WW INTERNATIONAL, INC.

Basis of Presentation

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 “Digital” business refers to providing subscriptions to the Company’s digital product offerings. The Company’s “Workshops + Digital” business refers to providing subscriptions for unlimited access to the Company’s workshops combined with the Company’s digital subscription product offerings. The Company’s “Clinical” business refers to providing subscriptions to the Company’s clinical product offerings provided by WeightWatchers Clinic (formerly referred to as Sequence) combined with the Company’s digital subscription product offerings and unlimited access to the Company’s workshops. The Company also refers to its Workshops + Digital business and Digital business collectively as its “Behavioral” business.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and include amounts that are based on management’s best estimates and assumptions. While all available information has been considered, actual amounts could differ from those estimates. These estimates and assumptions may change as new events occur and additional information is obtained, and such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity. The consolidated financial statements include all of the Company’s majority-owned subsidiaries. All entities acquired, and any entity of which a majority interest was acquired, are included in the consolidated financial statements from the date of acquisition. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s operating results for any interim period are not necessarily indicative of future or annual results. The consolidated financial statements are unaudited and, accordingly, they do not include all of the information necessary for a comprehensive presentation of results of operations, financial position and cash flow activity required by GAAP for complete financial statements but, in the opinion of management, reflect all adjustments, including those of a normal recurring nature, necessary for a fair statement of the interim results presented.

As previously disclosed, effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reportable segments changed to one segment for the purpose of making operational and resource decisions and assessing financial performance. See Note 11 for disclosures related to segments.

Prior period amounts have been reclassified to conform with the current period presentation.

These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal 2024 filed on February 28, 2025, which includes additional information about the Company, its results of operations, its financial position and its cash flows.

Liquidity and Going Concern

The Company has experienced significant disruption and competitive pressures, including shifts in consumer behavior in the weight loss category, a rapid proliferation of GLP-1 and other medications available as weight-loss options, and significantly increased competition from new entrants. These factors have negatively impacted the Company’s Behavioral 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 and decreased cash flows from operations. The Company’s management has continued to execute certain cost-savings initiatives, including the Company’s previously disclosed restructuring plans, to proactively manage the Company’s liquidity.

The Company has recurring net losses. During the three months ended March 29, 2025, the Company recorded an operating loss of $20,201 and a net loss of $72,585. Operating loss included $27,549 of franchise rights acquired impairments that were non-cash. The Company’s revenues decreased from $206,548 for thethree months ended March 30, 2024 to $186,571 for thethree months ended March 29, 2025. Cash provided by operating activities for the three months ended March 29, 2025 was $14,998, which reflected outflows of $13,693 for interest payments and $4,545 for severance payments. The Company had a total deficit of $1,182,923 at March 29, 2025.

The Company’s principal sources of liquidity are cash and cash equivalents, cash flows from operations and proceeds from the January 2025 borrowings under the Revolving Credit Facility (as defined below). The Company’s primary cash needs for the twelve months following the issuance date of the financial statements (the “issuance date”) are funding its operations and global strategic initiatives, meeting debt service requirements and other financing commitments. The Company had unrestricted cash on hand of $236,346 at March 29, 2025 (of which $39,064 is maintained at foreign subsidiaries).

At March 29, 2025, the Company had outstanding $1,616,341 of total debt, consisting of borrowings under the Term Loan Facility (as defined below) of $945,000 with a stated maturity of April 13, 2028, $500,000 in aggregate principal amount of Senior Secured Notes (as defined below) with a stated maturity of April 15, 2029, and $171,341 of borrowings under the Revolving Credit Facility with a stated maturity of April 13, 2026.

In order to provide flexibility in assessing strategic options and to create financial flexibility, the Company increased its outstanding debt by borrowing $50,000 and $121,341 on January 2, 2025 and January 31, 2025, respectively, under its Revolving Credit Facility, currently at an interest rate of approximately 7.3%. As a result of these drawdowns and $3,659 outstanding letters of credit, the Company hasno availability for future borrowings under its Revolving Credit Facility. At the filing of the fiscal 2024 Form 10-K, the Company had the intent and ability to remain in compliance with its obligations under its debt agreements.

