain of the charges associated with our previously disclosed 2020 organizational restructuring plan (the “2020 plan”), and (y) the impact of certain non-recurring transaction costs in connection with the acquisition of Sequence. We generally refer to such non-GAAP measures as excluding or adjusting for the impact of franchise rights acquired impairments, the net impact of restructuring charges, the impact of acquisition transaction costs, and the impact of former CEO separation expenses, as applicable. We also present within this Quarterly Report on Form 10-Q the non-GAAP financial measures: earnings before interest, taxes, depr…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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. Gross profit, gross margin, operating loss, operating loss margin and components thereof are discussed in this Quarterly Report on Form 10-Q both as reported (on a GAAP basis) and as adjusted (on a non-GAAP basis), as applicable, with respect to (i) the first quarter of fiscal 2025 to exclude (a) the impact of the franchise rights acquired impairment charge related to our United States unit of account, (b) the impact of certain non-recurring transaction costs related to the review of strategic alternatives to strengthen our balance sheet, and (c) the net impact of charges associated with our previously disclosed 2024 restructuring plan (the “2024 plan”) or the reversal of certain of the charges associated with the 2024 plan, as applicable, and the reversal of charges associated with our previously disclosed 2023 restructuring plan (the “2023 plan”); and (ii) the first quarter of fiscal 2024 to exclude (a) the impact of franchise rights acquired impairment charges related to our United States, Australia, New Zealand and United Kingdom units of account and (b) the net impact of charges associated with the 2023 plan and our previously disclosed 2022 restructuring plan (the “2022 plan”). We generally refer to such non-GAAP measures as excluding or adjusting for the impact of franchise rights acquired impairments, the impact of transaction costs related to the review of strategic alternatives to strengthen our balance sheet, and the net impact of restructuring charges, as applicable. We also present within this Quarterly Report on Form 10-Q the non-GAAP financial measures: earnings before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”); earnings before interest, taxes, depreciation, amortization, stock-based compensation, franchise rights acquired impairments, transaction costs related to the review of strategic alternatives to strengthen our balance sheet, net restructuring charges, former CEO separation expenses, and other items that management believes are not indicative of ongoing operations (“Adjusted EBITDAS”); total debt less unamortized deferred financing costs, unamortized debt discount and cash on hand (i.e., net debt); and a net debt/Adjusted EBITDAS ratio. See “—Liquidity and Capital Resources—EBITDAS, Adjusted EBITDAS and Net Debt” 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 evaluati…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In performing the impairment analysis for indefinite-lived franchise rights acquired, the fair value for franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for franchise rights related to our Workshops + Digital business and a relief from royalty methodology for franchise rights related to our Digital business. The aggregate estimated fair value for these franchise rights is then compared to the carrying value of the unit of account for these rights. We have determined the appropriate unit of account for purposes of assessing impairment to be the combination of the rights in both the Workshops + Digital business and the Digital business in the country in which the applicable acquisition occurred. The net book value of franchise rights acquired for the United States unit of account as of the September 28, 2024 balance sheet date was $68.6 million.

Current wording

In performing the impairment analysis for indefinite-lived franchise rights acquired, the fair value for franchise rights acquired is estimated using a discounted cash flow approach referred to as the hypothetical start-up approach for franchise rights related to our Workshops + Digital business and a relief from royalty methodology for franchise rights related to our Digital business. The aggregate estimated fair value for these franchise rights is then compared to the carrying value of the unit of account for these rights. We have determined the appropriate unit of account for purposes of assessing impairment to be the combination of the rights in both the Workshops + Digital business and the Digital business in the country in which the applicable acquisition occurred. The net book value of franchise rights acquired for the United States unit of account as of the March 29, 2025 balance sheet date was $41.1 million.

Previous wording

In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit. We have determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines. Our “Behavioral” business line consists of our Workshops + Digital business and Digital business. The net book values of goodwill for the Behavioral and Clinical reporting units as of the September 28, 2024 balance sheet date were $153.0 million and $89.7 million, respectively.

Current wording

In performing the impairment analysis for goodwill, the fair value for our reporting units is estimated using a discounted cash flow approach. This approach involves projecting future cash flows attributable to the reporting unit and discounting those estimated cash flows using an appropriate discount rate. The estimated fair value is then compared to the carrying value of the reporting unit. We have determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines. Our “Behavioral” business line consists of our Workshops + Digital business and Digital business. The net book values of goodwill for the Behavioral and Clinical reporting units as of the March 29, 2025 balance sheet date were $150.5 million and $89.7 million, respectively.

Previous wording

We review indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require. We performed our annual fair value impairment testing as of May 5, 2024 and May 7, 2023, each the first day of fiscal May, on our indefinite-lived franchise rights acquired and goodwill. In addition, based on triggering events, we performed interim impairment tests as of March 30, 2024 and September 28, 2024 on our indefinite-lived franchise rights acquired and goodwill for the first and third quarters of fiscal 2024, respectively.

Current wording

We review indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require. Based on triggering events, we performed interim impairment tests as of March 29, 2025 on our indefinite-lived franchise rights acquired and goodwill for the first quarter of fiscal 2025.

