{"url_path":"/sec/nus/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-13","source_url":"https://www.sec.gov/Archives/edgar/data/1021561/0001140361-26-005130-index.html","accession_number":"0001140361-26-005130","cik":"0001021561","ticker":"NUS","issuer_name":"NU SKIN ENTERPRISES, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1021561/0001140361-26-005130-index.html","primary_entity_key":"0001021561","primary_entity_name":"NU SKIN ENTERPRISES, INC."},"word_count":18425,"has_tables":true,"body_markdown":"ITEM 8.\n\nFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\n\n1.\n\nFinancial Statements. Set forth below is the index to the Financial Statements included in this Item 8:\n\n \n\nPage\n\n[Consolidated Balance Sheets at December 31,](#ConsolidatedBalanceSheets)[2025 and 2024](#ConsolidatedBalanceSheets)\n\n67\n\n[Consolidated Statements of Income for the years ended December 31, 2025,\n2024 and 2023](#ConsolidatedStatementsofI)\n\n68\n\n[Consolidated Statements of Comprehensive Income for the years ended December 31, 2025,\n2024 and 2023](#ConsolidatedStatementsofC)\n\n69\n\n[Consolidated Statements of Stockholders’ Equity for the years ended December 31,](#ConsolidatedStatementsofS)[2025, 2024 and 2023](#ConsolidatedStatementsofS)\n\n70\n\n[Consolidated Statements of Cash Flows for the years ended December 31,](#ConsolidatedStatementsofCash)[2025, 2024 and 2023](#ConsolidatedStatementsofCash)\n\n71\n\n[Notes to Consolidated Financial Statements](#NotestoConsolidatedFinanc)\n\n72\n\n[Report of Independent Registered Public Accounting Firm](#Report) (PricewaterhouseCoopers LLP, PCAOB ID 238)\n\n101\n\n2.\n\nFinancial Statement Schedules: Financial statement schedules have been omitted because they are not required or are not applicable, or because the required information is\nshown in the financial statements or notes thereto.\n\n66\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nConsolidated Balance Sheets\n\n(U.S. dollars in thousands)\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nASSETS\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent assets\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n238,630\n\n \n\n \n\n$\n\n186,883\n\n \n\nCurrent investments\n\n \n\n \n\n1,211\n\n \n\n \n\n \n\n11,111\n\n \n\nAccounts receivable, net\n\n \n\n \n\n39,544\n\n \n\n \n\n \n\n50,784\n\n \n\nInventories, net\n\n \n\n \n\n178,643\n\n \n\n \n\n \n\n190,242\n\n \n\nPrepaid expenses and other\n\n \n\n \n\n89,670\n\n \n\n \n\n \n\n72,643\n\n \n\nCurrent assets held for sale\n\n \n\n \n\n—\n\n \n\n \n\n \n\n26,936\n\n \n\nTotal current assets\n\n \n\n \n\n547,698\n\n \n\n \n\n \n\n538,599\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty and equipment, net\n\n \n\n \n\n377,168\n\n \n\n \n\n \n\n379,595\n\n \n\nOperating lease right-of-use assets\n\n \n\n \n\n74,021\n\n \n\n \n\n \n\n72,605\n\n \n\nGoodwill\n\n \n\n \n\n83,625\n\n \n\n \n\n \n\n83,625\n\n \n\nOther intangible assets, net\n\n \n\n \n\n42,614\n\n \n\n \n\n \n\n74,278\n\n \n\nOther assets\n\n \n\n \n\n280,187\n\n \n\n \n\n \n\n298,008\n\n \n\nLong-term assets held for sale\n\n \n\n \n\n—\n\n \n\n \n\n \n\n22,204\n\n \n\nTotal assets\n\n \n\n$\n\n1,405,313\n\n \n\n \n\n$\n\n1,468,914\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLIABILITIES AND STOCKHOLDERS’ EQUITY\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable\n\n \n\n$\n\n26,183\n\n \n\n \n\n$\n\n34,880\n\n \n\nAccrued expenses\n\n \n\n \n\n217,551\n\n \n\n \n\n \n\n217,808\n\n \n\nCurrent portion of long-term debt\n\n \n\n \n\n20,000\n\n \n\n \n\n \n\n30,000\n\n \n\nCurrent liabilities held for sale\n\n \n\n \n\n—\n\n \n\n \n\n \n\n13,919\n\n \n\nTotal current liabilities\n\n \n\n \n\n263,734\n\n \n\n \n\n \n\n296,607\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease liabilities\n\n \n\n \n\n57,640\n\n \n\n \n\n \n\n58,439\n\n \n\nLong-term debt\n\n \n\n \n\n204,187\n\n \n\n \n\n \n\n363,613\n\n \n\nOther liabilities\n\n \n\n \n\n74,512\n\n \n\n \n\n \n\n97,475\n\n \n\nLong-term liabilities held for sale\n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,325\n\n \n\n Total liabilities\n\n \n\n \n\n600,073\n\n \n\n \n\n \n\n817,459\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommitments and contingencies (Notes 8 and 17)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders’ equity\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nClass A common stock – 500\nmillion shares authorized, $0.001 par value, 90.6 million shares issued\n\n \n\n \n\n91\n\n \n\n \n\n \n\n91\n\n \n\nAdditional paid-in capital\n\n \n\n \n\n635,994\n\n \n\n \n\n \n\n627,787\n\n \n\nTreasury stock, at cost – 42.4\nmillion and 40.8 million shares\n\n \n\n \n\n(1,575,059\n\n)\n\n \n\n \n\n(1,563,614\n\n)\n\nAccumulated other comprehensive loss\n\n \n\n \n\n(116,105\n\n)\n\n \n\n \n\n(124,758\n\n)\n\nRetained earnings\n\n \n\n \n\n1,860,319\n\n \n\n \n\n \n\n1,711,949\n\n \n\nTotal stockholders’ equity\n\n \n\n \n\n805,240\n\n \n\n \n\n \n\n651,455\n\n \n\nTotal liabilities and stockholders’ equity\n\n \n\n$\n\n1,405,313\n\n \n\n \n\n$\n\n1,468,914\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n67\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nConsolidated Statements of Income\n\n(U.S. dollars in thousands, except per share amounts)\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nRevenue\n\n \n\n$\n\n1,485,159\n\n \n\n \n\n$\n\n1,732,084\n\n \n\n \n\n$\n\n1,969,131\n\n \n\nCost of sales\n\n \n\n \n\n453,761\n\n \n\n \n\n \n\n550,233\n\n \n\n \n\n \n\n611,850\n\n \n\nGross profit\n\n \n\n \n\n1,031,398\n\n \n\n \n\n \n\n1,181,851\n\n \n\n \n\n \n\n1,357,281\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating expenses:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSelling expenses\n\n \n\n \n\n508,380\n\n \n\n \n\n \n\n652,039\n\n \n\n \n\n \n\n742,365\n\n \n\nGeneral and administrative expenses\n\n \n\n \n\n432,141\n\n \n\n \n\n \n\n479,037\n\n \n\n \n\n \n\n546,858\n\n \n\nRestructuring and impairment expenses\n\n \n\n \n\n25,114\n\n \n\n \n\n \n\n202,360\n\n \n\n \n\n \n\n19,790\n\n \n\nTotal operating expenses\n\n \n\n \n\n965,635\n\n \n\n \n\n \n\n1,333,436\n\n \n\n \n\n \n\n1,309,013\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating income (loss)\n\n \n\n \n\n65,763\n\n \n\n \n\n \n\n(151,585\n\n)\n\n \n\n \n\n48,268\n\n \n\nInterest expense\n\n \n\n \n\n13,948\n\n \n\n \n\n \n\n26,409\n\n \n\n \n\n \n\n25,560\n\n \n\nGain on sale\n\n \n\n \n\n176,162\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther income (expense), net\n\n \n\n \n\n(31,780\n\n)\n\n \n\n \n\n2,943\n\n \n\n \n\n \n\n3,870\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIncome (loss) before provision for income taxes\n\n \n\n \n\n196,197\n\n \n\n \n\n \n\n(175,051\n\n)\n\n \n\n \n\n26,578\n\n \n\nProvision (benefit) for income taxes\n\n \n\n \n\n35,993\n\n \n\n \n\n \n\n(28,457\n\n)\n\n \n\n \n\n17,983\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss)\n\n \n\n$\n\n160,204\n\n \n\n \n\n$\n\n(146,594\n\n)\n\n \n\n$\n\n8,595\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss) per share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n$\n\n3.25\n\n \n\n \n\n$\n\n(2.95\n\n)\n\n \n\n$\n\n0.17\n\n \n\nDiluted\n\n \n\n$\n\n3.18\n\n \n\n \n\n$\n\n(2.95\n\n)\n\n \n\n$\n\n0.17\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted-average common shares outstanding (000s):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n \n\n49,293\n\n \n\n \n\n \n\n49,662\n\n \n\n \n\n \n\n49,711\n\n \n\nDiluted\n\n \n\n \n\n50,301\n\n \n\n \n\n \n\n49,662\n\n \n\n \n\n \n\n49,860\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n68\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nConsolidated Statements of Comprehensive Income\n\n(U.S. dollars in thousands)\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNet income (loss)\n\n \n\n$\n\n160,204\n\n \n\n \n\n$\n\n(146,594\n\n)\n\n \n\n$\n\n8,595\n\n \n\nOther comprehensive income (loss):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign currency translation adjustment, net of taxes of $(2), $406, and $(626), respectively\n\n \n\n \n\n12,343\n\n \n\n \n\n \n\n(18,497\n\n)\n\n \n\n \n\n(7,973\n\n)\n\nNet unrealized gains/(losses) on cash flow hedges, net of taxes of $(51), $(497) and $(629), respectively\n\n \n\n \n\n185\n\n \n\n \n\n \n\n1,800\n\n \n\n \n\n \n\n2,281\n\n \n\nLess: Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, net of taxes of $1,069, $2,223, and $2,154, respectively\n\n \n\n \n\n(3,875\n\n)\n\n \n\n \n\n(8,055\n\n)\n\n \n\n \n\n(7,805\n\n)\n\n \n\n \n\n \n\n8,653\n\n \n\n \n\n \n\n(24,752\n\n)\n\n \n\n \n\n(13,497\n\n)\n\nComprehensive income (loss)\n\n \n\n$\n\n168,857\n\n \n\n \n\n$\n\n(171,346\n\n)\n\n \n\n$\n\n(4,902\n\n)\n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n69\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nConsolidated Statements of Stockholders’ Equity\n\n(U.S. dollars in thousands)\n\n \n\nClass A\n\nCommon\n\nStock\n\n \n\n \n\nAdditional\n\nPaid-in\n\nCapital\n\n \n\n \n\nTreasury\n\nStock, at\n\ncost\n\n \n\n \n\nAccumulated\n\nOther\n\nComprehensive\n\nLoss\n\n \n\n \n\nRetained\n\nEarnings\n\n \n\n \n\nTotal\n\n \n\nBalance at January 1, 2023\n\n \n\n$\n\n91\n\n \n\n \n\n$\n\n613,278\n\n \n\n \n\n$\n\n(1,569,061\n\n)\n\n \n\n$\n\n(86,509\n\n)\n\n \n\n$\n\n1,939,497\n\n \n\n \n\n$\n\n897,296\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n8,595\n\n \n\n \n\n \n\n8,595\n\n \n\nOther comprehensive loss, net of tax\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(13,497\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(13,497\n\n)\n\nRepurchase of Class A common stock (Note 9)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(13,011\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(13,011\n\n)\n\nExercise of employee stock options (0.5 million shares)/vesting of stock awards\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(7,071\n\n)\n\n \n\n \n\n11,632\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,561\n\n \n\nStock-based compensation\n\n \n\n \n\n—\n\n \n\n \n\n \n\n15,646\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n15,646\n\n \n\nCash dividends\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(77,622\n\n)\n\n \n\n \n\n(77,622\n\n)\n\nBalance at December 31, 2023\n\n \n\n$\n\n91\n\n \n\n \n\n$\n\n621,853\n\n \n\n \n\n$\n\n(1,570,440\n\n)\n\n \n\n$\n\n(100,006\n\n)\n\n \n\n$\n\n1,870,470\n\n \n\n \n\n$\n\n821,968\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(146,594\n\n)\n\n \n\n \n\n(146,594\n\n)\n\nOther comprehensive loss, net of tax\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(24,752\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(24,752\n\n)\n\nExercise of employee stock options (0.3 million shares)/vesting of stock awards\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(8,889\n\n)\n\n \n\n \n\n6,826\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(2,063\n\n)\n\nStock-based compensation\n\n \n\n \n\n—\n\n \n\n \n\n \n\n14,823\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n14,823\n\n \n\nCash dividends\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(11,927\n\n)\n\n \n\n \n\n(11,927\n\n)\n\nBalance at December 31, 2024\n\n \n\n$\n\n91\n\n \n\n \n\n$\n\n627,787\n\n \n\n \n\n$\n\n(1,563,614\n\n)\n\n \n\n$\n\n(124,758\n\n)\n\n \n\n$\n\n1,711,949\n\n \n\n \n\n$\n\n651,455\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n160,204\n\n \n\n \n\n \n\n160,204\n\n \n\nOther comprehensive income, net of tax\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n8,653\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n8,653\n\n \n\nRepurchase of Class A common stock (Note 9)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(20,040\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(20,040\n\n)\n\nExercise of employee stock options (0.4 million shares)/vesting of stock awards\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(10,507\n\n)\n\n \n\n \n\n8,595\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(1,912\n\n)\n\nStock-based compensation\n\n \n\n \n\n—\n\n \n\n \n\n \n\n18,714\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n18,714\n\n \n\nCash dividends\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(11,834\n\n)\n\n \n\n \n\n(11,834\n\n)\n\nBalance at December 31, 2025\n\n \n\n$\n\n91\n\n \n\n \n\n$\n\n635,994\n\n \n\n \n\n$\n\n(1,575,059\n\n)\n\n \n\n$\n\n(116,105\n\n)\n\n \n\n$\n\n1,860,319\n\n \n\n \n\n$\n\n805,240\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n70\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nConsolidated Statements of\nCash Flows\n\n(U.S. dollars in thousands)\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCash flows from operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss)\n\n \n\n$\n\n160,204\n\n \n\n \n\n$\n\n(146,594\n\n)\n\n \n\n$\n\n8,595\n\n \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGain on sale of business\n\n \n\n \n\n(176,162\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nDepreciation and amortization\n\n \n\n \n\n52,261\n\n \n\n \n\n \n\n69,810\n\n \n\n \n\n \n\n70,923\n\n \n\nNon-cash lease expense\n\n \n\n \n\n26,227\n\n \n\n \n\n \n\n26,600\n\n \n\n \n\n \n\n33,321\n\n \n\nStock-based compensation\n\n \n\n \n\n24,105\n\n \n\n \n\n \n\n14,823\n\n \n\n \n\n \n\n15,646\n\n \n\nInventory write-down\n\n \n\n \n\n3,807\n\n \n\n \n\n \n\n48,221\n\n \n\n \n\n \n\n88,108\n\n \n\nForeign currency losses\n\n \n\n \n\n6,092\n\n \n\n \n\n \n\n1,709\n\n \n\n \n\n \n\n1,039\n\n \n\n(Gain) loss on disposal of assets\n\n \n\n \n\n160\n\n \n\n \n\n(84\n\n)\n\n \n\n \n\n780\n\n \n\nImpairment of fixed assets, goodwill and other intangibles\n\n \n\n \n\n25,114\n\n \n\n \n\n \n\n181,069\n\n \n\n \n\n \n\n—\n\n \n\nUnrealized losses on equity investments\n\n \n\n \n\n28,077\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nDeferred taxes\n\n \n\n \n\n20\n\n \n\n \n\n \n\n(55,477\n\n)\n\n \n\n \n\n(18,090\n\n)\n\nChanges in operating assets and liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts receivable, net\n\n \n\n \n\n10,055\n\n \n\n \n\n \n\n(7,763\n\n)\n\n \n\n \n\n(22,679\n\n)\n\nInventories, net\n\n \n\n \n\n11,887\n\n \n\n \n\n \n\n30,318\n\n \n\n \n\n \n\n(13,222\n\n)\n\nPrepaid expenses and other\n\n \n\n \n\n(20,415\n\n)\n\n \n\n \n\n579\n\n \n\n \n\n \n\n6,359\n\n \n\nOther assets\n\n \n\n \n\n(8,577\n\n)\n\n \n\n \n\n(1,054\n\n)\n\n \n\n \n\n45\n\n \n\nAccounts payable\n\n \n\n \n\n(9,112\n\n)\n\n \n\n \n\n(7,294\n\n)\n\n \n\n \n\n(10,083\n\n)\n\nAccrued expenses\n\n \n\n \n\n(54,315\n\n)\n\n \n\n \n\n(27,582\n\n)\n\n \n\n \n\n(37,701\n\n)\n\nOther liabilities\n\n \n\n \n\n858\n\n \n\n \n\n \n\n(15,539\n\n)\n\n \n\n \n\n(4,402\n\n)\n\nNet cash provided by operating activities\n\n \n\n \n\n80,286\n\n \n\n \n\n \n\n111,742\n\n \n\n \n\n \n\n118,639\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash flows from investing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchases of property and equipment\n\n \n\n \n\n(34,277\n\n)\n\n \n\n \n\n(41,583\n\n)\n\n \n\n \n\n(58,490\n\n)\n\nProceeds on investment sales\n\n \n\n \n\n10,214\n\n \n\n \n\n \n\n18,378\n\n \n\n \n\n \n\n18,147\n\n \n\nPurchases of investments\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(14,757\n\n)\n\n \n\n \n\n(16,883\n\n)\n\nAcquisitions (net of cash acquired)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(77,275\n\n)\n\nProceeds from sale of business, net\n\n \n\n \n\n193,725\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther, net\n\n \n\n \n\n1,000\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nNet cash provided by (used in) investing activities\n\n \n\n \n\n170,662\n\n \n\n \n\n \n\n(37,962\n\n)\n\n \n\n \n\n(134,501\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash flows from financing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nExercise of employee stock options and taxes paid related to the net shares settlement of stock awards\n\n \n\n \n\n(1,912\n\n)\n\n \n\n \n\n(2,063\n\n)\n\n \n\n \n\n4,561\n\n \n\nPayment