NU Skin Enterprises, Inc.: Form 10-Q for the period ended Sep 30, 2025

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that represent our current expectations and beliefs. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws and include, but are not limited to, statements of management’s expectations regarding our performance, initiatives, strategies, product introductions and offerings, acquisitions, and the integration of acquired companies, growth, opportunities and risks; statements of projections regarding future sales, expenses, operating results, taxes and duties, capital expenditures, sources and uses of cash, foreign-currency fluctuations or devaluations, repatriation of undistributed earnings, and other financial items; statements of management’s expectations and beliefs regarding global economic conditions and our markets, including India; statements regarding the payment of future dividends and stock repurchases; statements regarding the outcome of litigation, audits, investigations or other regulatory actions; statements regarding government policies and regulations relating to our industry, including government policies and regulations in or related to the United States and Mainland China; statements regarding tariffs and trade policies; accounting estimates and assumptions; statements of belief; and statements of assumptions underlying any of the foregoing. In some cases, you can identify these statements by forward-looking words such as “believe,” “expect,” “optimistic,” “project,” “anticipate,” “determine,” “estimate,” “intend,” “plan,” “goal,” “objective,” “targets,” “become,” “likely,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. We caution and advise readers that these statements are based on assumptions that may not be realized and involve important risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. For a summary of these risks, see the risk factors included in our Annual Report on Form 10-K for the 2024 fiscal year and in any of our subsequent Securities and Exchange Commission filings, including this Quarterly Report.

The following Management’s Discussion and Analysis should be read in conjunction with our consolidated financial statements and related notes and Management’s Discussion and Analysis included in our Annual Report on Form 10-K for the 2024 fiscal year, and our other reports filed with the Securities and Exchange Commission through the date of this Quarterly Report.

Overview

Revenue for the three-month period ended September 30, 2025 decreased 15% to $364.2 million, compared to $430.1 million in the prior-year period, and revenue for the nine-month period ended September 30, 2025 decreased 13% to $1,114.8 million, compared to $1,286.5 million in the prior-year period. Our revenue in the third quarter and first nine months of 2025 was negatively impacted 0.4% and 0.9%, respectively, from foreign-currency fluctuations. Our Customers, Paid Affiliates and Sales Leaders declined 10%, 13% and 19%, respectively, on a year-over-year basis.

The declines for the third quarter and first nine months of 2025 were largely driven by the continued macroeconomic challenges we have been facing in our markets, which have negatively impacted consumer spending and customer acquisition. In addition, while we believe we continue to make progress on our long-term vision, we have experienced headwinds from the transformation process. Our priorities for 2025 focus on business model optimization, driven by the continued rollout of enhancements to our sales performance plan, a limited preview of our Prysm iO intelligent wellness platform and business expansion into India. Due to the timing of the limited leader preview, we are not anticipating material revenue from the Prysm iO device sales in 2025. We are currently anticipating nominal revenue from our fourth quarter India market pre-opening, as we are preparing for the formal launch in the second half of 2026.

Earnings per share for the third quarter of 2025 increased to $0.34, compared to $0.17 in the prior-year period. Earnings per share for the first nine months of 2025 increased to $2.91, compared to $(2.23) in the prior-year period. The increase in earnings per share for the third quarter of 2025 was primarily attributable to a decline in our income tax rate from additional research and development credits recognized during the quarter, as well as a decline in general and administrative expenses from continued expense management. In addition, our earnings per share for the first nine months of 2025 increased due to the sale of our Mavely business, which generated a pre-tax gain of approximately $176.2 million, partially offset by the associated taxes, an intangible asset group impairment of $25.1 million in our Rhyz Other segment, a non-cash loss on investment of $28.1 million and the decline in revenue. The improvement in earnings per share for the nine-month period also reflects restructuring and impairment charges of $149.4 million in the second quarter of 2024, which did not repeat in 2025.

Segment Results

We report our business in nine segments to reflect our current management approach. These segments consist of our seven geographic Nu Skin segments—Americas, Mainland China, Southeast Asia/Pacific, Japan, Europe & Africa, South Korea and Hong Kong/Taiwan—and our two Rhyz segments—Manufacturing and Rhyz Other. The Nu Skin Other category includes miscellaneous corporate revenue and related adjustments.