Previous wording

Further information regarding the results of our franchise rights acquired and goodwill annual impairment tests and our franchise rights acquired and goodwill interim impairment tests for the first and third quarters of fiscal 2024 can be found in Note 6 “Franchise Rights Acquired, Goodwill and Other Intangible Assets” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Further information regarding the results of our franchise rights acquired and goodwill interim impairment tests for the first quarter of fiscal 2025 can be found in Note 5 “Franchise Rights Acquired, Goodwill and Other Intangible Assets” in the notes to the Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Revenues—Our “Subscription Revenues” consist of “Digital Subscription Revenues”, “Workshops + Digital Subscription Revenues” and “Clinical Subscription Revenues”. “Digital Subscription Revenues” consist of the fees associated with subscriptions for our Digital offerings. “Workshops + Digital Subscription Revenues” consist of the fees associated with subscriptions for combined workshops and Digital offerings. “Clinical Subscription Revenues” consist of the fees associated with subscriptions for combined Clinical and Digital offerings. In addition, “Other Revenues” (formerly known as “product sales and other”) consist of revenues from licensing and publishing, franchise fees with respect to commitment plans and royalties, and other revenues. Prior to fiscal 2024, “Other Revenues” included sales of consumer products.

Current wording

Revenues—Our “Subscription Revenues” consist of the aggregate of: (a) “Digital Subscription Revenues”, the fees associated with subscriptions for our Digital offerings; (b) “Workshops + Digital Subscription Revenues”, the fees associated with subscriptions for our Workshops + Digital offerings; and (c) “Clinical Subscription Revenues”, the fees associated with subscriptions for our Clinical offerings. “Behavioral Subscription Revenues” is the sum of Digital Subscription Revenues and Workshops + Digital Subscription Revenues. In addition, “Other Revenues” (formerly known as “product sales and other”) consist of revenues from licensing, franchise fees with respect to commitment plans and royalties, publishing and other revenues. Prior to fiscal 2024, Other Revenues included sales of consumer products.

Previous wording

Paid Weeks—The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for our Digital offerings; (ii) “Workshops + Digital Paid Weeks” is the total paid subscription weeks for combined workshops and Digital offerings; (iii) “Clinical Paid Weeks” is the total paid subscription weeks for combined Clinical and Digital offerings; and (iv) “Total Paid Weeks” is the sum of Digital Paid Weeks, Workshops + Digital Paid Weeks and Clinical Paid Weeks.

Current wording

Paid Weeks—The “Paid Weeks” metric reports paid weeks by WW customers in Company-owned operations for a given period as follows: (i) “Digital Paid Weeks” is the total paid subscription weeks for our Digital offerings; (ii) “Workshops + Digital Paid Weeks” is the total paid subscription weeks for our Workshops + Digital offerings; (iii) “Behavioral Paid Weeks” is the sum of Digital Paid Weeks and Workshops + Digital Paid Weeks; (iv) “Clinical Paid Weeks” is the total paid subscription weeks for our Clinical offerings; and (v) “Total Paid Weeks” is the sum of Behavioral Paid Weeks and Clinical Paid Weeks.

Previous wording

Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers and Clinical subscribers who participate in recurring bill programs in Company-owned operations. The “Incoming Subscribers” metric reports Subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of subscribers that have access to combined workshops and Digital offerings; (iii) “Incoming Clinical Subscribers” is the total number of subscribers that have access to combined Clinical and Digital offerings; and (iv) “Incoming Subscribers” is the sum of Incoming Digital Subscribers, Incoming Workshops + Digital Subscribers and Incoming Clinical Subscribers, as applicable. Given we completed our acquisition of Sequence in April 2023 after the beginning of the second quarter of fiscal 2023, we have incoming subscribers with respect to our Clinical business for the third quarter and first nine months of fiscal 2024 and for the third quarter of fiscal 2023, but not for the first nine months of fiscal 2023. Recruitment and retention are key drivers for this metric.

Current wording

Incoming Subscribers—“Subscribers” refer to Digital subscribers, Workshops + Digital subscribers, and Clinical subscribers who participate in recurring bill programs in Company-owned operations. The “Incoming Subscribers” metric reports Subscribers in Company-owned operations at a given period start as follows: (i) “Incoming Digital Subscribers” is the total number of Digital subscribers; (ii) “Incoming Workshops + Digital Subscribers” is the total number of Workshops + Digital subscribers; (iii) “Incoming Behavioral Subscribers” is the sum of Incoming Digital Subscribers and Incoming Workshops + Digital Subscribers; (iv) “Incoming Clinical Subscribers” is the total number of Clinical subscribers; and (v) “Incoming Subscribers” is the sum of Incoming Behavioral Subscribers and Incoming Clinical Subscribers. Recruitment and retention are key drivers for this metric.

Previous wording

End of Period Subscribers—The “End of Period Subscribers” metric reports Subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital subscribers; (ii) “End of Period Workshops + Digital Subscribers” is the total number of subscribers that have access to combined workshops and Digital offerings; (iii) “End of Period Clinical Subscribers” is the total number of subscribers that have access to combined Clinical and Digital offerings; and (iv) “End of Period Subscribers” is the sum of End of Period Digital Subscribers, End of Period Workshops + Digital Subscribers and End of Period Clinical Subscribers. Recruitment and retention are key drivers for this metric.

Current wording

End of Period Subscribers—The “End of Period Subscribers” metric reports Subscribers in Company-owned operations at a given period end as follows: (i) “End of Period Digital Subscribers” is the total number of Digital subscribers; (ii) “End of Period Workshops + Digital Subscribers” is the total number of Workshops + Digital subscribers; (iii) “End of Period Behavioral Subscribers” is the sum of End of Period Digital Subscribers and End of Period Workshops + Digital Subscribers; (iv) “End of Period Clinical Subscribers” is the total number of Clinical subscribers; and (v) “End of Period Subscribers” is the sum of End of Period Behavioral Subscribers and End of Period Clinical Subscribers. Recruitment and retention are key drivers for this metric.

Previous wording

The table below sets forth selected financial information for the third quarter of fiscal 2024 from our consolidated statements of operations for the three months ended September 28, 2024 versus selected financial information for the third quarter of fiscal 2023 from our consolidated statements of operations for the three months ended September 30, 2023.

