Q1 2021 Performance - Revenue increased by 31% year-over-year, with a 5.7% positive impact from foreign exchange[5] - Earnings per share (EPS) increased by 153% year-over-year to $0.91[5] - The number of sales leaders increased by 22% year-over-year[5] - The number of customers increased by 34% year-over-year[5] Customer and Sales Leader Metrics - Total customers reached 1,517,260 in Q1 2021[7] - Total sales leaders reached 60,619 in Q1 2021[7] - EMEA region saw a 111% increase in customers and an 88% increase in sales leaders[7] - Americas/Pacific region saw a 90% increase in customers and a 78% increase in sales leaders[7] Operational Performance - Gross margin was 74.8% in Q1 2021[12] - Selling expenses were 40.4% of revenue in Q1 2021[12] - General & Administrative (G&A) expenses were 25.1% of revenue in Q1 2021[12] - Operating margin was 9.3% in Q1 2021[12] 2021 Projections - The company projects 2021 EPS to be between $4.05 and $4.30, representing a 12% to 18% increase[17] - The company projects Q2 2021 revenue to be between $680 million and $705 million, representing an 11% to 15% increase, with approximately a 5% positive foreign exchange impact[17] - The company projects Q2 2021 EPS to be between $0.97 and $1.07, representing a 20% to 32% increase[17] - The company projects 2021 revenue to be between $2.80 billion and $2.87 billion, representing a 9% to 11% increase, with approximately a 3% to 4% positive foreign exchange impact[17]

Nu Skin Enterprises, Inc. 2021 Investor Day Summary Company Overview - **Company**: Nu Skin Enterprises, Inc. (NYSE: NUS) - **Event**: 2021 Investor Day held on February 11, 2021 Key Points and Arguments Business Resilience and Response to COVID-19 - Nu Skin faced unprecedented challenges due to the COVID-19 pandemic but demonstrated resilience and adaptability in maintaining business operations and supporting employees and sales leaders [6][11] - The management team expressed gratitude for the dedication and efforts of global employees and sales leaders during the pandemic [6][12] Leadership Transition - Ritch Wood, the current CEO, will transition the CEO role to Ryan Napierski on September 1, 2021, after 30 years with the company [8][12] - Ryan Napierski has over 25 years of experience with Nu Skin and has been prepared for this leadership role [9][12] Growth Strategy - The company aims to expand its growth strategy through innovative products, digital platforms, and a balanced geographic profile [7][21] - Nu Skin reported a 60% increase in active customer base from 980,000 in Q1 2017 to 1,560,000 in Q4 2020 [15] - The average age of customers has decreased by 5 years, attracting a younger demographic [16] Financial Performance - In Q4 2020, Nu Skin achieved its largest quarterly revenue in 7 years, with earnings per share (EPS) of $1.40, representing a 94% growth [18] - For the full year 2020, revenue grew by 7% and EPS grew by 17%, despite the pandemic [20] - The company anticipates revenue growth of 5% to 9% for 2021, equating to approximately $200 million [22] Product Innovation and Sustainability - Nu Skin introduced new products, including the ageLOC Boost device, which generated approximately $100 million in revenue in the second half of 2020 [19][41] - The company is committed to sustainability, with goals to ensure all packaging is recycled, recyclable, reusable, reduced, or renewable by 2030 [27] - Nu Skin secured 9 sustainability awards in 2020 for its waste and packaging reductions [29] Digital Transformation and Social Commerce - The company is transitioning to a digital-first affiliate marketing model, leveraging social commerce to connect with consumers [52][56] - Over 90% of revenue transactions now occur online, with approximately half coming from personal product subscriptions and loyalty programs [38] - The introduction of Vera, an AI-powered personal product recommendation tool, aims to enhance customer engagement and personalization [64] Geographic Performance - The West region, including North America and Latin America, reported record revenue growth of 53% year-over-year [67] - Mainland China showed a return to growth in Q4 2020, with active customers up 30% year-over-year [68] - Southeast Asia is beginning to adopt social commerce, with encouraging potential in markets like Indonesia and the Philippines [69] Additional Important Content - Nu Skin's commitment to corporate social responsibility (CSR) includes various initiatives, such as providing meals to children and supporting local charities [25][26] - The company emphasizes the importance of diversity, equity, and inclusion (DEI) in its workplace and community efforts [26] - Nu Skin's Empower Me strategy focuses on personalized beauty and wellness solutions, leveraging technology to enhance customer experiences [45][64] This summary encapsulates the key insights and strategic directions discussed during the Nu Skin 2021 Investor Day, highlighting the company's resilience, growth strategies, and commitment to innovation and sustainability.