During March 2025, the Company commenced substantive discussions with an ad hoc group of its lenders and noteholders with the aim of restructuring the Company’s debt in advance of the scheduled maturity dates and materially reducing the aggregate principal amount and corresponding interest payments. The goal of these discussions was to restructure the Company’s debt to allow increased operating cash flow for funding its operations and strategic initiatives. As a result of the negotiations with the ad hoc lender group, the Company reevaluated its intent to repay a portion of the Revolving Credit Facility.

If the aggregate principal amount of extensions of credit outstanding under the Revolving Credit Facility, inclusive of outstanding letters of credit, as of any fiscal quarter end exceeds 35%, or $61,250, of the amount of the aggregate commitments under the Revolving Credit Facility, the Company is 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. The Company’s Consolidated First Lien Leverage Ratio as of March 29, 2025 was 7.37:1.00. Although the Company had the ability to reduce its borrowings under the Revolving Credit Facility, the Company did not reduce its borrowings under the Revolving Credit Facility to $61,250 as of March 29, 2025 as previously intended. Accordingly, the Company expects 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. The Company has not requested and does not currently expect to receive a waiver and, as a result, the maturity of borrowings under the Revolving Credit Facility could be accelerated by the Revolving Credit Facility lenders as a result of the anticipated Event of Default.

If the Revolving Credit Facility maturity is accelerated as a result of the anticipated Event of Default, 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. Based on the potential acceleration of the Revolving Credit Facility, the Term Loan Facility, and Senior Secured Notes, all outstanding borrowings under the Revolving Credit Facility, the Term Loan Facility, and Senior Secured Notes have been classified as current liabilities at March 29, 2025.

The Company’s ability to meet its debt service requirements may be impacted by the anticipated Event of Default, as defined under the Revolving Credit Facility, which may result in acceleration of all of its indebtedness 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. The Company has been engaged in substantive discussions with an ad hoc group of its lenders and noteholders representing a portion of the Term Loan Facility and Senior Secured Notes lenders and noteholders, including the negotiation of a potential restructuring support agreement. The Company currently expects that these discussions will result in a prepackaged bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code by WW International, Inc. and certain of its subsidiaries, which the Company anticipates will occur imminently. A bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code would constitute an Event of Default under the Revolving Credit Facility, Term Loan Facility and Senior Secured Notes. There is no assurance that a prepackaged bankruptcy filing will be successful in restructuring the Company’s outstanding debt.

Given the anticipated Event of Default under the Revolving Credit Facility, the potential cross defaults under the Company’s Term Loan Facility and Senior Secured Notes and/or an Event of Default under the Revolving Credit Facility, Term Loan Facility and Senior Secured Notes as a result of a bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code and the inherent uncertainties associated with the Company’s discussions with lenders and noteholders, any resolution through a restructuring support agreement and bankruptcy process is uncertain and beyond management’s control. Therefore, management has concluded that as of March 29, 2025 there is substantial doubt about the Company’s ability to continue as a going concern and management’s plans at this stage do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not reflect any adjustments related to the recoverability of assets and satisfaction of liabilities that might be necessary should the Company be unable to continue as a going concern.

Accounting Standards Adopted in Current Year

There were no new accounting standards adopted during the three months ended March 29, 2025.

Leases

At March 29, 2025 and December 28, 2024, the Company’s lease assets and lease liabilities for its studios and corporate offices were as follows:

For thethree months ended March 29, 2025 and March 30, 2024, the components of the Company’s lease expense were as follows:

As previously disclosed, in conjunction with the continued rationalization of its real estate portfolio, the Company entered into subleases with commencement dates in the first quarter of fiscal 2023. The Company recorded $1,119 and $912 of sublease income for thethree months ended March 29, 2025 and March 30, 2024, respectively, as an offset to general and administrative expenses.

At March 29, 2025 and December 28, 2024, the Company’s weighted average remaining lease term and weighted average discount rates were as follows:

The Company’s leases have remaining lease terms of 0 to 7 years with a weighted average lease term of 6.72 years as of March 29, 2025.