Current wording

The table below sets forth selected financial information for the first quarter of fiscal 2025 from our consolidated statements of operations for the three months ended March 29, 2025 versus selected financial information for the first quarter of fiscal 2024 from our consolidated statements of operations for the three months ended March 30, 2024.

Previous wording

The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for the third quarter of fiscal 2023 to exclude the net impact of the $6.2 million ($4.6 million after tax)of 2023 plan restructuring chargesand the reversal of $0.2 million ($0.2 million after tax)of 2022 plan restructuring charges. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.

Current wording

The “As adjusted” measure is a non-GAAP financial measure that adjusts the consolidated statements of operations for the first quarter of fiscal 2024 to exclude the impact of the $258.0 million ($241.5 million after tax) of franchise rights acquired impairments, and the net impact of the $5.5 million ($4.1 million after tax)of 2023 plan restructuring charges andthe $0.2 million ($0.2 million after tax)of 2022 plan restructuring charges. See “Non-GAAP Financial Measures” above for an explanation of our use of non-GAAP financial measures.

Previous wording

Revenues for the third quarter of fiscal 2024 were $192.9 million, a decrease of $22.0 million, or 10.2%, versus the third quarter of fiscal 2023. Excluding the impact of foreign currency, which positively impacted our revenues in the third quarter of fiscal 2024 by $0.7 million, revenues for the third quarter of fiscal 2024 would have decreased 10.6% versus the prior year period. This decrease was driven by both the decline in Subscription Revenues and the decline in Other Revenues. The decline in Subscription Revenues was primarily due to recruitment declines during the third quarter of fiscal 2024 versus the prior year period and the lower number of non-Clinical Incoming Subscribers at the beginning of the third quarter of fiscal 2024 versus the beginning of the third quarter of fiscal 2023. Additionally, Subscription Revenues were negatively impacted by the continued mix shift from our Workshops + Digital business to our Digital business and a higher mix of Digital subscribers within their initial, lower-priced commitment periods. Subscription Revenues benefited from an increase in Clinical Subscription Revenues for the third quarter of fiscal 2024 versus the prior year period. The decline in Other Revenues was primarily due to the discontinuation of our consumer products business at the end of fiscal 2023. See “—Operating Results” for additional details on revenues.

Current wording

Revenues for the first quarter of fiscal 2025 were $186.6 million, a decrease of $20.0 million, or 9.7%, versus the first quarter of fiscal 2024. Excluding the impact of foreign currency, which negatively impacted our revenues in the first quarter of fiscal 2025 by $1.8 million, revenues for the first quarter of fiscal 2025 would have decreased 8.8% versus the prior year period. This decrease was driven by a decline in Behavioral Subscription Revenues, partially offset by an increase in Clinical Subscription Revenues. The decline in Behavioral Subscription Revenues was primarily due to the lower number of Incoming Behavioral Subscribers at the beginning of the first quarter of fiscal 2025 versus the beginning of the first quarter of fiscal 2024 and Behavioral recruitment declines during the first quarter of fiscal 2025 versus the prior year period. The decline in Behavioral Subscription Revenues was also driven by a higher mix of subscribers within their initial, lower-priced commitment periods. The increase in Clinical Subscription Revenues was primarily due to Clinical recruitment growth during the first quarter of fiscal 2025 versus the prior year period and the higher number of Incoming Clinical Subscribers at the beginning of the first quarter of fiscal 2025 versus the beginning of the first quarter of fiscal 2024. See “—Operating Results” for additional details on revenues.

Previous wording

Cost of revenues for the third quarter of fiscal 2024 decreased $9.7 million, or 13.3%, versus the third quarter of fiscal 2023. Excluding the impact of foreign currency, which increased cost of revenues in the third quarter of fiscal 2024 by $0.1 million, cost of revenues for the third quarter of fiscal 2024 would have decreased 13.5% versus the prior year period. Excluding the net impact of the $3.8 million of restructuring charges in the third quarter of fiscal 2024 and the net impact of the $0.4 million of restructuring charges in the third quarter of fiscal 2023, cost of revenues for the third quarter of fiscal 2024 would have decreased by 18.1%, or 18.2% on a constant currency basis, versus the prior year period.

Current wording

Cost of revenues for the first quarter of fiscal 2025 decreased $15.1 million, or 21.9%, versus the first quarter of fiscal 2024. Excluding the impact of foreign currency, which decreased cost of revenues in the first quarter of fiscal 2025 by $0.2 million, cost of revenues for the first quarter of fiscal 2025 would have decreased 21.6% versus the prior year period. Excluding the net impact of the reversal of $0.4 million of restructuring charges in the first quarter of fiscal 2025 and the net impact of the $2.5 million of restructuring charges in the first quarter of fiscal 2024, cost of revenues for the first quarter of fiscal 2025 would have decreased by 18.4%, or 18.1% on a constant currency basis, versus the prior year period as a result of the actions to reduce the fixed cost base within our business.

Previous wording

Gross profit for the third quarter of fiscal 2024 decreased $12.3 million, or 8.6%, versus the third quarter of fiscal 2023. Excluding the impact of foreign currency, which positively impacted gross profit in the third quarter of fiscal 2024 by $0.6 million, gross profit for the third quarter of fiscal 2024 would have decreased 9.1% versus the prior year period. Excluding the net impact of the $3.8 million of restructuring charges in the third quarter of fiscal 2024 and the net impact of the $0.4 million of restructuring charges in the third quarter of fiscal 2023, gross profit for the third quarter of fiscal 2024 would have decreased by 6.2%, or 6.6% on a constant currency basis, versus the prior year period. Gross margin for the third quarter of fiscal 2024 increased to 67.1%, both as reported and on a constant currency basis, versus 66.0% for the third quarter of fiscal 2023. Excluding the net impact of restructuring charges in the third quarter of fiscal 2024 and the net impact of restructuring charges in the third quarter of fiscal 2023, gross margin for the third quarter of fiscal 2024 would have increased to 69.1%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period. This gross margin increase was driven primarily by actions to reduce the fixed cost base within our business and the discontinuation of our lower margin consumer products business at the end of fiscal 2023.

