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What changed in NU SKIN ENTERPRISES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NU SKIN ENTERPRISES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+475 added−435 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in NU SKIN ENTERPRISES, INC.'s 2025 10-K

475 paragraphs added · 435 removed · 355 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+12 added−6 removed114 unchanged
Biggest changeYear Ended December 31, (U.S. dollars in millions) 2024 2023 2022 Nu Skin Americas $ 322.5 19 % $ 398.2 20 % $ 508.5 23 % Southeast Asia/Pacific 244.8 14 267.2 14 344.4 16 Mainland China 235.2 14 298.1 15 360.4 16 Japan 181.6 10 207.8 10 224.9 10 Europe & Africa 164.2 9 192.4 10 204.3 9 South Korea 163.7 9 236.1 12 268.7 12 Hong Kong/Taiwan 130.6 8 153.6 8 157.2 7 Other 2.9 — (0.9 ) — 4.0 — Total Nu Skin 1,445.5 83 1,752.5 89 2,072.4 93 Rhyz Manufacturing 201.4 12 181.4 9 149.5 7 Rhyz Other 85.2 5 % 35.2 2 % 3.8 — Total Rhyz 286.6 17 216.6 11 153.3 7 Total $ 1,732.1 100 % $ 1,969.1 100 % $ 2,225.7 100 % Additional comparative revenue and related financial information is presented in Note 16 to the consolidated financial statements contained in this report.
Biggest changeYear Ended December 31, (U.S. dollars in millions) 2025 2024 2023 Nu Skin Americas $ 283.0 19 % $ 322.5 19 % $ 398.2 20 % Southeast Asia/Pacific 209.8 14 244.8 14 267.2 14 Mainland China 195.6 13 235.2 14 298.1 15 Japan 174.4 12 181.6 10 207.8 10 Europe & Africa 150.2 10 164.2 9 192.4 10 South Korea 130.2 9 163.7 9 236.1 12 Hong Kong/Taiwan 117.4 8 130.6 8 153.6 8 Other 1.0 — 2.8 — (0.9 ) — Total Nu Skin 1,261.6 85 1,445.5 83 1,752.5 89 Rhyz Manufacturing 205.8 14 201.4 12 181.4 9 Rhyz Other 17.8 1 85.2 5 35.2 2 Total Rhyz 223.6 15 286.6 17 216.6 11 Total $ 1,485.2 100 % $ 1,732.1 100 % $ 1,969.1 100 % Additional comparative revenue and related financial information is presented in Note 16 to the consolidated financial statements contained in this report.
Failure to comply with good manufacturing practices could also result in product recalls. Advertising and Product Claims. Most of our major markets also regulate advertising and product claims regarding the efficacy and quality of products and require adequate and reliable scientific substantiation of all claims.
Failure to comply with good manufacturing practices could also result in product recalls. Advertising and Product Claims. Most of our major markets regulate advertising and product claims regarding the efficacy and quality of products and require adequate and reliable scientific substantiation of all product claims.
Our sales force is required to comply with work authorization and other local legal requirements prior to working in a market. Some markets, including Mainland China and Vietnam, also prohibit or restrict participation of overseas personnel or foreigners in direct selling activities.
Our sales force is required to comply with work authorization and other local legal requirements prior to working in a market. Some markets, including Mainland China, Vietnam and India also prohibit or restrict participation of overseas personnel or foreigners in direct selling activities.
The markets in which we operate all have varied regulations that distinguish foods and nutritional supplements from “pharmaceutical products.” Because of the varied regulations, some products or ingredients that are recognized as a “food” in certain markets may be treated as a “pharmaceutical” in other markets.
The markets in which we operate all have varied regulations that distinguish foods and nutritional supplements from “pharmaceutical products.” Because of the varied regulations, some products or ingredients that are recognized as “food” in certain markets may be treated as “pharmaceutical” in other markets.
Keisel has served as our Executive Vice President and President of Global Sales since March 2024. Mr. Keisel first joined our company in 1998, where for 14 years he primarily worked in roles supporting growth in our North Asia and Southeast Asia markets. In 2012, Mr.
Keisel has served as our Executive Vice President and President of Global Sales since 2024. Mr. Keisel first joined our company in 1998, where for 14 years he primarily worked in roles supporting growth in our North Asia and Southeast Asia markets. In 2012, Mr.
Our Rhyz businesses, which are reported in two segments, primarily consist of the following consumer, technology and manufacturing companies: Rhyz Manufacturing Segment: ● Elevate Nutraceuticals LLC, dba Elevate Health Sciences—a manufacturer of private-label dietary supplements. ● Ingredient Innovations International Company, dba 3i Solutions—a manufacturing technology company, making ingredients more bioavailable and shelf stable across food, beverage, supplements and personal care products. ● L&W Holdings, Inc., dba CasePak—a packaging company that consults with product developers to design and develop custom packaging. ● Wasatch Product Development, LLC—a developer and manufacturer of personal care products, dietary supplements and functional foods.
Our Rhyz businesses, which are reported in two segments, primarily consist of the following consumer, technology and manufacturing companies: Rhyz Manufacturing Segment: ● Elevate Nutraceuticals LLC, dba Elevate Health Sciences—a manufacturer of private-label dietary supplements. ● Ingredient Innovations International Company, dba 3i Solutions—a manufacturing technology company, making ingredients more bioavailable and shelf stable across food, beverage, supplements and personal care products. ● L&W Holdings, Inc., dba CasePak—a packaging company that consults with product developers to design, develop, and source packaging. ● Wasatch Product Development, LLC—a developer and manufacturer of personal care products, dietary supplements and functional foods.
In the United States, the FDA, in particular, regulates the formulation, manufacture and labeling of over-the-counter (“OTC”) drugs, cosmetics, dietary supplements, foods and medical devices such as those that we distribute. Regulation of Beauty Products in the United States.
In the United States, the FDA regulates the formulation, manufacture and labeling of over-the-counter (“OTC”) drugs, cosmetics, dietary supplements, foods and medical devices such as those that we distribute. Regulation of Beauty Products in the United States.
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 (the "SEC").
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 (the “SEC”).
During this time, we have been receiving and addressing an increased number of government reviews, inspections, and inquiries and consumer complaints in Mainland China; our ability to hold certain business meetings has been limited; and negative media coverage has spread to include additional companies, including ours. Another example occurred in 2014.
Since this time, we have been receiving and addressing an increased number of government reviews, inspections, and inquiries and consumer complaints in Mainland China; our ability to hold certain business meetings has been limited; and negative media coverage has spread to include additional companies, including ours. Another example occurred in 2014.
Under applicable direct selling regulations in Mainland China, our Pharmanex BioPhotonic Scanner , ageLOC LumiSpa , ageLOC Galvanic Facial Spa , ageLOC WellSpa iO and ageLOC Body Spa systems are registered as “health care equipment” or “household appliances,” which enables us to market and sell them through our direct sales channel in that market.
Under applicable direct selling regulations in Mainland China, our Pharmanex BioPhotonic Scanner , ageLOC LumiSpa , ageLOC Galvanic Facial Spa and ageLOC Body Spa systems are registered as “health care equipment” or “household appliances,” which enables us to market and sell them through our direct sales channel in that market.
Failure to correctly interpret and comply with the new requirements could lead to government actions against us and the associated impairment to our business.
Failure to correctly interpret and comply with the new requirements could lead to government actions against us and an associated impairment to our business.
Such a determination might prevent the use of such a claim or result in additional FDA enforcement. From time to time, there are unfavorable media reports regarding dietary supplements, which call for the repeal or amendment of DSHEA.
Such a determination might prevent the use of such a claim or result in enforcement by the FDA. From time to time, there are unfavorable media reports regarding dietary supplements, which call for the repeal or amendment of DSHEA.
Keisel returned to our company in 2019 as General Manager of our United States and Canada markets and served in that position until 2021, when he was promoted to President of our Americas region, the position he held until his March 2024 promotion. Mr. Keisel holds B.S. and M.B.A. degrees from Brigham Young University. 18 Table of Contents
Keisel returned to our company in 2019 as General Manager of our United States and Canada markets and served in that position until 2021, when he was promoted to President of our Americas region, the position he held until his 2024 promotion. Mr. Keisel holds B.S. and M.B.A. degrees from Brigham Young University. 17 Table of Contents
A product may be considered a drug if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or any function of the body (“structure/function claims”).
A product may be considered a drug or a medical device if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or any function of the body (“structure/function claims”).
It is possible that cosmetic product ingredients now commonly in use may be restricted or prohibited in the future as more is learned about such ingredients. 10 Table of Contents In recent years, the FDA has issued warning letters to many cosmetic companies alleging improper structure/function claims regarding their cosmetic products, including, for example, product claims regarding gene activity, cellular rejuvenation, and rebuilding collagen.
It is possible that cosmetic product ingredients now commonly in use may be restricted or prohibited in the future as more is learned about such ingredients. In recent years, the FDA has issued warning letters to many cosmetic companies alleging improper structure/function claims regarding their cosmetic products, including, for example, product claims regarding gene activity, cellular rejuvenation, and rebuilding collagen.
From time to time, efforts are made by some individuals or groups to repeal DSHEA. If this were to happen, significant burdens would be imposed on our product development, and the costs of running our business would increase significantly. Regulation of Wellness Products Globally.
From time to time, efforts are made by some individuals or groups to repeal DSHEA. If this were to happen, significant burdens would be imposed on our product development, and the costs of running our business would increase significantly. 11 Table of Contents Regulation of Wellness Products Globally.
He received a B.A. degree from Brigham Young University and a J.D. degree from Brigham Young University’s J. Reuben Clark Law School. 17 Table of Contents Ryan S. Napierski has served as our Company’s President since 2017 and as our CEO since 2021. Previously, he served as President of Global Sales and Operations from 2015 to 2017.
He received a B.A. degree from Brigham Young University and a J.D. degree from Brigham Young University’s J. Reuben Clark Law School. Ryan S. Napierski has served as our Company’s President since 2017 and as our CEO since 2021. Previously, he served as President of Global Sales and Operations from 2015 to 2017.
Rhyz Other Segment: ● Beauty Biosciences LLC—a beauty company that sells its products through digital and retail channels. ● LifeDNA, Inc.—a DNA assessment and recommendation technology company that we believe holds potential for our broader personalization strategy. 15 Table of Contents Until January 2025, the Rhyz Other segment additionally included MyFavoriteThings, Inc., dba Mavely, a social commerce platform.
Rhyz Other Segment: ● Beauty Biosciences LLC—a beauty company that sells its products through digital and retail channels. ● LifeDNA, Inc.—a DNA assessment and recommendation technology company that we believe holds potential for our broader personalization strategy. Until January 2025, the Rhyz Other segment additionally included MyFavoriteThings, Inc., dba Mavely, a social commerce platform.
Keisel 51 Executive Vice President and President of Global Sales Steven J. Lund has served as Executive Chairman of our board of directors since 2012. Mr.
Keisel 52 Executive Vice President and President of Global Sales Steven J. Lund has served as Executive Chairman of our board of directors since 2012. Mr.
The labeling of these products is subject to the requirements of the FDCA and the Fair Packaging and Labeling Act and other FDA regulations. Regulation of Beauty Products in Other Markets. The other markets in which we operate have similar regulations.
The labeling of these products is subject to the requirements of the FDCA and the Fair Packaging and Labeling Act and other FDA regulations. 10 Table of Contents Regulation of Beauty Products in Other Markets. The other markets in which we operate have similar regulations.
Sales Leader previews and other product introductions and promotions sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue during the quarter and skew year-over-year and sequential comparisons.
Sales Leader previews and other product introductions and promotions sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue, Customers, Paid Affiliates and Sales Leaders during the quarter and skew year-over-year and sequential comparisons.
Any amendments or waivers (including implicit waivers) regarding the Code of Conduct requiring disclosure under applicable SEC rules or NYSE listing standards will be disclosed in the same section of our website. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers as of February 14, 2025 are as follows: Name Age Position Steven J.
Any amendments or waivers (including implicit waivers) regarding the Code of Conduct requiring disclosure under applicable SEC rules or NYSE listing standards will be disclosed in the same section of our website. 16 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers as of February 14, 2026 are as follows: Name Age Position Steven J.
Our Rhyz business arm also includes two additional segments: Manufacturing and Rhyz Other. The following table sets forth the revenue for each of the segments and the Other category for the last three years.
Our Rhyz strategic investment arm also includes two additional segments: Manufacturing and Rhyz Other. The following table sets forth the revenue for each of the segments and the Other category for the last three years.
We conduct a global employee experience survey every six months to obtain our employees’ feedback, which helps to guide our human capital initiatives and to maintain robust employee engagement. Culture—A High-Performance and High-Engagement Work Environment.
We conduct a global employee experience survey every six months to obtain our employees’ feedback, which helps to guide our human capital initiatives and to maintain robust employee engagement. 15 Table of Contents Culture—A High-Performance and High-Engagement Work Environment.
In some cases it has taken us four years or longer to obtain product registrations. A pre-market process has been established for a minority of “health foods,” which allows products with only basic nutritional ingredients (some vitamins and minerals) to undergo a simplified approval process rather than the full registration process.
In some cases it has taken us four years or longer to obtain product registrations. A pre-market process has been established for a minority of “health foods,” which allows products with specifically approved nutritional ingredients (such as some vitamins and minerals) to undergo a filing process rather than the full registration process.
We believe our product launch process attracts new Customers, Paid Affiliates and Sales Leaders to our business, increases consumer trial, and provides us with important marketing and forecasting information about our products. Please refer to Item 1A. Risk Factors for more information on risks related to our product launch process.
We believe our product launch process attracts new Customers, Paid Affiliates and Sales Leaders to our business, increases consumer trial, and provides us with important marketing and forecasting information about our products. Please refer to Item 1A.
Pursuant to FSMA, the FDA is authorized, among other things, to order mandatory recalls, issue “administrative detention” orders, and revoke manufacturing facility registrations (effectively preventing the operation of a food or dietary supplement manufacturing facility), and importers of foods and nutritional supplements are subject to Foreign Supplier Verification Program requirements. 11 Table of Contents The FDA regulates dietary supplements principally under the Dietary Supplement Health and Education Act of 1994 (“DSHEA”).
Pursuant to FSMA, the FDA is authorized, among other things, to order mandatory recalls, issue “administrative detention” orders, and revoke manufacturing facility registrations (effectively preventing the operation of a food or dietary supplement manufacturing facility), and importers of foods and nutritional supplements are subject to Foreign Supplier Verification Program requirements.
Medical devices must be labeled in accordance with the FDA’s general device labeling requirements and whatever particular label requirements the FDA may designate for that type of device.
The FDA has broad regulatory powers in the areas of clinical testing, manufacturing and labeling of medical devices. Medical devices must be labeled in accordance with the FDA’s general device labeling requirements and whatever particular label requirements the FDA may designate for that type of device.
As is the case with most companies in our industry, we receive inquiries from time to time from government regulatory authorities regarding the nature of our business and other issues, such as compliance with local direct selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws. 8 Table of Contents Direct Selling Regulations Direct selling is regulated by various national, state and local government agencies in the United States and foreign markets.
As is the case with most companies in our industry, we receive inquiries from time to time from government regulatory authorities regarding the nature of our business and other issues, such as compliance with local direct selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws.
The laws and regulations in our current markets generally: ● impose requirements related to order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers; ● require us, or our sales force, to register with government agencies; ● impose limits on the amount and type of sales compensation we can pay; ● impose reporting requirements; and ● require that our sales force is compensated for sales of products and not for recruiting others.
The laws and regulations in our current markets generally: ● impose requirements related to order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers; ● require us, or our sales force, to register with government agencies; ● impose limits on the amount and type of sales compensation we can pay; ● impose reporting requirements; and ● require that our sales force is compensated for sales of products and not for recruiting others. 8 Table of Contents The laws and regulations governing direct selling may be modified or reinterpreted from time to time, which may cause us to modify our sales compensation and business models.
Lund 71 Executive Chairman of the Board Ryan S. Napierski 51 President and Chief Executive Officer James D. Thomas 46 Executive Vice President and Chief Financial Officer Chayce D. Clark 42 Executive Vice President and General Counsel Steven K. Hatchett 53 Executive Vice President and Chief Product Officer Justin S.