The following table sets forth revenue for the three- and nine-month periods ended September 30, 2025 and 2024 for each of our reportable segments (U.S. dollars in thousands):

(1) Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.

The tables below set forth summarized financial information for each of our reportable segments for the three- and nine-month periods ended September 30, 2025 and 2024 (U.S. dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items. We use segment contribution to measure the portion of profitability that the segment managers have the ability to control for their respective segments. For additional information regarding our segments and the calculation of segment contribution, see Note 11 to the consolidated financial statements contained in this report.

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The following table provides information concerning the number of Customers, Paid Affiliates and Sales Leaders in our core Nu Skin business for the three-month periods ended September 30, 2025 and 2024.

• “Customers” are persons who have purchased directly from the Company during the three months ended as of the date indicated. Our Customer numbers include members of our sales force who made such a purchase, including Paid Affiliates and those who qualify as Sales Leaders, but they do not include consumers who purchase directly from members of our sales force.
• “Paid Affiliates” are any Brand Affiliates, as well as members of our sales force in Mainland China, who earned sales compensation during the three-month period. In all of our markets besides Mainland China, we refer to members of our independent sales force as “Brand Affiliates” because their primary role is to promote our brand and products through their personal social networks.
• “Sales Leaders” are the three-month average of our monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who achieved certain qualification requirements as of the end of each month of the quarter.

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Following is a narrative discussion of our results in each segment, which supplements the tables above.

Americas. The results in our Americas segment reflect a continued decline in our North America markets, while our Latin America markets grew year-over-year. Our North America markets continued to be challenged, where in November 2024 we introduced enhancements to the sales performance plan to address the macro environmental landscape. These enhancements have caused disruption as our sales force adapts to the changes. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 6.4% and 6.3% for the third quarter and first nine months of 2025, respectively.

In the second quarter of 2024, we launched our developing market strategy in Argentina, with a revised operating model with a focused product portfolio and modified business model that has enabled us to reach a broader demographic. During early 2025, we continued to roll out this strategy in additional Latin America markets. For the third quarter of 2025, our Latin America markets revenue increased from $16.0 million to $24.4 million, a 52.5% year-over-year increase; in addition, Latin America Customers increased 87%, Paid Affiliates increased 56%, and Sales Leaders increased 53%.

The year-over-year decrease in segment contribution for the first nine months of 2025 primarily reflects the overall decline in revenue, partially offset by increased profitability in Latin America.

Southeast Asia/Pacific. The decline in revenue, Customers, Paid Affiliates and Sales Leaders for the third quarter and first nine months of 2025 is partially attributable to slowing momentum from the general macroeconomic factors in the markets. In response to these challenges, in 2025 we began leveraging our learnings from the developing market strategy, including with the launch of products specifically aimed at expanding our customer base.

The year-over-year increases in segment contribution for the third quarter and first nine months of 2025 are primarily attributable to a 3.7 percentage point and 2.5 percentage point increase to gross margin due to a shift in product mix, and a 1.4 percentage point and 1.9 percentage point decrease in selling expenses as a percentage of revenue primarily from a lower amount of local sales force incentives during the period as well as less qualifiers for the success trips.

Mainland China. Our Mainland China market continued to be challenged during the first nine months of 2025, with ongoing macroeconomic factors, the associated decrease in consumer spending and a continued shift of market consumer awareness and demand to online product marketplaces. During the third quarter of 2025, we had a limited preview of our relaunched Tru Face line, which generated approximately $7.2 million of revenue, compared to $4.1 million from the prior Tru Face line in the comparable period. The full launch is expected to occur in December 2025.

The decrease in segment contribution for the third quarter of 2025 primarily reflects the decline in revenue, partially offset by a 3.2 percentage point decrease in selling expenses as a percent of revenue, a 2.2 percentage point increase in gross margin. The year-over-year decrease in segment contribution for the first nine months of 2025 primarily reflects lower revenue, partially offset by a 4.2 percentage point decrease in selling expense as a percent of revenue. The salaries and service fees of our Sales Leaders in Mainland China are fixed until they are adjusted in a quarterly evaluation process. As a result, we have variations in our selling expenses as a percentage of revenue, particularly when there is a sequential change in revenue.