Current wording

Gross profit for the first quarter of fiscal 2025 decreased $4.9 million, or 3.6%, versus the first quarter of fiscal 2024. Excluding the impact of foreign currency, which negatively impacted gross profit in the first quarter of fiscal 2025 by $1.6 million, gross profit for the first quarter of fiscal 2025 would have decreased 2.4% versus the prior year period. Excluding the net impact of the reversal of $0.4 million of restructuring charges in the first quarter of fiscal 2025 and the net impact of the $2.5 million of restructuring charges in the first quarter of fiscal 2024, gross profit for the first quarter of fiscal 2025 would have decreased by 5.5%, or 4.4% on a constant currency basis, versus the prior year period. Gross margin for the first quarter of fiscal 2025 increased to 71.2%, or 71.4% on a constant currency basis, versus 66.7% for the first quarter of fiscal 2024. Excluding the net impact of the reversal of restructuring charges in the first quarter of fiscal 2025 and the net impact of restructuring charges in the first quarter of fiscal 2024, gross margin for the first quarter of fiscal 2025 would have increased to 3.1%, or 3.3% on a constant currency basis, versus the prior year period. This gross margin increase was driven primarily by actions to reduce the fixed cost base within our business.

Previous wording

Marketing expenses for the third quarter of fiscal 2024 decreased $3.7 million, or 7.7%, versus the third quarter of fiscal 2023. Excluding the impact of foreign currency, which decreased marketing expenses in the third quarter of fiscal 2024 by $0.1 million, marketing expenses for the third quarter of fiscal 2024 would have decreased 7.5% versus the prior year period. This decrease in marketing expenses was primarily due to the strategic decision to reduce investment in the quarter given the rise in customer acquisition costs. Marketing expenses as a percentage of revenue for the third quarter of fiscal 2024 increased to 23.0% from 22.4% for the third quarter of fiscal 2023.

Current wording

Marketing expenses for the first quarter of fiscal 2025 decreased $11.4 million, or 12.6%, versus the first quarter of fiscal 2024. Excluding the impact of foreign currency, which decreased marketing expenses in the first quarter of fiscal 2025 by $0.2 million, marketing expenses for the first quarter of fiscal 2025 would have decreased 12.4% versus the prior year period. This decrease in marketing expenses was primarily due to lower spend on TV and online advertising. Marketing expenses as a percentage of revenue for the first quarter of fiscal 2025 decreased to 42.2% from 43.7% for the first quarter of fiscal 2024.

Previous wording

Selling, general and administrative expenses for the third quarter of fiscal 2024 increased $4.1 million, or 6.4%, versus the third quarter of fiscal 2023. Excluding the impact of foreign currency, which increased selling, general and administrative expenses in the third quarter of fiscal 2024 by $0.1 million, selling, general and administrative expenses for the third quarter of fiscal 2024 would have increased 6.3% versus the prior year period. Excluding the net impact of the $10.0 million of restructuring charges in the third quarter of fiscal 2024, the impact of the $3.9 million of former CEO separation expenses in the third quarter of fiscal 2024 and the net impact of the $5.6 million of restructuring charges in the third quarter of fiscal 2023, selling, general and administrative expenses for the third quarter of fiscal 2024 would have decreased by 7.3%, or 7.4% on a constant currency basis, versus the prior year period. This decrease in selling, general and administrative expenses was primarily due to a decline in employee compensation and related costs. Selling, general and administrative expenses as a percentage of revenue for the third quarter of fiscal 2024 increased to 34.8% from 29.3% for the third quarter of fiscal 2023. Excluding the net impact of restructuring charges in the third quarter of fiscal 2024, the impact of former CEO separation expenses in the third quarter of fiscal 2024 and the net impact of restructuring charges in the third quarter of fiscal 2023, selling, general and administrative expenses as a percentage of revenue for the third quarter of fiscal 2024 would have increased by 0.9%, both as adjusted and as adjusted on a constant currency basis, versus the prior year period.

Current wording

Selling, general and administrative expenses for the first quarter of fiscal 2025 decreased $12.2 million, or 20.7%, versus the first quarter of fiscal 2024. Excluding the impact of foreign currency, which decreased selling, general and administrative expenses in the first quarter of fiscal 2025 by $0.1 million, selling, general and administrative expenses for the first quarter of fiscal 2025 would have decreased 20.5% versus the prior year period. Excluding the impact of the $10.8 million of transaction costs related to the review of strategic alternatives to strengthen our balance sheet in the first quarter of fiscal 2025, the net impact of the $1.4 million of restructuring charges in the first quarter of fiscal 2025 and the net impact of the $3.3 million of restructuring charges in the first quarter of fiscal 2024, selling, general and administrative expenses for the first quarter of fiscal 2025 would have decreased by 37.9%, or 37.7% on a constant currency basis, versus the prior year period. This decrease in selling, general and administrative expenses was primarily due to a decline in employee compensation and related costs from continued cost discipline and execution towards our cost savings initiative plan announced in 2024. Selling, general and administrative expenses as a percentage of revenue for the first quarter of fiscal 2025 decreased to 25.1% from 28.6% for the first quarter of fiscal 2024. Excluding the impact of the transaction costs related to the review of strategic alternatives to strengthen our balance sheet in the first quarter of fiscal 2025, the net impact of restructuring charges in the first quarter of fiscal 2025 and the net impact of restructuring charges in the first quarter of fiscal 2024, selling, general and administrative expenses as a percentage of revenue for the first quarter of fiscal 2025 would have decreased by 8.4%, or 8.5% on a constant currency basis, versus the prior year period.