Lund 72 Executive Chairman of the Board Ryan S. Napierski 52 President and Chief Executive Officer James D. Thomas 47 Executive Vice President and Chief Financial Officer Chayce D. Clark 43 Executive Vice President and General Counsel Steven K. Hatchett 54 Executive Vice President and Chief Product Officer Justin S.
The FTC could initiate an enforcement action to the extent the FTC determines that our advertising or promotional practices are deceptive or contrary to the requirements of the consent decrees. Regulation of Medical Devices. In 2014, our Nu Skin Facial Spa device was cleared for marketing through the 510(k) process with the FDA as a medical device with cosmetic benefit.
The FTC could initiate an enforcement action to the extent the FTC determines that our advertising or promotional practices are deceptive or contrary to the requirements of the consent decrees. Regulation of Medical Devices. Our Nu Skin Facial Spa and Nu Skin RenuSpa iO devices were cleared for marketing through the FDA’s 510(k) process.
Most of the other markets in which we operate have not adopted legislation like DSHEA, and we may be subject to more restrictive limitations on the claims we can make about our products in these markets. For example, in Japan, our nutritional supplements are marketed as food products, which significantly limits our ability to make claims regarding these products.
Most of the other markets in which we operate have not adopted legislation like DSHEA, and we may be subject to more restrictive limitations on the claims we can make about our products in these markets.
If marketing materials produced or used by us or our sales force globally make claims that exceed the scope of allowed claims for nutritional supplements, the FDA or other regulatory authorities could deem our products to be unapproved drugs. In Mainland China, we also face significant restrictions on our ability to make product claims regarding the efficacy of our products.
If marketing materials produced or used by us or our sales force make claims that exceed the scope of allowed claims for nutritional supplements, the FDA or other regulatory authorities could deem our products to be unapproved drugs.
All of our full- and part-time employees are responsible for upholding the Nu Skin Code of Conduct and for striving to follow the Nu Skin Way, our global culture aspiration, which includes the following principles: ● A force for good ● Accountable and empowered ● Bold innovators ● Customer obsessed ● Direct and decisive ● Exceptional ● Fast speed ● One global team Inclusion.
All of our full- and part-time employees are responsible for upholding the Nu Skin Code of Conduct and for striving to follow the Nu Skin Way, our global culture aspiration, which includes the following principles: ● Force for good ● Own it ● Innovate ● All in ● Lead ● One global team ● Customer obsessed Inclusion.
Failure to respond timely to FDA inspection observations, a warning letter or other notice of noncompliance and to promptly come into compliance could result in the FDA bringing enforcement action against us, which could include the shutdown of our production facilities, denial of importation rights to the United States for products manufactured in overseas locations and criminal and civil fines. 14 Table of Contents Our Pharmanex BioPhotonic Scanner and our current and future device products may be subject to the regulations of various health, consumer-protection and other government authorities around the world.
Failure to respond timely to FDA inspection observations, a warning letter or other notice of noncompliance and to promptly come into compliance could result in the FDA bringing enforcement action against us, which could include the shutdown of our production facilities, denial of importation rights to the United States for products manufactured in overseas locations and criminal and civil fines.
This implementation creates a greater burden for cosmetic manufacturer facility registration and audits, mandates product notifications for cosmetics, and mandates the reporting of serious adverse events to the FDA. Rollout of MoCRA is expected to continue for the coming years.
In 2024, the FDA began implementing portions of the Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”). This implementation creates a greater burden for cosmetic facility registration and audits, mandates product notifications for cosmetics, allergen labeling declarations, and mandates the reporting of serious adverse events to the FDA. Rollout of MoCRA is expected to continue for the coming years.
There is often ambiguity and uncertainty with respect to the state of direct selling and anti-pyramiding laws and regulations. In the United States, for example, federal law provides law enforcement agencies, such as the Federal Trade Commission (“FTC”), broad latitude in policing unfair or deceptive trade practices, but does not provide a bright-line test for identifying a pyramid scheme.
In the United States, for example, federal law provides law enforcement agencies, such as the Federal Trade Commission (“FTC”), broad latitude in policing unfair or deceptive trade practices, but does not provide a bright-line test for identifying a pyramid scheme.
In connection with investigations that occurred in the 1990s of certain alleged unsubstantiated product and earnings claims made by our Brand Affiliates, we entered into two consent decrees with the FTC and various agreements with state regulatory agencies.
Any action in the future by the FTC could materially and adversely affect our ability to successfully market our products in the United States. 13 Table of Contents In connection with investigations that occurred in the 1990s of certain alleged unsubstantiated product and earnings claims made by our Brand Affiliates, we entered into two consent decrees with the FTC and various agreements with state regulatory agencies.
In some circumstances, the regulations in foreign markets may require us to obtain regulatory approval prior to introduction of a new product or limit our use of certain ingredients altogether. 12 Table of Contents Because of negative publicity associated with some adulterated or misbranded supplements, including pharmaceutical drugs marketed as dietary supplements, there has been an increased movement in the United States and other markets to expand the regulation of dietary supplements, which could lead to additional restrictions or requirements in the future.
Because of negative publicity associated with some adulterated or misbranded supplements, including pharmaceutical drugs marketed as dietary supplements, there has been an increased movement in the United States and other markets to expand the regulation of dietary supplements, which could lead to additional restrictions or requirements in the future.
In the United States, the FDA generally prohibits disease diagnosis, prevention and treatment claims when made for a dietary supplement. DSHEA, however, permits substantiated, truthful and non-misleading “statements of nutritional support” to be included in labeling for dietary supplements without FDA pre-approval.
DSHEA, however, permits substantiated, truthful and non-misleading “statements of nutritional support” to be included in labeling for dietary supplements without FDA pre-approval.
These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.
Direct Selling Regulations Direct selling is regulated by various national, state and local government agencies in the United States and foreign markets. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.
In most of our foreign markets, we are typically not able to make any “medicinal” claims with respect to our wellness products. In some cases, such regulations may limit our ability to inform consumers of some of the benefits our products offer.
In most of our foreign markets, we are typically not able to make any “medicinal” claims with respect to our wellness products.
No assurance can be given that the FTC will not question our advertising or other operations in the United States in the future. Any action in the future by the FTC could materially and adversely affect our ability to successfully market our products in the United States.
No assurance can be given that the FTC will not question our advertising or other operations in the United States in the future.
In South Korea, all “functional” cosmetics are required to either undergo examination by or be reported to the Ministry of Food and Drug Safety. The sale of cosmetic products is regulated in the European Union (the “EU”) under the EU Cosmetics Regulation, which requires a uniform application for foreign companies placing finished beauty products on the European market.
The sale of cosmetic products is regulated in the European Union (the “EU”) under the EU Cosmetics Regulation, which requires a uniform application for foreign companies placing finished beauty products on the European market.
We compete in these markets by emphasizing the innovation, value and premium quality of our products and the reach, convenience and customer servicing of our distribution system. The personal touch our sales force provides is a key differentiator in our approach to sharing products with and retaining consumers.
We compete in these markets by emphasizing the innovation, value and premium quality of our products and the reach, convenience and customer servicing of our distribution system.
Violations, alleged violations, or negative media attention related to our compliance with these restrictions could harm consumers’ perception of our business and products and could negatively impact the registration, licensing status and sales of our products. 13 Table of Contents The FTC, which exercises primary jurisdiction over the advertising of all of our products in the United States, has instituted enforcement actions against dietary supplement, food, and cosmetic companies for, among other things, deceptive advertising and lack of adequate scientific substantiation for claims.
The FTC, which exercises primary jurisdiction over the advertising of all of our products in the United States, has instituted enforcement actions against dietary supplement, food, and cosmetic companies for, among other things, deceptive advertising and lack of adequate scientific substantiation for claims.
As a result, we often must modify the ingredients and/or the levels of ingredients in our products for certain markets or create unique formulations for multiple markets.
As a result, we often must modify the ingredients and/or the levels of ingredients in our products for certain markets or create unique formulations for multiple markets. In some circumstances, the regulations in foreign markets may require us to obtain regulatory approval prior to the introduction of a new product or limit our use of certain ingredients altogether.
We believe an inclusive work environment allows us to benefit from unique perspectives and provides vitality, creativity, new ideas and growth. We are committed to being a force for good as we seek, develop, and empower diverse individuals and perspectives. We aspire to be a global community where every employee, entrepreneur, and consumer knows and feels they belong.
We believe an inclusive work environment allows us to benefit from unique perspectives and provides vitality, creativity, new ideas and growth. We aspire to be a global community where every employee, entrepreneur, and consumer knows and feels they belong. We have established employee resource groups to help ensure that under-represented populations feel welcome at Nu Skin .
In addition to rewarding performance, incentive trips provide Sales Leaders and the company opportunities to share best practices, set goals, generate alignment of Sales Leaders around key initiatives, and provide a high level of motivation and team building. 7 Table of Contents Product Launch Process 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.
Product Launch Process 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.
Foreign jurisdictions may take note of the fact that we have registered a medical device in the United States and require us to register in their market as well. The FDA has broad regulatory powers in the areas of clinical testing, manufacturing and labeling of medical devices.
Medical devices are highly regulated by the FDA. Manufacturers of medical devices must register and list their products with the FDA annually, whether they are located domestically or overseas. Foreign jurisdictions may take note of the fact that we have registered a medical device in the United States and require us to register in their market as well.
In the United States, the regulation of cosmetic content and labeling is under the primary jurisdiction of the FDA.
In the United States, the regulation of cosmetic content and labeling is under the primary jurisdiction of the FDA. Cosmetics are not subject to pre-market approval by the FDA, but their ingredients and labeling content are regulated by the FDA.
We face a risk that future investigations and other regulatory actions may result in fines, revocation of licenses or other significant sanctions. 9 Table of Contents Several markets, including Mainland China, South Korea, Indonesia and Vietnam, impose limits on the amount of sales compensation we can pay to our sales force.
Several markets, including Mainland China, South Korea, Indonesia and Vietnam, impose limits on the amount of sales compensation we can pay to our sales force.
We compete with these companies to attract and retain our sales force and consumers based on the strength of our product offerings, sales compensation, multiple business opportunities, management and international operations. RHYZ COMPANIES In addition to our core Nu Skin business, we also explore new areas of synergistic and adjacent growth through our business arm known as Rhyz Inc.
RHYZ COMPANIES In addition to our core Nu Skin business, we also explore new areas of synergistic and adjacent growth through our strategic investment arm known as Rhyz Inc.
GEOGRAPHIC REGIONS We currently sell and distribute our Nu Skin business’s products in nearly 50 markets.
Risk Factors for more information on risks related to our product launch process. 7 Table of Contents GEOGRAPHIC REGIONS We currently sell and distribute our Nu Skin business’s products in nearly 50 markets.
Cosmetics are not subject to pre-market approval by the FDA, but their ingredients and their label and labeling content are regulated by the FDA, and those who sell cosmetics have the burden to ensure that they are safe for use as directed and not adulterated or misbranded.
Those who sell cosmetics have the burden to ensure their products are safe for use as directed and not adulterated or misbranded. The labeling of cosmetic products is subject to the requirements of the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Fair Packaging and Labeling Act and other FDA regulations.
This does not include approximately 8,200 sales employees in our Mainland China operations. Although we have statutory employee representation obligations in certain markets, our employees are generally not represented by labor unions except where expressly required by law.
We have statutory employee representation obligations in certain markets, and our employees are represented by labor unions where expressly required by law, including in Mainland China where substantially all of our employees are registered as members of the required labor union in that market.
Direct Selling We compete with other direct selling companies, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. Leading global direct selling companies include Amway, Natura & Co and Herbalife. We also compete with local direct selling companies in the markets in which we operate.
The personal touch our sales force provides is a key differentiator in our approach to sharing products with and retaining consumers. 14 Table of Contents Direct Selling We compete with other direct selling companies, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do.
These voluntary measures and the adverse publicity had a significant negative impact on our business.
These voluntary measures and the adverse publicity had a significant negative impact on our business. We face a risk that future investigations and other regulatory actions may result in fines, revocation of licenses or other significant sanctions.
We have implemented policies that are designed to comply with these regulations and inform our sales force regarding the types of activities that are not permitted. However, we cannot ensure that actions of our sales force will not violate local laws or regulations or our policies. Please refer to Item 1A.
We cannot ensure that actions of our sales force will not violate local laws or regulations. 9 Table of Contents Please refer to Item 1A. Risk Factors for more information on regulatory and other risks associated with our business.
The laws and regulations governing direct selling may be modified or reinterpreted from time to time, which may cause us to modify our sales compensation and business models. In almost all of our markets, regulations are subject to discretionary interpretation by regulators and judicial authorities.
In almost all of our markets, regulations are subject to discretionary interpretation by regulators and judicial authorities. There is often ambiguity and uncertainty with respect to the state of direct selling and anti-pyramiding laws and regulations.
As previously announced, we sold this business in January 2025. Mavely accounted for $69.6 million of our 2024 reported revenue. In 2024, the Rhyz companies generated $286.6 million, or 17%, of our 2024 reported revenue (excluding sales to our core Nu Skin business).
As previously announced, we sold this business in January 2025. Mavely accounted for $69.6 million of our 2024 reported revenue. Also as previously announced, we are currently evaluating strategic opportunities with LifeDNA, including potentially divesting it, to maximize our return on investment.
We established “The Best You” wellness program in the United States to improve the quality of each employee’s physical, emotional, intellectual and financial wellness by encouraging and incentivizing healthy lifestyle practices through health screenings, prevention programs and education. Our employees also receive free product benefits, including our wellness products.
From time to time, we implement employee wellness programs to raise awareness of and encourage healthy lifestyle practices in the areas of physical, emotional, intellectual and /or financial wellness. Where possible, our employees receive free product benefits, including our wellness products.
Rhyz is a key component of our business, and these companies enable us to reduce our cost of goods, improve lead times, diversify our revenue mix, and create synergies for our owned and partner brands. HUMAN CAPITAL RESOURCES As of December 31, 2024, we had approximately 3,100 full- and part-time employees worldwide.
In 2025, the Rhyz companies generated $223.6 million, or 15%, of our 2025 reported revenue (excluding sales to our core Nu Skin business). Rhyz is a key component of our business, and these companies enable us to optimize our cost of goods, improve lead times, diversify our revenue mix, and create synergies for our brands.
We have established employee resource groups to help ensure that under-represented populations feel welcome at Nu Skin, including people of color, women and LGBTQIA+ individuals. Our Healthy Workplace Policy also aims to cultivate a culture of mutual respect and to provide all employees a work environment free from harassment, discrimination and unprofessional behavior.
Our Healthy Workplace Policy also aims to cultivate a culture of mutual respect and to provide all employees a work environment free from harassment, discrimination and unprofessional behavior. Our employees receive training on their responsibility in this important area, and we regularly communicate with employees about the process to report concerns.
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Risk Factors for more information on regulatory and other risks associated with our business.
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In addition to rewarding performance, incentive trips provide Sales Leaders and the company opportunities to share best practices, set goals, generate alignment of Sales Leaders around key initiatives, and provide a high level of motivation and team building.
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The labeling of cosmetic products is subject to the requirements of the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Fair Packaging and Labeling Act and other FDA regulations. In 2024, the FDA began implementing portions of the Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”).
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During the fourth quarter of 2025, we began pre-market activities in India, setting the operational foundation and infrastructure ahead of a full market opening anticipated in the back half of 2026. Our financial results and key performance indicators for this market, which are included in our Southeast Asia/Pacific segment in this report, were insignificant for 2025.
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More recently, our RenuSpa iO device was cleared for marketing through the FDA’s 510(k) process. Medical devices are highly regulated by the FDA. Manufacturers of medical devices must register and list their products with the FDA annually, whether they are located domestically or overseas.
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In South Korea, only cosmetics that either underwent examination by or have been reported to the Ministry of Food and Drug Safety as functional cosmetics can be claimed and advertised as “functional” cosmetics.
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During 2024, we engaged in restructuring initiatives, in which we canceled some open job positions and reduced our employee headcount to enable us to operate more efficiently. Developing our employees and keeping them engaged is crucial.
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The FDA regulates dietary supplements principally under the Dietary Supplement Health and Education Act of 1994 (“DSHEA”).
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Our employees receive training on their responsibility in this important area, and we make a Healthy Workplace Hotline available for employees to report concerns anonymously. We also incorporate inclusion practices into our hiring process. We conduct training to create awareness of unintentional biases that may be present in the hiring process.