Japan. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders is partially attributable to consumer inflationary pressures which depressed spending. In addition, our third quarter of 2024 revenue benefited from elevated promotions that did not repeat in 2025.

The year-over-year decrease in segment contribution is primarily attributable to the decreased revenue.

Europe & Africa. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders reflects continued softness in these markets, as well as the macroeconomic factors that have led to a decline in the purchasing power of our customers. We introduced enhancements to the sales performance plan in Europe & Africa starting in March 2025. In addition, our reported revenue reflects benefits from favorable foreign currency fluctuations of 5.9% and 2.6% for the third quarter and first nine months of 2025, respectively.

The year-over-year increase in segment contribution was primarily driven by a 1.2 percentage point and a 2.2 percentage point decline in selling expenses as a percent of revenue for the third quarter and first nine months of 2025, respectively, primarily from elevated sales force events costs in the prior-year periods, partially offset by the decline in revenue.

South Korea. Our South Korea market was challenged by difficult macroeconomic trends, including inflationary pressures, political instability, and our associated price increases which negatively impacted our revenue, Customers, Paid Affiliates and Sales Leaders for the three- and nine-month periods ended September 30, 2025. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 1.9% and 3.5% for the third quarter and first nine months of 2025, respectively.

The year-over-year decline in segment contribution primarily reflects the decline in revenue, as well as a 8.3 and 3.3 percentage point increase in selling expenses associated with incremental cost pressure from the enhancements to the sales performance plan, which we introduced in this segment during the fourth quarter of 2024.

Hong Kong/Taiwan. The declines in our Hong Kong/Taiwan segment for the third quarter and first nine months of 2025 are attributable to macroeconomic issues, which are resulting in less purchasing power for our consumers. Our reported revenue reflects benefits from favorable foreign currency fluctuations of 4.3% and 1.5% for the third quarter and first nine months of 2025, respectively.

The increase in segment contribution for the third quarter was primarily driven by a 3.1 percentage point improvement in gross margin due to sales mix with higher shift of sales to higher margin products, partially offset by the decline in revenue. For the first nine months of 2025, the increase in segment contribution was primarily driven by a 2.2 percentage point increase in gross margin due to sales mix, a 2.4 percentage point decrease in selling expenses and a 1.9 percentage point decrease in general and administrative, from our recent cost saving efforts, partially offset by the decline in revenue.

Manufacturing. Our Manufacturing segment revenue decreased 8.0% for the third quarter of 2025 and increased 6.4% for the first nine months of 2025. Our third quarter revenue was negatively impacted by uncertainty surrounding tariffs which affected the timing of customer orders.

The increase in segment contribution for the third quarter and first nine months of 2025 is primarily from the revenue mix amongst our manufacturing entities as well as product mix, which resulted in more profitability for the periods presented.

Rhyz Other. The decrease in revenue of our Rhyz Other segment is primarily driven by the January 2, 2025 sale of Mavely. Mavely recognized $18.4 million and $37.4 million of revenue in the third quarter and first nine months of 2024. In addition, our BeautyBio entity continues to be challenged, with a 65.1% and a 59.4% decline in revenue for the third quarter and first nine months of 2025, as we continue to implement our strategy to minimize future losses and better position the brand.

Our Rhyz Other segment also includes LifeDNA, Inc. (“LifeDNA”), a DNA assessment and recommendation technology company. During the third quarter and first nine months of 2025, LifeDNA revenue grew 181% and 150%, respectively, to $3.3 million and $7.9 million. In addition, the profitability of LifeDNA has increased as part of the revenue growth, resulting in an operating margin of 15.9% compared to (25.3)% for the third quarter of 2025 and 2024, respectively, and 10.4% compared to (27.7)% for the first nine months of 2025 and 2024. We are currently evaluating strategic opportunities with LifeDNA, including potentially divesting it, to maximize our return on investment.

The increase in segment contribution is primarily from the sale of Mavely, which operated at a loss during the first half of 2024 and turned profitable in the third quarter of 2024, as well as our cost saving efforts at BeautyBio, which had smaller losses for the third quarter and first nine months of 2025.