Part I [Business](index=5&type=section&id=Item%201.%20Business) Nu Skin is a global direct selling company developing and distributing beauty and wellness solutions across approximately 50 markets, primarily through direct selling - In 2020, the company's revenue was **$2.6 billion**, with **84%** generated from outside the United States[9](index=9&type=chunk)[11](index=11&type=chunk) - Mainland China is the largest market, accounting for approximately **24%** of 2020 revenue[11](index=11&type=chunk) - The strategic investment arm, Rhyz Inc., generated **$150.2 million** (**6%** of total revenue) in 2020 from external sales, primarily from its manufacturing companies[10](index=10&type=chunk) [Products](index=5&type=section&id=PRODUCTS) The company offers personal care and wellness products under Nu Skin, Pharmanex, and ageLOC brands, emphasizing innovation and intellectual property protection Revenue by Product Category (2018-2020) | Product Category | 2020 Revenue (Millions) | 2020 % | 2019 Revenue (Millions) | 2019 % | 2018 Revenue (Millions) | 2018 % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Personal Care | $1,491.8 | 57.8% | $1,423.5 | 58.8% | $1,659.7 | 62.0% | | Wellness | $922.6 | 35.7% | $863.1 | 35.7% | $921.3 | 34.4% | | Other (Rhyz) | $167.5 | 6.5% | $133.8 | 5.5% | $98.0 | 3.6% | | **Total** | **$2,581.9** | **100.0%** | **$2,420.4** | **100.0%** | **$2,679.0** | **100.0%** | - ageLOC personal care products accounted for **50%** of the personal care category revenue and **29%** of total revenue in 2020[17](index=17&type=chunk) - ageLOC nutritional products accounted for **42%** of the wellness category revenue and **15%** of total revenue in 2020[18](index=18&type=chunk) - The company is launching a new beauty device system, ageLOC Boost, in the second half of 2020 and into 2021[12](index=12&type=chunk) [Distribution Channel](index=8&type=section&id=DISTRIBUTION%20CHANNEL) Nu Skin employs a direct selling channel, increasingly leveraging social commerce, with distinct models for customer and sales leader engagement, especially in Mainland China Total Customers and Sales Leaders by Region (as of year-end) | Region | Customers 2020 | Sales Leaders 2020 | Customers 2019 | Sales Leaders 2019 | Customers 2018 | Sales Leaders 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 381,460 | 21,990 | 292,812 | 17,987 | 303,789 | 33,129 | | Americas/Pacific | 404,955 | 14,439 | 220,216 | 7,607 | 248,609 | 8,354 | | South Korea | 158,953 | 7,059 | 168,972 | 7,251 | 182,026 | 7,565 | | Southeast Asia | 154,355 | 8,903 | 136,349 | 7,480 | 153,465 | 8,933 | | Japan | 128,400 | 6,318 | 125,557 | 5,916 | 130,181 | 5,916 | | EMEA | 258,587 | 7,063 | 153,330 | 4,619 | 149,085 | 4,791 | | Hong Kong/Taiwan | 70,592 | 4,663 | 65,669 | 3,900 | 76,891 | 4,767 | | **Total** | **1,557,302** | **70,435** | **1,162,905** | **54,760** | **1,244,046** | **73,455** | - The business model in Mainland China is different from other markets due to local regulations, utilizing retail stores, sales employees, independent direct sellers, and independent marketers[29](index=29&type=chunk)[42](index=42&type=chunk) - Outside Mainland China, Brand Affiliates earn money through retail markups and sales compensation from their network's product sales (multi-level compensation)[39](index=39&type=chunk)[40](index=40&type=chunk) [Geographic Regions](index=12&type=section&id=GEOGRAPHIC%20REGIONS) Operating in approximately 50 markets, the company's revenue is segmented geographically, with Mainland China being the largest contributor in 2020 Revenue by Segment (2018-2020) | Segment | 2020 Revenue (Millions) | 2020 % | 2019 Revenue (Millions) | 2019 % | 2018 Revenue (Millions) | 2018 % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | $625.5 | 24% | $722.5 | 30% | $886.5 | 33% | | Americas/Pacific | $511.9 | 20% | $349.1 | 14% | $385.0 | 14% | | South Korea | $326.5 | 13% | $330.0 | 14% | $373.4 | 14% | | Southeast Asia | $302.7 | 12% | $301.6 | 12% | $316.9 | 12% | | Japan | $273.7 | 10% | $260.0 | 11% | $254.9 | 10% | | EMEA | $230.2 | 9% | $167.2 | 7% | $182.4 | 7% | | Hong Kong/Taiwan | $161.1 | 6% | $166.3 | 7% | $185.9 | 7% | | Manufacturing | $149.3 | 6% | $121.9 | 5% | $90.6 | 