At March 29, 2025, the maturity of the Company’s lease liabilities in each of the next five fiscal years and thereafter were as follows:

Supplemental cash flow information related to leases for thethree months ended March 29, 2025 and March 30, 2024 were as follows:

Revenue

The following table presents the Company’s revenues disaggregated by revenue source:

Information about Contract Balances

For Subscription Revenues, 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. The opening and ending balances of the Company’s deferred revenues were as follows:

Revenue recognized from amounts included in current deferred revenue as of December 28, 2024 was $22,675 for the three months ended March 29, 2025. Revenue recognized from amounts included in current deferred revenue as of December 30, 2023 was $27,915 for thethree months ended March 30, 2024. The Company’s long-term deferred revenue, which is included in other liabilities on its consolidated balance sheets, represents revenue that will not be recognized during the next 12 months and is generally related to upfront payments received as an inducement for entering into certain sales-based royalty agreements with third-party licensees. This revenue is amortized on a straight-line basis over the term of the applicable agreement.

Franchise Rights Acquired, Goodwill and Other Intangible Assets

Franchise rights acquired are due to acquisitions of the Company’s franchised territories as well as the acquisition of franchise promotion agreements and other factors associated with the acquired franchise territories. For the three months ended March 29, 2025, the change in the carrying value of franchise rights acquired was due to the impairment of the United States unit of account as discussed below and the effect of exchange rate changes.

Goodwill primarily relates to the acquisition of the Company by The Kraft Heinz Company (successor to H.J. Heinz Company) in 1978, and the Company’s acquisitions of WW.com, LLC (formerly known as WW.com, Inc. and WeightWatchers.com, Inc.) in 2005, Weekend Health Inc., doing business as Sequence, in 2023, and the Company’s franchised territories. For thethree months ended March 29, 2025, the change in the carrying value of goodwill was due to the effect of exchange rate changes as follows:

Change in Goodwill Reporting Units

As discussed in Note 1, effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’sreportable segments changed toone reportable segment for the purpose of making operational and resource decisions and assessing financial performance. In connection with the Company’s change to one reportable segment, the Company’s operating segments also changed toone operating segment. As a result of this change to the Company’s operating segments, the Company reassessed its reporting units for the evaluation of goodwill during the first quarter of fiscal 2024.

In accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 350, Intangibles—Goodwill and Other (“ASC 350”), the Company determines its reporting units based upon whether discrete financial information is available, if management regularly reviews the operating results of the component, the nature of the products offered to customers and the market characteristics of each reporting unit. A reporting unit is considered to be an operating segment or one level below an operating segment also known as a component. Prior to the change in operating segments, the Company’s reporting units for the evaluation of goodwill were determined by country. Component level financial information is reviewed by management across two business lines: Behavioral and Clinical. The Company’s “Behavioral” business line consists of the Company’s Workshops + Digital business and Digital business. Accordingly, these were determined to be the Company's new reporting units as of the first day of fiscal 2024.

This change in reporting units qualified as a triggering event and required goodwill to be tested for impairment. As required by ASC 350, the Company tested goodwill for impairment immediately before and after the change in reporting units. As a result of these impairment analyses, it was determined that goodwill was not impaired before or after the change in reporting units.

Franchise Rights Acquired

Finite-lived franchise rights acquired are amortized over the remaining contractual period, which is generally less thanone year. Indefinite-lived franchise rights acquired are tested for potential impairment on at least an annual basis or more often if events so require.

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 the Company’s Workshops + Digital business and a relief from royalty methodology for franchise rights related to the Company’s 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. The Company has 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 $41,078.

In its hypothetical start-up approach analysis for fiscal 2025, the Company assumed that the year of maturity was reached after 7 years. Subsequent to the year of maturity, the Company estimated future cash flows for the Workshops + Digital business in each country based on assumptions regarding revenue growth and operating income margins. In the Company’s relief from royalty approach analysis for fiscal 2025, the cash flows associated with the Digital business in each country were based on the expected Digital revenue for such country and the application of a royalty rate based on current market terms. The cash flows for the Workshops + Digital and the Digital businesses were discounted utilizing rates which were calculated using the weighted average cost of capital, which included the cost of equity and the cost of debt.