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In some cases, such regulations may limit our ability to inform consumers of some of the benefits our products offer. 12 Table of Contents In the United States, the FDA generally prohibits disease diagnosis, prevention and treatment claims when made for a dietary supplement.
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We work to ensure the wording of our job postings is inclusive and utilize multiple broad-based candidate search engines to expand our talent pools and increase our access to diverse candidates. 16 Table of Contents Employee Health and Well-Being. Our employees’ health and well-being is an essential component of our human capital management strategy.
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For example, in Japan, most of our nutritional supplements are marketed as food products, which significantly limits our ability to make claims regarding these products.
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In Mainland China and Europe, we also face significant restrictions on our ability to make product claims regarding the efficacy of our products. Violations, alleged violations, or negative media attention related to our compliance with these restrictions could harm consumers’ perception of our business and products and could negatively impact the registration, licensing status and sales of our products.
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Our Pharmanex BioPhotonic Scanner, Prysm iO, and future device products may be subject to the regulations of various health, consumer-protection and other government authorities around the world.
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Leading global direct selling companies include Amway, Natura & Co and Herbalife. We also compete with local direct selling companies in the markets in which we operate. We compete with these companies to attract and retain our sales force and consumers based on the strength of our product offerings, sales compensation, multiple business opportunities, management and international operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operating results have been and could be adversely affected if our business opportunities, platforms, products and other initiatives do not generate sufficient enthusiasm and economic benefit to retain our existing consumers and sales force or to attract new consumers and sales force members. 24 Table of Contents Factors affecting the attractiveness of our business opportunities, platforms, products and other initiatives include, among other things, shifting consumer demands, perceived product quality and value, similarities to other products, product exclusivity or effectiveness, growth of the gig economy, disruption of retail commerce and e-commerce by social commerce, demographic trends, the strength of our brand and public image, growth of connected commerce, sustainability factors, diversity and inclusion initiatives, economic competitiveness of our business opportunity in the marketplace, perceived ability of potential affiliates to succeed in our business opportunity, accepted methods of selling products to customers in the affiliate and member-based platform environment, the quality and accuracy of the data we use in running our business, our technology infrastructure and capabilities, restrictions in social or digital media for sharing products and attracting consumers, adverse media attention and regulatory restrictions on claims.
Biggest changeFactors affecting the attractiveness of our business opportunities, platforms, products and other initiatives include, among other things, shifting consumer demands, perceived product quality and value, similarities to other products, product exclusivity or effectiveness, growth of the gig economy and influencer marketing, disruption of retail commerce and e-commerce by social commerce, the increasing prominence of third-party online product marketplaces, demographic trends, the strength of our brand and public image, growth of connected commerce, sustainability factors, diversity and inclusion initiatives, economic competitiveness of our business opportunity in the marketplace, perceived ability of potential affiliates to succeed in our business opportunity, accepted methods of selling products to customers in the affiliate and member-based platform environment, the quality and accuracy of the data we use in running our business, our technology infrastructure and capabilities, restrictions in social or digital media for sharing products and attracting consumers, adverse media attention, regulatory restrictions on claims and the ease of new startup entrepreneurship via artificial intelligence platforms.
The NPR proposes to prohibit multi-level marketers from making deceptive earnings claims, and it would require them to have written substantiation to back up any earnings claims and make that substantiation available to consumers upon request. The ANPR indicates that the FTC is considering additional restrictions on earnings claims and recruiting by multi-level marketers.
The NPR proposes to prohibit multi-level marketers from making deceptive earnings claims, and it would require them to have written substantiation to back up any earnings claims and make that substantiation available to consumers upon request. The ANPR indicates that the FTC is considering additional restrictions on earnings claims and recruiting by multi-level marketers.
For example, in 2021, the FTC sent a notice to more than 1,100 companies, including us, that outlined several practices that the FTC determined to be unfair or deceptive in prior administrative cases. These practices relate to earnings claims, other money-making opportunity claims, and endorsements and testimonials.
For example, in 2021, the FTC sent a notice to more than 1,100 companies, including us, that outlined several practices that the FTC determined to be unfair or deceptive in prior administrative cases. These practices relate to earnings claims, other money-making opportunity claims, and endorsements and testimonials.
Risks Associated with Epidemics and Other Widespread Crises Epidemics and other crises have negatively impacted our business and may do so in the future.
Risks Associated with Epidemics and Other Widespread Crises Epidemics and other crises have negatively impacted our business and may do so in the future.
The expansion of our Rhyz business into new businesses has been viewed negatively by some of our Sales Leaders as these new companies sell products that are similar to those of our core business and are viewed as using our resources for non-core businesses.
The expansion of our Rhyz business into new businesses has been viewed negatively by some of our Sales Leaders as some of these new companies sell products that are similar to those of our core business and are viewed as using our resources for non-core businesses.
In other cases, the removal or reduction of a technical ingredient, such as various types of parabens, leads to a significant change to the character of the product that may make it no longer desirable or safe to the consumer.
In other cases, the removal or reduction of a technical ingredient, such as various types of parabens, leads to a significant change in the character of the product that may make it no longer desirable or safe to the consumer.
Such a determination could restrict our ability to import or sell the product in such market until registration or clearance is obtained.
Such a determination could restrict our ability to import or sell the product in such a market until registration or clearance is obtained.
In particular, maintaining compliance with these and other evolving regulations and requirements around the world has required changes to our information system architecture, data transfer and data storage processes.
In particular, maintaining compliance with these and other evolving regulations and requirements around the world has required changes to our information system architecture and data transfer and data storage processes.
These risks include the following: Risks Associated with Direct Selling and Our Sales Force ● Challenges to the form of our network marketing system or to our business practices have harmed and could continue to harm our business. ● Direct selling laws and regulations vary globally, are subject to interpretation or change, and may prohibit or severely restrict direct selling and cause our revenue and profitability to decline. ● Improper sales force actions could harm our business. ● Social media platforms’ decisions to prohibit, block or decrease the prominence of our sales force’s content could harm our business. ● If our business practices or policies or the actions of our sales force are deemed to be in violation of applicable local regulations regarding foreigners, then we could be sanctioned and/or required to change our business model, which could significantly harm our business. ● Our sales compensation plans or other incentives could be viewed negatively by some of our sales force, could be restricted by government regulators, and could fail to achieve desired long-term results and have a negative impact on revenue. ● Limits on the amount of sales compensation we pay could inhibit our ability to attract and retain our sales force, negatively impact our revenue and cause regulatory risks. ● We may be held responsible for certain taxes, assessments and other requirements relating to the activities of our sales force, which could harm our financial condition and operating results.
These risks include the following: Risks Associated with Direct Selling and Our Sales Force ● Challenges to the form of our network marketing system or to our business practices have harmed and could continue to harm our business. ● Direct selling laws and regulations vary globally, are subject to interpretation or change, and may prohibit or severely restrict direct selling and cause our revenue and profitability to decline. ● Improper sales force actions could harm our business. ● Social media platforms’ decisions to prohibit, block or decrease the prominence of our sales force’s content could harm our business. ● If our business practices or policies or the actions of our sales force are found to be in violation of applicable local regulations regarding foreigners, then we could be sanctioned and/or required to change our business model, which could significantly harm our business. ● Our sales compensation plans or other incentives could be viewed negatively by some of our sales force, could be restricted by government regulators, and could fail to achieve desired long-term results and have a negative impact on revenue. ● Limits on the amount of sales compensation we pay could inhibit our ability to attract and retain our sales force, negatively impact our revenue and cause regulatory risks. ● We may be held responsible for certain taxes, assessments and other requirements relating to the activities of our sales force, which could harm our financial condition and operating results.
Moreover, some social marketplace platforms reduce visibility of product offers or posts based on pricing, degree of brand awareness or other factors that could apply to our products. Additional social media platforms’ adoption of similar or stricter policies could significantly hamper our sales force’s ability to promote our products and attract consumers, which could cause our revenue to decline.
Moreover, some social media platforms reduce visibility of product offers or posts based on pricing, degree of brand awareness or other factors that could apply to our products. Additional social media platforms’ adoption of similar or stricter policies could significantly hamper our sales force’s ability to promote our products and attract consumers, which could cause our revenue to decline.
Many other jurisdictions, including California and Mainland China, have increased enforcement of laws and regulations that have recently taken effect. In addition, the FTC has taken an increasingly active approach to enforcing data privacy in the U.S. and has launched investigations and taken action against several large private companies over their data privacy practices in the past year.
Many jurisdictions, including California and Mainland China, have increased enforcement of laws and regulations that have recently taken effect. In addition, the FTC has taken an increasingly active approach to enforcing data privacy in the U.S. and has launched investigations and taken action against several large private companies over their data privacy practices in the past year.
We have incurred additional asset impairments, most recently in the fourth quarter of 2024 when we wrote down $29 million of information technology assets. As we continue to re-architect legacy systems and roll out new tools, we face the possibility of further costs, delays, or disruptions.
We have incurred additional asset impairments, most recently in the fourth quarter of 2024 when we wrote down $29.4 million of information technology assets. As we continue to re-architect legacy systems and roll out new tools, we face the possibility of further costs, delays, or disruptions.
If this trend in new regulations continues, we may find it necessary to alter some of the ways we have traditionally marketed our products in order to stay in compliance with a changing regulatory landscape and this could add to the costs of our operations and/or have an adverse impact on our business.
If this trend in new regulations continues, we may find it necessary to alter some of the ways we have traditionally marketed our products to stay in compliance with a changing regulatory landscape and this could add to the costs of our operations and/or have an adverse impact on our business.
Such a repeal would result in significant burdens to our product development, and the costs of running our business would increase significantly. We face similar pressures in our other markets, which continue to set restrictions on ingredients and their acceptable maximum levels, as well as on ingredient characterization, quality and levels.
Such a repeal would result in significant burdens for our product development, and the costs of running our business would increase significantly. We face similar pressures in our other markets, which continue to set restrictions on ingredients and their acceptable maximum levels, as well as on ingredient characterization, quality and levels.
We collect, transmit and/or store large volumes of company, employee, sales force, customer and guest data, including payment card information, personally identifiable information, health-related data, biometric information and other personal information, for business purposes, including for transactional and promotional purposes, and our various information technology systems enter, process, summarize, report and transmit such data.
We collect, transmit and/or store large volumes of company, employee, sales force, customer and guest data, including payment card information, personally identifiable information, health-related data, biometric information and other sensitive personal information, for business purposes, including for transactional and promotional purposes, and our various information technology systems enter, process, summarize, report and transmit such data.
Federal Trade Commission (“FTC”) and other direct selling companies and guidance from the FTC have addressed inappropriate earnings and lifestyle claims, problematic compensation structures and the importance of focusing on consumers. These developments have created ambiguity as to the proper interpretation of the law and related court decisions.
Federal Trade Commission (“FTC”) and other direct selling companies, as well as guidance from the FTC, have addressed inappropriate earnings and lifestyle claims, problematic compensation structures and the importance of focusing on consumers. These developments have created ambiguity as to the proper interpretation of the law and related court decisions.
They have also become more restrictive on permitted contaminant levels in ingredients and, in many cases, have forced complete removal of such contaminants. In certain cases, such as regarding some pesticides which are virtually ubiquitous in nature, it has proven difficult to comply with the requirements.
They have also become more restrictive regarding the permitted contaminant levels in ingredients and, in many cases, have forced complete removal of such contaminants. In certain cases, such as some pesticides which are virtually ubiquitous in nature, it has proven difficult to comply with the requirements.
Although we take measures to protect the security, integrity, accessibility and confidentiality of our data systems, we experience cyberattacks of varying degrees and types on a regular basis. Although we use best efforts to detect and investigate all cyberattacks and data security incidents, it may be difficult to determine its scope of impact.
Although we take measures to protect the security, integrity, accessibility and confidentiality of our data systems, we experience cyberattacks of varying degrees and types on a regular basis. Although we use best efforts to detect and investigate all cyberattacks and data security incidents, it may be difficult to determine the scope of impact.
For example, the European Union’s Packaging and Packaging Waste Regulation, which was adopted in December 2024, with some of its provisions becoming effective beginning in August 2026, regulates what kind of packaging can be placed on the EU market, as well as packaging waste management and prevention measures.
For example, the European Union’s Packaging and Packaging Waste Regulation, which was adopted in 2024, with some of its provisions becoming effective beginning in August 2026, regulates what kind of packaging can be placed on the EU market, as well as packaging waste management and prevention measures.
For example, in March 2024, a regulation of the U.S. Department of Labor went into effect that alters the employee vs. independent contractor analysis under the Fair Labor Standards Act in a way that could potentially cause more workers to be classified as employees.
For example, in 2024, a regulation of the U.S. Department of Labor went into effect that alters the employee vs. independent contractor analysis under the Fair Labor Standards Act in a way that could potentially cause more workers to be classified as employees.
Difficult economic conditions could harm our business. Difficult economic conditions, such as high unemployment levels, inflation, deflation, or recession, have in the past, and could continue to, adversely affect our business by causing a decline in demand for our products, particularly if the economic conditions are prolonged or worsen.
Difficult economic conditions, such as high unemployment levels, inflation, deflation, or recession, have in the past, and could continue to, adversely affect our business by causing a decline in demand for our products, particularly if the economic conditions are prolonged or worsen.
Over the past several years, the environment for direct selling has become increasingly difficult due to customer trends, increased competition from other affiliate marketing and gig economy businesses, and a stricter regulatory environment across many of our markets.
Over the past several years, the environment for direct selling has become increasingly difficult due to customer trends, increased competition from other affiliate marketing, influencer and gig economy businesses, and a stricter regulatory environment across many of our markets.
Various government agencies throughout the world regulate direct sales practices. Laws and regulations in the United States, Japan, South Korea, Vietnam and Mainland China are particularly stringent and subject to broad discretion in enforcement by regulators.
Various government agencies throughout the world regulate direct sales practices. Laws and regulations in the United States, Japan, South Korea, Vietnam, India and Mainland China are particularly stringent and subject to broad discretion in enforcement by regulators.
For example, Washington’s “My Health, My Data” law creates a private right of action for non-compliance. ● Artificial intelligence (“AI”)—If we introduce AI technologies into new or existing offerings or back-office functions, it may result in new or expanded risks and liabilities due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, and data privacy and security risks, all of which could adversely affect our business, reputation, and financial results.
For example, Washington’s “My Health, My Data” law creates a private right of action for non-compliance. ● Artificial intelligence (“AI”)—As we introduce AI technologies into new or existing offerings or back-office functions, it may result in new or expanded risks and liabilities due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, and data privacy and security risks, all of which could adversely affect our business, reputation and financial results.
Risks Associated with Our Operations in Mainland China ● Our operations in Mainland China are subject to significant government scrutiny, and we could be subject to fines or other penalties. ● If direct selling regulations in Mainland China are modified, interpreted or enforced in a manner that results in negative changes to our business model or the imposition of a range of potential penalties, our business could be significantly negatively impacted. ● Our ability to expand our business in Mainland China could be negatively impacted if we are unable to obtain additional necessary national and local government approvals in Mainland China. ● If we are not able to register products for sale in Mainland China, our business could be harmed.
Risks Associated with Our Operations in Mainland China ● Our operations in Mainland China are subject to significant government scrutiny, and we could be subject to fines, operational restrictions or other penalties. ● If direct selling regulations in Mainland China are modified, interpreted or enforced in a manner that results in negative changes to our business model or the imposition of a range of potential penalties, our business could be significantly negatively impacted. ● Our ability to expand our business in Mainland China could be negatively impacted if we are unable to obtain additional necessary national and local government approvals in Mainland China. ● If we are not able to register products for sale in Mainland China, our business could be harmed.
These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may be disclosed to or otherwise become known or be independently developed by competitors.
These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may be disclosed to, become known by or be independently developed by competitors.
All of these actions and any future scrutiny of us or our industry could generate negative publicity or further regulatory actions that could result in fines, restrict our ability to conduct our business in our various markets, enter into new markets, motivate our sales force and attract consumers. 21 Table of Contents Direct selling laws and regulations vary globally, are subject to interpretation or change, and may prohibit or severely restrict direct selling and cause our revenue and profitability to decline.