Consolidated Results

Revenue

Revenue for the three-month period ended September 30, 2025 decreased 15% to $364.2 million, compared to $430.1 million in the prior-year period. Revenue for the nine-month period ended September 30, 2025 decreased 13% to $1,114.8 million compared to $1,286.5 million. Our revenue in the third quarter and first nine months of 2025 was negatively impacted 0.4% and 0.9%, respectively, from foreign-currency fluctuations. For a discussion and analysis of these decreases in revenue, see “Overview” and “Segment Results,” above.

Gross profit

Gross profit as a percentage of revenue was 70.5% for the third quarter of 2025, compared to 70.1% for the prior-year period, and 69.0% for the first nine months of 2025, compared to 70.2% for the prior-year period. Gross profit as a percentage of revenue for our Nu Skin business increased 1.2 percentage points to 77.7% for the third quarter of 2025 and increased 0.7 percentage points to 77.3% for the first nine months of 2025. Our Nu Skin gross margin continues to benefit from our strategic portfolio optimization as well as a favorable product mix shift.

We continue to monitor macroeconomic trends and uncertainties related to international trade relations and trade policy, including those related to tariffs. Incremental tariffs did not have a significant impact on our financial results for the third quarter or the first nine months of 2025 but could adversely impact our results in the future. While we remain focused on mitigating the impacts of the tariffs, we currently estimate approximately $2 million of incremental cost pressure for the full year 2025. We continue to monitor and plan to take proactive measures to minimize the potential impact.

Selling expenses

Selling expenses as a percentage of revenue decreased to 35.8% for the third quarter of 2025, compared to 39.0% for the prior-year period, and decreased to 33.8% for the first nine months of 2025, compared to 37.8% for the prior-year period. Core Nu Skin selling expenses as a percentage of revenue decreased 1.8 percentage points to 41.7% for the third quarter of 2025 and decreased 2.4 percentage points to 40.1% for the first nine months of 2025. Selling expenses for our core Nu Skin business are driven by the specific performance of our individual Sales Leaders. Given the size of our sales force and the various components of our compensation and incentive programs, selling expenses as a percentage of revenue typically fluctuate plus or minus approximately 100 basis points from period to period. Our third quarter and first nine months of 2025 core Nu Skin selling expenses decrease is partially attributable to our third quarter of 2024 global Nu Skin L!VE events, which drove approximately $10.2 million of incremental expenditures, that did not repeat in 2025. In addition, approximately 1.3 percentage points and 1.0 percentage points of the decline in selling expenses as a percentage of revenue in our consolidated results are attributable to the January 2, 2025 sale of Mavely.

General and administrative expenses

General and administrative expenses decreased to $104.8 million in the third quarter of 2025, compared to $115.6 million in the prior-year period and decreased to $324.7 million in the first nine months of 2025, compared to $358.1 million in the prior-year period. The $10.8 million decline for the third quarter is from contraction in labor expenses, $2.9 million of 2024 expenses from Mavely, which was sold in the first quarter of 2025, a decline in professional fees and a decrease in promotional expenses in connection with our prior-year product launches. The $33.4 million decline for the first nine months of 2025 is primarily from $9.1 million contraction in labor expenses, $9.1 million of 2024 expenses from Mavely, which was sold in the first quarter of 2025 and a decrease in promotional expenses in connection with our prior-year product launches. General and administrative expenses as a percentage of revenue increased to 28.8% for the third quarter of 2025, from 26.9% for the prior-year period, and increased to 29.1% for the first nine months of 2025, from 27.8% for the prior-year period.

Restructuring and impairment expenses

2023 restructuring plan. In the fourth quarter of 2023, we adopted a strategic plan to focus resources on our global priorities and optimize future growth and profitability. The global program includes workforce reductions and fixed asset impairments associated with our consolidation of technology assets. Total charges under the program included approximately $27.9 million in cash charges of severance, approximately $1.1 million in other cash charges and approximately $38.8 million in non-cash charges, including approximately $36.6 million in fixed asset impairments. We have incurred all expected charges under the 2023 plan and anticipate making the remaining payments in the fourth quarter of 2025. During the fourth quarter of 2023, we incurred charges to be settled in cash of $10.0 million in severance charges. During the first quarter of 2024, we incurred charges to be settled in cash of $4.1 million in severance charges and $2.0 million in other associated costs, and non-cash charges of $1.0 million in write-down of assets. During the second quarter of 2024, we incurred charges to be settled in cash of $1.0 million in severance charges and $0.1 million in other cash charges, and non-cash charges of $6.4 million in fixed asset impairments and $0.8 million in other write-downs. In the fourth quarter of 2024, we incurred charges to be settled in cash of $12.8 million in severance charges and $(1.1) million in other cash charges, and non-cash charges of $30.2 million of fixed asset impairments and $0.4 million of other non-cash charges. During the third quarter and first nine months of 2025, we incurred no further charges.