Goodwill

In performing the impairment analysis for goodwill, the fair value for the Company’s 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. The Company has determined the appropriate reporting units for purposes of assessing goodwill impairment to be the Behavioral and Clinical business lines. The net book values of goodwill for the Behavioral and Clinical reporting units as of the March 29, 2025 balance sheet date were $150,541 and $89,742, respectively.

In performing the impairment analysis for goodwill, for all of the Company’s reporting units, the Company estimated future cash flows by utilizing the historical debt-free cash flows (cash flows provided by operations less capital expenditures) attributable to each of the Behavioral and Clinical reporting units and then applied expected future operating income growth rates for the respective reporting unit. The Company utilized operating income as the basis for measuring its potential growth because it believes it is the best indicator of the performance of its business. The Company then discounted the estimated future cash flows utilizing a discount rate which was calculated using the weighted average cost of capital, which included the cost of equity and the cost of debt.

First Quarter Fiscal 2025 Indefinite-Lived Franchise Rights Acquired and Goodwill Interim Impairment Tests

The Company reviews indefinite-lived franchise rights acquired and goodwill for potential impairment on at least an annual basis or more often if events so require. During the quarter ended March 29, 2025, the Company identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred. These factors included the continued decline in the Company’s stock price and market capitalization, and actual business performance. As a result of this triggering event, the Company performed interim impairment tests for its franchise rights acquired unit of account and goodwill reporting units in the first quarter of fiscal 2025.

In performing the interim franchise rights acquired impairment test as of March 29, 2025, the Company determined that the carrying value of its United States indefinite-lived franchise rights acquired unit of account exceeded its respective fair value. Accordingly, the Company recorded animpairment charge for its United States unit of account of $27,549 in the first quarter of fiscal 2025. This impairment was driven primarily by the weighted average cost of capital used in this interim impairment test, reflecting market factors, including higher interest rates and the trading values of the Company’s equity and debt, and, to a lesser extent, business performance in the Behavioral business.

Based on the results of the interim franchise rights acquired impairment test as of March 29, 2025 performed for the Company’s United States unit of account, which held 100.0% of the Company’s indefinite-lived franchise rights acquired as of the March 29, 2025 balance sheet date, the estimated fair value of this unit of account was equal to its respective carrying value. Accordingly, a change in the underlying assumptions for the United States unit of account may change the results of the impairment assessment and, as such, could result in further impairment of the franchise rights acquired related to the United States, for which the net book value was $41,078 as of March 29, 2025.

Based on the results of the interim goodwill impairment test as of March 29, 2025 performed for the Company’s Behavioral reporting unit, which held 62.7% of the Company’s goodwill as of the March 29, 2025 balance sheet date, the estimated fair value of this reporting unit was at least 55% higher than the respective unit's carrying value and, therefore, no impairment existed. Based on the results of the interim goodwill impairment test as of March 29, 2025 performed for the Company’s Clinical reporting unit, which held 37.3% of the Company’s goodwill as of the March 29, 2025 balance sheet date, the estimated fair value of this reporting unit was at least 60% higher than the respective unit's carrying value and, therefore, no impairment existed.

First Quarter Fiscal 2024 Indefinite-Lived Franchise Rights Acquired and Goodwill Interim Impairment Tests

During the quarter ended March 30, 2024, the Company identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred. These factors included the continued decline in the Company’s stock price and market capitalization, and actual business performance. As a result of this triggering event, the Company performed interim impairment tests for all of its franchise rights acquired units of account and goodwill reporting units in the first quarter of fiscal 2024.

In performing the interim franchise rights acquired impairment test as of March 30, 2024, the Company determined that the carrying values of its United States, Australia, New Zealand and United Kingdom franchise rights acquired with indefinite-lived units of account exceeded their respective fair values. Accordingly, the Company recorded impairment charges for its United States, Australia, New Zealand and United Kingdom units of account of $251,431, $4,074 (which comprised the remaining balance of franchise rights acquired for the Australia unit of account), $2,328 (which comprised the remaining balance of franchise rights acquired for the New Zealand unit of account) and $155, respectively, in the first quarter of fiscal 2024. These impairments were driven primarily by the weighted average cost of capital used in this interim impairment test, reflecting market factors, including higher interest rates and the trading values of the Company’s equity and debt, and, to a lesser extent, business performance.

