Nu Skin Enterprises (NYSE:NUS) Q4 2025 Earnings call February 12, 2026 05:00 PM ET Company ParticipantsB.G. Hunt - VP of Treasurer and Investor RelationsDave Storms - Director of Equity ResearchJames Thomas - CFORyan Napierski - President and CEOOperatorGood day, and thank you for standing by. Welcome to the Q4 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, please press star one ...

Financial Data and Key Metrics Changes - In Q4 2025, revenue increased by 9% to $734 million, and Adjusted EPS rose by 17% to $1.15, both exceeding expectations [5][16] - For the full year, revenue reached $2.93 billion, up 9% year-over-year, and Adjusted EPS was $4.55, representing 31% growth [5][14] Business Line Data and Key Metrics Changes - Backup Care revenue grew by 17% in Q4 to $183 million, driven by strong utilization across various programs [6][17] - Full Service revenue increased by 6% in Q4 to $515 million, supported by tuition increases and modest enrollment growth [9][18] - Ed Advisory revenue rose by 10% in Q4 to $36 million, with operating margins of 30% [11][19] Market Data and Key Metrics Changes - Backup Care had double-digit growth in users among existing clients, indicating deeper penetration into the eligible population [8] - Enrollment in centers open for more than one year increased by approximately 1%, with occupancy averaging in the mid-60% range [10][18] Company Strategy and Development Direction - The company aims to scale the Backup Care business by expanding unique users and increasing usage frequency among existing clients [8] - Focus remains on serving families where they work and live, while continuing to rationalize locations that do not meet strategic criteria [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the business model and long-term growth opportunities, expecting revenue in 2026 to be between $3.075 billion and $3.125 billion [15][21] - The company anticipates adjusted EPS for 2026 to be in the range of $4.90 to $5.10 per share [15][22] Other Important Information - The company repurchased $225 million of shares in 2025, including approximately $120 million in Q4 [20] - The 2026 fiscal year marks the 40th anniversary of the company, highlighting its evolution alongside changes in workforce and employer priorities [12] Q&A Session Summary Question: Full service margin outlook and center closures - Management indicated that most closed centers were loss-making, contributing to a projected margin improvement of 25-50 basis points in the full service business for 2026 [25][26] Question: Health and safety protocols and local market risks - Management emphasized a commitment to high-quality care and strong communication with families, noting stability in client relationships despite recent incidents [28][29] Question: Pricing and enrollment growth assumptions - The company expects average price increases of approximately 4% and enrollment growth of about 100 basis points for 2026 [36] Question: New York City exposure and UPK opportunities - Management expressed confidence in their relationship with the city regarding UPK contracts and the potential for future expansion into younger age groups [39][40] Question: Backup Care growth drivers - The majority of growth is expected to come from existing clients, with a focus on increasing unique users and usage frequency [61] Question: Enrollment season and center count - Management noted a stable fall enrollment season and plans to open around 20 centers in 2026 while closing 45-50 underperforming centers [70][71]

Financial Data and Key Metrics Changes - Total company sales for 2025 were $4.5 billion, down 3%, with a decline of 1% excluding the impact of China [24][25] - Consolidated operating income was $699 million, down 10%, and operating margin was 15.7%, down 120 basis points [25] - Earnings per share were $3.61, down 12% [26] Business Line Data and Key Metrics Changes - **Water Segment**: Sales were $617 million for Q4, down 4%, with operating income of $141 million, down 8% [28][30] - **Outdoors Segment**: Sales for Q4 were $295 million, down 3%, with operating income of $42 million, down 24% [31][32] - **Security Segment**: Sales for Q4 were $166 million, up 6%, with operating income of $22 million, up 52% [33][34] Market Data and Key Metrics Changes - The Chinese market saw double-digit declines, with the company taking actions to reduce costs and reposition its business there [27][30] - U.S. housing fundamentals remain strong, but repair and remodel spending has tapered, leading to uncertain near-term demand [20][21] Company Strategy and Development Direction - The company is focused on a comprehensive profitability reset, including a 10% reduction in headquarters workforce and $60 million in continuous improvement savings [9][10] - A new CEO, Amit Banati, will take over in May, with a focus on continuing the company's transformation and growth strategies [5][6][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainty and low consumer confidence, with no near-term demand inflection expected [22][38] - The outlook for 2026 anticipates flat to 2% net sales growth, with operating income margin expected to be approximately 14.5%-15.5% [39][41] Other Important Information - The company has a strong balance sheet with net debt of approximately $2.3 billion and ample liquidity of $1.1 billion [35][36] - Free cash flow generation for the full year was $367 million, representing cash conversion of over 120% [36] Q&A Session Summary Question: What is driving the expected decline in margin despite flat to up 2% sales outlook? - Management indicated that increased tariff costs and manufacturing inflation will lead to margin compression in the first half of 2026 [48][49] Question: What makes Amit Banati the best candidate for CEO? - The board highlighted Banati's strong background in consumer-branded products and his proven leadership in delivering profitable growth [54][55] Question: How did the company approach market growth assumptions given the macro uncertainty? - Management built a conservative model for 2026, reflecting current trends without assuming a market recovery [60][61]