3% | | **Total** | **$2,581.9** | **100%** | **$2,420.4** | **100%** | **$2,679.0** | **100%** | [Regulation](index=12&type=section&id=REGULATION) The company's direct selling model and products are subject to extensive global regulations, with particularly complex and restrictive frameworks in Mainland China - Direct selling regulations are intended to prevent pyramid schemes and generally require compensation to be based on product sales, not recruitment[54](index=54&type=chunk) - The regulatory environment in Mainland China is complex, prohibiting multi-level compensation and requiring a different business model, with no new direct selling licenses issued since early 2019[55](index=55&type=chunk) - Several markets, including Mainland China and South Korea, impose limits on the amount of sales compensation that can be paid (e.g., **30%** of revenue in China, **35%** of total value in South Korea)[58](index=58&type=chunk) - Products are regulated by agencies like the FDA, with cosmetics regulated for safety and labeling, and wellness products (dietary supplements) under DSHEA with specific rules for claims and new ingredients[61](index=61&type=chunk)[71](index=71&type=chunk) - The FTC exercises jurisdiction over advertising in the U.S. and has taken action against companies for deceptive advertising and lack of substantiation for claims, with the company having a consent decree from the early 1990s regarding product and earnings claims[84](index=84&type=chunk)[86](index=86&type=chunk) [Competition](index=19&type=section&id=COMPETITION) Nu Skin faces intense competition in direct selling and product markets from established global companies with greater financial resources and brand recognition - Competes with other direct selling organizations such as Amway, Avon Products, and Herbalife to attract and retain its sales force and consumers[92](index=92&type=chunk) - Product competitors include a broad array of marketers of personal care and nutritional products like L'Oréal, Clinique, Estée Lauder, and Mary Kay[93](index=93&type=chunk) [Human Capital Resources](index=19&type=section&id=HUMAN%20CAPITAL%20RESOURCES) As of year-end 2020, Nu Skin employed approximately 5,000 globally and 21,000 in Mainland China, with a human capital strategy focused on business transformation and diversity - As of year-end 2020, the company had approximately **5,000** full- and part-time employees globally, and an additional **21,000** sales employees in Mainland China[94](index=94&type=chunk) - The human capital strategy focuses on three objectives: supporting business transformation, leveraging diversity and inclusion, and simplifying the employee experience[95](index=95&type=chunk) - Recognized by Direct Selling News as one of the best places to work in direct selling for the fifth consecutive year in 2020[98](index=98&type=chunk) [Available Information](index=20&type=section&id=AVAILABLE%20INFORMATION) The company provides free access to its SEC filings and other material information on its Investor Relations website - SEC filings are available free of charge on the company's Investor Relations website, ir.nuskin.com[100](index=100&type=chunk) [Information About Our Executive Officers](index=21&type=section&id=INFORMATION%20ABOUT%20OUR%20EXECUTIVE%20OFFICERS) This section details executive officers as of January 2021, including a planned CEO transition for September 2021 - A CEO transition is planned for September 1, 2021, with current President Ryan S. Napierski set to succeed Ritch N. Wood as Chief Executive Officer[108](index=108&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from direct selling model challenges, intense Mainland China scrutiny, competition, and cybersecurity threats - Challenges to the network marketing system, particularly from the FTC regarding pyramid schemes and improper earnings claims, pose a significant risk[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Operations in Mainland China are subject to intense government scrutiny and complex regulations that prohibit multi-level compensation, creating significant business risk[138](index=138&type=chunk)[143](index=143&type=chunk) - The business is dependent on its ability to recruit and retain its independent sales force, which is subject to high