Previous wording

In performing our interim impairment analysis as of March 30, 2024, we determined that the carrying values of our United States, Australia, New Zealand and United Kingdom franchise rights acquired with indefinite-lived units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our United States, Australia, New Zealand and United Kingdom units of account of $251.4 million, $4.1 million, $2.3 million and $0.2 million, respectively, in the first quarter of fiscal 2024.

Current wording

In performing our interim impairment analysis as of March 30, 2024, we determined that the carrying values of our United States, Australia, New Zealand and United Kingdom indefinite-lived franchise rights acquired units of account exceeded their respective fair values and, as a result, we recorded impairment charges for our United States, Australia, New Zealand and United Kingdom units of account of $251.4 million, $4.1 million, $2.3 million and $0.2 million, respectively, in the first quarter of fiscal 2024.

Previous wording

Operating loss for the first nine months of fiscal 2024 was $272.4 million compared to operating income for the first nine months of fiscal 2023 of $28.3 million. Operating loss for the first nine months of fiscal 2024 was positively impacted by $0.4 million of foreign currency. Excluding the impact of the $315.0 million of franchise rights acquired impairments in the first nine months of fiscal 2024, the net impact of the $21.5 million of restructuring charges in the first nine months of fiscal 2024, the impact of the $3.9 million of former CEO separation expenses in the first nine months of fiscal 2024, the net impact of the $31.3 million of restructuring charges in the first nine months of fiscal 2023 and the impact of the $8.6 million of acquisition transaction costs in the first nine months of fiscal 2023, operating income would have been $68.0 million for the first nine months of fiscal 2024 versus operating income of $68.2 million for the first nine months of fiscal 2023, a decrease of 0.4%, or 1.1% on a constant currency basis. Operating loss margin for the first nine months of fiscal 2024 was 45.3% compared to operating income margin for the first nine months of fiscal 2023 of 4.1%. Excluding the impact of franchise rights acquired impairments in the first nine months of fiscal 2024, the net impact of restructuring charges in the first nine months of fiscal 2024, the impact of former CEO separation expenses in the first nine months of fiscal 2024, the net impact of restructuring charges in the first nine months of fiscal 2023 and the impact of acquisition transaction costs in the first nine months of fiscal 2023, operating income margin would have been 11.3%, or 11.2% on a constant currency basis, for the first nine months of fiscal 2024 versus operating income margin of 10.0% for the first nine months of fiscal 2023. This increase in operating income margin was driven primarily by an increase in gross margin, partially offset by an increase in marketing expenses as a percentage of revenue and an increase in selling, general and administrative expenses as a percentage of revenue, versus the prior year period.

Current wording

Operating loss for the first quarter of fiscal 2025 was $20.2 million compared to operating loss for the first quarter of fiscal 2024 of $269.3 million. Operating loss for the first quarter of fiscal 2025 was negatively impacted by $1.2 million of foreign currency. Excluding the impact of the $27.5 million franchise rights acquired impairment in the first quarter of fiscal 2025, the impact of the $10.8 million of transaction costs related to the review of strategic alternatives to strengthen our balance sheet in the first quarter of fiscal 2025, the net impact of the $1.0 million of restructuring charges in the first quarter of fiscal 2025, the impact of the $258.0 million of franchise rights acquired impairments in the first quarter of fiscal 2024 and the net impact of the $5.7 million of restructuring charges in the first quarter of fiscal 2024, operating income would have been $19.1 million, or $20.4 million on a constant currency basis, for the first quarter of fiscal 2025 versus operating loss of $5.6 million for the first quarter of fiscal 2024. Operating loss margin for the first quarter of fiscal 2025 was 10.8% compared to operating loss margin for the first quarter of fiscal 2024 of 130.4%. Excluding the impact of the franchise rights acquired impairment in the first quarter of fiscal 2025, the impact of the transaction costs related to the review of strategic alternatives to strengthen our balance sheet in the first quarter of fiscal 2025, the net impact of restructuring charges in the first quarter of fiscal 2025, the impact of franchise rights acquired impairments in the first quarter of fiscal 2024 and the net impact of restructuring charges in the first quarter of fiscal 2024, operating income margin would have been 10.3%, or 10.8% on a constant currency basis, for the first quarter of fiscal 2025 versus operating loss margin of 2.7% for the first quarter of fiscal 2024. This increase in operating income margin was driven by a decrease in selling, general and administrative expenses as a percentage of revenue, an increase in gross margin and a decrease in marketing expenses as a percentage of revenue versus the prior year period.