All of these actions and any future scrutiny of us or our industry could generate negative publicity or further regulatory actions that could result in fines, restrict our ability to conduct our business in our various markets, enter into new markets, motivate our sales force and attract consumers. 20 Table of Contents Direct selling laws and regulations vary globally, are subject to interpretation or change, and may prohibit or severely restrict direct selling and cause our revenue and profitability to decline.
Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected to comply with the standards set in the prior administrative cases and could incur significant civil penalties if they or their representatives fail to do so. 22 Table of Contents We implement strict policies and procedures to help ensure our sales force complies with legal requirements.
Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected to comply with the standards set in the prior administrative cases and could incur significant civil penalties if they or their representatives fail to do so. 21 Table of Contents We implement strict policies and procedures to help ensure our sales force complies with legal requirements.
The cost of assessing and bringing company practices into compliance with these new laws can be significant and the risk of legal claims in the event of a non-compliance is increasing.
The cost of assessing and bringing company practices into compliance with these new laws can be significant, and the risk of legal claims in the event of non-compliance is increasing.
In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how. We generally seek to protect this information by confidentiality, non-disclosure and assignment of invention agreements with our employees, consultants, scientific advisors and third parties. Our employees may leave to work for competitors. Our sales force members may seek other opportunities.
In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how. We generally seek to protect this information by confidentiality, non-disclosure and assignment of invention agreements with our employees, consultants, scientific advisors and third parties. Our employees may leave the company to work for competitors. Our sales force members may seek other opportunities.
The shift to cloud-based and outsourced solutions further heightens our reliance on third-party providers, including Amazon Web Services for core computing needs and Infosys Limited for managed services and digital channel operations. Disruptions in these partnerships or challenges in transitioning services could delay critical business processes and increase operational costs.
The shift to cloud-based and outsourced solutions further heightens our reliance on third-party providers, including Worldpay for payment services, Amazon Web Services for core computing needs and Infosys Limited for managed services and digital channel operations. Disruptions in these partnerships or challenges in transitioning services could delay critical business processes and increase operational costs.
Certain impacts of physical risk may include temperature changes that increase the heating and cooling costs at our facilities; extreme weather patterns that affect the production or sourcing of certain components; flooding and storms that damage or destroy our buildings and inventory; and heat and extreme weather events that cause long-term disruption or threats to the habitability of our customers’ communities.
Certain impacts of physical risk may include temperature changes that increase the heating and cooling costs at our facilities; extreme weather patterns that affect the production or sourcing of certain components; flooding and storms that damage or destroy our buildings, inventory or transportation channels; and heat and extreme weather events that cause long-term disruption or threats to the habitability of our customers’ communities.
As our sales force increases its use of social platforms to interact with customers, our business results could be adversely affected if our implementation of new platforms and processes to support our sales force is delayed. In addition, we are dependent on third parties for testing and delivery of portions of these and other of our information system platforms.
As our sales force increases its use of social platforms to interact with customers, our business results could be adversely affected if our implementation of new platforms and processes to support our sales force is delayed. In addition, we are dependent on third parties for testing and delivery of portions of our information system platforms.
For example, the General Data Protection Regulation, which went into effect in the European Union in 2018, imposes increased data protection regulations, the violation of which could result in fines of up to 4% of annual consolidated revenue. Many other U.S. states and foreign jurisdictions have similarly enacted security and privacy regulations.
For example, the General Data Protection Regulation, which went into effect in the European Union in 2018, imposes increased data protection regulations, the violation of which could result in fines of up to 4% of annual consolidated revenue. Many other U.S. states and foreign jurisdictions have similarly enacted security, privacy and data use transparency regulations.
International Risks ● Our ability to conduct business in international markets may be affected by political, legal, tax and regulatory risks. ● We are subject to financial risks as a result of our international operations, including exposure to foreign-currency fluctuations, currency controls and inflation in foreign markets, all of which could impact our financial position and results of operations. ● Changes to tariff and import/export regulations, and trade disputes between the United States and other jurisdictions may have a negative effect on global economic conditions and our business, financial results and financial condition.
International Risks ● Our ability to conduct business in international markets may be affected by political, legal, tax and regulatory risks. ● We are subject to financial risks as a result of our international operations, including exposure to foreign-currency fluctuations, currency controls and inflation in foreign markets, all of which could impact our financial position and results of operations. ● 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.
A loss of any of these suppliers and any difficulties in finding or transitioning to alternative suppliers could harm our business. In addition, we obtain some products and ingredients from sole suppliers that own or control the product formulations, ingredients or other intellectual property rights associated with such products.
The loss of any of these suppliers and any difficulties in finding or transitioning to alternative suppliers could harm our business. We obtain some products and ingredients from sole suppliers that own or control the product formulations, ingredients or other intellectual property rights associated with such products.
Many laws and regulations govern the registration, pre-market approval or other aspects of regulatory oversight of our products. For example, in the United States, some legislators and industry critics have pushed for years to increase regulatory authority by the FDA over nutritional supplements.
Many laws and regulations govern the registration, pre-market approval or other aspects of regulatory oversight of our products. For example, in the United States, some legislators and industry critics have pushed to increase the regulatory authority of the FDA over nutritional supplements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. 20 Table of Contents Risks Associated with Direct Selling and Our Sales Force Challenges to the form of our network marketing system or to our business practices have harmed and could continue to harm our business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. 19 Table of Contents Risks Associated with Direct Selling and Our Sales Force Challenges to the form of our network marketing system or to our business practices have harmed and could continue to harm our business.
In addition to these risks, several U.S. and international jurisdictions have passed laws regulating the use of AI technologies. For example, the European Union’s Artificial Intelligence Act has provided a regulatory landscape that private businesses will need to navigate with caution. The scale of penalties for non-compliance could be up to €35 million or 7% of global turnover.
In addition, several U.S. and international jurisdictions have passed laws regulating the use of AI technologies. For example, the European Union’s Artificial Intelligence Act of 2024 has provided a regulatory landscape that private businesses will need to navigate with caution. The scale of penalties for non-compliance could be up to €35 million or 7% of global turnover.
Human Capital Risks ● If we are unable to retain our existing sales force and recruit additional people to join our sales force, our revenue may not increase and may even decline. ● We depend on our key personnel and Sales Leaders, and the loss of the services provided by any of our executive officers, other key employees or key Sales Leaders could harm our business and results of operations. 19 Table of Contents Risks Associated with Our Manufacturing and Operations ● Production difficulties, quality control problems, inaccurate forecasting, shortages in ingredients, and reliance on our suppliers could harm our business. ● The loss of or a disruption in our manufacturing, supply chain and distribution operations, or significant expenses or violations incurred by such operations, could adversely affect our business. ● Our business could be negatively impacted if we fail to execute our product launch process or ongoing product sales due to difficulty in forecasting or increased pressure on our supply chain, information systems and management. ● If we are unable to effectively manage our growth in certain markets, our business and operations could be harmed. ● System failures, capacity constraints and other information technology difficulties could harm our business. ● Any acquired companies or future acquisitions may expose us to additional risks.
Human Capital Risks ● If we are unable to retain our existing sales force and recruit additional people to join our sales force, our revenue may not increase and may even decline. ● We depend on our key personnel and Sales Leaders, and the loss of the services provided by any of our executive officers, other key employees or key Sales Leaders could harm our business and results of operations. 18 Table of Contents Risks Associated with Our Manufacturing and Operations ● Production difficulties, quality control problems, inaccurate forecasting, shortages in ingredients, and reliance on our suppliers could harm our business. ● The loss of or a disruption in our manufacturing, supply chain and distribution operations, or significant expenses or violations incurred by such operations, could adversely affect our business. ● Our business could be negatively impacted if we fail to execute our product launch process or ongoing product sales due to difficulty in forecasting or increased pressure on our supply chain, information systems and management. ● Difficulties managing our entry or growth in certain markets could cause our business and operations to be harmed. ● System failures, capacity constraints and other information technology difficulties could harm our business. ● Any acquired companies or future acquisitions may expose us to additional risks.
If government officials feel the categorization of our products is inconsistent with product claims, form of delivery, ingredients or function, we could be prohibited or limited in marketing such products in Mainland China in their current form. As we expand our direct selling channel, we face additional product marketing restrictions compared to our retail store channel.
If government officials feel the categorization of our products is inconsistent with product claims, form of delivery, ingredients or function, we could be prohibited or limited in marketing such products in Mainland China in their current form. 28 Table of Contents As we expand our direct selling channel, we face additional product marketing restrictions compared to our retail store channel.
It is not possible to predict the final resolution of any legal proceeding to which we may become party, and the impact of these matters on our business, results of operations and financial condition could be material. 39 Table of Contents Non-compliance or alleged non-compliance with anti-corruption laws could harm our business.
It is not possible to predict the final resolution of any legal proceeding to which we may become party, and the impact of these matters on our business, results of operations and financial condition could be material. Non-compliance or alleged non-compliance with anti-corruption laws could harm our business.
Our sales force is required to comply with our residency and work authorization policies and other local legal requirements prior to working in a market. Some markets, including Mainland China and Vietnam, also prohibit or restrict participation of foreigners in direct selling activities.
Our sales force is required to comply with our residency and work authorization policies and other local legal requirements prior to working in a market. Some markets, including Mainland China, Vietnam and India, also prohibit or restrict participation of overseas personnel or foreigners in direct selling activities.
Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business. 44 Table of Contents Risks Related to Our Common Stock The market price of our Class A common stock is subject to significant fluctuations due to a number of factors that are beyond our control.
Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business. Risks Related to Our Common Stock The market price of our Class A common stock is subject to significant fluctuations due to a number of factors that are beyond our control.
We also sought and received clearance from the United States Food and Drug Administration to market our Nu Skin Facial Spa device and, more recently, our Nu Skin RenuSpa iO device for over-the-counter use. In some cases, challenges can arise even after we have completed the required registration/clearance process or determined that a product does not need registration/clearance.
We also sought and received clearance from the United States Food and Drug Administration to market our Nu Skin Facial Spa device and, more recently, our Nu Skin RenuSpa iO device for over-the-counter use. 37 Table of Contents In some cases, challenges can arise even after we have completed the required registration/clearance process or determined that a product does not need registration/clearance.
The regulatory environment in Mainland China continues to be challenging and restrictive. We will evaluate potential changes to the structure of our sales compensation in Mainland China to address the evolving commercial environment and, as the need arises, the evolving regulatory environment. Any such changes could have a negative impact on our sales in that market.
The regulatory environment in Mainland China continues to be challenging and restrictive. From time to time, we evaluate potential changes to the structure of our sales compensation in Mainland China to address the evolving commercial environment and, as the need arises, the evolving regulatory environment. Any such changes could have a negative impact on our sales in that market.
Our sales force has historically used testimonials and “before and after” photos to market and sell some of our popular products such as our spa devices and ageLOC Transformation anti-aging skin care system. We intend to continue to use testimonials for our popular products, including weight management products and beauty products.
Our sales force has historically used testimonials and “before and after” photos to market and sell some of our popular products such as our spa devices and ageLOC Tru Face anti-aging skin care system. We intend to continue to use testimonials for our popular products, including weight management products and beauty products.
Similarly, from time to time, efforts are made by some individuals or groups to repeal the Dietary Supplement Health and Education Act of 1994 (“DSHEA”), the U.S. law that provides a separate body of regulations for dietary supplements as compared to drugs.
Similarly, f rom time to time, efforts are made by some individuals or groups to repeal the Dietary Supplement Health and Education Act of 1994 (“DSHEA”), the U.S. law that provides a separate body of regulations for dietary supplements as compared to drugs.
These production difficulties and quality problems have in the past resulted, and could in the future result, in stock outages or shortages in our markets with respect to such products, harm our sales, or create inventory write-downs for unusable products. 32 Table of Contents In addition, we and manufacturers in our supply chain acquire ingredients, components, products and packaging from third-party suppliers and manufacturers.
These production difficulties and quality problems have in the past resulted, and could in the future result, in stock outages or shortages in our markets with respect to such products, harm our sales, or create inventory write-downs for unusable products. In addition, we and manufacturers in our supply chain acquire ingredients, components, products and packaging from third-party suppliers and manufacturers.
As a result, we may also be required to develop alternative non-infringing technology, which could require significant effort and expense and/or cause us to alter our products or services, which could negatively affect our business. 41 Table of Contents We employ individuals who were previously employed at other beauty or wellness product companies, including our competitors or potential competitors.
As a result, we may also be required to develop alternative non-infringing technology, which could require significant effort and expense and/or cause us to alter our products or services, which could negatively affect our business. We employ individuals who were previously employed at other beauty or wellness product companies, including our competitors or potential competitors.
Likewise, if we are unable to anticipate or adapt to changes in the affiliate marketing, gig and sharing economies, our ability to capture growth trends in the social commerce marketplace could be materially adversely affected.
Likewise, if we are unable to anticipate or adapt to changes in the affiliate marketing, gig and sharing economies or the artificial intelligence landscape, our ability to capture growth trends in the social commerce marketplace could be materially adversely affected.
In particular, the requirements are impacting the ingredients we can include in our products, the accepted quantities of those ingredients, and the quality and characterization of the ingredients. Global regulators have in recent years become overall more restrictive on the accepted levels of active ingredients that we can use in our product, in some cases banning them outright.
In particular, the requirements are impacting the ingredients we can include in our products, the accepted quantities of those ingredients, and the quality and characterization of the ingredients. In recent years, global regulators have become more restrictive regarding the accepted levels of active ingredients that we can use in our products, in some cases banning them outright.
At any particular time, we may be in various stages of assessment, discussion and/or negotiation with regard to one or more potential acquisitions or investments, not all of which will be consummated. Acquisitions involve numerous risks and uncertainties, and some of our past acquisition targets have been in industries in which we lack operational or market experience.
At any particular time, we may be in various stages of assessment, discussion and/or negotiation regarding one or more potential acquisitions , divestitures, or investments, not all of which will be consummated. Acquisitions involve numerous risks and uncertainties, and some of our past acquisition targets have been in industries in which we lack operational or market experience.
Unanticipated changes or system failures by third parties could harm our ability to meet the expectations of our sales force, thus resulting in harm to our revenue, reputation and sales force confidence in our systems.
Unanticipated changes or system failures by third parties could harm our ability to meet the expectations of our sales force and could result in harm to our revenue, reputation and sales force confidence in our systems.
Data Security and Privacy Risks ● Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations, and the integrity of company, employee, sales force, customer or guest data, could expose us to litigation, liability, substantial negative financial consequences and harm to our reputation. ● The unauthorized access, use, theft or destruction of our information systems or of data that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues.
Data Security and Privacy Risks ● Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations, and the integrity of company, employee, sales force, customer or guest data, could expose us to litigation, liability, substantial negative financial consequences and harm to our reputation. ● The unauthorized access, use, theft or destruction of our information systems or of data that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues. ● The use of artificial intelligence could adversely affect our business, results of operations and reputation.
The government of Mainland China has adopted direct selling and anti-pyramiding regulations that impose significant restrictions and limitations on businesses in our industry. Most notably, the regulations prohibit multi-level compensation, which is the basis of how we compensate our sales force outside of Mainland China. The regulations also prohibit overseas personnel from participating in direct selling in Mainland China.
The government of Mainland China has adopted direct selling and anti-pyramiding regulations that impose significant restrictions and limitations on businesses in our industry. Most notably, the regulations prohibit multi-level compensation, which is the basis of how we compensate our sales force outside of Mainland China. The regulations also prohibit the recruitment of overseas personnel as direct sellers in Mainland China.
However, t he need to develop affiliate sales teams to take full advantage of our sales compensation plans or other incentives may be viewed negatively by such prospective affiliates who are familiar with other gig and sharing opportunities.
However, the need to develop affiliate sales teams to take full advantage of our sales compensation plans or other incentives may be viewed negatively by prospective affiliates who are familiar with other gig and sharing opportunities.
These offerings sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue during the quarter and skew year-over-year and sequential comparisons. These offerings may also increase our product return rate.
These offerings sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue, Customers, Paid Affiliates and Sales Leaders during the quarter and skew year-over-year and sequential comparisons. These offerings may also increase our product return rate.
These legal proceedings can include, among other things, claims alleging violation of the federal securities laws or state corporate laws, or claims related to employment matters, contracts, intellectual property, fair-competition/anti-trust laws, our products, business opportunity or advertising, defamation, negligence, data breaches, privacy compliance, or other matters.