turnover[174](index=174&type=chunk) - The COVID-19 pandemic has negatively impacted the business by limiting in-person meetings, disrupting supply chains, and increasing regulatory scrutiny of health-related claims[161](index=161&type=chunk)[163](index=163&type=chunk) - Cybersecurity risks and failure to protect customer and sales force data could lead to litigation, liability, and reputational harm, especially with evolving data privacy laws like GDPR[236](index=236&type=chunk)[237](index=237&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[242](index=242&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The company's principal properties include corporate headquarters, R&D centers, and manufacturing facilities primarily in Utah and Mainland China - Principal administrative offices are in Provo, Utah and Shanghai, China[244](index=244&type=chunk) - The company operates its own manufacturing facilities in Mainland China and, through its Rhyz arm, in Utah[246](index=246&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) The company is in ongoing litigation with Don Roberts over a claimed **50%** ownership in its indoor-growing business, seeking over **$250 million** - The company is in litigation with Don Roberts, who claims a **50%** ownership interest in the indoor-growing business and is seeking damages exceeding **$250 million**[247](index=247&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[248](index=248&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE under 'NUS', with **325,479** shares repurchased for approximately **$17 million** in Q4 2020 Issuer Purchases of Equity Securities (Q4 2020) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining Under Plan (millions) | | :--- | :--- | :--- | :--- | | Oct 1 – 31, 2020 | 60,985 | $54.12 | $339.5 | | Nov 1 – 30, 2020 | 142,954 | $51.36 | $332.2 | | Dec 1 – 31, 2020 | 121,540 | $52.09 | $325.8 | | **Total** | **325,479** | **$52.15** | **$325.8** | - The company's Class A common stock is listed on the NYSE under the symbol 'NUS'[250](index=250&type=chunk) [Reserved](index=47&type=section&id=Item%206.%20Reserved) This item is not applicable [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, revenue grew **7%** to **$2.58 billion**, driven by digital commerce and customer growth, despite a decline in Mainland China [Results of Operations](index=52&type=section&id=Results%20of%20Operations) For 2020, revenue increased **7%** to **$2.58 billion**, driven by Americas/Pacific and EMEA growth, offsetting a Mainland China decline, while gross margin decreased 2020 vs. 2019 Revenue Change by Segment | Segment | 2020 Revenue (millions) | 2019 Revenue (millions) | % Change | Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | Mainland China | $625.5 | $722.5 | (13)% | (14)% | | Americas/Pacific | $511.9 | $349.1 | 47% | 53% | | South Korea | $326.5 | $330.0 | (1)% | — | | Southeast Asia | $302.7 | $301.6 | — | 1% | | Japan | $273.7 | $260.0 | 5% | 3% | | EMEA | $230.2 | $167.2 | 38% | 35% | | Hong Kong/Taiwan | $161.1 | $166.3 | (3)% | (6)% | | **Total Nu Skin** | **$2,431.7** | **$2,298.4** | **6%** | **6%** | - Overall revenue increased **7%** to **$2.58 billion** in 2020 from **$2.42 billion** in 2019[286](index=286&type=chunk) - Diluted earnings per share increased **17%** to **$3.63** in 2020 from **$3.10** in 2019, driven by higher revenue, a lower tax rate, and stock repurchases[288](index=288&type=chunk) - Gross profit as a percentage of revenue decreased to **74.5%** in 2020 from **76.0%** in 2019, primarily due to higher freight costs and shifts in product and geographic mix[307](index=307&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with cash from operations increasing to **$379.1 million** in 2020, supporting dividends, repurchases, and capital expenditures - Generated **$379.1 million** in cash from operations in 2020, a significant increase from **$177.9 million** in 2019[315](index=315&type=chunk) - Ended 2020 with **$423.9 million** in cash and cash equivalents, up from **$344.0 million** in 2019[316](index=316&type=chunk) - In 2020, the company repurchased **5.1 million** shares for **$144.3 million** and paid **$78.4 million** in dividends[322](index=322&type=chunk)[323](index=323&type=chunk) - As