of cash dividends\n\n \n\n \n\n(11,834\n\n)\n\n \n\n \n\n(11,927\n\n)\n\n \n\n \n\n(77,622\n\n)\n\nRepurchase of shares of common stock\n\n \n\n \n\n(20,040\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(13,011\n\n)\n\nFinance lease principal payments\n\n \n\n \n\n(2,238\n\n)\n\n \n\n \n\n(2,886\n\n)\n\n \n\n \n\n(3,198\n\n)\n\nContingent consideration payments\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(6,300\n\n)\n\n \n\n \n\n—\n\n \n\nPayments on debt\n\n \n\n \n\n(225,000\n\n)\n\n \n\n \n\n(125,000\n\n)\n\n \n\n \n\n(10,000\n\n)\n\nProceeds from debt\n\n \n\n \n\n55,000\n\n \n\n \n\n \n\n15,000\n\n \n\n \n\n \n\n110,000\n\n \n\nOther, net\n\n \n\n \n\n3,620\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nNet cash (used in) provided by financing activities\n\n \n\n \n\n(202,404\n\n)\n\n \n\n \n\n(133,176\n\n)\n\n \n\n \n\n10,730\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEffect of exchange rate changes on cash\n\n \n\n \n\n3,203\n\n \n\n \n\n \n\n(9,778\n\n)\n\n \n\n \n\n(3,536\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet increase (decrease) in cash and cash equivalents\n\n \n\n \n\n51,747\n\n \n\n \n\n \n\n(69,174\n\n)\n\n \n\n \n\n(8,668\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents, beginning of period\n\n \n\n \n\n186,883\n\n \n\n \n\n \n\n256,057\n\n \n\n \n\n \n\n264,725\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents, end of period\n\n \n\n$\n\n238,630\n\n \n\n \n\n$\n\n186,883\n\n \n\n \n\n$\n\n256,057\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n71\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNU SKIN ENTERPRISES, INC.\n\nNotes to Consolidated Financial Statements\n\n1.\n\nThe Company\n\nNu Skin Enterprises, Inc. (the “Company”) is a holding company, with Nu Skin being the primary operating unit. Nu Skin develops and\ndistributes premium-quality, innovative beauty and wellness products that are sold worldwide. The Company reports revenue from nine\nsegments, consisting of its seven geographic Nu Skin segments—Americas, which includes Canada, Latin America and the United States;\nSoutheast Asia/Pacific, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand, and other markets; Mainland China; Japan; Europe and Africa, which includes markets in Europe as well as South\nAfrica; South Korea; and Hong Kong/Taiwan, which also includes Macau—and two Rhyz segments—Manufacturing, which includes manufacturing\nand packaging subsidiaries it has acquired; and Rhyz Other, which includes other investments by its Rhyz strategic investment arm (the Company’s subsidiaries operating within each segment are collectively referred to as the “Subsidiaries”). During the fourth quarter of 2025, the Company began pre-market activities in India, setting the operational foundation and infrastructure\nahead of a full market opening anticipated in the back half of 2026. This market’s financial results, which are included in the Southeast Asia/Pacific segment in this report, were insignificant for 2025.\n\n2.\n\nSummary of Significant Accounting Policies\n\nConsolidation\n\nThe consolidated financial statements include the accounts of the Company and the Subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.\n\nUse of estimates\n\nThe preparation of these financial statements, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), required\nmanagement to make estimates and assumptions that affected the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expenses\nduring the reporting period. Actual results may differ from these estimates.\n\nReclassifications\n\nCertain prior period amounts have been reclassified to conform with current presentation. The Company reclassified $25.6\nmillion of interest expense from other income (expense), net to the interest expense line on the consolidated statement of income\nfor the fiscal year 2023. The reclassification had no impact on net income for fiscal year 2023.\n\nCash and cash equivalents\n\nCash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less.\n\nAccounts receivable\n\nAccounts receivable represents amounts owed to us through our operating activities and are presented net of allowance for credit losses. Accounts\nreceivable for core Nu Skin consists primarily of credit card receivables, while accounts receivable for our Rhyz businesses consists primarily of trade receivables from customer sales. For the Company’s trade receivables from its Rhyz customers, the Company performs ongoing credit evaluations of its customers and maintains an allowance for expected credit losses. The allowance for expected credit\nlosses represents the Company’s best estimate based on current and historical information, and reasonable and supportable forecasts of future events and circumstances.\n\nInventories\n\nInventories consist primarily of raw materials for the production of finished goods or merchandise purchased for resale and are stated at the lower of standard cost or net\nrealizable value, using a standard cost method which approximates the first-in, first-out method. The Company records reserves on inventory that is damaged, expired, excess and slow-moving to cost of sales to establish a lower cost basis for that\ninventory. The Company had reserves of its inventory carrying value\ntotaling $58.0 million and $84.0\nmillion as of December 31, 2025 and 2024, respectively.\n\n72\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nInventories consist of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nRaw materials\n\n \n\n$\n\n94,944\n\n \n\n \n\n$\n\n121,929\n\n \n\nFinished goods\n\n \n\n \n\n83,699\n\n \n\n \n\n \n\n68,313\n\n \n\nTotal inventory, net\n\n \n\n$\n\n178,643\n\n \n\n \n\n$\n\n190,242\n\n \n\nReserves of inventories consist of the following (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBeginning balance\n\n \n\n$\n\n84,006\n\n \n\n \n\n$\n\n83,378\n\n \n\n \n\n$\n\n37,267\n\n \n\nAdditions (1)\n\n \n\n \n\n3,807\n\n \n\n \n\n \n\n48,211\n\n \n\n \n\n \n\n88,108\n\n \n\nDisposals\n\n \n\n \n\n(29,855\n\n)\n\n \n\n \n\n(47,583\n\n)\n\n \n\n \n\n(41,997\n\n)\n\nEnding balance\n\n \n\n$\n\n57,958\n\n \n\n \n\n$\n\n84,006\n\n \n\n \n\n$\n\n83,378\n\n \n\n(1)\n\nDuring the fourth quarter of 2024, the Company further executed on its product portfolio optimization initiative which\nresulted in an incremental inventory write-off charge of $38.8\nmillion to the inventory carrying value. During the third quarter of 2023, the Company made the strategic\ndecision to re-balance and narrow its product portfolio, which resulted in an incremental inventory write-off charge of $65.7\nmillion.\n\nPrepaid expense and other\n\nPrepaid expenses and other consist of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred charges\n\n \n\n$\n\n5,611\n\n \n\n \n\n$\n\n6,023\n\n \n\nPrepaid income tax\n\n \n\n \n\n23,639\n\n \n\n \n\n \n\n11,532\n\n \n\nPrepaid inventory and import costs\n\n \n\n \n\n4,956\n\n \n\n \n\n \n\n4,931\n\n \n\nPrepaid rent, insurance and other occupancy costs\n\n \n\n \n\n3,188\n\n \n\n \n\n \n\n3,597\n\n \n\nPrepaid promotion and event cost\n\n \n\n \n\n4,669\n\n \n\n \n\n \n\n5,818\n\n \n\nPrepaid other taxes\n\n \n\n \n\n18,683\n\n \n\n \n\n \n\n3,237\n\n \n\nDerivative financial instruments\n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,708\n\n \n\nPrepaid software license\n\n \n\n \n\n13,688\n\n \n\n \n\n \n\n15,118\n\n \n\nDeposits\n\n \n\n \n\n2,122\n\n \n\n \n\n \n\n3,960\n\n \n\nOther\n\n \n\n \n\n13,114\n\n \n\n \n\n \n\n13,719\n\n \n\n Total prepaid expense and other\n\n \n\n$\n\n89,670\n\n \n\n \n\n$\n\n72,643\n\n \n\nProperty and equipment\n\nProperty and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful lives:\n\nBuildings\n\n39 years\n\nFurniture and fixtures\n\n5 - 7 years\n\nComputers and equipment\n\n3 - 5 years\n\nLeasehold improvements\n\nShorter of estimated useful life or lease term\n\nScanners\n\n3 years\n\nVehicles\n\n3 - 5 years\n\nExpenditures for maintenance and repairs are charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and associated accumulated\ndepreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such\nassets may not be recoverable. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value.\n\n73\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nLeases\n\nThe Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses and\noperating lease liabilities on the consolidated balance sheets. Finance leases are included in other assets, accrued expenses and other liabilities on the consolidated balance sheets.\n\nOperating lease ROU assets represent the Company’s right to use\nan underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated\npresent value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU assets\nalso include any lease payments made and exclude lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that\noption. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s lease agreements do not contain any residual\nvalue guarantees.\n\nThe Company has lease agreements with lease and non-lease components. The Company accounts for the lease and non-lease components as a single lease\ncomponent.\n\nGoodwill and other intangible assets\n\nGoodwill is recorded when the cost of\nacquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are assessed for impairment annually on October 1. In addition,\nimpairment testing is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill and intangible assets with indefinite useful lives\nwould be written down to fair value if considered impaired.\n\nThe Company may use either a qualitative or\nquantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis is performed by evaluating a number of qualitative factors to determine whether it is more likely than\nnot that the fair value of a reporting unit was less than its carrying amount. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, the Company\nperforms a quantitative assessment.\n\nThe quantitative approach for\npotential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a\ndiscounted cash flow model) and the market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The\ncash flows used in the discounted cash flow model are based on the Company’s best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair\nvalue of a reporting unit. The market approach also requires management judgment in selecting comparable companies, business acquisitions and the transaction values observed and its related control premiums.\n\nIn the fourth quarter of 2025, the\ncarrying amount of goodwill at the date of the most recent annual impairment evaluation for the Manufacturing and Rhyz Other reporting unit was $78.9\nmillion and $4.7 million, respectively. The Company performed a quantitative (step one) goodwill impairment analysis for its Manufacturing reporting unit which indicated its fair value\nexceeded its carrying values and thus, was not deemed impaired. The Company performed a qualitative impairment analysis for its Rhyz Other reporting unit which indicated it was more likely than not that its fair value exceeded its\ncarrying value.\n\nThe impairment evaluation for\nindefinite-lived intangible assets consists of a qualitative assessment, similar to that for goodwill. If the qualitative assessment indicates it is more likely than not that the estimated fair value of an indefinite-lived intangible\nasset exceeds its carrying value, no further analysis is required, and the asset is not impaired.\n\nIntangible assets with finite useful lives are amortized to their estimated residual values over such finite lives using the straight-line method and reviewed for impairment whenever events or circumstances warrant such a review.\n\nEquity investments\n\nThe Company holds strategic investments in other companies.\nThese investments are accounted for under the measurement alternative described in ASC 321, Investments - Equity Securities\n(“ASC 321”) for equity investments that do not have readily determinable fair values. These investments are measured at cost, less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for\nidentical or similar investments of the same issuer. The Company does not exercise significant influence over these companies. These investments are carried on the consolidated balance sheets within Other Assets. Changes in fair value based on\nimpairments or resulting from observable price changes are recorded in Other Income (expense), net on the consolidated statements of income. See Note 11 – Fair Value and Equity Investments, for further details around the Company’s equity\ninvestments.\n\n74\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nOther assets\n\nOther assets consist of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred taxes\n\n \n\n$\n\n171,717\n\n \n\n \n\n$\n\n174,249\n\n \n\nDeposits for noncancelable operating leases\n\n \n\n \n\n11,990\n\n \n\n \n\n \n\n5,167\n\n \n\nCash surrender value for life insurance policies\n\n \n\n \n\n48,410\n\n \n\n \n\n \n\n44,091\n\n \n\nFinance lease, right-of-use asset, net\n\n \n\n \n\n7,686\n\n \n\n \n\n \n\n9,541\n\n \n\nEquity investments\n\n \n\n \n\n14,311\n\n \n\n \n\n \n\n35,726\n\n \n\nLong-term investments\n\n \n\n \n\n4,434\n\n \n\n \n\n \n\n3,864\n\n \n\nOther\n\n \n\n \n\n21,639\n\n \n\n \n\n \n\n25,370\n\n \n\nTotal other assets\n\n \n\n$\n\n280,187\n\n \n\n \n\n$\n\n298,008\n\n \n\nAccrued expenses\n\nAccrued expenses consist of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nAccrued sales force commissions and other payments\n\n \n\n$\n\n59,509\n\n \n\n \n\n$\n\n68,431\n\n \n\nAccrued income taxes\n\n \n\n \n\n7,349\n\n \n\n \n\n \n\n—\n\n \n\nAccrued other taxes\n\n \n\n \n\n16,990\n\n \n\n \n\n \n\n22,140\n\n \n\nAccrued payroll and other employee expenses\n\n \n\n \n\n25,081\n\n \n\n \n\n \n\n28,774\n\n \n\nAccrued payable to vendors\n\n \n\n \n\n13,802\n\n \n\n \n\n \n\n18,667\n\n \n\nShort-term operating lease liability\n\n \n\n \n\n18,440\n\n \n\n \n\n \n\n17,922\n\n \n\nShort-term liability for deferred compensation plan\n\n \n\n \n\n3,436\n\n \n\n \n\n \n\n4,419\n\n \n\nAccrued royalties\n\n \n\n \n\n548\n\n \n\n \n\n \n\n574\n\n \n\nSales return reserve\n\n \n\n \n\n2,295\n\n \n\n \n\n \n\n5,548\n\n \n\nDeferred revenue\n\n \n\n \n\n12,737\n\n \n\n \n\n \n\n15,688\n\n \n\nReserve for other tax liabilities\n\n \n\n \n\n21,865\n\n \n\n \n\n \n\n—\n\n \n\nOther\n\n \n\n \n\n35,499\n\n \n\n \n\n \n\n35,645\n\n \n\nTotal accrued expenses\n\n \n\n$\n\n217,551\n\n \n\n \n\n$\n\n217,808\n\n \n\nOther liabilities\n\nOther liabilities consist of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred tax liabilities\n\n \n\n$\n\n310\n\n \n\n \n\n$\n\n345\n\n \n\nReserve for other tax liabilities\n\n \n\n \n\n15,428\n\n \n\n \n\n \n\n39,521\n\n \n\nLiability for deferred compensation plan\n\n \n\n \n\n41,423\n\n \n\n \n\n \n\n38,568\n\n \n\nFinance lease liabilities\n\n \n\n \n\n6,346\n\n \n\n \n\n \n\n8,251\n\n \n\nAsset retirement obligation\n\n \n\n \n\n3,873\n\n \n\n \n\n \n\n3,312\n\n \n\nOther\n\n \n\n \n\n7,132\n\n \n\n \n\n \n\n7,478\n\n \n\nTotal other liabilities\n\n \n\n$\n\n74,512\n\n \n\n \n\n$\n\n97,475\n\n \n\n75\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nRevenue recognition\n\nNet sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as\nthe amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The Company recognizes revenue by transferring the promised products\nto the customer, with revenue primarily recognized at shipping point, the point in time the customer obtains control of the products. The Company accounts for\nshipping and handling activities after control of a product is transferred to a\ncustomer as fulfillment costs and not as a separate performance obligation. A reserve for product returns is accrued based on historical experience totaling $2.3 million and $5.5 million as of\nDecember 31, 2025 and 2024, respectively. During the years ended December 31, 2025, 2024 and 2023, the Company recorded sales returns of $25.5\nmillion, $36.7 million and $34.7\nmillion, respectively. The majority of the Company’s contracts have a single performance obligation and are short term in nature. As a practical expedient, the Company has elected not to disclose the value of unsatisfied performance obligations for\ncontracts with an expected length of less than one year. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are\nexcluded from net sales.\n\nContract Liabilities – Customer Loyalty Programs\n\nContract liabilities, recorded as deferred revenue\nwithin the accrued expenses line in the consolidated balance sheets, include loyalty point program deferrals with certain customers which are accounted for as a reduction in the transaction price and are generally recognized as points are redeemed\nfor additional products.\n\nThe balance of deferred revenue related to contract liabilities\nwas $7.2 million and $7.8\nmillion as of December 31, 2025, and 2024, respectively. The contract liabilities impact to revenue for the years ended December 31, 2025, 2024 and 2023 was an increase of $0.6 million, $4.8 million and $6.1 million, respectively.\n\nDisaggregation of Revenue\n\nPlease refer to Note 16 - Segment Information for revenue by segment and product line.\n\nArrangements with Multiple Performance Obligations\n\nThe Company’s contracts with customers may include multiple performance obligations. For such arrangements, which are immaterial to the current and prior\nperiod financial statements, the Company allocates revenues to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers for\nindividual products sales to customers.\n\nShipping and handling costs\n\nShipping and handling costs are recorded as cost of sales and are expensed as incurred.\n\nAdvertising expenses\n\nAdvertising costs are expensed as incurred and are included in\ngeneral and administrative expenses in the accompanying consolidated statements of income. Advertising expense incurred for the years ended December 31, 2025, 2024 and 2023 totaled $19.0 million, $17.4 million and $18.0 million, respectively.\n\nSelling expenses\n\nSelling expenses are the Company’s most significant expense and are classified as\noperating expenses. Selling expenses include commissions the Company pays to its Brand Affiliates, as well as salaries, service fees, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland\nChina. Selling expenses do not include amounts the Company pays to its sales force based on their personal purchases; rather, such amounts are reflected as reductions to\nrevenue. The term “Brand Affiliates” refers to members of the Company’s independent sales force in all of the Company’s markets besides Mainland China. In each of the Company’s markets, except Mainland China,\nSales Leaders can earn “multi-level” compensation under the Company’s global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have\ndeveloped and trained. The Company does not pay commissions on sales materials.\n\nOutside of Mainland China, the Company’s Brand Affiliates may\nmake profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by Brand Affiliates. In many markets, the\nCompany also allows individuals who are not members of its sales force, referred to as “preferred customers,” to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring\nmember of its sales force.\n\n76\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nResearch and development\n\nResearch and development costs are expensed as incurred and are\nincluded in general and administrative expenses in the accompanying consolidated statements of income and totaled $10.8 million, $13.0 million and $22.6 million in 2025,\n2024 and 2023, respectively.\n\nDeferred tax assets and liabilities\n\nThe Company accounts for income taxes in accordance with the Income Taxes Topic of the Financial Accounting Standards Codification. These standards establish\nfinancial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. The Company takes an asset and liability approach for financial accounting and\nreporting of income taxes. The Company pays 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 the Company and its\nforeign affiliates. Deferred tax assets and liabilities are created in this process. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. These deferred tax assets assume sufficient future earnings will\nexist for their realization and are calculated using anticipated tax rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized.\n\nUncertain tax positions\n\nThe Company files income tax returns in the U.S. federal jurisdiction, and in\nvarious state and foreign jurisdictions. In 2009, we entered into a voluntary program with the IRS called Compliance Assurance Process (“CAP”). Under the CAP program, the IRS audits the tax position of the Company to identify and resolve any\ntax issues that may arise throughout the tax year. In 2022 the IRS developed a new phase called “Bridge Plus.” Under Bridge Plus the taxpayer is required to provide book-to-tax reconciliations, credit utilization and other supporting\ndocumentation shortly after their audited financial statement is finalized. The Company has been selected for the Bridge Plus phase each year since the 2022 tax year. As of December 31, 2025, all open tax years except 2021 & 2024 have been\naudited and are effectively closed to further examination. 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\nof assurance for the year. There are limited circumstances that tax years in the Bridge phase will be opened for examination. For the tax year 2024, the company has provided all required documentation to the IRS and is waiting for the IRS to\nissue their Full Acceptance Letter to indicate the audit is complete and the period is closed. 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\njurisdictions have varying lengths of statutes of limitations for income tax examinations. Some statutes are as short as three years\nand in certain markets may be as long as ten years. The Company is currently under examination in certain foreign jurisdictions;\nhowever, the outcomes of those reviews are not yet determinable.\n\nA reconciliation of the beginning and ending amount of\nunrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nGross balance at January 1\n\n \n\n$\n\n25,866\n\n \n\n \n\n$\n\n22,002\n\n \n\n \n\n$\n\n23,099\n\n \n\nIncreases related to prior year tax positions\n\n \n\n \n\n551\n\n \n\n \n\n \n\n2,858\n\n \n\n \n\n \n\n180\n\n \n\nIncreases related to current year tax positions\n\n \n\n \n\n2,421\n\n \n\n \n\n \n\n5,354\n\n \n\n \n\n \n\n3,065\n\n \n\nSettlements\n\n \n\n \n\n(8,244\n\n)\n\n \n\n \n\n(2,299\n\n)\n\n \n\n \n\n(2,378\n\n)\n\nDecreases due to lapse of statutes of limitations\n\n \n\n \n\n(307\n\n)\n\n \n\n \n\n(489\n\n)\n\n \n\n \n\n(1,284\n\n)\n\nCurrency adjustments\n\n \n\n \n\n1,525\n\n \n\n \n\n(1,560\n\n)\n\n \n\n \n\n(680\n\n)\n\nGross balance at December 31\n\n \n\n$\n\n21,812\n\n \n\n \n\n$\n\n25,866\n\n \n\n \n\n$\n\n22,002\n\n \n\nAt December 31, 2025, the Company had $21.8 million in unrecognized tax benefits, all of which, if recognized, would affect the effective tax rate. In comparison, at December 31, 2024, the\nCompany had $25.9 million in unrecognized tax benefits, all of which, if recognized, would affect the effective tax rate. The Company’s\nunrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Potential changes in unrecognized tax benefits can arise from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes\nof limitation and possible completion of tax examinations.\n\nDuring the years ended December 31, 2025, 2024, and 2023 the\nCompany recognized $1.8 million, $0.7\nmillion, and $0.6 million, respectively, in interest and penalties expenses related to uncertain tax positions. The Company had $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\nrelated to uncertain tax positions are recognized as a component of income tax expense.