Financial Data and Key Metrics Changes - The company achieved net income of $3.6 million in Q3 2025, marking its first net income since going public in 2021, compared to a net loss of $12 million in the prior year [23] - Adjusted EBITDA was $9.5 million, up from $4.6 million in the prior quarter and down from $10.1 million in the prior year [23] - Total revenues were $59.9 million, a decline of 6.3% sequentially and 41.4% year over year, aligning with expectations due to the strategic transition [18] - Gross margins improved to 74.6%, an increase of 230 basis points from the prior quarter and 730 basis points year over year [19] Business Line Data and Key Metrics Changes - Digital revenue decreased 8.3% from the prior quarter to $36.4 million and decreased 32.2% year over year, impacted by a decline in digital subscription counts [19] - Nutrition and other revenue decreased 2.8% from the prior quarter to $23.5 million and fell 50.4% year over year, with nutrition subscriptions remaining flat sequentially at approximately 70,000 [20] Market Data and Key Metrics Changes - The company is transitioning from a multi-level marketing (MLM) model to an omnichannel approach, which has impacted revenue streams and customer acquisition strategies [18][19] - The shift has opened new growth channels that were previously inaccessible, with expectations for a stronger balance sheet and long-term business model [25] Company Strategy and Development Direction - The company plans to launch a comprehensive retail initiative in 2026, introducing products like Shakeology and new nutritional supplements to retail for the first time [5][6] - A new P90X fitness program will be launched, creating cross-marketing opportunities between digital content and retail nutrition products [6] - The focus will be on expanding the total addressable market (TAM) by targeting the 185 million overweight Americans who do not currently engage in regular fitness routines [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the turnaround progress, achieving eight consecutive quarters of positive adjusted EBITDA and a significant reduction in the revenue break-even point from $900 million to $180 million [4][7] - The company anticipates that 2026 will mark the transition from financial restructuring to capitalizing on new revenue opportunities [5][15] - Management highlighted the importance of leveraging AI and technology to enhance customer experience and drive acquisition [15][16] Other Important Information - The company has generated $13.1 million in free cash flow year-to-date, with $9 million generated in Q3 alone [4] - The cash position stands at $33.9 million, exceeding outstanding debt of $25 million, providing financial flexibility [4] Q&A Session Summary Question: Changes in Customer Base with New Business Model - Management noted that the customer demographic remains similar, focusing on individuals seeking convenience and shorter workout durations [32] Question: New Product Pipeline and Rollout Timing - The company is excited about launching numerous new products in 2026, including affordable nutrition products and fitness programs [38][39] Question: Marketing Spend and Cost Management - Management confirmed that marketing spend is aligned with the new business model, maintaining operational leverage while managing costs effectively [41][62] Question: Retail Launch Visibility - The company is currently coordinating sell-in meetings with major retailers, expecting to appear on shelves by late Q1 to Q2 2026 [59] Question: Nutrition Margin Expectations - Management anticipates a steady state for nutrition margins between 46-52%, with a focus on generating revenue and subscriber growth [74]

Core Insights - dsm-firmenich reported a solid Q3 2025 with 2% organic sales growth and a significant increase in Adjusted EBITDA, despite facing challenges from foreign exchange and vitamin price volatility [2][10][3] Financial Performance - Total sales for Q3 YTD 2025 reached €9,580 million, a slight increase from €9,542 million in Q3 YTD 2024, with a 5% organic sales growth [8][10] - Adjusted EBITDA for Q3 YTD 2025 was €1,800 million, up 19% from €1,517 million in Q3 YTD 2024, with an Adjusted EBITDA margin of 18.8% [8][10] - The company anticipates a full-year Adjusted EBITDA of around €2.3 billion for 2025, reflecting a €90 million negative foreign exchange effect and a €50 million lower contribution from vitamins in Animal Nutrition & Health [3][7] Business Unit Performance - **Perfumery & Beauty**: Sales decreased by 1% to €2,959 million, with a 2% organic sales growth. Adjusted EBITDA was €652 million, down 4% [15][16] - **Taste, Texture & Health**: Sales increased by 2% to €2,495 million, with a 5% organic sales growth. Adjusted EBITDA rose by 7% to €506 million [19][20] - **Health, Nutrition & Care**: Sales fell by 5% to €1,574 million, with a 5% organic sales growth. Adjusted EBITDA increased by 7% to €288 million [22][24] - **Animal Nutrition & Health**: Sales grew by 6% to €2,533 million, with a 12% organic sales growth. Adjusted EBITDA surged by 156% to €428 million [26][28] Strategic Initiatives - The company is committed to exiting the Animal Nutrition & Health business, with the divestment process expected to conclude in Q4 2025 [4] - A share buyback program initiated on April 1, 2025, aims to repurchase ordinary shares worth €1 billion, with approximately 85% executed by October 28, 2025 [5]