of Dec 31, 2020, the company had **$337.5 million** outstanding on its term loan and no borrowings under its **$350 million** revolving credit facility[321](index=321&type=chunk) [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies Income Taxes and Intangible Assets as critical accounting policies, requiring significant judgment in valuation and impairment testing - The company's critical accounting policies are identified as Accounting for Income Taxes and Accounting for Intangible Assets[275](index=275&type=chunk) - As of December 31, 2020, the company had net deferred tax assets of **$34.8 million** and unrecognized tax benefits of **$17.6 million**[276](index=276&type=chunk)[280](index=280&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually; no impairment charges were recognized in 2020, 2019, or 2018[283](index=283&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency and interest rate risks, managing the latter with interest rate swaps and monitoring the LIBOR transition - A majority of revenue is from outside the U.S., exposing the company to foreign currency risk, where a strengthening U.S. dollar negatively impacts reported revenue and earnings[331](index=331&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt; as of Dec 31, 2020, a hypothetical **1%** increase in rates would increase annual interest expense by about **$1.4 million**[336](index=336&type=chunk) - The company uses interest rate swaps to hedge variable cash flows associated with its variable-rate debt, with a total notional amount of **$200 million** as of year-end 2020[322](index=322&type=chunk)[336](index=336&type=chunk) - The company is monitoring the planned phase-out of LIBOR, which is the reference rate for its credit facility and interest rate swaps[338](index=338&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2020, including balance sheets, income statements, and cash flow statements Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,957,076** | **$1,769,006** | | Total Current Assets | $903,198 | $740,166 | | **Total Liabilities** | **$1,062,805** | **$893,717** | | Total Current Liabilities | $542,856 | $356,760 | | Long-term Debt | $305,393 | $334,461 | | **Total Stockholders' Equity** | **$894,271** | **$875,289** | Consolidated Income Statement Data (Year Ended Dec 31) | (in thousands, except per share) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Revenue | $2,581,934 | $2,420,416 | $2,679,008 | | Gross Profit | $1,923,906 | $1,838,996 | $2,044,868 | | Operating Income | $257,564 | $267,426 | $240,860 | | **Net Income** | **$191,355** | **$173,553** | **$121,887** | | Diluted EPS | $3.63 | $3.10 | $2.16 | Consolidated Cash Flow Data (Year Ended Dec 31) | (in thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $379,141 | $177,931 | $202,738 | | Net cash used in investing activities | ($79,428) | ($71,412) | ($108,761) | | Net cash used in financing activities | ($245,166) | ($154,794) | ($116,714) | | **Net increase (decrease) in cash** | **$67,053** | **($51,281)** | **($39,488)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=103&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[532](index=532&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that disclosure controls and procedures were effective as of December 31, 2020[533](index=533&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2020[535](index=535&type=chunk) [Other Information](index=103&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[536](index=536&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Certain Relationships](index=104&type=section&id=ITEMS%2010-14) Information for these items will be incorporated by reference from the forthcoming 2021 Definitive Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2021 Definitive Proxy Statement[538](index=538&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=104&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including financial statements and various corporate exhibits [Form 10-K Summary](index=106&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - None[545](index=545&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $.001 par value NUS New York Stock Exchange FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ____ ...