Based on the results of the interim goodwill impairment test as of March 30, 2024 performed for all of the Company’s reporting units, each unit had an estimated fair value at least 25% higher than the respective unit’s carrying value and, therefore, no impairment existed.

Finite-lived Intangible Assets

The carrying values of finite-lived intangible assets as of March 29, 2025 and December 28, 2024 were as follows:

Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $5,950 and $9,290 for the three months ended March 29, 2025 and March 30, 2024, respectively.

Estimated amortization expense of existing finite-lived intangible assets for the next five fiscal years and thereafter is as follows:

The components of the Company’s long-term debt were as follows:

(1)

Includes amortization of deferred financing costs and debt discount.

In the second quarter of fiscal 2021, in connection with its refinancing of its then-existing credit facilities, the Company incurred approximately $1,000,000 in an aggregate principal amount of borrowings under its new credit facilities (as amended from time to time, the “Credit Facilities”) and issued $500,000 in aggregate principal amount of 4.500% Senior Secured Notes due 2029 (the “Senior Secured Notes”), each as described in further detail below.

Credit Facilities

The Credit Facilities were issued under a credit agreement, dated April 13, 2021 (as amended from time to time, the “Credit Agreement”), among the Company, as borrower, the lenders party thereto, and Bank of America, N.A. (“Bank of America”), as administrative agent and an issuing bank. The Credit Facilities consist of (1) $1,000,000 in aggregate principal amount of senior secured tranche B term loans due in 2028 (the “Term Loan Facility”) and (2) $175,000 in an aggregate principal amount of commitments under a senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2026 (the “Revolving Credit Facility”).

On January 2, 2025 and January 31, 2025, the Company borrowed $50,000 and $121,341, respectively, under the Revolving Credit Facility. These borrowings under the Revolving Credit Facility were incurred in order to provide flexibility in assessing strategic options and to create financial flexibility.

As of March 29, 2025, the Company had $1,116,341 in an aggregate principal amount of loans outstanding under the Credit Facilities, with $0 of availability and $3,659 in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below. There were $171,341 of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025.

All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of the Company’s current and future wholly-owned material domestic restricted subsidiaries. All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the assets of the Company and each guarantor, subject to customary exceptions, including:

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a pledge of 100% of the equity interests directly held by the Company and each guarantor in any wholly-owned material subsidiary of the Company or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such first-tier non-U.S. subsidiary), subject to certain exceptions; and

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a security interest in substantially all other tangible and intangible assets of the Company and each guarantor, subject to certain exceptions.

The Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with:

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50% (which percentage will be reduced to 25% and 0% if the Company attains certain first lien secured net leverage ratios) of the Company’s annual excess cash flow;

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100% of the net cash proceeds of certain non-ordinary course asset sales by the Company and its restricted subsidiaries (including casualty and condemnation events, subject to de minimis thresholds), and subject to the right to reinvest 100% of such proceeds, subject to certain qualifications; and

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100% of the net proceeds of any issuance or incurrence of debt by the Company or any of its restricted subsidiaries, other than certain debt permitted under the Credit Agreement.

The foregoing mandatory prepayments will be used to reduce the installments of principal on the Term Loan Facility. The Company may voluntarily repay outstanding loans under the Credit Facilities at any time without penalty, except for customary “breakage” costs with respect to Term SOFR loans under the Credit Facilities.

In June 2023, in connection with the planned phase-out of LIBOR, the Company amended its Credit Facilities to replace LIBOR with Term SOFR as the benchmark rate under the Credit Agreement, which is calculated to include a credit spread adjustment of 0.11448%,0.26161%,0.42826%, or 0.71513% for 1, 3, 6, or 12 months period, respectively, in addition to the Term SOFR Screen Rate (as defined in the Credit Agreement) and the margin (which was not amended).

Borrowings under the Term Loan Facility bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a)0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that Term SOFR is not lower than a floor of 0.50%. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid, plus, at the Company’s option, either (1) a base rate determined by reference to the highest of (a)0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.00% or (2) a Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided such rate is not lower than a floor ofzero. As of March 29, 2025, the applicable margins for the Term SOFR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 3.50% and 2.75%, resp ectively.

