Nu Skin(NUS) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Highlights Nu Skin reported Q2 2025 revenue at the high end of guidance and earnings per share exceeding guidance, despite a year-over-year decline in overall revenue and customer metrics. The company achieved an 8% operating margin and saw strong growth in its Rhyz Manufacturing segment Q2 2025 vs. Prior-year Quarter Performance: | Metric | Q2 2025 Value | YoY Change | | :--- | :--- | :--- | | Revenue | $386.1 million | (12.1)% | | EPS | $0.43 | N/A (vs. $(2.38)) | | Customers | 771,407 | (14)% | | Paid Affiliates | 130,799 | (16)% | | Sales Leaders | 29,593 | (23)% | - Operating margin reached 8% despite top-line pressures, indicating effective operational optimization efforts[2] - Rhyz Manufacturing segment demonstrated strong performance with 17% year-over-year revenue growth[2] Strategic Initiatives and Management Commentary Management highlighted significant progress in building sales leader engagement and alignment for key initiatives. These include the upcoming Q4 limited preview of the AI-powered Prysm iO intelligent wellness device and strategic market expansion plans for India, leveraging successful growth principles from Latin America - A mid-Q4 limited preview is scheduled for the Prysm iO intelligent wellness device, an AI-powered assessment tool expected to boost nutritional supplements through personalized recommendations and subscriptions[3] - Plans for Q4 market pre-opening activities in India are on track, with a formal launch anticipated for mid-2026, following 107% year-over-year revenue growth in Latin America[3] - The company remains confident in its strategy to return to growth and drive shareholder value[3] Q2 2025 Operating Results Key Operating Metrics Nu Skin's Q2 2025 operating results showed a decrease in revenue and gross margin compared to the prior year, but a significant improvement in operating margin due to lower selling expenses and the absence of large impairment charges seen in the prior year Q2 2025 Year-over-year Operating Results: | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $386.1 million | $439.1 million | (12.1)% | | Gross Margin | 68.8% | 70.0% | (1.2) pp | | Selling Expenses (% of Revenue) | 33.2% | 37.7% | (4.5) pp | | G&A Expenses (% of Revenue) | 27.6% | 26.9% | 0.7 pp | | Operating Margin | 8.0% | (28.6)% | 36.6 pp | | Interest Expense | $2.5 million | $6.7 million | (62.6)% | | Income Tax Rate | 23.0% | 10.2% | 12.8 pp | | EPS | $0.43 | $(2.38) | N/A | - Nu Skin business gross margin improved to 77.5% in Q2 2025 from 76.1% in Q2 2024[4] - Operating margin, excluding impairment and other charges, improved to 8.0% in Q2 2025 from 5.4% in Q2 2024[4] Stockholder Value In Q2 2025, Nu Skin paid $3.0 million in dividends and had no stock repurchases, with a significant amount remaining in its stock repurchase authorization Q2 2025 Stockholder Value: | Metric | Amount | | :--- | :--- | | Dividend Payments | $3.0 million | | Stock Repurchases | $0.0 million | | Remaining Repurchase Authorization | $157.4 million | Financial Outlook Q3 and Full-Year 2025 Guidance Nu Skin provided Q3 2025 revenue guidance of $360 to $390 million and EPS of $0.25 to $0.35. For the full year 2025, revenue is projected to be $1.48 to $1.55 billion, with EPS of $3.05 to $3.25, or adjusted EPS of $1.15 to $1.35 excluding Mavely gain and other charges Q3 and Full-Year 2025 Outlook: | Metric | Q3 2025 Guidance | Full-Year 2025 Guidance | | :--- | :--- | :--- | | Revenue | $360 to $390 million | $1.48 to $1.55 billion | | Revenue Change (YoY) | (16)% to (9)% | (15)% to (11)% | | Revenue Change (YoY, ex-Mavely) | (13)% to (5)% | (11)% to (7)% | | EPS | $0.25 to $0.35 | $3.05 to $3.25 | | EPS (ex-Mavely gain & other charges) | N/A | $1.15 to $1.35 | - Approximately (1)% FX impact is anticipated for both Q3 and full-year 2025 revenue[5] CFO Commentary on Financial Position The CFO highlighted improved profitability, significant cash generation, and a strengthened balance sheet, achieving a positive net cash position for the first time in over four years. Based on first-half results and clearer market sentiment, the company narrowed revenue guidance and raised EPS guidance for 2025 - The company achieved a positive net cash position ahead of schedule, marking the first time in over 4 years[6] - Based on first-half results and improved clarity, the company is narrowing its revenue