Intangibles and fixed asset impairment. During the three months ended March 31, 2025, we decided to make a strategic shift in how we operate the BeautyBio asset group. These strategic changes include exiting certain sales channels, which reduced the forecasted revenues for BeautyBio. We concluded these actions were an interim impairment triggering event that required us to perform an interim impairment analysis on our BeautyBio asset group. We assessed the recoverability of the related asset group comparing the carrying value to the undiscounted cash flows expected to be generated. The recoverability test indicated the asset group was impaired. We concluded that the carrying value of the asset group exceeded the estimated fair value which resulted in an impairment charge of $25.1 million in our Rhyz Other segment during the three months ended March 31, 2025.

Interest expense

Interest expense decreased to $4.1 million in the third quarter of 2025, compared to $6.5 million in the prior-year period. Interest expense for the first nine months of 2025 decreased to $10.0 million compared to $20.5 million for the prior-year period. The decrease in interest expense was primarily due to the debt payments made in the first quarter of 2025 using a portion of the proceeds from the Mavely sale. Our interest rate swap arrangements that we entered into in 2020 matured on July 31, 2025, at which time our effective interest rate increased.

Gain on sale of business

In January 2025, we completed the sale of our Mavely entity for $230 million in cash and shares of the purchaser’s common stock, subject to certain adjustments as set forth in the purchase agreement, including post-closing determination of net working capital and other elements of purchase price. Following the completion of certain payments to other equity holders in Mavely and the payment of certain transaction expenses, we received $193.7 million of cash and equity interest with an estimated fair value of $6.1 million. Following the finalization of net working capital, we received additional cash payments of $2.7 million and $1.7 million in the second and third quarter of 2025, respectively. In the first quarter of 2025, we recorded a pre-tax gain on disposition of $176.2 million.

Other income (expense), net

Other income (expense), net was $(1.5) million for the third quarter of 2025 compared to $1.6 million for the prior-year period and $(30.7) million for the first nine months of 2025 compared to $1.8 million for the prior-year period. The increase in other expense for the first nine months of 2025 is primarily from a $28.1 million unrealized loss on investment. See Note 8 to the consolidated financial statements contained in this report for more information on the unrealized equity investment and the associated loss.

Provision (benefit) for income taxes

Provision (benefit) for income taxes for the three- and nine-month periods ended September 30, 2025 was $(1.1) million and $32.3 million, respectively, compared to $5.0 million and $(6.8) million for the prior-year periods. The effective tax rates for the three- and nine-month periods ended September 30, 2025 were (6.8)% and 18.1% of pre-tax income compared, respectively, compared to 37.6% and 5.8% in the prior-year periods. Our effective tax rates for the third quarter and first nine months of 2025 benefited from $8.1 million of additional research and development credits determined creditable during the quarter. Our effective tax rate for the first nine months of 2025 was additionally impacted by the following items recorded discretely in the first quarter of 2025: the sale of Mavely, the impairment of the BeautyBio asset group and the unrealized loss on investment. Our effective tax rate for the nine-month period ended September 30, 2024 was impacted by the second quarter of 2024 goodwill impairment.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We completed the initial assessment of the OBBBA corporate tax provisions as they relate to our financial statements in the third quarter of 2025. The enactment of the OBBBA did not have a material impact to our income tax benefit for the three and nine months ended September 30, 2025. We will continue to evaluate the impacts of OBBBA and do not expect the OBBBA to have a material impact to our total tax provision.