Financial Data and Key Metrics Changes - The company reported a 6.4% growth in FFO for Q4 2025 and a 4.3% growth for the full year, with guidance for 2026 indicating close to 6% growth at the midpoint [6][18] - FFO per share for Q4 was $1.84, reflecting a strong operational quarter, slightly below the midpoint of guidance due to a non-cash charge related to Saks' bankruptcy [18][80] - Liquidity at year-end stood at $1.3 billion, with a new $250 million delayed draw term loan enhancing financial flexibility [19] Business Line Data and Key Metrics Changes - The overall portfolio was 96.1% leased and 94.1% occupied, with leasing driving future results [6][14] - The company signed 105 comparable deals in Q4, achieving a 12% rollover, and 20 non-comparable deals at an average rate of $48.18 [7][14] - The leasing platform achieved record-breaking volumes in 2025, with the highest annual square footage leased in company history [14] Market Data and Key Metrics Changes - Strong demand for assets was noted in both historical locations and newer markets, particularly in California, which is expected to be a major growth source [6][70] - Foot traffic in the greater Washington, D.C. area increased by 3% quarterly, with annual sales moving higher year-over-year [15][17] Company Strategy and Development Direction - The company is focused on driving rent growth, disciplined expense management, and capitalizing on quality real estate for multi-year growth opportunities [14] - A total of $280 million has been allocated for new residential development, with projects expected to add over 500 units to the portfolio [10][11] - The company plans to continue its asset recycling program, targeting both residential and retail assets for sale to fund acquisitions [35][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across all categories and the ability to drive rents higher, with expectations for improved occupancy levels by the end of 2026 [15][42] - The company anticipates a temporary drag on comparable POI growth due to turnover in anchor spaces, but expects to recover and achieve growth in the mid-3% range historically [59] - The refinancing of bonds is expected to be managed efficiently, with no special dividends anticipated [49][80] Other Important Information - The company will report both NAREIT FFO and core FFO going forward to enhance comparability across periods [22] - Guidance for 2026 indicates core FFO of $7.42-$7.52 per share, representing about 5.8% growth compared to 2025 [23][25] Q&A Session Summary Question: Can you provide insight into the investment pipeline? - The company is targeting large, dominant shopping centers and expects more opportunities in the second half of the year [31] Question: How much more peripheral multifamily could be marketed for sale this year? - There are opportunities to monetize residential products, with an estimated $400 million-$500 million available for sale [35] Question: Is the pricing power driving rent increases broad-based? - Management indicated that the pricing power is broad-based, driven by high demand and limited supply across the portfolio [41] Question: Can you break down the same-store NOI growth? - The growth is driven by comparable POI growth, acquisitions, and redevelopment, with term fees expected to be slightly higher than last year [46] Question: What is the status of tenant credit and any watch list items? - The company has limited exposure to tenant credit issues, with Saks and Container Store being monitored closely [62][64] Question: What is driving the robust performance in California? - California is expected to be a major growth source due to leasing and development activity [70]

Financial Data and Key Metrics Changes - In 2025, the company closed $4.3 billion in new transactions, an increase of 87% compared to 2024, with a growing pipeline exceeding $6.5 billion by year-end [6][10] - Adjusted EPS grew by 10.2% in 2025, reaching $2.70 per share, supported by increased investment volumes and profitability [7][17] - Adjusted ROE rose to 13.4%, reflecting a 70 basis point increase from 2024, driven by higher yields and growth in fees from managed assets [18] Business Line Data and Key Metrics Changes - The company reported a 25% increase in adjusted recurring net investment income, totaling $362 million in 2025 [17] - The securitization business contributed $65 million to adjusted earnings, indicating strong performance in this area [18] - The portfolio yield improved to 8.8%, with managed assets growing 18% to $16.1 billion by the end of 2025 [19] Market Data and Key Metrics Changes - The renewables pipeline is projected to exceed $230 billion, with renewables accounting for 99% of projected capacity additions in 2026 [11] - The demand for project-level capital remains strong, with significant growth in the renewables sector, particularly in solar and storage [10][11] Company Strategy and Development Direction - The company aims to maintain a payout ratio below 50% by 2028, focusing on capital recycling to enhance growth and profitability [16][84] - The strategy includes expanding equity commitments in the CCH1 vehicle, which has been upsized by $1 billion in Q4 2025 [8][20] - The company is committed to sustainability, with a record of avoiding 1.7 million metric tons of