These legal proceedings have included, or could include, among other things, claims alleging violation of the federal securities laws or state corporate laws, or claims related to employment matters, contracts, intellectual property, consumer protection, fair-competition/anti-trust laws, our products, business opportunity or advertising, defamation, negligence, data breaches, privacy compliance, or other matters.
There is some risk associated with the common practice in Mainland China of marketing a product as a “general food” without any health food claims while applying to the authorities for “health food” classification.
There is some risk associated with the common practice in Mainland China of marketing a product as a “general food” without any health food claims while applying to the authorities for “health food” classification after localizing the product formula to meet applicable health food claims.
These risks may be heightened if we consolidate certain of our manufacturing, distribution, or supply facilities or if we are unable to successfully enhance our disaster recovery planning. These risks also increase as we pursue our current strategy of acquiring manufacturing companies and thereby conducting more of our manufacturing in-house.
These risks may be heightened if we consolidate certain of our manufacturing, distribution, or supply facilities or if we are unable to successfully enhance our disaster recovery planning. These risks also increase as we continue acquiring manufacturing companies and thereby conduct more of our manufacturing in-house.
If we fail to effectively forecast product demand in the product launch process or for ongoing product sales, our reputation and profitability also could be negatively impacted. If we are unable to effectively manage our growth in certain markets, our business and operations could be harmed. At times, we can experience significant growth in one or more of our markets.
If we fail to effectively forecast product demand in the product launch process or for ongoing product sales, our reputation and profitability also could be negatively impacted. Difficulties managing our entry or growth in certain markets could cause our business and operations to be harmed. At times, we can experience significant growth in one or more of our markets.
If our business, products and initiatives do not drive growth and/or sales productivity in Sales Leaders, Paid Affiliates and Customers, our operating results could be further harmed. 31 Table of Contents The number and productivity of our sales force is negatively impacted by several additional factors, including: ● any adverse publicity or negative public perception regarding us, our products or ingredients, our distribution channel, or our industry or competitors; ● lack of interest in, dissatisfaction with, or the technical failure of, our products or digital tools; ● lack of compelling products or income opportunities, including through our sales compensation plans and incentive trips and other offerings; ● negative sales force reaction to changes in our sales compensation plans or our failure to make changes that would be necessary to keep our compensation competitive with the market; ● interactions with our company, including our actions to enforce our policies and procedures and the quality of our customer service; ● any regulatory actions or charges against us or others in our industry, as well as regulatory changes that impact product formulations and sales viability; ● general economic, business, public health and geopolitical conditions, including employment levels, employment trends such as the gig and sharing economies and affiliate marketing, pandemics or other conditions that curtail person-to-person interactions, and the ongoing conflicts in Russia/Ukraine and Israel/Hamas which have caused distraction to our sales force; ● changes in the policies of social media platforms and product marketplaces used to prospect or recruit potential consumers and sales force participants; ● recruiting efforts of our competitors and changes in consumer-loyalty trends; ● potential saturation or maturity levels in a given market, which could negatively impact our ability to attract and retain our sales force in such market ; ● growing gig economy competition which may draw away potential product sellers, affiliates, and influencers; ● our sales force’s increased use of social sharing channels, which may enable them to more easily engage their consumers and sales network in other opportunities; ● lack of sufficient tools to create customer interest in our products and to manage and build a personalized business; and ● our and our sales force’s ability to implement social commerce and other selling platforms that appeal to consumers.
The number and productivity of our sales force is negatively impacted by several additional factors, including: ● any adverse publicity or negative public perception regarding us, our products or ingredients, our distribution channel, or our industry or competitors; ● lack of interest in, dissatisfaction with, or the technical failure of, our products or digital tools; ● lack of compelling products or income opportunities, including through our sales compensation plans and incentive trips and other offerings; ● negative sales force reaction to changes in our sales compensation plans or our failure to make changes that would be necessary to keep our compensation competitive with the market; ● interactions with our company, including our actions to enforce our policies and procedures and the quality of our customer service; ● any regulatory actions or charges against us or others in our industry, as well as regulatory changes that impact product formulations and sales viability; ● general economic, business, public health and geopolitical conditions, including employment levels, employment trends such as the gig and sharing economies and affiliate marketing, and pandemics or other conditions that curtail person-to-person interactions; ● changes in the policies of social media platforms and product marketplaces used to prospect or recruit potential consumers and sales force participants; ● recruiting efforts of our competitors and changes in consumer-loyalty trends; ● potential saturation or maturity levels in a given market, which could negatively impact our ability to attract and retain our sales force in such market ; ● growing competition in the gig economy and the influencer marketing space which may draw away potential product sellers, affiliates, and influencers; ● our sales force’s increased use of social sharing channels, which may enable them to more easily engage their consumers and sales network in other opportunities; ● lack of sufficient tools to create customer interest in our products and to manage and build a personalized business; and ● our and our sales force’s ability to implement social commerce and other selling platforms that appeal to consumers.
As of December 31, 2024, approximately 253 Sales Leaders occupied the highest levels under our global sales compensation plan, and in Mainland China approximately 72 key Sales Leaders were playing a significant role in managing, training and servicing our sales force in that market and driving sales .
As of December 31, 2025, approximately 198 Sales Leaders occupied the highest levels under our global sales compensation plan, and in Mainland China approximately 60 key Sales Leaders were playing a significant role in managing, training and servicing our sales force in that market and driving sales .
As a result of claims against us regarding suspected infringement, our technologies may be subject to injunction, we may be required to pay damages, or we may have to seek a license to continue certain practices (which may not be available on reasonable terms, if at all), all of which may significantly increase our operating expenses or may require us to restrict our business activities and limit our ability to deliver our products and services and/or certain features, integrations, and capabilities of our platform.
Any of these results may adversely affect our financial condition. 40 Table of Contents As a result of claims against us regarding suspected infringement, our technologies may be subject to injunction, we may be required to pay damages, or we may have to seek a license to continue certain practices (which may not be available on reasonable terms, if at all), all of which may significantly increase our operating expenses or may require us to restrict our business activities and limit our ability to deliver our products and services and/or certain features, integrations, and capabilities of our platform.
Our past acquisitions have entailed, and future acquisitions could entail, numerous risks, including: ● difficulties in integrating acquired operations, employees or products; ● the difficulties of imposing financial and operating controls on the acquired companies and their management and the potential costs of doing so; ● the potential loss of key employees, customers, suppliers or distributors from acquired businesses; ● disruption to our direct selling channel; ● diversion of management’s and other employees’ attention from our core business; ● the failure to achieve the strategic objectives of these acquisitions; ● increased fixed costs; ● financing structures that dilute the interests of our stockholders and/or result in an increase in our indebtedness; ● the failure of the acquired businesses to achieve the results we have projected in either the near or long term; ● the assumption of unexpected liabilities, including litigation risks or compliance issues not discovered during pre-acquisition diligence; ● adverse effects on existing business relationships with our suppliers, sales force or consumers; ● the risk of being unable to protect intellectual property related to newly acquired technologies; and ● risks associated with entering markets or industries in which we have limited or no prior experience, including limited expertise in running the business, developing the technology, and selling and servicing the products.
Our past acquisitions have entailed, and future acquisitions could entail, numerous risks, including: ● difficulties in integrating acquired operations, employees or products; ● difficulties and costs of imposing financial and operating controls on the acquired companies and their management; ● potential loss of key employees, customers, suppliers or distributors from acquired businesses; ● disruption to our direct selling channel; ● diversion of management’s and other employees’ attention from our core business; ● failure to achieve the strategic objectives of these acquisitions; ● increased fixed costs; ● financing structures that dilute the interests of our stockholders and/or result in an increase in our indebtedness; ● failure of the acquired businesses to achieve projected results; ● failure to accurately assess the value, strengths, weaknesses, operating characteristics or long-term profitability of an acquisition target, or to realize anticipated synergies or other expected benefits; ● assumption of unexpected liabilities, including litigation risks or compliance issues not discovered during pre-acquisition diligence; ● adverse effects on existing business relationships with our suppliers, sales force or consumers; ● inability to protect intellectual property related to newly acquired technologies; and ● risks associated with entering markets or industries in which we have limited or no prior experience, including limited expertise in running the business, developing the technology, and selling and servicing the products.
If we are unable to transition existing customers to a similar or alternative product, or we are unable to anticipate changes in consumer and sales force preferences and trends, or the discontinuation of products causes increased customer attrition, our business, financial condition and operating results could be materially adversely affected.
If we are unable to transition existing customers to a similar or alternative product, or we are unable to anticipate changes in consumer and sales force preferences and trends, or the discontinuation of products causes increased customer attrition, our business, financial condition and operating results could be materially adversely affected. ● We are currently endeavoring to help our sales force penetrate previously untapped emerging markets.
Moreover, our growing business places additional demands on our technology infrastructure, particularly our e-commerce channels. Despite ongoing investments to expand and upgrade our systems, any inability to handle increased traffic or transaction volumes could impede order processing, impact customer satisfaction, and harm our financial performance.
Moreover, our growing business places additional demands on our technology infrastructure, particularly our e-commerce channels. Despite ongoing investments to expand and upgrade our systems, any inability to handle increased traffic or transaction volumes could impede order processing, impact customer satisfaction, and harm our financial performance. In summary, our initiatives to evolve and enhance our technology systems involve considerable risks.
If we are not able to successfully retain existing personnel and identify, hire and integrate new personnel, our business and growth prospects could be harmed. The success of our business also depends on our key Sales Leaders. For the three months ended December 31, 2024, we had approximately 36,912 Sales Leaders.
If we are not able to successfully retain existing personnel and identify, hire and integrate new personnel, our business and growth prospects could be harmed. 31 Table of Contents The success of our business also depends on our key Sales Leaders. For the three months ended December 31, 2025, we had approximately 30,045 Sales Leaders.
Insufficient management execution to support growth could result in, among other things, product delays or shortages, decreases in product quality, service level challenges, operating mistakes and errors, inadequate customer service, inappropriate claims or promotions by our sales force, and governmental inquires and investigations, all of which could harm our revenue and ability to generate sustained growth and result in unanticipated expenses.
Failure to execute effectively could result in, among other things, product delays or shortages, decreases in product quality, service level challenges, operating mistakes and errors, inadequate customer service, inappropriate claims or promotions by our sales force, and governmental inquiries or investigations, all of which could harm our revenue and ability to generate sustained growth and result in unanticipated expenses.
Our ability to improve our financial performance largely depends on our ability to anticipate and/or react in a timely and effective manner to changes in consumer spending patterns and preferences regarding products, platforms, and business opportunities in the affiliate gig and sharing economy .
Our ability to improve our financial performance largely depends on our ability to anticipate and react in a timely and effective manner to changes in consumer spending patterns and preferences regarding products, platforms, and business opportunities in the affiliate gig and sharing economy, including changes in how consumers discover, evaluate and purchase products.
The FTC has been active and aggressive in its enforcement activities, taking action in some cases to require other multi-level marketing companies to cease engaging in multi-level marketing or to modify their business models.
The FTC has been active in its enforcement activities and, in some cases, has taken action that required other multi-level marketing companies to cease engaging in multi-level marketing or to modify their business models.
Claims of intellectual property infringement also might require us to redesign affected products, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products. Any of these results may adversely affect our financial condition.
Claims of intellectual property infringement also might require us to redesign affected products, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products.
Growth in our sales force and consumers and our results of operations can be particularly impacted by adverse publicity. Given the nature of our operations, lack of clarity on applicable legal requirements and standards, and our continuous need to recruit and retain consumers and members of our sales force, we are particularly vulnerable to adverse publicity.
Given the nature of our operations, lack of clarity on applicable legal requirements and standards, and our continuous need to recruit and retain consumers and members of our sales force, we are particularly vulnerable to adverse publicity.
We have, and may in the future, experienced difficulty effectively managing growth associated with these offerings and may face increased risk of improper sales force activities and related government scrutiny. 33 Table of Contents In addition, the size and condensed schedule of these product offerings increase pressure on our supply chain and order processing systems.
We have experienced, and may in the future experience, difficulty managing growth associated with these offerings which could increase the risk of improper sales force activities and related government and regulatory scrutiny. In addition, the size and condensed schedule of these product offerings increase pressure on our supply chain and order processing systems.
Additionally, we may provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially valuable. The occurrence of any of these events may adversely affect our financial condition or diminish our investments in this area.
We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially valuable. The occurrence of any of these events may adversely affect our financial condition or diminish our investments in this area.
Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected to comply with the standards set in the FTC’s prior administrative cases on this topic, and they could incur significant civil penalties if they or their representatives fail to do so.
Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected to comply with the standards set in the FTC’s prior administrative cases on this topic, and they could incur significant civil penalties if the FTC were to determine that they or their representatives engaged in conduct inconsistent with those standards.
Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is exposed to risks associated with our international operations, including: ● the possibility that a government might ban or severely restrict our sales compensation and business models; ● the possibility that local civil unrest, political instability, or changes in diplomatic or trade relationships might disrupt our supply chain or other operations in one or more markets—for example, the ongoing conflict in Russia and Ukraine has caused distraction to our sales force; ● the lack of well-established or reliable legal systems in certain areas where we operate; ● the presence of high inflation in the economies of international markets in which we operate; ● the possibility that a government authority might impose legal, tax, customs, or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets; ● the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and ● the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is exposed to risks associated with our international operations, including: ● government actions could ban or severely restrict our sales compensation and business models; ● civil unrest, political instability, or changes in diplomatic or trade relationships could disrupt our supply chain or other operations—for example, the ongoing conflict in Russia and Ukraine has caused distraction to our sales force; ● less predictable or less developed legal systems in certain areas; ● high inflation or currency instability in certain markets; ● legal, tax, customs or other financial burdens imposed on us or our sales force, due, for example, to the structure of our operations in various markets; ● a government authority could challenge the status of our sales force as independent contractors or impose employment or social taxes; and ● currency remittance restrictions could limit our ability to repatriate cash.
The introduction of a new product or key initiative can also negatively impact other product lines to the extent our Sales Leaders focus their efforts on the new product or initiative. 25 Table of Contents In addition, our ability to develop and introduce new products could be impacted by, among other things, government regulations, changing policies in social media and other communications platforms, the inability to attract and retain qualified staff, the termination of third-party research and collaborative arrangements, intellectual property of competitors that may limit our ability to offer innovative products or that challenge our own intellectual property, problems related to manufacturing or quality control, and difficulties in anticipating changes in consumer tastes and buying preferences.
In addition, our ability to develop and introduce new products could be impacted by, among other things, government regulations, changing policies in social media and other communications platforms, the inability to attract and retain qualified staff, the termination of third-party research and collaborative arrangements, intellectual property of competitors that may limit our ability to offer innovative products or that challenge our own intellectual property, problems related to manufacturing or quality control, and difficulties in anticipating changes in consumer tastes and buying preferences.
Similarly, we face the risk that we could fail to make changes to our compensation plans that would be necessary to keep our compensation competitive with the market, compliant with changing regulations, and allow us to attract new opportunity seekers or segments of opportunity seekers, which could have a negative impact on our sales force. 23 Table of Contents Limits on the amount of sales compensation we pay could inhibit our ability to attract and retain our sales force, negatively impact our revenue and cause regulatory risks.
Similarly, we face the risk that we could fail to make changes to our compensation plans that would be necessary to keep our compensation competitive with the market, compliant with changing regulations, and allow us to attract new opportunity seekers or segments of opportunity seekers, which could have a negative impact on our sales force.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information regarding the risks we face from cybersecurity threats, please see Item 1A. Risk Factors. 45 Table of Contents Our management plays a pivotal role in assessing and managing material risks from cybersecurity threats.
Biggest changeFor more information regarding the risks we face from cybersecurity threats, please see Item 1A. Risk Factors. Our management plays a pivotal role in assessing and managing material risks from cybersecurity threats. Our management has implemented a broad and continuous process for cyber event monitoring, analysis of emerging threats, and the development and implementation of risk mitigation strategies.
In addition, we undergo an annual third-party external PCI penetration test, as well as third-party attack-surface monitoring to understand our potential vulnerabilities, threat vectors, and additional impacts to critical assets and operations. In addition, our cybersecurity team performs procedures to identify risks that inform our annual security roadmap.