Financial Data and Key Metrics Changes - The company has seen a stabilization in global net sales, with five out of the last seven quarters showing constant currency net sales growth [59] - North America experienced a significant turnaround, with July marking the first year-over-year volume growth since April 2021 [58][60] - The company is guiding for improved EBITDA margins, projecting an increase from 11.3% in 2023 to 12.7% last year, with expectations to exceed this in the current year [93] Business Line Data and Key Metrics Changes - The nutrition club model remains strong, with approximately 10,000 clubs in the U.S. and 4 million consumers engaging in around 50 million transactions [67] - The company is focusing on converting nutrition club visitors into long-term customers who purchase products for home use, which is currently a small percentage of the total visitors [70][72] Market Data and Key Metrics Changes - The company operates in 95 markets, with India being the largest market where Herbalife is perceived as a premium brand with limited competition [26] - The U.S. market is showing signs of recovery, with a focus on leveraging the existing distributor network to drive sales [61][70] Company Strategy and Development Direction - The company aims to transition into a digital-first health and wellness platform, connecting customers directly with distributors and enhancing service offerings [21][22] - Recent acquisitions, including ProveIt, Pro2col app, and Link BioSciences, are intended to enhance the company's digital capabilities and personalized nutrition offerings [37][39] Management's Comments on Operating Environment and Future Outlook - Management views the rise of GLP-1 medications as an opportunity, positioning Herbalife to support customers regardless of their weight loss choices [73][74] - The company is optimistic about future growth, particularly in the U.S. market, and is focused on building credibility through consistent performance [61][92] Other Important Information - The company has a robust forecasting process and tight control over expenses, which has contributed to exceeding EBITDA guidance for several quarters [87][88] - The company is committed to paying down debt, which is expected to enhance shareholder value significantly [93] Q&A Session Summary Question: How is the company addressing the challenges of integrating new technology with distributors? - Management indicated that many distributors are already tech-savvy and excited about new tools, which will help them engage a broader customer base [26][27] Question: What is the revenue model for the Pro2col app? - The app is expected to generate revenue through health and wellness services, product sales, and subscription models, leveraging the existing customer base [50][51] Question: How does the company plan to improve customer conversion in nutrition clubs? - The company is implementing strategies such as QR codes to engage customers and facilitate conversations about health and wellness, aiming to convert them into long-term users of Herbalife products [69][70]

Financial Data and Key Metrics Changes - The company has seen a stabilization in global net sales growth, with five out of the last seven quarters showing constant currency net sales growth [57] - North America experienced a significant turnaround, with July marking the first year-over-year volume growth since April 2021 [56][58] - The adjusted EBITDA margin improved from 11.3% in 2023 to 12.7% in the previous year, with expectations to exceed this in the current year [90] Business Line Data and Key Metrics Changes - The nutrition club model remains strong, with approximately 10,000 clubs in the U.S. and 4 million consumers participating in around 50 million transactions [64] - The company is focusing on converting nutrition club visitors into long-term customers who purchase products for home use [66] Market Data and Key Metrics Changes - The company operates in 95 markets, with India being the largest market where Herbalife is perceived as a premium brand [26] - The U.S. market is showing signs of recovery, with a focus on leveraging the existing distributor network to drive sales [58][66] Company Strategy and Development Direction - The company aims to transition into a digital-first health and wellness platform, similar to models like Airbnb and Uber, to better connect with customers and distributors [20][21] - Recent acquisitions, including ProveIt and Link BioSciences, are intended to enhance the company's digital capabilities and personalized nutrition offerings [36][38] Management's Comments on Operating Environment and Future Outlook - Management views the rise of GLP-1 medications as an opportunity to support customers in their weight loss journeys, regardless of their chosen path [70][71] - The company has a robust forecasting process and tight control over expenses, which has led to consistent guidance achievement [84][85] Other Important Information - The company is in the process of launching a health and wellness app that is expected to generate revenue and enhance customer engagement [48][49] - The app will facilitate incremental product sales and subscription revenue opportunities, although significant impacts are anticipated in 2026 rather than 2025 [55] Q&A Session Summary Question: How is the company managing guidance and revenue predictions? - The company has exceeded EBITDA guidance for six or seven consecutive quarters and maintains a robust forecasting process [84][85] Question: What is the company's stance on GLP-1 medications? - Management considers GLP-1 medications a friend, aiming to support customers regardless of their weight loss choices [70][71] Question: How does the company plan to leverage its distributor network? - The company is focused on converting nutrition club visitors into long-term customers and enhancing distributor engagement through new tools and technology [66][68]