Financial Data and Key Metrics Changes - In Q3 2020, the company reported a revenue of $703.3 million, reflecting a 19% year-over-year growth, and earnings per share (EPS) of $1.08, which is a 37% increase compared to the previous year [7][22][27] - Gross margin decreased to 73.9% from 76.2% in the prior year, primarily due to increased freight costs and a shift in geographic mix towards lower-margin regions [22][23] - The company generated $118.4 million in cash from operations and reduced debt by $72.5 million, maintaining a strong financial position [25][26] Business Line Data and Key Metrics Changes - The manufacturing segment experienced a significant revenue growth of 34% in Q3, driven by strong demand and effective supply chain management [9] - The company’s digital platform strategy has resulted in approximately 90% of revenue flowing through digital properties, enhancing customer acquisition and productivity [15] Market Data and Key Metrics Changes - The Americas and Pacific regions grew by 90% in constant currency, with customer growth of 92% and sales leader growth of 86% [17] - EMEA reported high double-digit growth of 67% in constant currency, supported by 59% growth in customers and 53% growth in sales leaders [18] - Mainland China showed a moderate local currency decline of 4%, but there were sequential improvements in revenue, customers, and sales leaders [19] Company Strategy and Development Direction - The company is focused on transforming into a digital-first, socially enabled affiliate opportunity platform, leveraging macroeconomic shifts towards online shopping and social commerce [12][21] - The 3P strategy (platforms, products, and programs) is central to the company’s growth, emphasizing digital technologies, innovative products, and flexible compensation programs [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued strong demand for products and the opportunity for supplemental income for entrepreneurs globally [11] - The company is raising its 2020 revenue and EPS guidance due to positive trends in customer and sales leader growth ahead of new product launches [10][27] Other Important Information - The company is committed to sustainability efforts, focusing on the environmental impact of its top products and making measurable changes [10] - The company anticipates challenges with freight costs in the fourth quarter but is exploring ways to mitigate these impacts [39][40] Q&A Session Summary Question: Customer growth and marketing agenda for Boost - Management indicated that customer growth is largely driven by a socially enabled business model and plans to apply a similar marketing strategy as with LumiSpa for the Boost launch [28][29] Question: Confidence in retaining new sales leaders - Management emphasized the importance of providing opportunities for sales leaders to progress and earn commissions, which helps retain them in the business [32][33] Question: Growth in the West region vs. Asia - Management noted that the West is experiencing a new leadership group embracing social selling, while Asia is transitioning from a traditional model [42][43] Question: Manufacturing business growth and capacity - The manufacturing segment is expected to continue growing, with capacity available for expansion and ongoing investments planned [45][46] Question: Sustaining momentum post-COVID - Management is focused on leveraging digital tools to maintain growth momentum and anticipates a strong product lineup for the upcoming year [70][72]

Q2 2020 Financial Performance - Revenue decreased by 2% year-over-year, with a 3% negative impact from foreign exchange, equivalent to a $19.8 million decrease[5] - Earnings per share (EPS) were $0.81, compared to $0.83 in the same quarter of the previous year[5] - The number of Sales Leaders decreased by 9%, while the number of Customers increased by 29%[5] - A dividend payment of $19.4 million was made in Q2[27] Customer and Sales Leader Metrics - Total Customers reached 1,500,000[7] - Total Sales Leaders reached 56,036[7] - In Mainland China, Customers increased by 41.90%, while Sales Leaders decreased by 29.72%[7] - In Americas/Pacific, Customers increased by 67.23%, and Sales Leaders increased by 32.18%[7] Q3 Outlook and 2020 Guidance - Q3 2020 revenue is projected to be between $605 million and $635 million, representing a growth of 3% to 8%, with an approximate (1 to 2%) foreign exchange impact[28] - Q3 2020 EPS is expected to be between $0.78 and $0.88[28] - 2020 revenue is projected to be between $2.37 billion and $2.45 billion, representing a (2%) to +1% change, with an approximate (2% to 3%) foreign exchange impact[28] - 2020 EPS is expected to be between $2.85 and $3.10[28]