Previous wording

Interest expense for the third quarter of fiscal 2024 increased $4.1 million, or 16.8%, versus the third quarter of fiscal 2023. The increase in interest expense was driven primarily by an increase in the base rate of our Term Loan Facility (as defined below). The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the third quarter of fiscal 2024 and the third quarter of fiscal 2023 and excluding the impact of any applicable interest rate swaps, increased to 7.75% per annum for the third quarter of fiscal 2024 from 7.73% per annum for the third quarter of fiscal 2023. Interest expense was impacted by the termination of our interest rate swaps on March 31, 2024. Including the impact of any applicable interest rate swaps, the effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the third quarter of fiscal 2024 and the third quarter of fiscal 2023, increased to 7.75% per annum for the third quarter of fiscal 2024 from 6.75% per annum for the third quarter of fiscal 2023. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon. Further information regarding our use of interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Interest expense for the first quarter of fiscal 2025 increased $2.9 million, or 11.6%, versus the first quarter of fiscal 2024. The increase in interest expense was driven primarily by an increase in the base rate of our Term Loan Facility (as defined below). The effective interest rate on our debt, based on interest incurred (which includes amortization of our deferred financing costs and debt discount) and our average borrowings during the first quarter of fiscal 2025 and the first quarter of fiscal 2024 and excluding the impact of any applicable interest rate swaps, was 7.17% per annum for the first quarter of fiscal 2025 versus 7.78% per annum for the first quarter of fiscal 2024, or 6.80% per annum for the first quarter of fiscal 2024 including the impact of any applicable interest rate swaps. Interest expense was impacted by the termination of our interest rate swaps on March 31, 2024. See “—Liquidity and Capital Resources—Long-Term Debt” for additional details regarding our debt, including interest rates and payments thereon.

Previous wording

Other expense (income), net, which consists primarily of the negative impact of foreign currency on intercompany transactions, changed by $4.2 million for the first nine months of fiscal 2024 to $4.2 million of expense as compared to $36 thousand of income for the first nine months of fiscal 2023.

Current wording

Other expense (income), net, which consists primarily of the impact of foreign currency on intercompany transactions, changed by $3.8 million for the first quarter of fiscal 2025 to $2.2 million of expense as compared to $1.6 million of income for the first quarter of fiscal 2024.

Previous wording

Our effective tax rate for the third quarter of fiscal 2024 was 37.2% compared to (727.7%) for the third quarter of fiscal 2023. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year fiscal 2024 tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove the unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to pretax loss for the third quarter of fiscal 2024 resulted in an income tax benefit. The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on our effective tax rate for the third quarter of fiscal 2024.

Current wording

Our effective tax rate for the first quarter of fiscal 2025 was (45.1%) compared to (19.0%) for the first quarter of fiscal 2024. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year fiscal 2025 tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove the unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to pretax loss for the first quarter of fiscal 2025 resulted in an income tax expense of $22.6 million, which is mostly reflected in income taxes payable on our consolidated balance sheet and consolidated statement of cash flows.

Previous wording

Our effective tax rate for the first nine months of fiscal 2024 was (3.4%) compared to 44.0% for the first nine months of fiscal 2023. The effective tax rate for interim periods is determined using an annual effective tax rate, adjusted for discrete items. The forecasted full-year fiscal 2024 tax expense, which included an increase in valuation allowance against U.S. deferred tax assets, in relation to our forecasted full-year pretax loss (albeit minimal), drove the unusually high negative annual effective tax rate. Applying this negative annual effective tax rate to the pretax loss for the first nine months of fiscal 2024 resulted in an income tax expense. In addition, for the first nine months of fiscal 2024, the effective tax rate was impacted by tax expense recorded for an out-of-period income tax adjustment and tax expense from a valuation allowance established to offset certain non-U.S. deferred tax assets due to the uncertainty of realizing future tax benefits. The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on our effective tax rate for the first nine months of fiscal 2024.

Current wording

For the first quarter of fiscal 2025, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to the valuation allowance noted above. In addition, the effective tax rate was impacted by a tax expense related to the Base Erosion and Anti-Abuse Tax, partially offset by a tax benefit related to foreign-derived intangible income (“FDII”). The adoption of the Organization for Economic Cooperation and Development’s global tax reform initiative, which introduces a global minimum tax of 15% applicable to large multinational corporations, did not have an impact on the first quarter of fiscal 2025. For the first quarter of fiscal 2024, the difference between the U.S. federal statutory tax rate and our consolidated effective tax rate was primarily due to an increase in valuation allowance against U.S. deferred tax assets. In addition, the effective tax rate was impacted by a tax benefit related to FDII.

Previous wording

Net loss for the third quarter of fiscal 2024 was $46.2 million compared to net income for the third quarter of fiscal 2023 of $43.7 million. Net loss for the third quarter of fiscal 2024 was positively impacted by $0.3 million of foreign currency. Net loss for the third quarter of fiscal 2024 included a $51.8 million impact from franchise rights acquired impairments, a $10.4 million net impact from restructuring charges and a $2.9 million impact from former CEO separation expenses. Net income for the third quarter of fiscal 2023 included a $4.5 million net impact from restructuring charges.

Current wording

Net loss for the first quarter of fiscal 2025 was $72.6 million compared to net loss for the first quarter of fiscal 2024 of $347.9 million. Net loss for the first quarter of fiscal 2025 was negatively impacted by $0.9 million of foreign currency. Net loss for the first quarter of fiscal 2025 included a $26.3 million impact from the franchise rights acquired impairment, an $8.1 million impact from transaction costs related to the review of strategic alternatives to strengthen our balance sheet, and a $0.7 million net impact from restructuring charges. Net loss for the first quarter of fiscal 2024 included a $241.5 million impact from franchise rights acquired impairments and a $4.3 million net impact from restructuring charges.

Previous wording

Diluted net loss per share for the first nine months of fiscal 2024 was $4.67 compared to diluted net loss per share for the first nine months of fiscal 2023 of $0.32. Diluted net loss per share for the first nine months of fiscal 2024 included a $3.69 impact from franchise rights acquired impairments, a $0.20 net impact from restructuring charges and a $0.04 impact from former CEO separation expenses. Diluted net loss per share for the first nine months of fiscal 2023 included a $0.31 net impact from restructuring charges and a $0.10 impact from acquisition transaction costs.