On a quarterly basis, the Company pays a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon the Company’s Consolidated First Lien Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.

The 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 $61,250, of the aggregate revolving commitments, the Company is 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 $171,341 of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025. The Company’s Consolidated First Lien Leverage Ratio as of March 29, 2025 was 7.37:1.00. Accordingly, the Company expects 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.

Senior Secured Notes

The Senior Secured Notes were issued pursuant to an Indenture, dated as of April 13, 2021 (as amended, supplemented or modified from time to time, the “Indenture”), among the Company, the guarantors named therein and The Bank of New York Mellon, as trustee and notes collateral agent. The Indenture contains customary terms, events of default and covenants for an issuer of non-investment grade debt securities. These covenants include limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions.

The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029. Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year. Commencing April 15, 2024, the Company may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026. If a change of control occurs, the Company must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 101% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, the Company must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 100% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date.

The Senior Secured Notes are guaranteed on a senior secured basis by the Company’s subsidiaries that guarantee the Credit Facilities. The Senior Secured Notes and the note guarantees are secured by a first-priority lien on all the collateral that secures the Credit Facilities, subject to a shared lien of equal priority with the Company’s and each guarantor’s obligations under the Credit Facilities and subject to certain thresholds, exceptions and permitted liens.

Outstanding Debt

At March 29, 2025, the Company had $1,616,341 outstanding under the Credit Facilities and the Senior Secured Notes, consisting of borrowings under the Term Loan Facility of $945,000, $171,341 drawn down on the Revolving Credit Facility and $500,000 in aggregate principal amount of Senior Secured Notes issued and outstanding.

At March 29, 2025 and December 28, 2024, the Company’s debt consisted of both fixed and variable-rate instruments. The Company has historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. At March 29, 2025, the Company 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 the Company’s 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 the Company’s 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.

Per Share Data

Basic net loss per share is calculated utilizing the weighted average number of common shares outstanding during the periods presented. Diluted 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.

The following table sets forth the computation of basic and diluted net loss per share:

The number of anti-dilutive common stock equivalents excluded from the calculation of the weighted average number of common shares for diluted net loss per sharewas 8,076 and 9,083 for the three months ended March 29, 2025 and March 30, 2024, respectively.

Income Taxes

The Company’s effective tax rate for the three months ended March 29, 2025 was(45.1%) compared to (19.0%) for thethree months ended March 30, 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 the Company’s 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 three months ended March 29, 2025 resulted in an income tax expense of $22,575, which is mostly reflected in income taxes payable on the Company’s consolidated balance sheet and consolidated statement of cash flows.

For the three months ended March 29, 2025, the difference between the U.S. federal statutory tax rate and the Company’s 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 three months ended March 30, 2024, the difference between the U.S. federal statutory tax rate and the Company’s 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.

Cash Flow Information

The following table presents the Company’s cash and cash equivalents and restricted cash by balance sheet location:

The Company’s restricted cash as of March 29, 2025 consisted of cash held in escrow accounts in connection with credit card processor payments and a foreign entity’s restructuring payments. The Company’s restricted cash as of December 28, 2024 consisted solely of cash held in an escrow account in connection with a foreign entity’s restructuring payments.

Legal

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.

Segment and Geographic Data

As previously disclosed, effective the first day of fiscal 2024 (i.e., December 31, 2023), as a result of the continued evolution of the Company’s centralized organizational structure in fiscal 2023, and management’s 2024 strategic planning process, the Company’s reportable segments changed toone segment for the purpose of making operational and resource decisions and assessing financial performance.

The Company operates asone operating segment. The Company's chief operating decision maker (“CODM”) is itschief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating income and net income to assess financial performance and allocate resources. Significant expenses within operating income, as well as within net income, include cost of revenues, marketing expenses, and selling, general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net income include interest expense, other expense (income), net, and provision for income taxes.

Fair Value Measurements

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:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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 Company’s significant financial instruments included long-term debt agreements as of March 29, 2025 and December 28, 2024. The fair value of the outstanding borrowings under the Company’s Revolving Credit Facility approximated $94,200 at March 29, 2025 and was valued based on an analysis of potential scenarios and probable outcomes using observable inputs such as quoted prices for similar liabilities and other inputs that were corroborated by observable market data (Level 2 input). Since there wereno outstanding borrowings under the Revolving Credit Facility as of December 28, 2024, the fair value approximated a carrying value of $0 at December 28, 2024.

