NU SKIN ENTERPRISES, INC. Q3 FY2025 earnings call

• Delivered Q3 revenue of $364 million within guidance range and EPS of $0.34 at higher end of guidance. • Focused on Q4 with introduction of Prysm iO and premarket opening of India. • Latin America up 53% Y/Y, showing potential of emerging market strategy. • North America undergoing business model transformation. • Prysm iO is an intelligent wellness platform with potential for significant device placement and subscriber growth. • India entry with localized model and digital-first infrastructure. • Gross margin for Q3 was 70.5%, with Nu Skin core business gross margin at 77.7% (up 120 basis points Y/Y). • Selling expense as % of revenue was 35.8%, down from prior year, with core business selling expense at 41.7%.

Third quarter revenue was $364 million. Latin America continued exceptional growth, up 53% year-over-year. North America faced challenges. Europe, Africa, South Korea, Southeast Asia Pacific, Hong Kong and Taiwan had sequential growth. Mainland China showed improving trends. Revenue contribution: Latin America's 53% Y/Y growth demonstrates emerging market potential, while North America's challenges contrast with other regions' sequential growth.

• Q4 revenue projected between $365 million to $400 million. • Full-year 2025 revenue guidance narrowed to $1.48 billion to $1.51 billion. • Full-year 2025 EPS guidance maintained high end at $3.15 to $3.25, with adjusted EPS between $1.25 and $1.35. • Prysm iO limited release in Q4, full consumer launches in second half of 2026. • India premarket opening beginning next week with multi-city tour.

• Macro environmental pressures impacting the industry. • Uncertainties in the adoption and market impact of Prysm iO. • Risks associated with entering new markets like India, including learning the local market dynamics. • Potential challenges in maintaining operational discipline across regions with varying market conditions.

Q: I wanted to start with the full year guidance. It looks like since last quarter, you brought down the top end of revenue but brought up the low end of EPS kind of tightening that range, which makes sense relative to how your 3Q results came in relative to guidance for that. I guess I'd really like to ask what are the puts and takes here? What's really been working between the price versus volume mix, operational efficiencies?

A: Ryan and James discussed that gross margin improvement from strategic portfolio optimization and product mix, selling expense improvements towards highest returning initiatives, and G&A being well managed. Also, timing of Prysm iO adoption and India premarket opening are factors.

Q: Sticking maybe, Ryan, going back to India. I know you guys are going to be over there shortly with the soft opening. Kind of can you help us get a more clear picture on what the final launch logistics are like there?

A: Ryan explained that India is being opened with a pre-market opening period to acquire revenues and build sales force, learning the local market with multi-city tours to understand unique market segments and adapt the digital-first model with local manufacturing and Infosys partnership.

Q: Thinking about domestic markets here in North America. You mentioned you're doing a little bit of restructuring here. Any correlation to that with the current government shutdown. I guess kind of what inning are we in with some of that revamp? And have you seen any of that be impacted by the shutdown in the United States?

A: Ryan said North America has been less impacted by the government shutdown, but it relates to direct selling regulatory evolution. Focus is on rebalancing to intelligent wellness with Prysm iO, leveraging female social leaders and family-based usage.

Q: Southeast Asia saw strong sequential growth. It's kind of a sequential standout here at a revenue level. Would just love to get your thoughts maybe a little more about what drove that and if there's any more to that story.

A: Ryan mentioned Southeast Asia is diverse with markets like Pacific (Australia, NZ, etc.) doing well with new business sales plan, Indonesia has potential, Malaysia and Singapore doing well, while Thailand and Philippines have some challenges.