CO2 emissions from new investments in 2025 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability objectives, with a three-year guidance extending to 2028, expecting adjusted EPS in the range of $3.50-$3.60 [15][29] - The company noted that the underlying demand for power and the cost-effectiveness of its asset classes create an attractive investing environment [10] - Management acknowledged challenges such as policy changes and market dynamics but emphasized the resilience of the business model [12] Other Important Information - The company has made significant investments in talent and technology to support future growth, exceeding $16 billion in managed assets [25] - The introduction of junior subordinated hybrid notes is expected to enhance profitability and reduce reliance on new equity issuance [7][23] Q&A Session Summary Question: 2028 outlook and growth above 10% CAGR - Management highlighted pathways to exceed guidance through increased volume, better yields, and lower debt costs [28][29] Question: 2026 outlook - Management indicated that while they do not provide specific guidance for 2026, they expect to maintain higher transaction closings than historical levels [32] Question: Change in guidance strategy - The switch to nominal EPS guidance allows for more precise adjustments in future quarters, reflecting increased confidence in business performance [39] Question: Large deals in the pipeline - Management confirmed no structural change in the business, with project sizes increasing due to market demand [42] Question: Market share and pipeline growth - Management believes they have increased market share, absorbing demand from competitors, although precise data is lacking [49][50] Question: Data center financing opportunities - Management is evaluating potential roles in the data center ecosystem but has no direct investments to report at this time [82] Question: Impact of PPA renegotiations on earnings - Positive renegotiations of PPAs are expected to enhance long-term cash flows and portfolio yield [73][76]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue grew 13% to $751 million, with organic growth of 6.6% and M&A contributing over five percentage points to the top line [31] - Full year 2025 revenues surpassed $3 billion, up 21% year over year, driven by organic growth of 10.1% and significant contributions from M&A [4][32] - Adjusted EBITDA grew 19.2% to $967 million, with an adjusted EBITDA margin of 31.7%, slightly down from 32.2% in the prior year [4][32] - Adjusted earnings per share increased by 9.5% to $1.96 [4][32] Business Line Data and Key Metrics Changes - The property business experienced a modest decline, particularly in Q4 where pricing dropped 25%-35% for large accounts [16][17] - The casualty practice had a strong year, with significant price increases in high-hazard lines exceeding 10% [18] - The delegated authority business generated $1.4 billion in revenue, accounting for 47% of total revenue, up from $700 million and 35% two years ago [8] Market Data and Key Metrics Changes - The insurance market is currently experiencing significant volatility, with rapid shifts in market sentiment [6][7] - The company noted a trend of admitted carriers stepping back into certain segments, particularly on smaller accounts [16] - The overall market conditions are expected to lead to continued pricing declines in property for 2026 [17] Company Strategy and Development Direction - The company is focused on a diversified platform to deliver innovative solutions, emphasizing the importance of specialized expertise and top talent [7][8] - A three-year restructuring program called "Empower" is being launched to improve efficiency and create headroom for additional investment [10][36] - The company has authorized a $300 million share repurchase program, reflecting confidence in its long-term outlook [12][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in property despite near-term pricing pressures, citing factors like increasing populations in cat-affected areas [17] - The company anticipates high single-digit organic revenue growth for 2026, reflecting current market conditions and continued property pricing pressures [37] - Management emphasized the importance of AI as an enabler to improve efficiency and client relationships [47][49] Other Important Information - The company completed five acquisitions in 2025, contributing to its growth strategy [5][25] - The Empower program is expected to incur a cumulative special charge of approximately $160 million through 2028, with anticipated annual savings of $80 million by 2029 [11][37] Q&A Session Summary Question: Can you elaborate on the organic growth guidance for 2026? - Management noted that property pricing declines are expected to continue, impacting overall growth guidance, which is now set at high single digits for 2026 [41][42] Question: How does the company view AI's impact on the brokerage sector? - Management views AI as an ally that will enhance efficiency and client service, emphasizing the importance of relationships and trust in the brokerage business [46][48] Question: What is the outlook for the construction segment? - The construction segment remains strong, with a robust pipeline, although macroeconomic pressures have caused delays in project timelines [51][54]

Nu Skin Enterprises (NYSE:NUS) Q4 2025 Earnings call February 12, 2026 05:00 PM ET Company ParticipantsB.G. Hunt - VP of Treasurer and Investor RelationsDave Storms - Director of Equity ResearchJames Thomas - CFORyan Napierski - President and CEOOperatorGood day, and thank you for standing by. Welcome to the Q4 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, please press star one ...