Net income (loss)

As a result of the foregoing factors, net income (loss) for the third quarter of 2025 was $17.1 million, compared to $8.3 million in the prior-year period. Net income (loss) for the first nine months of 2025 was $145.7 million, compared to $(110.5) million for the first nine months of 2024.

Liquidity and Capital Resources

Historically, our principal uses of cash have included operating expenses (particularly selling expenses) and working capital (principally inventory purchases), as well as capital expenditures, stock repurchases, dividends, and debt repayment. We have at times incurred long-term debt, or drawn on our revolving line of credit, to fund strategic transactions, stock repurchases, capital investments and short-term operating needs. We typically generate positive cash flow from operations due to favorable margins and have generally relied on cash from operations to fund operating activities. In the first nine months of 2025, we generated $63.7 million in cash from operations, compared to $86.0 million during the prior-year period. The decrease in cash flow from operations primarily reflects cash payments made in the first quarter of 2025 related to expenses accrued as of year-end, which included restructuring and other accrued expenses, partially offset by a decline in prepaid expenses associated with the utilization of prepaid income taxes. Cash and cash equivalents, including current investments, as of September 30, 2025 and December 31, 2024 were $253.0 million and $198.0 million, respectively, with the increase being driven by the proceeds from the sale of Mavely and cash generated from operations as described above, partially offset by $165.0 million in net debt payments, which was comprised of $130.0 million toward our term loan and $35.0 million toward our revolving credit facility.

Working capital. As of September 30, 2025, working capital was $293.7 million, compared to $242.0 million as of December 31, 2024. Our increase in working capital is primarily attributable to changes in our cash balance as explained above.

Capital expenditures. Capital expenditures for the nine months ended September 30, 2025 were $23.5 million. We expect that our capital expenditures in 2025 will be primarily related to:

• Rhyz plant expansion to increase capacity and capabilities;
• purchases and expenditures for computer systems and equipment, software, and application development; and
• the expansion and upgrade of facilities in our various markets.

We estimate that capital expenditures for the uses listed above will total approximately $30–35 million for 2025.

Credit Agreement. On June 14, 2022, we entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with various financial institutions as lenders and Bank of America, N.A., as administrative agent. The Credit Agreement provides for a $400.0 million term loan facility and a $500.0 million revolving credit facility, each with a term of five years. We used the proceeds of the term loan and the draw on the revolving facility to pay off the previous credit agreement. Both facilities bear interest at the SOFR, plus a margin based on our consolidated leverage ratio. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 2.5% during the first year and 5.0% during the subsequent years after the closing date of the Credit Agreement, with the remainder payable at final maturity. As of September 30, 2025 and December 31, 2024, we had $0 and $35.0 million of outstanding borrowings under our revolving credit facility, and $230.0 million and $360.0 million on our term loan facility. The carrying value of the debt also reflects debt issuance costs of $1.0 million and $1.4 million as of September 30, 2025 and December 31, 2024, respectively, related to the Credit Agreement. The Credit Agreement requires us to maintain a consolidated leverage ratio not exceeding 2.75 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. As of September 30, 2025, we were in compliance with all debt covenants under the Credit Agreement.

Derivative Instruments. During the third quarter of 2025, we had four interest rate swaps mature, with a total notional principal amount of $200 million. We entered into these interest rate swap arrangements during the third quarter of 2020 to hedge the variable cash flows associated with our variable-rate debt under the Credit Agreement.

Stock repurchase plan. In 2018, our board of directors approved a stock repurchase plan authorizing us to repurchase up to $500.0 million of our outstanding shares of Class A common stock on the open market or in private transactions. During the third quarter of 2025, we repurchased 0.4 million shares of our Class A common stock under the plan for $5.0 million. As of September 30, 2025, $152.4 million was available for repurchases under the plan. Our stock repurchases are used primarily to offset dilution from our equity incentive plans and for strategic initiatives.

Dividends. In February, May and August 2025, our board of directors declared quarterly cash dividends of $0.06 per share. The quarterly cash dividends of $3.0 million were paid on March 5, 2025, June 11, 2025 and September 10, 2025 to stockholders of record on February 24, 2025, May 30, 2025 and August 29, 2025). In November 2025, our board of directors declared a quarterly cash dividend of $0.06 per share to be paid on December 10, 2025 to stockholders of record on November 28, 2025. Currently, we anticipate that our board of directors will continue to declare quarterly cash dividends and that the cash flows from operations will be sufficient to fund our future dividend payments. However, the continued declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net earnings, financial condition, cash requirements, future prospects and other relevant factors.