Current wording

Diluted net loss per share for the first quarter of fiscal 2025 was $0.91 compared to diluted net loss per share for the first quarter of fiscal 2024 of $4.39. Diluted net loss per share for the first quarter of fiscal 2025 included a $0.33 impact from the franchise rights acquired impairment, a $0.10 impact from transaction costs related to the review of strategic alternatives to strengthen our balance sheet, and a $0.01 net impact from restructuring charges. Diluted net loss per share for the first quarter of fiscal 2024 included a $3.05 impact from franchise rights acquired impairments and a $0.05 net impact from restructuring charges.

Previous wording

The following tables set forth key metrics for the third quarter of fiscal 2024 and the percentage change in those metrics versus the prior year period:

Current wording

The following tables set forth key metrics for the first quarter of fiscal 2025 and the percentage change in those metrics versus the prior year period:

Previous wording

The decrease in revenues for the third quarter of fiscal 2024 versus the prior year period was driven by both a decrease in Subscription Revenues and a decrease in Other Revenues. The decrease in Subscription Revenues for the third quarter of fiscal 2024 versus the prior year period was driven by a decrease in Digital Subscription Revenues and, to a lesser extent, a decrease in Workshops + Digital Subscription Revenues primarily due to recruitment declines during the third quarter of fiscal 2024 as compared to the prior year period and the lower number of Incoming Digital Subscribers and Incoming Workshops + Digital Subscribers at the beginning of the third quarter of fiscal 2024 versus the beginning of the third quarter of fiscal 2023. In addition, the continued mix shift from our Workshops + Digital business to our Digital business and a higher mix of Digital subscribers within their initial, lower-priced commitment periods contributed to the decrease in Digital and Workshops + Digital Subscription Revenues in the quarter. Subscription Revenues benefited from an increase in Clinical Subscription Revenues for the third quarter of fiscal 2024 versus the prior year period, despite the recruitment challenges in the third quarter of fiscal 2024 arising from the increasingly competitive environment.

Current wording

The decrease in revenues for the first quarter of fiscal 2025 versus the prior year period was driven by a decline in Behavioral Subscription Revenues, partially offset by an increase in Clinical Subscription Revenues. The decline in Behavioral Subscription Revenues was driven by a decrease in Digital Subscription Revenues and, to a lesser extent, a decrease in Workshops + Digital Subscription Revenues due to the lower number of respective Incoming Subscribers at the beginning of the first quarter of fiscal 2025 versus the beginning of the first quarter of fiscal 2024 and recruitment declines. The decline in Behavioral Subscription Revenues was also driven by a higher mix of subscribers within their initial, lower-priced commitment periods. The increase in Clinical Subscription Revenues was primarily due to Clinical recruitment growth during the first quarter of fiscal 2025 versus the prior year period and the higher number of Incoming Clinical Subscribers at the beginning of the first quarter of fiscal 2025 versus the beginning of the first quarter of fiscal 2024.

Previous wording

The decrease in Total Paid Weeks for the first nine months of fiscal 2024 versus the prior year period was driven primarily by non-Clinical recruitment declines during the first nine months of fiscal 2024 as compared to the prior year period.

Current wording

The increase in Total Subscription Revenues Per Paid Weeks for the first quarter of fiscal 2025 versus the prior year period was driven primarily by a mix shift to the Clinical business.

Previous wording

The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents at:

Current wording

The following table sets forth certain relevant measures of our balance sheet working capital deficit, excluding cash and cash equivalents and current portion of long-term debt, net at:

Previous wording

The following table sets forth a summary of the primary factors contributing to the $10.1 million increase in our working capital deficit, excluding cash and cash equivalents:

Current wording

The following table sets forth a summary of the primary factors contributing to the $50.0 million increase in our working capital deficit, excluding cash and cash equivalents and current portion of long-term debt, net:

Previous wording

The decrease in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by a decrease in accrued liabilities due to a decline in employee compensation and related costs and a decline in accrued marketing costs. The increase in accrued interest was due to the timing of payments. The decrease in prepaid income taxes was primarily due to the outsized impact of a significant, largely non-cash, income tax expense resulting from the valuation allowance recorded to reflect the uncertainty of the realization of U.S. deferred tax assets.

Current wording

The increase in income taxes payable was primarily due to the outsized impact of a significant, largely non-cash, income tax expense resulting from the valuation allowance recorded to reflect the uncertainty of the realization of U.S. deferred tax assets. The increase in accrued interest was primarily due to the timing of payments. The increase in operational liabilities and other, net of assets, which includes accrued salaries and wages, was driven primarily by an increase in accounts payable due to the timing of payments, partially offset by a decrease in accrued salaries and wages due to the decline in employee compensation and related costs. The decrease in prepaid income taxes was primarily due to cash tax payments made in the quarter.

Previous wording

The following table sets forth a summary of our cash flows for the nine months ended:

Current wording

The following table sets forth a summary of our cash flows for the three months ended:

Previous wording

Cash flows used for operating activities of $21.4 million for the first nine months of fiscal 2024 reflected an increase of $20.3 million from $1.2 million of cash flows used for operating activities for the first nine months of fiscal 2023. This increase in cash flows used for operating activities was primarily attributable to an increase in net loss, partially offset by an increase in non-cash add-back adjustments driven by the franchise rights acquired impairments and an increase in cash provided by operating assets and liabilities in the first nine months of fiscal 2024 as compared to the prior year period.

Current wording

Cash flows provided by operating activities of $15.0 million for the first three months of fiscal 2025 reflected a change of $51.0 million from $36.0 million of cash flows used for operating activities for the first three months of fiscal 2024. This change was primarily attributable to a decrease in net loss, partially offset by a decrease in non-cash add-back adjustments driven by the decline in franchise rights acquired impairments in the first three months of fiscal 2025 as compared to the prior year period.