Financial Data and Key Metrics Changes - The company reported Q2 2020 revenue of $612.4 million, exceeding guidance, with earnings per share of $0.81, driven by a strong socially-enabled business model and strategic investments in technology [6][22] - Gross margin for the quarter was 74.8%, down from 75.3% year-over-year, impacted by increased freight charges and COVID-19 related costs [22] - Operating margin for the quarter was 9.5%, with selling expenses as a percentage of revenue increasing to 40.6% from 39.4% in the prior year [23][24] Business Line Data and Key Metrics Changes - The manufacturing segment reported a growth of 20%, contributing significantly to the overall business performance [10][11] - Customer growth was reported at 29%, with digitally enabled transactions exceeding 85% for the quarter [6][7] Market Data and Key Metrics Changes - The Americas and Pacific regions generated 48% constant currency revenue growth, with customer growth of 67% [15] - EMEA experienced constant currency revenue growth of 21%, with customer growth of 51% [17] - Mainland China saw a local currency revenue decline of 18% year-over-year but an 8% sequential increase, with customer growth of 42% [16][33] Company Strategy and Development Direction - The company is focused on becoming a leading business opportunity platform, emphasizing digital transformation and customer acquisition [13][19] - Upcoming product launches, including ageLOC Boost and Nutricentials, are expected to drive growth in the second half of the year [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and ability to generate growth in the second half of the year, despite macroeconomic uncertainties [21][24] - The company raised its annual revenue guidance by approximately $200 million, anticipating revenue between $2.37 billion and $2.45 billion [24][25] Other Important Information - The enJoy consumer rewards program was introduced to enhance customer loyalty and retention, with plans for broader rollout in the U.S. and EMEA [20][56] - The Vera app, leveraging AI and machine learning, is set to provide personalized product recommendations based on individual assessments [19][60] Q&A Session Summary Question: What drove the huge increases in the U.S. and Europe? - Management noted strong customer acquisition and the effectiveness of social sharing in driving growth, particularly in the West region [27][28] Question: How are you thinking about China specifically in the back half? - Management anticipates continued improvement in China, with expectations for slight growth in the second half due to product launches [32][33] Question: What are the sales trends for nutrition versus personal care? - There was a slight improvement in nutrition and manufacturing, offset by a decline in personal care [45][46] Question: Can you clarify the timing of new product launches? - All markets will receive new products in Q4, with full launches expected in Q1 of the following year [48] Question: What is the level of confidence regarding the Boost product's reception? - Management expressed confidence based on positive early feedback and the product's value proposition [50][51] Question: Can you update on the Go technology business? - The company continues to invest in sustainable and traceable ingredient technology, with potential revenue opportunities expected [52][53] Question: Can you discuss the enJoy customer loyalty program? - The program rewards customer loyalty and has shown success in reactivating previous customers [56][57] Question: How is the Vera app leveraging data for recommendations? - The app uses AI and big data to provide personalized product recommendations, enhancing sales leader productivity [59][60]