The fair value of the Company’s Credit Facilities is determined by utilizing average bid prices on or near the end of each fiscal quarter (Level 2 input). As of March 29, 2025 and December 28, 2024, the fair value of the Company’s Term Loan Facility and Senior Secured Notes was approximately$374,582 and $320,174, respectively, as compared to the carrying value (net of deferred financing costs and debt discount) of$1,431,688 and $1,430,643, respectively.

The Company didnot have any transfers into or out of Levels 1 and 2 and did not maintain any assets or liabilities classified as Level 3 during thethree months ended March 29, 2025 and the fiscal year ended December 28, 2024.

Accumulated Other Comprehensive Loss

Amounts reclassified out of accumulated other comprehensive loss were as follows:

Changes in Accumulated Other Comprehensive Loss by Component(1)

(1)

Amounts in parentheses indicate debits

(1)

Amounts in parentheses indicate debits

(2)

See separate table below for details about these reclassifications

Reclassifications out of Accumulated Other Comprehensive Loss(1)

(1)

Amounts in parentheses indicate debits to profit/loss

Related Party

As previously disclosed, on October 18, 2015, the Company entered into the Strategic Collaboration Agreement with Oprah Winfrey, under which she consulted with the Company and participated in developing, planning, executing and enhancing the WW program and related initiatives, and provided it with services in her discretion to promote the Company and its programs, products and services for an initial term offive years (the “Initial Term”).

As previously disclosed, on December 15, 2019, the Company entered into an amendment of the Strategic Collaboration Agreement with Ms. Winfrey, pursuant to which, among other things, the Initial Term of the Strategic Collaboration Agreement was extended until April 17, 2023 (with no additional successive renewal terms), after which a second term commenced that will continue through the earlier of the date of the Company’s 2025 annual meeting of shareholders or May 31, 2025. Ms. Winfrey will continue to provide certain consulting and other services to the Company during the second term.

In addition to the Strategic Collaboration Agreement, Ms. Winfrey and her related entities provided services to the Company totaling $2 for thethree months ended March 30, 2024, which services included advertising, production and related fees. Ms. Winfrey and her related entities were no longer considered a related party to the Company effective at the beginning of fiscal 2025.

The Company’s outstanding payables to parties related to Ms. Winfrey at March 29, 2025 and December 28, 2024 were $0 and $13, respectively.

Restructuring

2024 Plan

As previously disclosed, in the third quarter of fiscal 2024, in connection with the strategic streamlining of its operational structure to optimize its clinical and behavioral product portfolio and its cost-savings initiative, the Company committed to a plan of reduction in force that has resulted and will further result in the elimination of certain positions and the termination of employment for certain employees worldwide (the “2024 Plan”). Refer to the tables below for the total restructuring charges under the 2024 Plan recorded for the three months ended March 29, 2025 and for the fiscal year ended December 28, 2024. The cumulative amount incurred as of March 29, 2025 related to the aggregate 2024 Plan is $18,514, consisting of employee termination benefit costs of $16,870, lease termination costs of $168 and other cash restructuring charges of $1,476. The Company expects the 2024 Plan to be fully executed by the end of fiscal 2025.

For thethree months ended March 29, 2025, the components of the Company’s restructuring charges for the 2024 Plan were as follows:

For the three months ended March 29, 2025, restructuring charges for the 2024 Plan were recorded in the Company’s consolidated statements of operations as follows:

For the fiscal year ended December 28, 2024, the components of the Company’s restructuring charges for the 2024 Plan were as follows:

For the fiscal year ended December 28, 2024, restructuring charges for the 2024 Plan were recorded in the Company’s consolidated statements of operations as follows:

All expenses were recorded to general corporate expenses.

The following table presents a roll-forward of cash restructuring-related liabilities, which is included within accrued expenses in the Company’s consolidated balance sheets:

As of March 29, 2025, the Company expects the remaining employee termination benefit liability and the remaining lease termination liability to be paid in full by the end of fiscal 2027.