Previous wording

Net cash used for investing activities totaled $13.2 million for the first nine months of fiscal 2024, a decrease of $53.5 million as compared to the first nine months of fiscal 2023. This decrease was primarily attributable to a decrease in cash paid for acquisitions, net of cash acquired, and a decrease in capitalized software and website development expenditures in the first nine months of fiscal 2024 as compared to the prior year period.

Current wording

Net cash used for investing activities totaled $3.2 million for the first three months of fiscal 2025, a decrease of $1.6 million as compared to the first three months of fiscal 2024. This decrease was primarily attributable to a decrease in capitalized software and website development expenditures in the first three months of fiscal 2025 as compared to the prior year period.

Previous wording

Net cash used for financing activities totaled $17.1 million for the first nine months of fiscal 2024, an increase of $15.2 million as compared to the first nine months of fiscal 2023. This increase was primarily attributable to an increase in cash paid for acquisitions in the first nine months of fiscal 2024 as compared to the prior year period.

Current wording

Net cash provided by financing activities totaled $171.2 million for the first three months of fiscal 2025, a change of $171.9 million as compared to the first three months of fiscal 2024. This change was primarily attributable to an increase in borrowings on the Revolving Credit Facility in the first three months of fiscal 2025 as compared to the prior year period.

Previous wording

As of September 28, 2024, we had $945.0 million in an aggregate principal amount of loans outstanding under our Credit Facilities, with $173.8 million of availability and $1.2 million in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below. There were no outstanding borrowings under the Revolving Credit Facility as of September 28, 2024.

Current wording

As of March 29, 2025, we had $1,116.3 million in an aggregate principal amount of loans outstanding under our Credit Facilities, with $0 of availability and $3.7 million in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below. There were $171.3 million of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025.

Previous wording

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility as of any fiscal quarter end exceeds 35% of the amount of the aggregate commitments under the Revolving Credit Facility in effect on such date, we must be in compliance with a Consolidated First Lien Leverage Ratio of 5.25:1.00 for the period ending after the first fiscal quarter of 2024 through and including the first fiscal quarter of 2025, with a step down to 5.00:1.00, for the period following the first fiscal quarter of 2025. As of September 28, 2024, our actual Consolidated First Lien Leverage Ratio was 8.88:1.00 and there were no borrowings under our Revolving Credit Facility and total letters of credit issued were $1.2 million. We were not in compliance with the Consolidated First Lien Leverage Ratio as of September 28, 2024, and as a result, we are limited to borrowing no more than 35%, or $61.3 million, of the amount of the aggregate commitments under the Revolving Credit Facility as of each fiscal quarter end until we comply with the applicable ratio.

Current wording

The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit (inclusive of outstanding letters of credit) under the Revolving Credit Facility as of any fiscal quarter end exceeds 35%, or $61.3 million, of the aggregate revolving commitments, we are required to be in compliance with a Consolidated First Lien Leverage Ratio not to exceed 5.25:1.00 through and including the first fiscal quarter of 2025 and not to exceed 5.00:1.00 thereafter. There were $171.3 million of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025. Our Consolidated First Lien Leverage Ratio as of March 29, 2025 was 7.37:1.00. Accordingly, we expect an Event of Default, as defined under the Revolving Credit Facility, to occur upon the delivery of the next compliance certificate, due on May 13, 2025, and the expiration of the applicable cure period, which is to occur on or before June 4, 2025. If the Revolving Credit Facility is accelerated, the Term Loan Facility and Senior Secured Notes may be accelerated as the Term Loan Facility and Senior Secured Notes contain cross-default and/or cross-acceleration provisions.

Previous wording

At September 28, 2024, we had $1,445.0 million outstanding under the Credit Facilities and the Senior Secured Notes, consisting of borrowings under the Term Loan Facility of $945.0 million, $0.0 drawn down on the Revolving Credit Facility and $500.0 million in aggregate principal amount of Senior Secured Notes issued and outstanding.

Current wording

At March 29, 2025, we had $1,616.3 million outstanding under the Credit Facilities and the Senior Secured Notes, consisting of borrowings under the Term Loan Facility of $945.0 million, $171.3 million (inclusive of outstanding letters of credit) drawn down on the Revolving Credit Facility and $500.0 million in aggregate principal amount of Senior Secured Notes issued and outstanding.

Previous wording

At September 28, 2024 and December 30, 2023, our debt consisted of both fixed and variable-rate instruments. We have historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. At September 28, 2024, the Company did not have any interest rate swaps in effect. Further information regarding our use of interest rate swaps can be found in Note 11 “Derivative Instruments and Hedging” in the notes to the consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of any applicable interest rate swaps, was approximately 7.77% and 7.64% per annum at September 28, 2024 and December 30, 2023, respectively, based on interest rates on these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, including the impact of any applicable interest rate swaps, was approximately 7.39% and 6.53% per annum at September 28, 2024 and December 30, 2023, respectively, based on interest rates on these dates.

Current wording

At March 29, 2025 and December 28, 2024, our debt consisted of both fixed and variable-rate instruments. We have historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with our variable-rate borrowings. At March 29, 2025, we did not have any interest rate swaps in effect. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, exclusive of the impact of any applicable interest rate swaps, was approximately 7.18% and 7.75% per annum at March 29, 2025 and December 28, 2024, respectively, based on interest rates on these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on our outstanding debt, including the impact of any applicable interest rate swaps, was approximately 7.18% and 7.47% per annum at March 29, 2025 and December 28, 2024, respectively, based on interest rates on these dates.