guidance and increasing its earnings guidance for 2025[6] Company Information & Disclosures About Nu Skin Enterprises Inc. Nu Skin Enterprises Inc. encompasses Nu Skin, an integrated beauty and wellness company operating globally with personal care, nutrition, and anti-aging brands, and Rhyz Inc., an ecosystem of consumer, technology, and manufacturing companies focused on innovation in beauty, wellness, and lifestyle categories - Nu Skin is an integrated beauty and wellness company operating in nearly 50 markets worldwide, offering personal care (Nu Skin®), nutrition (Pharmanex®), and anti-aging (ageLOC®) products[8] - Rhyz Inc., formed in 2018, is a synergistic ecosystem of consumer, technology, and manufacturing companies focused on innovation within the beauty, wellness, and lifestyle categories[8] Conference Call Information Nu Skin's management team hosted a conference call on August 7, 2025, at 5 p.m. ET. Webcast access and financial information are available on the Investor Relations page of the company's website, with a replay accessible through August 22, 2025 - A conference call with the investment community was held on August 7, 2025, at 5 p.m. (ET)[7] - Webcast and financial information are available on the Investor Relations page at ir.nuskin.com, with a replay available through August 22, 2025[7] Important Information Regarding Forward-Looking Statements This section provides disclaimers regarding forward-looking statements, emphasizing that they represent current expectations and beliefs, are subject to important risks and uncertainties, and the company assumes no duty to update them except as required by law - Forward-looking statements represent the company's current expectations and beliefs, not historical facts, and are subject to important risks and uncertainties[10][11] - Risks include failure of initiatives, changes in direct selling laws, economic conditions, competitive pressures, adverse publicity, and regulatory uncertainties in international markets like Mainland China[12] - The company assumes no duty to update forward-looking statements contained in this release to reflect any change except as required by law[11] Non-GAAP Financial Measures The report defines and explains the use of non-GAAP financial measures, such as constant-currency revenue change, and adjusted EPS, operating margin, and income tax rate. These adjustments remove the impact of fluctuations in foreign-currency exchange rates and specific non-recurring or non-operational charges (e.g., Mavely gain, restructuring, impairment) to facilitate period-to-period performance comparisons - Constant-currency revenue change is a non-GAAP measure that removes the impact of foreign-currency fluctuations to facilitate period-to-period performance comparisons[13] - Non-GAAP measures for EPS, operating margin, and income tax rate exclude the gain from the Mavely sale, restructuring charges, impairment charges, unrealized investment loss, and other charges[14] - These non-GAAP adjustments are considered useful to investors, lenders, and analysts for comparing the company's performance by isolating ongoing operational results from non-recurring items[15][16] Detailed Financial and Operational Metrics Segment Revenue Performance For Q2 2025, total revenue decreased by 12.1% year-over-year to $386.1 million. Most Nu Skin segments experienced declines, with South Korea and Mainland China showing significant decreases. Japan was an exception with 4.6% growth. The Rhyz Manufacturing segment showed strong growth of 17.3%, while Rhyz Other declined significantly Q2 2025 Segment Revenue (in thousands): | Segment | 2025 Revenue | 2024 Revenue | Change | | :--- | :--- | :--- | :--- | | Nu Skin Americas | $72,946 | $84,935 | (14.1)% | | Nu Skin Mainland China | $53,224 | $64,710 | (17.7)% | | Nu Skin Japan | $44,550 | $42,587 | 4.6% | | Nu Skin South Korea | $34,068 | $44,119 | (22.8)% | | Total Nu Skin | $320,904 | $371,248 | (13.6)% | | Rhyz Manufacturing | $60,400 | $51,473 | 17.3% | | Total Rhyz | $65,234 | $67,833 | (3.8)% | | Total Company | $386,138 | $439,081 | (12.1)% | Six Months Ended June 30, 2025 Segment Revenue (in thousands): | Segment | 2025 Revenue | 2024 Revenue | Change | | :--- | :--- | :--- | :--- | | Total Nu Skin | $627,186 | $726,021 | (13.6)% | | Rhyz Manufacturing | $115,690 | $101,775 | 13.7% | | Total Rhyz | $123,442 | $130,366 | (5.3)% | | Total Company | $750,628 | $856,387 | (12.3)% | Customer and Sales Force Metrics All key operational metrics (Customers, Paid Affiliates, Sales Leaders) declined significantly year-over-year in Q2 2025. Total Customers decreased by 14%, Paid Affiliates by 16%, and Sales Leaders by 23%. Mainland China and South Korea showed the steepest declines across these categories, while Americas was the only region to show customer growth Q2 2025 Customer, Paid Affiliates, and Sales Leaders: | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Customers | 771,407 | 893,514 | (14)% | | Total Paid Affiliates | 130,799 | 155,486 | (16)% | | Total Sales Leaders | 29,593 | 38,592 | (23)% | | Americas Customers | 240,477 | 226,626 | 6% | | Mainland China Sales Leaders | 5,790 | 10,266 | (44)% | | South Korea Customers | 67,313 | 99,358 | (32)% | - Customers are defined as persons who purchased directly from the Company during the three months ended as of the date indicated, including members of the sales force who made such a purchase[19] - Sales Leaders are the three-month average of monthly Brand Affiliates (or sales employees/independent marketers in Mainland China) who met certain qualification requirements[19] Consolidated Statements of Income For Q2 2025, Nu Skin reported net income of $21.1 million, a significant improvement from a net loss of $118.3 million in Q2 2024, primarily due to the absence of large restructuring and impairment expenses. Revenue decreased, but operating income turned positive Consolidated Statements of Income (Unaudited) - Q2: | Metric (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $386,138 | $439,081 | | Gross profit | $265,733 | $307,177 | | Total operating expenses | $234,953 | $432,734 | | Operating income (loss) | $30,780 | $(125,557) | | Income (loss) before provision for income taxes | $27,411 | $(131,648) | | Net income (loss) | $21,119 | $(118,258) | | Diluted EPS | $0.43 | $(2.38) | Consolidated Statements of Income (Unaudited) - Six Months: | Metric (in thousands) | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Revenue | $750,628 | $856,387 | | Gross profit | $512,694 | $601,241 | | Total operating expenses | $491,817 | $717,976 | | Operating income (loss) | $20,877 | $(116,735) | | Gain on sale of business | $176,162 | — | | Net income (loss) | $128,634 | $(118,791) | | Diluted EPS | $2.59 | $(2.39) | Consolidated Balance Sheets As of June 30, 2025, Nu Skin's cash and cash equivalents increased significantly to $264.2 million from $186.9 million at year-end 2024. Total assets slightly decreased, while total liabilities decreased more substantially, leading to an increase in total stockholders' equity. Long-term debt was also reduced Consolidated Balance Sheets (Unaudited) - Key Figures (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $264,159 | $186,883 | | Total current assets | $571,553 | $538,599 | | Total assets | $1,443,693 | $1,468,914 | | Total current liabilities | $283,906 | $296,607 | | Long-term debt | $213,900 | $363,613 | | Total liabilities | $655,939 | $817,459 | | Total stockholders' equity | $787,754 | $651,455 | - The company's cash and cash equivalents increased by approximately $77.3 million from year-end 2024 to June 30, 2025[23] - Total liabilities decreased by approximately $161.5 million, contributing to a significant increase in total stockholders' equity[23] Non-GAAP Reconciliations Operating Margin Reconciliation The reconciliation shows that excluding restructuring and impairment expenses, the adjusted operating margin for Q2 2024 would have been 5.4%, significantly improving from the reported (28.6)%, and comparable to the 8.0% reported for Q2 2025. For the six months ended June 30, 2025, the adjusted operating margin was 7.2% Operating Margin Reconciliation (Q2): | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Income (GAAP) | $30,780 | $(125,557) | | Impact of restructuring and impairment | — | $149,350 | | Adjusted operating income | $30,780 | $23,793 | | Operating margin (GAAP) | 8.0% | (28.6)% | | Operating margin, excluding certain charges | 8.0% | 5.4% | Operating Margin Reconciliation (Six Months): | Metric | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Operating Income (GAAP) | $20,877 | $(116,735) | | Impact of other charges | $7,966 | — | | Impact of restructuring and impairment | $25,114 | $156,484 | | Adjusted operating income | $53,957 | $39,749 | | Operating margin (GAAP) | 2.8% | (13.6)% | | Operating