2023 Plan

As previously disclosed, in the fourth quarter of fiscal 2022, management reviewed the then-current global business operations of the Company as well as the different functions and systems supporting those operations and contrasted them with the Company's strategic priorities and requirements for fiscal 2023 and beyond. Based on that review, in December 2022, the Company's management resolved to centralize its global management of certain functions and systems, deprioritize and in some cases cease operations for certain non-strategic business lines, and continue the rationalization of its real estate portfolio to align with its future needs. Throughout December 2022 and January 2023, management developed and continued refining a detailed plan to achieve these goals.

The Company committed to a restructuring plan consisting of (i) an organizational restructuring and rationalization of certain functions and systems to centralize the Company’s management, align resources with strategic business lines and reduce costs associated with certain functions and systems (the “Organizational Restructuring”) and (ii) the continued rationalization of its real estate portfolio and resulting operating lease termination charges and the associated employment termination costs (the “Real Estate Restructuring,” and together with the Organizational Restructuring, the “2023 Plan”). Refer to the tables below for the total restructuring charges under the 2023 Plan recorded for the three months ended March 29, 2025 and for the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022. The cumulative amount incurred as of March 29, 2025 related to the aggregate 2023 Plan is $71,974.

The Organizational Restructuring has resulted and will further result in the elimination of certain positions and the termination of employment for certain employees worldwide. Refer to the tables below for the employee termination benefit costs related to the Organizational Restructuring under the 2023 Plan recorded for the three months ended March 29, 2025 and for the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022. The cumulative amount incurred as of March 29, 2025 related to the aggregate employee termination benefit costs related to the Organizational Restructuring under the 2023 Plan is $40,604.

Refer to the tables below for the lease termination costs and employee termination benefit costs related to the Real Estate Restructuring under the 2023 Plan recorded for the three months ended March 29, 2025 and for the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022, as applicable. The cumulative amount incurred as of March 29, 2025 related to the aggregate lease termination costs and employee termination benefit costs related to the Real Estate Restructuring under the 2023 Plan is $12,789 and $9,761, respectively.

Refer to the tables below for the other cash restructuring charges and other non-cash restructuring charges under the 2023 Plan recorded for the three months ended March 29, 2025 and for the fiscal years ended December 28, 2024 and December 30, 2023. The cumulative amount incurred as of March 29, 2025 related to the aggregate other cash restructuring charges and total non-cash restructuring charges under the 2023 Plan is $2,158 and $6,662, resp ectively.

For thethree months ended March 29, 2025, the components of the Company’s restructuring charges for the 2023 Plan were as follows:

For the three months ended March 29, 2025, restructuring charges for the 2023 Plan were recorded in the Company’s consolidated statements of operations as follows:

For the fiscal year ended December 28, 2024, the components of the Company’s restructuring charges for the 2023 Plan were as follows:

For the fiscal year ended December 28, 2024, restructuring charges for the 2023 Plan were recorded in the Company’s consolidated statements of operations as follows:

For the fiscal year ended December 30, 2023, the components of the Company’s restructuring charges for the 2023 Plan were as follows:

For the fiscal year ended December 30, 2023, restructuring charges for the 2023 Plan were recorded in the Company’s consolidated statements of operations as follows:

For the fiscal year ended December 31, 2022, the components of the Company’s restructuring charges for the 2023 Plan were as follows:

For the fiscal year ended December 31, 2022, restructuring charges for the 2023 Plan were recorded in the Company’s consolidated statements of operations as follows:

All expenses were recorded to general corporate expenses.

The following table presents a roll-forward of cash restructuring-related liabilities, which is included within accrued expenses in the Company’s consolidated balance sheets:

As of March 29, 2025, the Company expects the remaining employee termination benefit liability related to the Real Estate Restructuring and the remaining employee termination benefit liability related to the Organizational Restructuring to be paid in full by the end of fiscal 2026.

Subsequent Events

The Company has evaluated subsequent events from March 29, 2025 through the date these financial statements were issued and determined that there have been no events, other than what has been disclosed in the notes above, that would require adjustments to its disclosures in the consolidated financial statements.