\n\n77\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nNet income per share\n\nNet income per share is computed based on the weighted-average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share\ndata gives effect to all potentially dilutive common shares that were outstanding during the periods presented (Note 9).\n\nForeign currency translation\n\nA significant portion of the Company’s business operations\noccurs outside of the United States. The local currency of each of the Company’s Subsidiaries is considered its functional currency, except for the Company’s subsidiaries in Singapore and countries deemed highly inflationary where the U.S. dollar is\nused. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ equity is recorded at historical\nexchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and transaction gains and losses are included in other income (expense), net in the\nconsolidated statements of income. Net of tax, the accumulated other comprehensive loss related to the foreign currency translation adjustments are $116.1\nmillion (net of tax of $7.8 million), $128.4\nmillion (net of tax of $7.8 million), and $110.0\nmillion (net of tax of $7.4 million), at December 31, 2025, 2024 and 2023, respectively.\n\nClassification of a highly inflationary economy\n\nA market is considered to have a highly inflationary economy if it has a cumulative inflation rate of approximately 100% or more\nover a three-year period as well as other qualitative factors including historic inflation rate trends (increasing and decreasing), the capital intensiveness of the operation and other pertinent economic factors. The functional currency in highly\ninflationary economies is required to be the functional currency of the entity’s parent company, and transactions denominated in the local currency are remeasured to the functional currency. The remeasurement of local currency into U.S. dollars creates\nforeign currency transaction gains or losses, which the Company includes in its consolidated statements of income.\n\nIn the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018, we\nelected to adopt highly inflationary accounting for our subsidiary in Argentina. Under highly inflationary accounting, Argentina’s functional currency became the U.S. dollar, and its income statement and balance sheet have been measured in U.S. dollars\nusing both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in other income (expense), net and was not material. As of December 31,\n2025, and 2024, Argentina had a small net peso monetary position. Net sales of Argentina were less than 4 percent of our consolidated\nnet sales for the years ended December 31, 2025, 2024 and 2023.\n\nFair value of financial instruments\n\nThe carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term\nnature of these instruments. The Company’s current investments as of December 31, 2025 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent\nand ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. As of December 31, 2025 and 2024, the fair value of debt was $225.0 million and $395.0 million,\nrespectively. The fair value of the Company’s debt is estimated using level 2 inputs based on interest rates available for debt with similar terms and remaining maturities.\n\nThe FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous\nmarket for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards\nspecify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s\nmarket assumptions. These two types of inputs have created the following fair-value hierarchy:\n\n●\n\nLevel 1 – quoted prices in active markets for identical assets or liabilities;\n\n●\n\nLevel 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;\n\n●\n\nLevel 3 – unobservable inputs based on the Company’s own assumptions.\n\nAccounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to apply\nthe fair value option to existing eligible items.\n\n78\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nStock-based compensation\n\nAll share-based payments, including grants of stock options and\nrestricted stock units, are required to be recognized in the Company’s financial statements based upon their respective grant date fair values. The Black-Scholes option-pricing model is used to estimate the fair value of stock options. The\ndetermination of the fair value of stock options is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company uses historical\nvolatility as the expected volatility assumption required in the Black-Scholes model. The expected life of the stock options is based on historical data trended into the future. The risk-free interest rate assumption is based on observed interest\nrates appropriate for the expected terms of the Company’s stock options. The fair value of the Company’s restricted stock units is based on the closing market price of its stock on the date of grant less the Company’s expected dividend yield. The\nCompany recognizes stock-based compensation net of actual forfeitures over the requisite service period of the award.\n\nThe total compensation expense related to equity compensation\nplans was $18.7 million, $14.8\nmillion and $15.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. In 2025, 2024 and 2023, there were no reversals of expense associated with changes in the number of performance based awards expected to vest. For the years ended December 31, 2025, 2024 and 2023, all stock-based compensation expense was recorded within general and administrative\nexpenses.\n\nReporting comprehensive income\n\nComprehensive income is defined as the change in equity of a\nbusiness enterprise during a period from transactions and other events and circumstances from non-owner sources, and it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.\n\nDerivative instruments and hedging activities\n\nFASB ASC 815, Derivatives\nand Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative\ninstruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further,\nqualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about\ncredit-risk-related contingent features in derivative instruments.\n\nAs required by ASC 815, the Company records all derivatives on\nthe balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge\naccounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment\nattributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions,\nare considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition\non the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash\nflow hedge.  The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.\n\nIn accordance with the FASB’s fair value measurement guidance\nin ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.\n\nRecent accounting pronouncements\n\nIn December 2023, the FASB issued ASU 2023-09, Income\nTaxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies\nother income tax-related disclosures. ASU 2023-09 is effective for the Company’s annual periods beginning January 1, 2025. The Company adopted this standard prospectively\n\nand included the additional required disclosures for the annual period ended December 31, 2025.  See Note 12 - Income Taxes for further information.\n\n79\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220). This\nstandard requires disclosure of specific information about costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently\nevaluating the potential effect that the updated standard will have on its financial statement disclosures.\n\nIn January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update clarifies the effective date of\nASU 2024-03 (Disaggregation of Income Statement Expenses) to require all public business entities to adopt the guidance for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15,\n2027; early adoption is permitted. The Company is evaluating the impact of these disclosure requirements and the timing of adoption.