In addition, we undergo an annual third-party external PCI penetration test, as well as third-party attack-surface monitoring to understand our potential vulnerabilities, threat vectors, and additional impacts to critical assets and operations. Our cybersecurity team also performs procedures to identify risks that inform our annual security roadmap.
We also enact a process to perform a risk assessment of new third-parties, inclusive of new third-party contracts, which provides an additional layer of oversight in identifying material risks associated with the use of particular external service providers.
We also maintain processes to perform a risk assessment of new third parties, inclusive of new third-party contracts, which provides an additional layer of oversight in identifying material risks associated with the use of particular external service providers.
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Our management has implemented a broad and continuous process for cyber event monitoring, analysis of emerging threats, and the development and implementation of risk mitigation strategies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal properties consist of the following: Offices Our principal administrative offices are our corporate headquarters in Provo, Utah and our offices in Shanghai, China. Distribution Centers We distribute our products through distribution centers and warehouses in many of our markets, with our principal facilities being in Provo, Utah and Mainland China.
Biggest changePROPERTIES Our principal properties consist of the following: ● Offices—Our principal administrative offices are our corporate headquarters in Provo, Utah and our offices in Shanghai, China. ● Distribution Centers—We distribute our products through distribution centers and warehouses in many of our markets, with our principal facilities being in Provo, Utah and Mainland China. ● Research and Development Centers—We operate research and development centers in Provo, Utah and Shanghai, China. ● Manufacturing Facilities—We operate manufacturing facilities in Mainland China, and two of our Rhyz companies (Manufacturing segment) operate manufacturing facilities in Provo, Utah, Draper, Utah and West Valley City, Utah.
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Research and Development Centers We operate research and development centers in Provo, Utah and Shanghai, China. Manufacturing Facilities We operate manufacturing facilities in Mainland China, and two of our Rhyz companies (Manufacturing segment) operate manufacturing facilities in Provo, Utah, Draper, Utah and West Valley City, Utah.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder this plan, our board of directors authorized the repurchase of up to $500 million of our outstanding Class A common stock on the open market or in privately negotiated transactions.
Biggest changeUnder this plan, our board of directors authorized the repurchase of up to $500 million of our outstanding Class A common stock on the open market or in privately negotiated transactions. The program has no expiration date and may be utilized over time, with no obligation to repurchase any specific number of shares.
Recent Sales of Unregistered Securities None. 47 Table of Contents Stock Performance Graph The following graph shows the changes in value over the five-year period ended December 31, 2024 of an assumed $100 investment in our Class A common stock, the S&P SmallCap 600 Consumer Staples Index (the “SmallCap Index”) and the S&P 500 Index.
Recent Sales of Unregistered Securities None. 47 Table of Contents Stock Performance Graph The following graph shows the changes in value over the five-year period ended December 31, 2025 of an assumed $100 investment in our Class A common stock, the S&P SmallCap 600 Consumer Staples Index (the “SmallCap Index”) and the S&P 500 Index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our Class A common stock is listed on the New York Stock Exchange and trades under the symbol “NUS.” The approximate number of holders of record of our Class A common stock as of January 31, 2025 was 207.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our Class A common stock is listed on the New York Stock Exchange and trades under the symbol “NUS.” The approximate number of holders of record of our Class A common stock as of January 31, 2026 was 192.
Purchases of Equity Securities by the Issuer (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1 – 31, 2024 — $ — — $ 162.4 November 1 – 30, 2024 — — — $ 162.4 December 1 – 31, 2024 — — — $ 162.4 Total — $ — — (1) In August 2018, we announced that our board of directors approved a stock repurchase plan.
Purchases of Equity Securities by the Issuer (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1) October 1 – 31, 2025 336,341 $ 10.85 336,341 $ 148.7 November 1 – 30, 2025 338,082 9.91 338,082 $ 145.3 December 1 – 31, 2025 296,745 10.17 296,745 $ 142.3 Total 971,168 $ 10.32 971,168 (1) In August 2018, we announced that our board of directors approved a stock repurchase plan.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Nu Skin Enterprises, Inc., the S&P 500 Index, and the S&P SmallCap 600 Consumer Staples Index Measured Period Nu Skin S&P 500 Index S&P SmallCap 600 Consumer Staples Index December 31, 2019 100.00 100.00 100.00 December 31, 2020 138.78 118.40 111.14 December 31, 2021 132.76 152.39 143.15 December 31, 2022 114.25 124.79 133.89 December 31, 2023 55.88 157.59 153.95 December 31, 2024 20.30 197.02 155.83 The stock performance graph above shall not be deemed to be “soliciting material” or to be “filed” with the U.S.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Nu Skin Enterprises, Inc., the S&P 500 Index, and the S&P SmallCap 600 Consumer Staples Index Measured Period Nu Skin S&P 500 Index S&P SmallCap 600 Consumer Staples Index December 31, 2020 100.00 100.00 100.00 December 31, 2021 95.67 128.71 128.79 December 31, 2022 82.33 105.40 120.46 December 31, 2023 40.27 133.10 138.51 December 31, 2024 14.63 166.40 140.20 December 31, 2025 20.95 196.16 116.43 The stock performance graph above shall not be deemed to be “soliciting material” or to be “filed” with the U.S.
Added
We may suspend or discontinue the program at any time.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

99 edited+44 added−36 removed82 unchanged
Biggest changeYear Ended December 31, 2024 Nu Skin Rhyz Investments Americas Southeast Asia/ Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Revenue $ 322,516 $ 244,846 $ 235,235 $ 181,557 $ 164,164 $ 163,706 $ 130,610 $ 201,430 $ 85,188 $ 1,729,252 Cost of sales 83,461 64,950 44,059 36,852 42,766 33,600 24,932 164,145 14,532 509,297 Other segment items 171,338 134,666 145,086 93,907 100,389 79,360 70,989 35,825 116,465 948,025 Segment contribution $ 67,717 $ 45,230 $ 46,090 $ 50,798 $ 21,009 $ 50,746 $ 34,689 $ 1,460 $ (45,809 ) $ 271,930 Segment contribution as a percentage of revenue 21 % 18 % 20 % 28 % 13 % 31 % 27 % 1 % -54 % -9 % Year Ended December 31, 2023 Nu Skin Rhyz Investments Americas Southeast Asia/ Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Revenue $ 398,222 $ 267,206 $ 298,079 $ 207,833 $ 192,352 $ 236,099 $ 153,589 $ 181,395 $ 35,214 $ 1,969,989 Cost of sales 104,162 71,364 46,915 41,191 54,095 46,326 27,488 136,875 5,274 533,690 Other segment items 215,117 148,099 188,905 112,566 119,665 115,682 85,519 32,199 50,504 1,068,256 Segment contribution $ 78,943 $ 47,743 $ 62,259 $ 54,076 $ 18,592 $ 74,091 $ 40,582 $ 12,321 $ (20,564 ) $ 378,043 Segment contribution as a percentage of revenue 20 % 18 % 21 % 26 % 10 % 31 % 26 % 7 % -58 % 19 % 56 Table of Contents The following table provides information concerning the number of Customers, Paid Affiliates and Sales Leaders in our core Nu Skin business as of December 31, 2024 and 2023. ● “Customers” are persons who have purchased directly from the Company during the three months ended as of the date indicated.
Biggest changeYear Ended December 31, 2025 Nu Skin Rhyz Americas Southeast Asia/Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Revenue $ 282,975 $ 209,802 $ 195,553 $ 174,364 $ 150,151 $ 130,216 $ 117,378 $ 205,788 $ 17,794 $ 1,484,021 Cost of sales 73,198 51,044 34,631 36,067 38,947 26,402 19,892 163,707 4,697 448,585 Other segment items 149,289 111,983 115,367 89,325 88,571 66,355 60,314 34,268 43,690 759,162 Segment contribution $ 60,488 $ 46,775 $ 45,555 $ 48,972 $ 22,633 $ 37,459 $ 37,172 $ 7,813 $ (30,593 ) $ 276,274 Segment contribution as a percentage of revenue 21.4 % 22.3 % 23.3 % 28.1 % 15.1 % 28.8 % 31.7 % 3.8 % (171.9 )% 18.6 % Year Ended December 31, 2024 Nu Skin Rhyz Americas Southeast Asia/Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Revenue $ 322,516 $ 244,846 $ 235,235 $ 181,557 $ 164,164 $ 163,706 $ 130,610 $ 201,430 $ 85,188 $ 1,729,252 Cost of sales 83,461 64,950 44,059 36,852 42,766 33,600 24,932 164,145 14,532 509,297 Other segment items 171,338 134,666 145,086 93,907 100,389 79,360 70,989 35,825 116,465 948,025 Segment contribution $ 67,717 $ 45,230 $ 46,090 $ 50,798 $ 21,009 $ 50,746 $ 34,689 $ 1,460 $ (45,809 ) $ 271,930 Segment contribution as a percentage of revenue 21.0 % 18.5 % 19.6 % 28.0 % 12.8 % 31.0 % 26.6 % 0.7 % (53.8 )% 15.7 % 56 Table of Contents Year Ended December 31, 2025 2024 2023 Total Segment Revenue $ 1,484,021 $ 1,729,252 $ 1,969,989 Core Nu Skin Adjustment 1,138 2,832 (858 ) Total Revenue $ 1,485,159 $ 1,732,084 $ 1,969,131 The following table provides information concerning the number of Customers, Paid Affiliates and Sales Leaders in our core Nu Skin business as of December 31, 2025 and 2024. ● “Customers” are persons who have purchased directly from the Company during the three months ended as of the date indicated.
During the fourth quarter of 2023, we incurred charges to be settled in cash of $10.0 million in severance charges. During 2024, we incurred charges to be settled in cash of $17.9 million in severance charges and $1.0 million of other associated cost, and non-cash charges of $36.6 million of fixed asset impairments and $2.2 million of other non-cash charges.
During the fourth quarter of 2023, we incurred charges to be settled in cash of $10.0 million in severance charges. During 2024, we incurred charges to be settled in cash of $17.9 million in severance charges and $1.1 million of other associated cost, and non-cash charges of $36.6 million of fixed asset impairments and $2.2 million of other non-cash charges.
We assessed the recoverability of the related asset group comparing the carrying value of the asset group to the undiscounted cash flows expected to be generated. The recoverability test indicated the retail asset group was impaired.
We assessed the recoverability of the related asset group comparing the carrying value of the asset group to the undiscounted cash flows expected to be generated. The recoverability test indicated the retail asset group was impaired.
These factors could materially increase or decrease the fair value of our reporting units and, accordingly, could result in a related impairment charge. Declines in our market capitalization or in our business performance could also result in a material impairment charge in a future period.
Changes in these factors could materially increase or decrease the fair value of our reporting units and, accordingly, could result in a related impairment charge. Declines in our market capitalization or in our business performance could also result in a material impairment charge in a future period.
We recognize revenue by transferring the promised products to the customer, with revenue recognized at shipping point, the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer.
We recognize revenue by transferring the promised products to the customer, with revenue primarily recognized at shipping point, the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer.
As of December 31, 2024, all open tax years except 2021 have been audited and are effectively closed to further examination.
As of December 31, 2025, all open tax years except 2021 and 2024 have been audited and are effectively closed to further examination.
With a few exceptions, we are no longer subject to state and local income tax examination by tax authorities for the years before 2021. Foreign jurisdictions have varying lengths of statutes of limitations for income tax examinations. Some statutes are as short as three years and in certain markets may be as long as ten years.
With a few exceptions, we are no longer subject to state and local income tax examination by tax authorities for the years before 2022. Foreign jurisdictions have varying lengths of statutes of limitations for income tax examinations. Some statutes are as short as three years and in certain markets may be as long as ten years.
We also anticipate paying quarterly cash dividends throughout 2025, approximating $3 million per quarter depending on the number of shares outstanding as of record date. Additional details about our dividends and term loan are provided below. For 2025 and onward, we currently expect the above material cash requirements will remain.
We also anticipate paying quarterly cash dividends throughout 2026, approximating $3 million per quarter depending on the number of shares outstanding as of record date. Additional details about our dividends and term loan are provided below. For 2026 and onward, we currently expect the above material cash requirements will remain.
Years open to examination contain matters that could be subject to differing interpretations of applicable tax laws and regulations related to the amount and/or timing of income, deductions, and tax credits. We account for uncertain tax positions in accordance with Accounting Standards Codification ("ASC") 740, Income Taxes.
Years open to examination contain matters that could be subject to differing interpretations of applicable tax laws and regulations related to the amount and/or timing of income, deductions, and tax credits. We account for uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes.
Provision for income taxes depends on the statutory tax rates and the withholding taxes in each of the jurisdictions in which we operate. For example, statutory tax rates in 2024 were approximately 17% in Hong Kong, 20% in Taiwan, 21% in South Korea, 32% in Japan and 25% in Mainland China.
Provision for income taxes depends on the statutory tax rates and the withholding taxes in each of the jurisdictions in which we operate. For example, statutory tax rates in 2025 were approximately 17% in Hong Kong, 20% in Taiwan, 21% in South Korea, 32% in Japan and 25% in Mainland China.
In certain jurisdictions, valuation allowances have been recorded against the deferred tax assets specifically related to use of foreign tax credits for branch income and net operating losses. The valuation allowance assessment requires estimates as to future operating results.
In certain jurisdictions, valuation allowances have been recorded against the deferred tax assets specifically related to use of foreign tax credits for branch income, research and development credits, and net operating losses. The valuation allowance assessment requires estimates as to future operating results.
In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two.
In 2021, as part of the Organization for Economic Co-operation and Development’s (“OECD”) Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax (“Pillar Two”) of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two.
With the year-over-year growth within our Manufacturing segment, their revenue represented a higher proportion of our overall consolidated revenue for the year ended December 31, 2024 than in the prior-year.
With the year-over-year growth within our Manufacturing segment, their revenue represented a higher proportion of our overall consolidated revenue for the year ended December 31, 2025 than in the prior-year.
We are subject to taxation in the United States at the statutory corporate federal tax rate of 21% in 2024, and we pay taxes in multiple states within the United States at various tax rates.
We are subject to taxation in the United States at the statutory corporate federal tax rate of 21% in 2025, and we pay taxes in multiple states within the United States at various tax rates.
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. 62 Table of Contents Cash from foreign subsidiaries .
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 .
Both facilities bear interest at the Secured Overnight Financing Rate ("SOFR") , plus a margin based on our consolidated leverage ratio.
Both facilities bear interest at the Secured Overnight Financing Rate (“SOFR”), plus a margin based on our consolidated leverage ratio.
For the tax year 2021, the Company was in the Bridge phase of the CAP program, pursuant to which the IRS did not accept disclosures, did not conduct reviews and did not provide letters of assurance for the Bridge year. There are limited circumstances that tax years in the Bridge phase will be opened for examination.
For the tax year 2021, we were in the Bridge phase of the CAP program, pursuant to which the IRS did not accept disclosures, did not conduct reviews and did not provide letters of assurance for the Bridge year. There are limited circumstances that tax years in the Bridge phase will be opened for examination.
Sales Leader previews and other product introductions and promotions sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue during the quarter and skew year-over-year and sequential comparisons.
Sales Leader previews and other product introductions and promotions sometimes generate significant activity and a high level of purchasing, which can result in a higher-than-normal increase in revenue, Customers, Paid Affiliates and Sales Leaders during the quarter and skew year-over-year and sequential comparisons.
Similar to other companies in our industry, we experience relatively high turnover among our sales force. 49 Table of Contents To enhance customer retention, we have developed product subscription and loyalty programs that provide incentives for consumers to commit to purchase a specific amount of product on a monthly basis.
Similar to other companies in our industry, we experience relatively high turnover among our sales force. 49 Table of Contents To enhance customer retention, we have developed product subscription and loyalty programs that provide incentives for consumers to commit to purchase a specific amount of product on a monthly basis. Several of our products are conducive to subscriptions.
When we determine that there is sufficient taxable income to utilize the foreign tax credits or the net operating losses, the valuation allowances will be released.
When we determine that there is sufficient taxable income to utilize the foreign tax credits, research and development credits, or the net operating losses, the valuation allowances will be released.
The carrying value of the debt also reflects debt issuance costs of $1.4 million and $2.0 million as of December 31, 2024 and 2023, respectively, related to the Credit Agreement. The Credit Agreement requires us to maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00.