Financial Data and Key Metrics Changes - Recurring gross profits increased by 33% in 2025, with adjusted EBITDA margins expanding to 34% [5][26] - Annual recurring revenue (ARR) grew by 26%, reaching over $2 billion, while payment volume hit $195 billion [26] - GAAP operating income rose to $292 million from $16 million a year ago, driven by strong adjusted EBITDA and tight management of stock-based compensation [27][30] Business Line Data and Key Metrics Changes - SaaS ARR and subscription revenue each grew by 28% year-over-year, with SaaS ARPU in the core growing even faster than total SaaS ARPU [29] - Subscription gross profit increased by 33%, with SaaS gross margin expanding by 300 basis points year-over-year to 80% in Q4 [30] - Payments ARR grew by 24%, and fintech gross profit increased by 25% in Q4 [30] Market Data and Key Metrics Changes - The company added a record 30,000 net locations in 2025, ending the year with 164,000 locations [26] - The SaaS net retention rate remained healthy at 109% in 2025, supported by upsell and location expansion from existing customers [30] - The company continues to gain market share in its core U.S. SMB and mid-market restaurants, now powering 20% of these restaurants [8][9] Company Strategy and Development Direction - The company aims to double its market share and ARR over time, with a focus on growing market share in its core and demonstrating that new markets will be material growth drivers [8][12] - Investments in product differentiation and AI are prioritized to enhance customer adoption and drive differentiation [18][21] - The company plans to launch new products, including a drive-thru solution, to capture additional market segments [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining high growth for the next 5-10 years, with a focus on reinvesting in growth initiatives [38] - The company anticipates 20%-22% growth in recurring gross profit streams and adjusted EBITDA of $775 million-$795 million for 2026 [36] - Management highlighted the importance of disciplined capital allocation while expanding margins over time [24][35] Other Important Information - The company has repurchased approximately 8 million shares for $235 million since the inception of its buyback authorization in 2024 [35] - The company is experiencing cost pressures from higher memory chip costs, which are expected to impact margins in the second half of 2026 [36][37] Q&A Session Summary Question: SaaS ARR per location and enterprise metrics - Management confirmed confidence in mid-single-digit SaaS ARPU growth for 2026, with core SaaS ARPU growing faster than total company metrics [41][43] Question: Net adds and new verticals contribution - Management indicated that net add growth in 2026 is expected to be higher than in 2025, with new TAMs contributing significantly to this growth [47][49] Question: AI disruption and competitive landscape - Management views AI as an opportunity to enhance the platform and drive innovation rather than a threat, emphasizing the unique value Toast provides [50][54] Question: R&D investment and margin framework - Management confirmed that the margin framework allows for increased R&D investment to capitalize on AI opportunities while targeting long-term margin goals [58][62] Question: Drive-through product rollout - Management stated that the upcoming drive-through product will open up new market opportunities, particularly in enterprise [72][73]

Financial Data and Key Metrics Changes - For the full year 2025, total revenues grew by 28%, reaching $1.64 billion, more than doubling since the end of 2022 [6][23] - Adjusted EBITDA for 2025 increased by 31%, reaching $303 million, outpacing revenue growth [7][23] - System same-shop sales growth was 5.6% for the year, with Q4 same-shop sales growth at 7.7% [6][24] Business Line Data and Key Metrics Changes - New shop growth contributed 16% to overall performance, with 154 new shop openings in 2025 [6][24] - Company-operated same-shop sales growth was 9.7% in Q4, driven by strong transaction growth of 7.6% [24][28] - Company-operated contribution margin improved to 27.6% in Q4, reflecting effective cost management despite rising coffee costs [28][30] Market Data and Key Metrics Changes - System-wide average unit volumes (AUVs) reached a record $2.1 million, indicating strong shop-level economics [8][23] - The company expanded into seven contiguous states, increasing its system shop footprint to 25 states and 1,136 shops [11][12] Company Strategy and Development Direction - The company aims to reach 2,029 shops by 2029, with a clear strategy focused on expanding its shop footprint and enhancing customer experience [9][19] - A significant focus on brand awareness through paid advertising and the rollout of a consumer packaged goods (CPG) platform is expected to drive long-term growth [14][15] - The company is also enhancing its food program, which has shown promising results in terms of transaction and ticket lift [19][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate competitive pressures and maintain strong transaction growth, citing a robust value proposition [38][55] - The company anticipates continued momentum into 2026, with expectations of opening