margin, excluding certain charges | 7.2% | 4.6% | Effective Tax Rate Reconciliation The effective tax rate for Q2 2025 was 23.0%. Excluding the impact of Mavely gain and certain charges, the effective tax rate for Q2 2024 would have been 41.4%, significantly higher than the reported 10.2%. For the six months ended June 30, 2025, the adjusted effective tax rate was 30.9% Effective Tax Rate Reconciliation (Q2): | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Provision (benefit) for income taxes (GAAP) | $6,292 | $(13,390) | | Impact of restructuring and impairment on provision for income taxes | — | $20,715 | | Provision for income taxes, excluding impact of Mavely gain and certain charges | $6,292 | $7,325 | | Effective tax rate (GAAP) | 23.0% | 10.2% | | Effective tax rate, excluding impact of Mavely gain and certain charges | 23.0% | 41.4% | Effective Tax Rate Reconciliation (Six Months): | Metric | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Provision (benefit) for income taxes (GAAP) | $33,378 | $(11,756) | | Impact of other charges on provision for income taxes | $725 | — | | Impact of restructuring and impairment on provision for income taxes | $5,433 | $23,071 | | Impact of gain on Mavely sale on provision for income taxes | $(31,104) | — | | Impact of unrealized investment loss on provision for income taxes | $6,074 | — | | Provision for income taxes, excluding impact of Mavely gain and certain charges | $14,506 | $11,315 | | Effective tax rate (GAAP) | 20.6% | 9.0% | | Effective tax rate, excluding impact of Mavely gain and certain charges | 30.9% | 43.6% | Earnings Per Share Reconciliation The reconciliation demonstrates that excluding the impact of restructuring, impairment, Mavely gain, and unrealized investment loss, the adjusted diluted EPS for Q2 2024 would have been $0.21, compared to the reported $0.43 for Q2 2025. For the full year 2025, the adjusted EPS guidance is $1.15 to $1.35 Diluted EPS Reconciliation (Q2): | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $21,119 | $(118,258) | | Impact of restructuring and impairment | — | $149,350 | | Tax impact of restructuring and impairment | — | $(20,715) | | Adjusted net income | $21,119 | $10,377 | | Diluted EPS (GAAP) | $0.43 | $(2.38) | | Diluted EPS, excluding impact of Mavely gain and certain charges | $0.43 | $0.21 | Diluted EPS Reconciliation (Six Months): | Metric | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $128,634 | $(118,791) | | Impact of other charges | $7,966 | — | | Tax impact of other charges | $(725) | — | | Impact of restructuring and impairment | $25,114 | $156,484 | | Tax impact of restructuring and impairment | $(5,433) | $(23,071) | | Impact of gain on Mavely sale | $(176,162) | — | | Tax impact of gain on Mavely sale | $31,104 | — | | Impact of unrealized investment loss | $28,077 | — | | Tax impact of unrealized investment loss | $(6,074) | — | | Adjusted net income | $32,501 | $14,622 | | Diluted EPS (GAAP) | $2.59 | $(2.39) | | Diluted EPS, excluding impact of Mavely gain and certain charges | $0.65 | $0.29 | Full Year 2025 Adjusted EPS Outlook: | Metric | Low end | High end | | :--- | :--- | :--- | | Earnings Per Share (GAAP) | $3.05 | $3.25 | | Adjusted EPS (excluding Mavely gain and certain charges) | $1.15 | $1.35 | Revenue Growth Rate Reconciliation The reconciliation provides revenue growth rates excluding Mavely 2024 revenue. For Q3 2025, the forecasted revenue growth rate is (13)% to (5)% excluding Mavely, compared to (16)% to (9)% including Mavely. For the full year 2025, the adjusted growth rate is (11)% to (7)%, compared to (15)% to (11)% including Mavely Q3 2025 Revenue Growth Rate Reconciliation: | Metric | Low end | High end | | :--- | :--- | :--- | | 2024 Revenue | $430,145 | $430,145 | | Less: Mavely 2024 Revenue | $18,391 | $18,391 | | Adjusted 2024 Revenue | $411,754 | $411,754 | | Revenue Growth Rate (GAAP) | (16)% | (9)% | | Revenue Growth Rate, excluding Mavely | (13)% | (5)% | | 2025 Forecasted Revenue | $360,000 | $390,000 | Full Year 2025 Revenue Growth Rate Reconciliation: | Metric | Low end | High end | | :--- | :--- | :--- | | 2024 Revenue | $1,732,084 | $1,732,084 | | Less: Mavely 2024 Revenue | $69,620 | $69,620 | | Adjusted 2024 Revenue | $1,662,464 | $1,662,464 | | Revenue Growth Rate (GAAP) | (15)% | (11)% | | Revenue Growth Rate, excluding Mavely | (11)% | (7)% | | 2025 Forecasted Revenue | $1,480,000 | $1,550,000 |