The carrying value of the debt also reflects debt issuance costs of $0.8 million and $1.4 million as of December 31, 2025 and 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.
Given the size of our international operations, our results, as reported in U.S. dollars, are often impacted by foreign-currency fluctuations; in 2024, our revenue was negatively impacted 4% from foreign-currency fluctuations compared to 2023. Our results also can be impacted by global economic, political, demographic and business trends and conditions.
Given the size of our international operations, our results, as reported in U.S. dollars, are often impacted by foreign-currency fluctuations; in 2025, our revenue was negatively impacted 0.8% from foreign-currency fluctuations compared to 2024. Our results also can be impacted by global economic, political, demographic and business trends and conditions.
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 December 31, 2024 and 2023, we had $27.4 million and $31.8 million, respectively, in cash denominated in Chinese RMB.
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 December 31, 2025 and 2024, we had $35.7 million and $27.4 million, respectively, in cash denominated in Chinese RMB.
A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. The company did not have a tax impact related to Pillar Two in 2024 and based on current enacted legislation, the Company does not anticipate a material impact related to Pillar Two for 2025.
A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. We did not have a tax impact related to Pillar Two in 2025 and based on current enacted legislation, we do not anticipate a material impact related to Pillar Two in 2026.
As discussed in more detail below, our capital expenditures are expected to be $45-65 million for 2025. ● Cash requirements for financing activities. In 2025 we are obligated to make a total of $20.0 million in quarterly principal payments plus the associated interest on our term loan.
As discussed in more detail below, our capital expenditures are expected to be $40-60 million for 2026. ● Cash requirements for financing activities. In 2025 we are obligated to make a total of $20.0 million in quarterly principal payments plus the associated interest on our term loan.
We pay income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between Nu Skin affiliates around the world. Deferred tax assets and liabilities are created in this process. As of December 31, 2024, we had net deferred tax assets of $173.9 million.
We pay income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between Nu Skin affiliates around the world. Deferred tax assets and liabilities are created in this process. As of December 31, 2025, we had net deferred tax assets of $171.4 million.
These segments consist of our seven geographic Nu Skin segments—Americas, Southeast Asia/Pacific, Mainland China, 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 Rhyz Other segment includes other investments by our Rhyz business arm.
These segments consist of our seven geographic Nu Skin segments—Americas, Southeast Asia/Pacific, Mainland China, 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.
As of December 31, 2024, $162.4 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, August and November 2024, our board of directors declared quarterly cash dividends of $0.06 per share.
As of December 31, 2025, $142.3 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, August and November 2025 , our board of directors declared quarterly cash dividends of $0.06 per share.
Undistributed earnings that we have indefinitely reinvested aggregate to $60.0 million as of December 31, 2024. If this amount were repatriated to the United States, the amount of incremental taxes would be approximately $6.0 million. The company operates in and files income tax returns in the U.S. and numerous foreign jurisdictions, which are subject to examination by tax authorities.
Undistributed earnings that we have indefinitely reinvested aggregate to $60.0 million as of December 31, 2025. If this amount were repatriated to the United States, the amount of incremental taxes would be approximately $6.0 million. We operate in and file income tax returns in the U.S. and numerous foreign jurisdictions, which are subject to examination by tax authorities.
Capital expenditures . Capital expenditures in 2024 totaled $41.6 million. As with 2024, we expect that the 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.
Capital expenditures . Capital expenditures in 2025 totaled $34.3 million. As with 2025, we expect that the capital expenditures in 2026 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.
Based on the analysis, we concluded the fair value of the Manufacturing and Rhyz Other reporting units were in excess of their carrying amounts and no impairment charge was required at that time. ● During the three months ended December 31, 2024, the continued decline in our BeautyBio reporting unit forecast was a triggering event that required us to perform a quantitative analysis.
Based on the analysis, we concluded the fair value of the Manufacturing and Rhyz Other reporting units were in excess of their carrying amounts and no impairment charge was required at that time. ● During the fourth quarter of 2024, the continued decline in our BeautyBio reporting unit forecast was a triggering event that required us to perform a quantitative analysis.
Our Global Operations In 2024, we generated approximately 30% of our revenue from the United States (consisting of our Nu Skin United States and Rhyz businesses) and the remainder from our international markets.
Our Global Operations In 2025, we generated approximately 26% of our revenue from the United States (consisting of our Nu Skin United States and Rhyz businesses) and the remainder from our international markets.
Cost of sales primarily consists of: ● cost of products purchased from third-party vendors; ● cost of self-manufactured products; ● cost of adjustments to inventory carrying value; ● freight cost of shipping products to our sales force and import duties for the products; and ● royalties and related expenses for licensed technologies. 50 Table of Contents For markets other than Mainland China, in 2024, we sourced most of our beauty products and wellness products from trusted third-party suppliers and manufacturers.
Cost of sales primarily consists of: ● cost of products purchased from third-party vendors; ● cost of self-manufactured products; ● cost of adjustments to inventory carrying value; ● cost of manufacturing and distribution occupancy cost; ● labor cost associated with the manufacturing process; ● freight cost of shipping products to our sales force and import duties for the products; and ● royalties and related expenses for licensed technologies. 50 Table of Contents For markets other than Mainland China, in 2025, we sourced most of our beauty products and wellness products from trusted third-party suppliers and manufacturers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 46 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 15, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 49 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on February 14, 2025.
We had approximately $13.7 million, $13.0 million and $12.4 million of accrued interest and penalties related to uncertain tax positions at December 31, 2024, 2023 and 2022, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.
We had approximately $15.5 million, $13.7 million and $13.0 million of accrued interest and penalties related to uncertain tax positions at December 31, 2025, 2024 and 2023, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.
Total charges under the program included approximately $27.9 million in cash charges of severance, approximately $1.0 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 first half of 2025.
Total charges under the program included approximately $27.9 million in cash charges of severance, approximately $1.0 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.
As a percentage of revenue, general and administrative decreased 0.1 percentage points to 27.7% for 2024, compared to 27.8% for 2023. Restructuring and impairment expenses 2022 restructuring plan . In the third quarter of 2022, we adopted a strategic plan to focus resources on our strategic priorities and optimize future growth and profitability.
As a percentage of revenue, general and administrative increased 1.4 percentage points to 29.1% for 2025, compared to 27.7% for 2024. Restructuring and impairment expenses 2022 restructuring plan . In the third quarter of 2022, we adopted a strategic plan to focus resources on our strategic priorities and optimize future growth and profitability.
We estimate that capital expenditures for the uses listed above will total approximately $45-65 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.
We estimate that capital expenditures for the uses listed above will total approximately $40-60 million for 2026. 62 Table of Contents 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.
A Global Network of Customers, Paid Affiliates and Sales Leaders As of December 31, 2024, we had 831,972 persons who purchased directly from the company during the previous three months (“Customers”).
A Global Network of Customers, Paid Affiliates and Sales Leaders As of December 31, 2025, we had 748,796 persons who purchased directly from the company during the previous three months (“Customers”).
As of December 31, 2024 and 2023, we had $35.0 million and $120.0 million of outstanding borrowings under our revolving credit facility, and $360.0 million and $385.0 million on our term loan facility.
As of December 31, 2025 and 2024, we had $0 and $35.0 million of outstanding borrowings under our revolving credit facility, and $225.0 million and $360.0 million on our term loan facility.
We also have experienced delays in repatriating cash from Argentina. As of December 31, 2024 and 2023, we had $22.4 million and $17.7 million, respectively, in intercompany receivable with our Argentina subsidiary.
We also have experienced delays in repatriating cash from Argentina. As of December 31, 2025 and 2024, we had $23.9 million and $22.4 million, respectively, in intercompany receivable with our Argentina subsidiary.
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.
Accordingly, we have accrued the necessary withholding taxes related to the non-U.S. earnings. 63 Table of Contents 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.
As of December 31, 2024 and 2023, we held $198.0 million and $267.8 million, respectively, in cash and cash equivalents, including current investments. These amounts include $154.1 million and $222.4 million as of December 31, 2024 and 2023, respectively, held in our operations outside of the United States.
As of December 31, 2025 and 2024, we held $239.8 million and $198.0 million, respectively, in cash and cash equivalents, including current investments. These amounts include $170.7 million and $154.1 million as of December 31, 2025 and 2024, respectively, held in our operations outside of the United States.
All purchases under these programs are subject to our standard product payment and return policies. We believe these subscription and loyalty programs have improved consumer retention, have had a stabilizing impact on revenue and have helped generate recurring sales.
For example, Prysm iO and its accompanying mobile application are designed to generate subscription sales. All purchases under these programs are subject to our standard product payment and return policies. We believe these subscription and loyalty programs have improved consumer retention, have had a stabilizing impact on revenue and have helped generate recurring sales.
In comparison, at December 31, 2023, we had $22.0 million in unrecognized tax benefits of which $22.0 million, if recognized, would affect the effective tax rate. We recognized an increase of approximately $0.7 million in interest and penalties expense during the year ended December 31, 2024 and $0.6 million in interest and penalties during the year ended December 31, 2023.
In comparison, at December 31, 2024, we had $25.9 million in unrecognized tax benefits , all of which, if recognized, would affect the effective tax rate. We recognized an increase of approximately $1.8 million in interest and penalties expense during the year ended December 31, 2025 and $0.7 million in interest and penalties during the year ended December 31, 2024.
See "Non-GAAP Financial Measures," below. The tables below set forth summarized financial information for each of our reportable segments for the years ended December 31, 2024 and 2023 (U.S. dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items.
See “Non-GAAP Financial Measures,” below. The table below sets forth segment contribution for the years ended December 31, 2025 and 2024 for each of our reportable segments (U.S. dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items.
In the event we were to determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination was made.
In the event we were to determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination was made. We evaluate our indefinite reinvestment assertions with respect to foreign earnings for each period.
Our core Nu Skin business’s selling expense as a percentage of revenue increased 0.8 percentage points to 41.9% for 2024, compared to 41.1% for 2023. Selling expenses for our core Nu Skin business are driven by the specific performance of our individual Sales Leaders.
Our core Nu Skin business’s selling expense as a percentage of revenue decreased 1.6 percentage points to 40.3% for 2025, compared to 41.9% for 2024. Selling expenses for our core Nu Skin business are driven by the specific performance of our individual Sales Leaders.
As of December 31, 2024, we had four interest rate swaps, with a total notional principal amount of $200 million and a maturity date of July 31, 2025. 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.
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 .
While our actual cash usage may vary based on the timing of payments, we currently expect these approximate percentages and payment practices to continue in 2025. In addition, we expect our 2025 lease payments will be approximately $21.5 million. ● Cash requirements for investing activities.
On average, we purchase our inventory approximately three to six months prior to sale. While our actual cash usage may vary based on the timing of payments, we currently expect these approximate percentages and payment practices to continue in 2026. In addition, we expect our 2026 lease payments will be approximately $23.5 million. ● Cash requirements for investing activities.
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 selling expenses are also impacted by the growth within our Manufacturing segment, which has minimal selling expenses.
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.
In the fourth quarter of 2024, we recorded an incremental inventory write-off charge of $38.8 million as we continue to accelerate and expand our product portfolio optimization, compared to a $65.7 million charge in 2023. 59 Table of Contents Selling expenses Selling expenses as a percentage of revenue decreased to 37.6% in 2024, compared to 37.7% for 2023.
In the fourth quarter of 2024, we recorded an incremental inventory write-off charge of $38.8 million, $32.7 million of which was recorded within our core Nu Skin business, as we continued to accelerate and expand our product portfolio optimization. 59 Table of Contents Selling expenses Selling expenses as a percentage of revenue decreased to 34.2% in 2025, compared to 37.6% for 2024.
Net income (loss) As a result of the foregoing factors, net income in 2024 decreased to $(146.6) million, compared to $8.6 million in 2023. 2023 Compared to 2022 For a comparison of our operating results for 2023 compared to 2022, see Item 7.
Net income (loss) As a result of the foregoing factors, net income (loss) in 2025 increased to $160.2 million, compared to $(146.6) million in 2024. 61 Table of Contents 2024 Compared to 2023 For a comparison of our operating results for 2024 compared to 2023, see Item 7.
As previously disclosed, in January 2025, we completed the sale of our Mavely entity f or $230 million in cash, subject to certain adjustments as set forth in the purchase agreement, including post-closing determination of net working capital and other elements of the purchase price, and a number of shares of the purchaser's common stock valued by the parties at $20 million.
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.
Our 2024 revenue was negatively impacted 4% from foreign-currency fluctuations. As of the end of the fourth quarter of 2024, Customers decreased 15%, Paid Affiliates decreased 13% and Sales Leaders decreased 16% compared to the prior year.
Our 2025 revenue was negatively impacted 0.8% from foreign-currency fluctuations. As of the end of the fourth quarter of 2025, Customers decreased 10%, Paid Affiliates decreased 11% and Sales Leaders decreased 19% compared to the prior year.
Business Overview Our Products Nu Skin Enterprises, Inc. develops and distributes a comprehensive line of premium-quality beauty and wellness solutions in nearly 50 markets worldwide. In 2024, our revenue of $1.7 billion was primarily generated by our three primary brands: our beauty brand, Nu Skin; our wellness brand, Pharmanex; and our anti-aging brand, ageLOC.
Business Overview Our Products Nu Skin Enterprises, Inc. develops and distributes a comprehensive line of premium-quality beauty and wellness solutions in nearly 50 markets worldwide. In 2025, our revenue of $1.5 billion was primarily generated by our two primary product categories: beauty products and wellness products.
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 skew year-over-year and sequential comparisons.
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 skew year-over-year and sequential comparisons. Recent Accounting Pronouncements A description of new accounting pronouncements is contained in Note 2 to consolidated financial statements contained in this report.
In 2022, t he IRS developed a new phase of CAP called "Bridge Plus." Under Bridge Plus the taxpayer is required to provide book-to-tax reconciliations, credit utilization and other supporting documentation shortly after their audited financial statement is finalized . The company was selected for the Bridge Plus phase for the 2023, 2024, and 2025 tax years.
In 2022, the IRS developed a new phase of CAP called “Bridge Plus.” Under Bridge Plus the taxpayer is required to provide book-to-tax reconciliations, credit utilization and other supporting documentation shortly after their audited financial statement is finalized. We have been selected for the Bridge Plus phase each year since the 2022 tax year.
As a result, we recorded a non-cash goodwill impairment charge of $130.9 million in the second quarter of 2024. 53 Table of Contents In addition, during the three months ended June 30, 2024, we determined that the current operating losses and decline in forecasted losses associated with our BeautyBio retail asset group were an interim triggering event that required us to perform an interim impairment analysis on our BeautyBio retail asset group.
In addition, during the three months ended June 30, 2024, we determined that the current operating losses and decline in forecasted losses associated with our BeautyBio retail asset group were an interim triggering event that required us to perform an interim impairment analysis on our BeautyBio retail asset group.
We concluded the carrying value of the retail asset group exceeded the estimated fair value which resulted in an impairment charge of $10.1 million in our Rhyz Other segment during the three months ended June 30, 2024. 60 Table of Contents Interest expense Interest expense increased to $26.4 million for 2024, compared to $25.6 million in the prior-year period.
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 $13.9 million for 2025, compared to $26.4 million in the prior-year period.
Our overall effective tax rate was 16.3% for the year ended December 31, 2024, a decrease from the previous fiscal year due to the sale of the Company’s subsidiary Mavely on January 2, 2025. 51 Table of Contents Critical Accounting Policies and Estimates The following critical accounting policies and estimates should be read in conjunction with our audited consolidated financial statements and related notes thereto.
Our overall effective tax rate was 18.3% for the year ended December 31, 2025. 51 Table of Contents Critical Accounting Policies and Estimates The following critical accounting policies and estimates should be read in conjunction with our audited consolidated financial statements and related notes thereto.
We account for such contingent liabilities in accordance with relevant accounting standards and believe we have appropriately provided for income taxes for all years. Several factors drive the calculation of our tax reserves.
We are subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. We account for such contingent liabilities in accordance with relevant accounting standards and believe we have appropriately provided for income taxes for all years. Several factors drive the calculation of our tax reserves.
The Manufacturing reporting units’ fair values remain sensitive to unfavorable changes in assumptions utilized in the income approach, including revenue growth rates, profitability margins, estimated future cash flows, and the discount rates that could result in impairment charges in a future period.