at least 181 new system shops [12][27] - Management acknowledged potential headwinds from elevated coffee costs but remains optimistic about achieving long-term margin goals [23][29] Other Important Information - The company has successfully generated free cash flow for two consecutive years, reinforcing its financial stability [32][34] - The average capital expenditure per shop decreased from $1.8 million in Q4 2024 to $1.3 million in Q4 2025, reflecting improved efficiency in shop openings [30][70] Q&A Session Summary Question: How does the company plan to protect traffic during competitive pressures? - Management highlighted the strength of their value proposition and service quality, expressing confidence in maintaining traffic despite competition [38] Question: What is the mandate for the new Chief Shops Officer? - The focus will be on supporting Broistas and enhancing operational initiatives, including the food program and mobile ordering [40] Question: What metrics are being tracked for the food program? - Management is monitoring Broista satisfaction, customer feedback, and operational metrics to assess the food program's success [46] Question: How does the company view the Clutch acquisition? - The acquisition is seen as a capital-efficient way to expand into new markets, with plans for conversion to Dutch Bros locations [59][81] Question: What is the outlook for competition in specific markets? - Management noted that they are not currently experiencing pressures on site availability or build costs, maintaining a strong position in real estate [70]

Financial Data and Key Metrics Changes - In 2025, net revenue increased by 4% year-over-year to $1.46 billion, while net income grew by 10% year-over-year to $146 million, resulting in a net income margin of 10% [5][14] - Adjusted EBITDA rose by 3% year-over-year to $369 million, representing a 25% adjusted EBITDA margin [5][14] - For Q4 2025, net revenue decreased by 1% year-over-year to $360 million, and net income fell by 10% year-over-year to $38 million, maintaining a 10% margin [14][15] Business Line Data and Key Metrics Changes - Revenue from RR&O categories declined by 6% year-over-year to $444 million, while advertising revenue from services increased by 8% year-over-year to a record $948 million [6] - Total ad clicks decreased by 7% year-over-year, with average cost per click increasing by 10% year-over-year [7] - Other revenue accelerated significantly, up 17% year-over-year, driven by growth in transaction, subscription, and data licensing revenue [7] Market Data and Key Metrics Changes - Total paying advertising locations decreased by 3% year-over-year, with a decline in RR&O offsetting growth in services [7] - App unique devices were down 2% year-over-year as consumers visited restaurants with reduced frequency [7] Company Strategy and Development Direction - The company plans to invest in three strategic initiatives in 2026, focusing on transforming the Yelp experience with AI, delivering AI tools for local businesses, and extending reach in the AI ecosystem [8][10] - The acquisition of Hatch, an AI lead management platform, is expected to enhance Yelp's capabilities in lead management and support growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment for RR&O categories remains challenging, but they are optimistic about the potential of AI to transform consumer experiences and drive engagement [23][24] - For 2026, the company expects net revenue to be in the range of $1.455 billion to $1.475 billion, with continued pressure on advertising revenue but growth in other revenue and services [19][20] Other Important Information - The company repurchased $292 million worth of shares in 2025 and authorized an additional $500 million for share repurchases in February 2026 [18] - Management aims to reduce stock-based compensation as a percentage of revenue to less than 6% by the end of 2027 [17] Q&A Session Summary Question: Environment for services and revenue outlook - Management acknowledged a softening in services demand, particularly in RR&O, but emphasized the importance of Yelp Assistant in driving engagement and monetization [23][24] Question: OpenAI agreement and its impact - Management highlighted the significance of the OpenAI agreement, noting that Yelp's high-quality content is essential for competing in local search [27][28] Question: AI transition and consumer interaction - Management discussed leveraging AI to enhance consumer experiences, including natural language search and the rollout of Yelp Assistant [33][36] Question: Hatch acquisition and growth strategy - Management expressed confidence in Hatch's growth potential and the opportunity to leverage Yelp's resources for further expansion [45][46] Question: Revenue mix evolution over five years - Management indicated a focus on diversifying revenue through SaaS offerings, with expectations for SaaS margins to converge with or exceed current ad revenue margins [48][49] Question: Stabilizing restaurant and retail advertising - Management noted the challenges faced by restaurants and retailers but expressed optimism about the potential for recovery and the role of Yelp Assistant in enhancing consumer interactions [52][53]