Cash from foreign subsidiaries. As of September 30, 2025 and December 31, 2024, we held $253.0 million and $198.0 million, respectively, in cash and cash equivalents, including current investments. These amounts include $162.4 million and $154.1 million as of September 30, 2025 and December 31, 2024, respectively, held in our operations outside of the U.S. Substantially all of our non-U.S. cash and cash equivalents are readily convertible into U.S. dollars or other currencies, subject to procedural or other requirements in certain markets, as well as an indefinite-reinvestment designation, as described below.

We typically fund the cash requirements of our operations in the U.S. through intercompany dividends, intercompany loans and intercompany charges for products, use of intangible property, and corporate services. However, some markets impose government-approval or other requirements for the repatriation of dividends. For example, in Mainland China, we are unable to repatriate cash from current operations in the form of dividends until we file the necessary statutory financial statements for the relevant period. As of September 30, 2025, we had $38.0 million in cash denominated in Chinese RMB. We also have experienced delays in repatriating cash from Argentina. As of September 30, 2025 and December 31, 2024, we had $20.5 million and $22.4 million, respectively, in intercompany receivables with our Argentina subsidiary. We also have intercompany loan arrangements in some of our markets, including Mainland China, that allow us to access available cash, subject to certain limits in Mainland China and other jurisdictions. We also have drawn on our revolving line of credit to address cash needs until we can repatriate cash from Mainland China or other markets, and we may continue to do so. Except for $60.0 million of earnings in Mainland China that we designated as indefinitely reinvested during the second quarter of 2018, we currently plan to repatriate undistributed earnings from our non-U.S. operations as necessary, considering the cash needs of our non-U.S. operations and the cash needs of our U.S. operations for dividends, stock repurchases, capital investments, debt repayment and strategic transactions. Repatriation of non-U.S. earnings is subject to withholding taxes in certain foreign jurisdictions. Accordingly, we have accrued the necessary withholding taxes related to the non-U.S. earnings.

We currently believe that existing cash balances, future cash flows from operations and existing lines of credit will be adequate to fund our cash needs on both a short- and long-term basis. The majority of our historical expenses have been variable in nature, and as such, a potential reduction in the level of revenue would reduce our cash flow needs. In the event that our current cash balances, future cash flow from operations and current lines of credit are not sufficient to meet our obligations or strategic needs, we would consider raising additional funds in the debt or equity markets or restructuring our current debt obligations. Additionally, we would consider realigning our strategic plans, including a reduction in capital spending, stock repurchases or dividend payments.

Contingent Liabilities

Please refer to Note 12 to the consolidated financial statements contained in this Quarterly Report for information regarding our contingent liabilities.

Critical Accounting Policies and Estimates

There were no significant changes in our critical accounting policies or estimates during the third quarter of 2025.

Seasonality and Cyclicality

In addition to general economic factors, we are impacted by seasonal factors and trends such as major cultural events and vacation patterns. For example, most Asian markets celebrate their respective local New Year in the first quarter, which generally has a negative impact on that quarter. We believe that direct selling is also generally negatively impacted during the third quarter, when many individuals, including our sales force, traditionally take vacations.

Prior to making a product generally available for purchase in a market, we often do one or more introductory offerings of the product, such as a preview of the product to our Sales Leaders or other product introduction or promotion. These offerings sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue, Sales Leaders, Paid Affiliates and/or Customers during the quarter and can skew year-over-year and sequential comparisons.

Non-GAAP Financial Measures

Constant-currency revenue change is a non-GAAP financial measure that removes the impact of fluctuations in foreign-currency exchange rates, thereby facilitating period-to-period comparisons of the Company’s performance. It is calculated by translating the current period’s revenue at the same average exchange rates in effect during the applicable prior-year period and then comparing that amount to the prior-year period’s revenue. We believe that constant-currency revenue change is useful to investors, lenders and analysts because such information enables them to gauge the impact of foreign-currency fluctuations on our revenue from period to period.