The Manufacturing reporting units’ fair values remain sensitive to unfavorable changes in assumptions utilized in the income approach, including revenue growth rates, profitability margins, estimated future cash flows, and the discount rates that could result in impairment charges in a future period. ● During the three months ended March 31, 2025, we decided to make a strategic shift in how we operate the BeautyBio asset group.
The quarterly cash dividends of $3.0 million were paid on March 6, 2024, June 12, 2024, September 11, 2024 and December 11, 2024 to stockholders of record on February 26, 2024, May 31, 2024, August 30, 2024 and November 29, 2024.
The quarterly cash dividends of $3.0 million, $3.0 million, $3.0 million, and $2.9 million were paid on March 5, 2025 , June 11, 2025 , September 10, 2025 and December 10, 2025 to stockholders of record on February 24, 2025 , May 30, 2025 , August 29, 2025 and November 28, 2025 , respectively.
We introduced our enhancements to the sales performance plan in North America starting in November 2024. 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.
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.
Our interest expense may increase after our interest rate swaps expire in July 2025. 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 2024, we made no repurchases.
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 2025, we repurchased 2.0 million shares of our Class A common stock under the plan for $20.0 million.
These compensation expenses consist primarily of commission payments, which we generally pay to our sales force within approximately one to two months of the sale. Inventory purchases have historically constituted approximately 15%-20% of our revenue. On average, we purchase our inventory approximately three to six months prior to sale.
Our operating expenses typically total approximately 85%-90% of our revenue, with compensation to our sales force constituting 40%-43% of our core Nu Skin revenue. These compensation expenses consist primarily of commission payments, which we generally pay to our sales force within approximately one to two months of the sale. Inventory purchases have historically constituted approximately 15%-20% of our revenue.
We did not recognize any impairment charges for goodwill or intangible assets during 2023. 54 Table of Contents Results of Operations The following table sets forth our operating results as a percentage of revenue for the periods indicated: Year Ended December 31, 2024 2023 2022 Revenue 100.0 % 100.0 % 100.0 % Cost of sales 31.8 31.1 28.3 Gross profit 68.2 68.9 71.7 Operating expenses: Selling expenses 37.6 37.7 39.5 General and administrative expenses 27.7 27.8 25.0 Restructuring and impairment expenses 11.7 1.0 2.3 Total operating expenses 77.0 66.5 66.7 Operating income (loss) (8.8 ) 2.4 5.0 Interest expense 1.5 1.3 0.6 Other income (expense), net 0.2 0.2 (0.4 ) Income (loss) before provision for income taxes (10.1 ) 1.3 4.0 Provision (benefit) for income taxes (1.6 ) 0.9 (0.7 ) Net income (loss) (8.5 )% 0.4 % 4.7 % 2024 Compared to 2023 Overview Revenue in 2024 decreased 12% to $1.73 billion from $1.97 billion in 2023.
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. 54 Table of Contents Results of Operations The following table sets forth our operating results as a percentage of revenue for the periods indicated: Year Ended December 31, 2025 2024 2023 Revenue 100.0 % 100.0 % 100.0 % Cost of sales 30.6 31.8 31.1 Gross profit 69.4 68.2 68.9 Operating expenses: Selling expenses 34.2 37.6 37.7 General and administrative expenses 29.1 27.7 27.8 Restructuring and impairment expenses 1.7 11.7 1.0 Total operating expenses 65.0 77.0 66.5 Operating income (loss) 4.4 (8.8 ) 2.4 Interest expense 0.9 1.5 1.3 Gain on sale 11.9 — — Other income (expense), net (2.2 ) 0.2 0.2 Income (loss) before provision for income taxes 13.2 (10.1 ) 1.3 Provision (benefit) for income taxes 2.4 (1.6 ) 0.9 Net income (loss) 10.8 % (8.5 )% 0.4 % 2025 Compared to 2024 Overview Revenue in 2025 decreased 14% to $1.49 billion from $1.73 billion in 2024.
During the three months ended March 31, 2024, we determined that the recent decline in our stock price and corresponding decrease in market capitalization were a triggering event that required us to perform a quantitative impairment analysis.
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. 53 Table of Contents 2024 During the three months ended March 31, 2024, we determined that the recent decline in our stock price and corresponding decrease in market capitalization were a triggering event that required us to perform a quantitative impairment analysis.
The year-over-year decrease in our 2024 revenue was primarily driven by the continued macroeconomic pressures we've been facing in our markets, which have negatively impacted consumer spending and customer acquisition.
The year-over-year decrease in our 2025 revenue was primarily driven by the continued macroeconomic pressures we’ve 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.
We held our last in-person global convention in the third quarter of 2024, with an east event in South Korea and a west event in the United States. These conventions have significant expenses associated with them. Because we have not incurred expenses for these conventions during every fiscal year or in comparable interim periods, year-over-year comparisons have been impacted accordingly.
We held our last in-person global convention in the third quarter of 2024, with an east event in South Korea and a west event in the United States , and we currently plan to hold our next in-person global convention in the third quarter of 2026. These conventions have significant expenses associated with them.
In addition to our core Nu Skin business, we also explore new areas of synergistic and adjacent growth through our business arm known as Rhyz Inc. Our Rhyz businesses primarily consist of consumer, technology and manufacturing companies. In 2024, the Rhyz companies generated $286.6 million, or 17% of our 2024 reported revenue (excluding sales to our core Nu Skin business).
Our Rhyz businesses primarily consist of consumer, technology and manufacturing companies. In 2025, the Rhyz companies generated $223.6 million, or 15%, of our 2025 reported revenue (excluding sales to our core Nu Skin business).
We generated $111.7 million in cash from operations during 2024, compared to $118.6 million in cash from operations during 2023. As of December 31, 2024, cash and cash equivalents, including current investments, were $198.0 million compared to $267.8 million as of December 31, 2023.
As of December 31, 2025, cash and cash equivalents, including current investments, were $239.8 million compared to $198.0 million as of December 31, 2024.
Selling expenses do not include amounts we pay to our sales force based on their personal purchases; rather, such amounts are reflected as reductions to revenue. Our global sales compensation plan, which we employ in all our markets except Mainland China, is an important factor in our ability to attract and retain our Sales Leaders.
Our global sales compensation plan, which we employ in all our markets except Mainland China, is an important factor in our ability to attract and retain our Sales Leaders.
Our Europe & Africa segment was previously Europe, Middle East and Africa ("EMEA"), but was changed following the June 2023 closure of the Israel market. 55 Table of Contents The following table sets forth revenue for the years ended December 31, 2024 and 2023 for each of our reportable segments (U.S. dollars in thousands): Constant Year Ended December 31, Currency 2024 2023 Change Change (1) Nu Skin Americas $ 322,516 $ 398,222 (19.0 )% (8.2 )% Southeast Asia/Pacific 244,846 267,206 (8.4 )% (6.4 )% Mainland China 235,235 298,079 (21.1 )% (19.7 )% Japan 181,557 207,833 (12.6 )% (5.9 )% Europe & Africa 164,164 192,352 (14.7 )% (14.6 )% South Korea 163,706 236,099 (30.7 )% (27.7 )% Hong Kong/Taiwan 130,610 153,589 (15.0 )% (13.3 )% Other 2,832 (858 ) (431.2 )% (430.3 )% Total Nu Skin 1,445,466 1,752,522 (17.5 )% (13.2 )% Rhyz Manufacturing 201,430 181,395 11.0 % 11.0 % Rhyz Other 85,188 35,214 141.9 % 142.0 % Total Rhyz 286,618 216,609 32.3 % 32.3 % Total $ 1,732,084 $ 1,969,131 (12.0 )% (8.2 )% (1) Constant-currency revenue change is a non-GAAP financial measure.
The Rhyz Other segment includes other investments by our Rhyz strategic investment arm. 55 Table of Contents The following table sets forth revenue for the years ended December 31, 2025 and 2024 for each of our reportable segments (U.S. dollars in thousands): Change Constant Currency Change (1) Year Ended December 31, 2025 2024 Nu Skin Americas $ 282,975 $ 322,516 (12.3 )% (6.2 )% Southeast Asia/Pacific 209,802 244,846 (14.3 )% (14.6 )% Mainland China 195,553 235,235 (16.9 )% (16.9 )% Japan 174,364 181,557 (4.0 )% (5.1 )% Europe & Africa 150,151 164,164 (8.5 )% (12.6 )% South Korea 130,216 163,706 (20.5 )% (17.1 )% Hong Kong/ Taiwan 117,378 130,610 (10.1 )% (11.9 )% Other 1,138 2,832 (59.8 )% (48.5 )% Total Nu Skin 1,261,577 1,445,466 (12.7 )% (11.8 )% Rhyz Manufacturing 205,788 201,430 2.2 % 2.2 % Rhyz Other 17,794 85,188 (79.1 )% (79.1 )% Total Rhyz 223,582 286,618 (22.0 )% (22.0 )% Total $ 1,485,159 $ 1,732,084 (14.3 )% (13.5 )% (1) Constant-currency revenue change is a non-GAAP financial measure.
In February 2025, our board of directors declared a quarterly cash dividend of $0.06 per share to be paid on March 5, 2025 to stockholders of record on February 24, 2025. During 2023, we paid quarterly cash dividends of $0.39 per share. The decrease in the quarterly dividend in 2024 preserved approximately $65.0 million of capital in 2024.
In February 2026, our board of directors declared a quarterly cash dividend of $0.06 per share to be paid on March 11, 2026 to stockholders of record on February 27, 2026.
We operate in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell our products, including through the use of social and digital platforms.
We operate in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell our products, including through the use of social and digital platforms. In addition to our core Nu Skin business, we also explore new areas of synergistic and adjacent growth through our strategic investment arm known as Rhyz Inc., which we formed in 2018.
Our South Korea market was challenged by difficult macroeconomic trends, including inflationary pressures, and our associated price increases which negatively impacted our revenue, Customers, Paid Affiliates and Sales Leaders for the year ended December 31, 2024. During the fourth quarter of 2024, we introduced our enhancements to the sales performance plan in 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 2025. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 3.4% for 2025.
The reduction in revenue, Customers, Paid Affiliates and Sales Leaders reflects the continued softening of momentum, as well as a continuation of the macroeconomic factors that have led to a decline in the purchasing power of our customers. Leveraging our learnings from Argentina, we plan on focusing on a product and pricing strategy aimed towards increasing accessibility and affordability.
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.
The year-over-year increase in segment contribution is primarily attributable to a 2.1 percentage-point increase in gross margin from less sales discounts, as well as a 0.50 percentage-point decrease in general and administrative expenses as a percent of revenue from cost saving efforts, all partially offset by the decline in revenue. 58 Table of Contents South Korea .
The increase in segment contribution for 2025 was primarily driven by a 2.1 percentage point improvement in gross margin due to sales mix, a 1.9 percentage point decrease in selling expenses and a 1.1 percentage point decrease in general and administrative expenses, from our recent cost saving efforts, partially offset by the decline in revenue. Manufacturing .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−1 removed6 unchanged
Biggest changeFollowing are the weighted-average currency exchange rates of U.S. $1 into local currency for each of our international or foreign markets in which revenue exceeded U.S. $5.0 million for at least one of the quarters listed: 2024 2023 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter Argentina 1,000.8 948.8 888.9 821.9 429.5 295.7 232.9 190.2 Australia 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Canada 1.4 1.4 1.4 1.3 1.4 1.3 1.3 1.4 Eurozone countries 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 Hong Kong 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 Indonesia 15,839 15,805 16,167 15,664 15,605 15,229 14,885 15,235 Japan 152.4 148.8 156.0 148.5 147.6 144.8 137.4 132.4 Mainland China 7.2 7.2 7.2 7.2 7.2 7.2 7.0 6.9 Malaysia 4.4 4.5 4.7 4.7 4.7 4.6 4.5 4.4 Mexico 20.1 18.9 17.3 17.0 17.5 17.1 17.6 18.7 Singapore 1.3 1.3 1.4 1.3 1.4 1.3 1.3 1.3 South Korea 1,399.1 1,351.9 1,371.7 1,330.0 1,321.1 1,316.6 1,314.5 1,283.0 Taiwan 32.4 32.2 32.4 31.5 31.7 31.8 30.7 30.4 Vietnam 25,282 25,046 25,363 24,568 24,374 23,926 23,478 23,587 Interest Rate Risk We are exposed to risks related to fluctuations in interest rates on our outstanding variable rate debt.
Biggest changeFollowing are the weighted-average currency exchange rates of U.S. $1 into local currency for each of our international or foreign markets in which revenue exceeded U.S. $5.0 million for at least one of the quarters listed: 2025 2024 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter 4 th Quarter 3 rd Quarter 2 nd Quarter 1 st Quarter Argentina 1,437 1,331 1,147 1,056 1,001 948.8 888.9 821.9 Australia 1.5 1.5 1.6 1.6 1.5 1.5 1.5 1.5 Canada 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.3 Eurozone countries 0.9 0.9 0.9 1.0 0.9 0.9 0.9 0.9 Hong Kong 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 Indonesia 16,662 16,374 16,511 16,336 15,839 15,805 16,167 15,664 Japan 154.1 147.5 144.5 152.4 152.4 148.8 156.0 148.5 Mainland China 7.1 7.2 7.2 7.3 7.2 7.2 7.2 7.2 Malaysia 4.2 4.2 4.3 4.4 4.4 4.5 4.7 4.7 Mexico 18.3 18.6 19.5 20.4 20.1 18.9 17.3 17.0 Singapore 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.3 South Korea 1,449 1,387 1,398 1,453 1,399 1,352 1,372 1,330 Taiwan 31.1 30.0 31.0 32.9 32.4 32.2 32.4 31.5 Vietnam 26,339 26,278 25,963 25,416 25,282 25,046 25,363 24,568 Interest Rate Risk We are exposed to risks related to fluctuations in interest rates on our outstanding variable rate debt.
As of December 31, 2024 and 2023, we did not hold any forward contracts designated as foreign-currency cash flow hedges. We continue to evaluate our foreign currency hedging policy.
As of December 31, 2025 and 2024, we did not hold any forward contracts designated as foreign-currency cash flow hedges. We continue to evaluate our foreign currency hedging policy.
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 December 31, 2024, and 2023, we did not hold non-designated mark-to-market forward derivative contracts to hedge foreign-denominated intercompany positions or third-party foreign debt.
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 December 31, 2025, and 2024, we did not hold non-designated mark-to-market forward derivative contracts to hedge foreign-denominated intercompany positions or third-party foreign debt.
For additional information about our market risk see Note 15 to the consolidated financial statements contained in this report. 64 Table of Contents
We have not entered into and currently do not hold derivatives for trading or speculative purposes. For additional information about our market risk see Note 15 to the consolidated financial statements contained in this report. 65 Table of Contents
As of December 31, 2024, our Argentina subsidiary had a small net peso monetary position. Net sales of Argentina were less than 2% of our consolidated net sales for 2024, 2023 and 2022.
As of December 31, 2025, our Argentina subsidiary had a small net peso monetary position.
As of December 31, 2024, we had $393.6 million outstanding on the term loan, net of unamortized debt issuance cost and outstanding borrowings on our revolving credit facility. Our four interest rate swaps reduce our exposure to interest rate risk on our term loan by $200.0 million as of December 31, 2024.
As of December 31, 2025, we had $224.2 million outstanding on the term loan, net of unamortized debt issuance cost and outstanding borrowings on our revolving credit facility. Our four interest rate swaps ended in the third quarter of 2025. As a result, the total variable debt of $224.2 million was exposed to market risks as of December 31, 2025.
For variable rate debt, interest rate changes generally do not affect the fair value of the debt instrument, but do impact future earnings and cash flows, assuming other factors are held constant. We have not entered into and currently do not hold derivatives for trading or speculative purposes.
A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $2.2 million. For variable rate debt, interest rate changes generally do not affect the fair value of the debt instrument, but do impact future earnings and cash flows, assuming other factors are held constant.
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.
Net sales of Argentina were less than 4% of our consolidated net sales for 2025, 2024 and 2023. 64 Table of Contents 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.
Removed
As a result, the total variable debt of $193.6 million was exposed to market risks as of December 31, 2024. A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $1.9 million.

Other NUS 10-K year-over-year comparisons