Benzinga | Aug 4, 2020 04:04PM EDT

WW Q2 End Of Period Subscribers Up 8.6% YoY, Total Paid Weeks Up 5.1% YoY

Q2 2020 Business and Financial Highlights

* End of Period Subscribers in Q2 2020 were up 8.6% versus the prior year period, driven by Digital subscriber growth across all major geographic markets. Q2 2020 End of Period Digital Subscribers were up 23.2% and End of Period Studio + Digital Subscribers were down 24.2% versus the prior year period.

* Total Paid Weeks in Q2 2020 were up 5.1% versus the prior year period, driven by Digital growth across all major geographic markets. Q2 2020 Digital Paid Weeks increased 16.8% and Studio + Digital Paid Weeks decreased 19.7% versus the prior year period.

* Revenues in Q2 2020 were $333.6 million. On a constant currency basis, Q2 2020 revenues decreased 8.7% versus the prior year period. Service Revenues in Q2 2020 were $293.0 million. On a constant currency basis, these revenues decreased 5.7% versus the prior year period, primarily driven by declines in Studio + Digital Fees as a result of the closure of our studios due to COVID-19. Product Sales and Other in Q2 2020 were $40.6 million. On a constant currency basis, these revenues decreased 25.7% versus the prior year period, primarily due to lower in-studio product sales as a result of the closure of our studios due to COVID-19.

* Gross Profit in Q2 2020 was $194.7 million. Adjusted gross profit in Q2 2020 was $201.2 million, which excluded $6.5 million in charges associated with the Company's previously disclosed 2020 organizational restructuring plan. On a constant currency basis, adjusted gross profit would have decreased 5.8% versus the prior year period. Gross Margin in Q2 2020 was 58.3% and adjusted gross margin was 60.3%. This compares to a gross margin of 58.5% in the prior year period.

* Operating Income in Q2 2020 was $51.0 million. Adjusted operating income in Q2 2020 was $94.9 million, which excluded the $32.7 million one-time stock compensation expense associated with the previously disclosed option granted to Ms. Oprah Winfrey in connection with the Company extending its partnership with Ms. Winfrey and the $11.2 million in charges associated with the Company's previously disclosed 2020 organizational restructuring plan. On a constant currency basis, adjusted operating income would have decreased 8.7% versus the prior year period. This decrease was due to lower revenues related to the Company's Studio + Digital business. Operating Income Margin for Q2 2020 was 15.3% and adjusted operating income margin was 28.4%. This compares to an operating income margin of 28.6% in the prior year period.

* Effective Tax Rate in Q2 2020 was 28.6%, versus 23.6% in the prior year period.

* Net Income in Q2 2020 was $14.0 million compared to $53.8 million in the prior year period.

* Earnings per fully diluted share (EPS) in Q2 2020 was $0.20 compared to $0.78 in the prior year period. Certain items affect year-over-year comparability. The following items in the aggregate negatively impacted Q2 2020 fully diluted EPS by $0.47: $0.35 per fully diluted share impact from the one-time stock compensation expense associated with the previously disclosed option granted to Ms. Winfrey in connection with the Company extending its partnership with Ms. Winfrey. $0.12 per fully diluted share impact from charges associated with the Company's previously disclosed 2020 organizational restructuring plan.