Available Information

Our website address is www.nuskin.com (http://www.nuskin.com). We make available, free of charge on our Investor Relations website, ir.nuskin.com, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

We also use our Investor Relations website, ir.nuskin.com, as a channel of distribution of additional Company information that may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts. The contents of our website shall not be deemed to be incorporated herein by reference.

Currency Risk and Exchange Rate Information

A majority of our revenue and many of our expenses are recognized outside of the United States, except for inventory purchases, a significant portion of which are primarily transacted in U.S. dollars from vendors in the United States. The local currency of each of our Subsidiaries’ primary markets is considered the functional currency with the exception of our Asia product-distribution subsidiary in Singapore and, as discussed below, our subsidiary in Argentina. All revenue and expenses are translated at weighted-average exchange rates for the periods reported. Therefore, our reported revenue and earnings will be positively impacted by a weakening of the U.S. dollar and will be negatively impacted by a strengthening of the U.S. dollar. These impacts may be significant because a large portion of our business is derived from outside of the United States. Given the uncertainty of exchange rate fluctuations, it is difficult to predict the effect of these fluctuations on our future business, product pricing and results of operations or financial condition.

In the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018, we elected to adopt highly inflationary accounting for our subsidiary in Argentina. Under highly inflationary accounting, the functional currency for our subsidiary in Argentina became the U.S. dollar, and the income statement and balance sheet for this subsidiary have been measured in U.S. dollars using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other income (expense), net and was not material. As of September 30, 2025, our subsidiary in Argentina had a small net peso monetary position. Net sales of our subsidiary in Argentina were less than 4% of our consolidated net sales for the three- and nine-month periods ended September 30, 2025 and 2024.

We may seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of foreign currency exchange contracts and through intercompany loans of foreign currency. We do not use derivative financial instruments for trading or speculative purposes. We regularly monitor our foreign currency risks and periodically take measures to reduce the impact of foreign exchange fluctuations on our operating results. As of September 30, 2025 and 2024, we did not hold material non-designated mark-to-market forward derivative contracts to hedge foreign denominated intercompany positions or third party foreign debt. As of September 30, 2025, and 2024 we did not hold any material forward contracts designated as foreign currency cash flow hedges. We continue to evaluate our foreign currency hedging policy.

For additional information about our market risk see Note 10 to the consolidated financial statements contained in this Quarterly Report.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective as of September 30, 2025.

Changes in Internal Controls Over Financial Reporting.

We made no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The information presented below supplements and should be read in conjunction with the detailed discussion of risks associated with our business in our recent SEC filings, including our Annual Report on Form 10-K for the 2024 fiscal year and subsequent reports.

Changes to tariff and import/export regulations, and trade disputes between the United States and other jurisdictions have had a negative effect on global economic conditions and could negatively affect our business, financial results and financial condition.

The United States and other foreign jurisdictions have changed customs regulations or tariff rates that are applied to our imports or exports, and they could make further changes at any time. Tariff changes are difficult to predict and may cause us material short-term or long-term cost fluctuations. The political administration in the United States has implemented new tariffs, some of which have been paused but may continue in the future, and has expressed an intention to continue using tariffs more robustly in pursuing government policy. When increases are made to U.S. duty rates or tariffs, retaliatory action by other countries has occurred and could continue occurring. Any increases could impact the price of our products and cause a decline in the demand for our products, as well as cause disruptions in our supply chain. We rely on the use of Free Trade Agreements, where available, that may experience alterations, suspensions or cancellations, which could increase our customs expenses or otherwise harm our business. Although we may take actions in response to tariffs, such as shifting our sourcing and production to alternate locations, there is no assurance that such actions would be successful in mitigating the additional tariffs.

In addition to duties and tariffs, any actions taken by the United States or by foreign countries to further implement trade policy changes, including limiting foreign investment or trade, banning imports from particular countries, increasing regulatory requirements, other actions that impact our ability to obtain necessary licenses or approvals, or any other restrictions on international trade, could negatively impact our business. These actions are unpredictable, and any of them could also have a material adverse effect on global economic conditions and the stability of global financial markets, significantly reduce global trade, or restrict our access to suppliers or customers, any of which would have a material adverse effect on our business, financial condition and results of operations.