\n\nIn September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments remove references to development “stages,”\nclarify the probable-to-complete threshold for capitalization of internal-use software costs, relocate website development guidance into Subtopic 350-40, and require that capitalized internal-use software costs follow Topic 360 disclosure\nrequirements regardless of balance-sheet presentation. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods; early adoption is permitted as of the beginning of an annual\nperiod. Entities may adopt the guidance prospectively, retrospectively, or using a modified prospective transition approach. The Company is evaluating the impact of this guidance and the available transition alternatives on its consolidated\nfinancial statements and disclosures.\n\n3.\n\nHeld for Sale\n\nAssets and liabilities to be disposed of by sale are classified as “held for sale” if their carrying amounts are principally expected to be recovered\nthrough a sale transaction rather than through continuing use. The classification occurs when the disposal group is available for immediate sale and the sale is probable. These criteria are generally met when an agreement to sell exists, or\nmanagement has committed to a plan to sell the assets within one year. Disposal groups are measured at the lower of carrying amount or fair value less costs to sell, and long-lived assets included within the disposal group are not depreciated or\namortized. The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an\nadjustment to the carrying value of the disposal group. When the net realizable value of a disposal group increases during a period, a gain can be\nrecognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale.\n\nOn January 2, 2025, the Company completed the sale of its Mavely entity to Clout.io Holdings, Inc. for $230 million in cash and shares of the purchaser’s common stock, subject to certain adjustments as set\nforth in the purchase agreement, including post-closing determination of net working capital and other elements of the purchase price. Following the completion of certain payments to\nother equity holders in Mavely and the payment of certain transaction expenses, the Company received net proceeds of $193.7 million and\nequity interest with an estimated fair value of $6.1 million. In the second quarter of 2025, the Company received an additional payment\nof $2.7 million and in the third quarter of 2025 received an additional $1.7 million. The estimated fair value of equity interest was based on observable price changes and is classified as a level 3 fair value measurement and is accounted for under the\nmeasurement alternative described in ASC 321-10-35-2 for equity securities that lack readily determinable fair values. In the first quarter of 2025, the Company recorded a gain on sale of $176.2 million.\n\nDuring the first quarter of 2025, the Company recorded $5.2\nmillion of stock-based compensation expense related to profit interest units issued to the Mavely founders. This expense should have been recorded in the fourth quarter of 2024 when the performance conditions became probable of vesting. The\nimpact of the adjustment to correct this item was immaterial to the current and prior period financial statements.\n\nAs of December 31, 2024, the Mavely disposal group, consisting of $26.9 million of current assets, $22.2 million of long-term assets, $13.9 million of current liabilities and $1.3\nmillion of long-term liabilities within the Company’s Rhyz Other segment, was classified as “Current assets held for sale”, “Long-term assets held for sale”, “Current liabilities held for sale” and “Long-term liabilities held for sale” in the\nConsolidated Balance Sheet. The Company determined that as of December 31, 2024, the disposal group met the criteria for classification as held for sale but did not meet the criteria for classification as discontinued operations. The Company\nrecognized income (loss) before provision for income taxes for the Mavely disposal group of $0, $9.0 million and $(7.7) million for the years ended December 31,\n2025, 2024 and 2023, respectively.\n\n80\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe total assets and liabilities of the Mavely disposal group that met the classification of held for sale in the Company’s\nConsolidated Balance sheet are as follows (U.S. dollars in thousands):\n\n \n\n \n\nDecember 31, 2024\n\n \n\nAssets\n\n \n\n \n\n \n\nCurrent assets\n\n \n\n \n\n \n\nAccounts receivable, net\n\n \n\n$\n\n26,455\n\n \n\nPrepaid expenses and other\n\n \n\n \n\n481\n\n \n\nTotal current assets held for sale\n\n \n\n \n\n26,936\n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty and equipment, net\n\n \n\n \n\n1,668\n\n \n\nGoodwill\n\n \n\n \n\n12,602\n\n \n\nOther intangible assets, net (1)\n\n \n\n \n\n7,934\n\n \n\nTotal long-term assets held for sale\n\n \n\n$\n\n22,204\n\n \n\nLiabilities\n\n \n\n \n\n \n\n \n\nCurrent liabilities\n\n \n\n \n\n \n\n \n\nAccounts payable\n\n \n\n$\n\n208\n\n \n\nAccrued expenses\n\n \n\n \n\n13,711\n\n \n\nTotal current liabilities held for sale\n\n \n\n \n\n13,919\n\n \n\n \n\n \n\n \n\n \n\n \n\nOther liabilities\n\n \n\n \n\n1,325\n\n \n\nTotal long-term liabilities held for sale\n\n \n\n \n\n1,325\n\n \n\n(1)\n\nNet\n\nof accumulated amortization of $8.4 million as of December 31, 2024.\n\n4.\n\nProperty and Equipment\n\nProperty and equipment are comprised of the following (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nLand\n\n \n\n$\n\n41,600\n\n \n\n \n\n$\n\n41,362\n\n \n\nBuildings\n\n \n\n \n\n307,229\n\n \n\n \n\n \n\n302,645\n\n \n\nConstruction in progress(1)\n\n \n\n \n\n14,801\n\n \n\n \n\n \n\n13,541\n\n \n\nFurniture and fixtures\n\n \n\n \n\n134,933\n\n \n\n \n\n \n\n129,627\n\n \n\nComputers and equipment\n\n \n\n \n\n163,641\n\n \n\n \n\n \n\n138,855\n\n \n\nLeasehold improvements\n\n \n\n \n\n98,039\n\n \n\n \n\n \n\n98,516\n\n \n\nScanners\n\n \n\n \n\n6,486\n\n \n\n \n\n \n\n6,337\n\n \n\nVehicles\n\n \n\n \n\n1,660\n\n \n\n \n\n \n\n1,667\n\n \n\n \n\n \n\n \n\n768,389\n\n \n\n \n\n \n\n732,550\n\n \n\nLess: accumulated depreciation\n\n \n\n \n\n(391,221\n\n)\n\n \n\n \n\n(352,955\n\n)\n\n \n\n \n\n$\n\n377,168\n\n \n\n \n\n$\n\n379,595\n\n \n\n(1)\n\nConstruction in progress includes $5.3 million and $5.2 million as of\nDecember 31, 2025 and 2024, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service.\n\nDepreciation of property and equipment totaled $43.9\nmillion, $56.2 million and $57.7\nmillion for the years ended December 31, 2025, 2024 and 2023, respectively.  The Company recorded impairments of $36.6 million for the year\nended December 31, 2024, in connection with our 2023 restructuring plan, see Note 18 – Restructuring and Severance Charges.\n\n81\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n5.\n\nGoodwill\n\nThe Company’s reporting units for goodwill are its operating segments, which are also its reportable segments, with the exception of Rhyz Other. The Rhyz Other segment is made up of two reporting units, which had goodwill of $4.7\nmillion and $0, respectively, as of both December 31, 2025 and December 31, 2024.\n\nThe following table presents goodwill allocated to the Company’s\nreportable segments for the periods ended December 31, 2025 and 2024 (U.S. dollars in thousands):\n\n \n\n \n\nNu Skin\n\n \n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n \n\nSoutheast\n\nAsia/Pacific\n\n \n\n \n\nMainland\n\nChina\n\n \n\n \n\nJapan\n\n \n\n \n\nEurope &\n\nAfrica\n\n \n\n \n\nSouth\n\nKorea\n\n \n\n \n\nHong Kong/\n\nTaiwan\n\n \n\n \n\nManufacturing\n\n \n\n \n\nRhyz\n\nOther\n\n \n\n \n\nTotal\n\nSegments\n\n \n\nGoodwill as of December 31, 2025\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n78,875\n\n \n\n \n\n$\n\n4,750\n\n \n\n \n\n$\n\n83,625\n\n \n\nGoodwill as of December 31, 2024\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n78,875\n\n \n\n \n\n$\n\n4,750\n\n \n\n \n\n$\n\n83,625\n\n \n\nAccumulated impairment\nlosses for each segment as of December 31, 2025 and December 31, 2024 are as follows:\n\n \n\n \n\nNu Skin\n\n \n\n \n\nRhyz \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n \n\nSoutheast\n\nAsia/Pacific\n\n \n\n \n\nMainland\n\nChina\n\n \n\n \n\nJapan\n\n \n\n \n\nEurope &\n\nAfrica\n\n \n\n \n\nSouth\n\nKorea\n\n \n\n \n\nHong Kong/\n\nTaiwan\n\n \n\n \n\nManufacturing\n\n \n\n \n\nRhyz\n\nOther\n\n \n\n \n\nTotal\n\nSegments\n\n \n\nAccumulated impairment losses\n\n \n\n$\n\n9,449\n\n \n\n \n\n$\n\n18,537\n\n \n\n \n\n$\n\n32,179\n\n \n\n \n\n$\n\n16,019\n\n \n\n \n\n$\n\n2,875\n\n \n\n \n\n$\n\n29,261\n\n \n\n \n\n$\n\n6,634\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n19,587\n\n \n\n \n\n$\n\n134,541\n\n \n\nAll of the Company’s goodwill is recorded in U.S. dollar functional currency and\nallocated to the respective segments. Goodwill is not amortized; rather, it is subject to annual impairment tests.\n\nDuring the three months ended June 30, 2024, the Company determined that the\ncontinued decline in the Company’s stock price and corresponding decrease in market capitalization as well as declines in some of the Company’s reporting units’ forecasts were triggering events that required the Company to perform a quantitative\nimpairment analysis for all reporting units. Based on the analysis, the Company concluded the estimated fair values of certain of its reporting units were less than their carrying values of equity as June 30, 2024. As a result, the Company recorded\nnon-cash goodwill impairment charges of $130.9 million within restructuring and impairment expenses on the consolidated statement of income during the three months ended June 30, 2024.  The impairment charges were $9.4 million for the Americas segment, $32.2\nmillion for the Mainland China segment, $18.5 million for the Southeast Asia/Pacific segment, $16.0 million for the Japan segment, $29.3 million for the South\nKorea segment, $2.9 million for the Europe & Africa segment, $6.6 million for the Hong Kong/Taiwan segment and $15.9 million for\nthe BeautyBio reporting unit within the Rhyz Other segment. As part of the Company’s impairment analysis, the fair values of the reporting units were determined using the income approach. The income approach used level 3 inputs and utilized\nmanagement estimates related to revenue growth rates, profitability margins, estimated future cash flows and discount rates.\n\nDuring the three months ended September 30, 2024, the Company determined that the\ncontinued decline in the Company’s stock price and corresponding decrease in market capitalization were a triggering event that required the Company to perform a quantitative impairment analysis for the Manufacturing and Rhyz Other reporting units.\nBased on the analysis, the Company 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.\n\nDuring the fourth quarter of 2024, the continued decline in our BeautyBio reporting\nunit forecast was a triggering event that required us to perform a quantitative analysis. As a result, we concluded the estimated fair value of our BeautyBio reporting unit was less than its carrying value and as a result recorded a non-cash goodwill\nimpairment charge of $3.6 million.\n\n82\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n6.\n\nOther Intangible Assets\n\nOther intangible assets consist of the following (U.S. dollars in thousands):\n\n \n\nCarrying Amount at December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nIndefinite life intangible assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nTrademarks and trade names\n\n \n\n$\n\n24,599\n\n \n\n \n\n$\n\n24,599\n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nWeighted-average\n\nFinite life intangible assets:\n\n \n\nGross Carrying\n\nAmount\n\n \n\n \n\nAccumulated\n\nAmortization\n\n \n\n \n\nGross Carrying\n\nAmount\n\n \n\n \n\nAccumulated\n\nAmortization\n\n \n\nAmortization\n\nPeriod\n\nScanner technology\n\n \n\n$\n\n40,716\n\n \n\n \n\n$\n\n40,716\n\n \n\n \n\n$\n\n40,716\n\n \n\n \n\n$\n\n40,716\n\n \n\n18 years\n\nDeveloped technology\n\n \n\n \n\n34,766\n\n \n\n \n\n \n\n29,815\n\n \n\n \n\n \n\n36,526\n\n \n\n \n\n \n\n28,254\n\n \n\n16 years\n\nSales force network\n\n \n\n \n\n11,598\n\n \n\n \n\n \n\n11,598\n\n \n\n \n\n \n\n11,598\n\n \n\n \n\n \n\n11,598\n\n \n\n15 years\n\nTrademarks\n\n \n\n \n\n7,467\n\n \n\n \n\n \n\n4,673\n\n \n\n \n\n \n\n26,386\n\n \n\n \n\n \n\n5,789\n\n \n\n13 years\n\nCustomer relationships\n\n \n\n \n\n35,649\n\n \n\n \n\n \n\n31,420\n\n \n\n \n\n \n\n40,718\n\n \n\n \n\n \n\n28,141\n\n \n\n8\nyears\n\nOther\n\n \n\n \n\n19,127\n\n \n\n \n\n \n\n13,086\n\n \n\n \n\n \n\n19,777\n\n \n\n \n\n \n\n11,544\n\n \n\n13 years\n\n \n\n \n\n$\n\n149,323\n\n \n\n \n\n$\n\n131,308\n\n \n\n \n\n$\n\n175,721\n\n \n\n \n\n$\n\n126,042\n\n \n\n14 years\n\nAmortization of finite-life intangible assets totaled $7.1 million, $12.3 million and $11.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nThe estimated annual amortization expense for each of the five succeeding fiscal years are as follows (U.S. dollars in thousands):\n\nYear Ending December 31,\n\n \n\n \n\n \n\n2026\n\n \n\n$\n\n6,342\n\n \n\n2027\n\n \n\n \n\n4,175\n\n \n\n2028\n\n \n\n \n\n3,912\n\n \n\n2029\n\n \n\n \n\n1,599\n\n \n\n2030\n\n \n\n \n\n778\n\n \n\nIndefinite life intangible assets are not\namortized, rather they are subject to annual impairment tests. Finite life intangibles are amortized over their useful lives. The Company reviews long-lived assets for impairment when performance expectations, events or change in\ncircumstances indicate that the assets’ carrying value may not be recoverable.  The evaluation is performed at the lowest level of identifiable cash flows by comparing the carrying value of the asset group to the net undiscounted cash flows.\nIf the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related asset group.\n\nDuring\n\nthe second quarter of 2024, based on continued losses and change in forecasted losses associated with the BeautyBio retail asset group within the Rhyz Other segment, the Company concluded that these factors were an interim triggering event. As\na result, the Company performed an interim impairment test of the asset group and assessed the recoverability of the related asset group by comparing the carrying value of the retail asset group to the net undiscounted cash flow expected to be\ngenerated. The recoverability test indicated that the retail asset group was impaired. The Company concluded the retail asset group’s carrying value exceeded its estimated fair value, which was determined utilizing the discounted projected\nfuture cash flows, which resulted in an impairment charge. The estimated fair value was based on expected future cash flows using level 3 inputs and utilized management estimates related to revenue growth\nrates, profitability margins and discount rates. The Company recorded an impairment charge of $10.1 million for its Rhyz\nOther segment during the three months ended June 30, 2024 within restructuring and impairment expenses on the consolidated statement of income. Following the impairment, the retail asset group has a remaining carrying value of $2.3 million with a remaining amortization period of approximately 9 years.\n\n83\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nDuring the first quarter of 2025, the Company decided to make a strategic shift in how it operates the BeautyBio asset group. These strategy\nchanges included exiting certain sales channels which reduced the forecasted revenues for BeautyBio. The Company concluded these actions were an interim impairment triggering event. As a result, the Company performed an interim impairment\ntest of the asset group and assessed the recoverability of the related asset group by comparing the carrying value of the asset group to the net undiscounted cash flow expected to be generated. The recoverability test indicated that the\nasset group was impaired. The Company concluded the asset group’s carrying value exceeded its estimated fair value, which was determined utilizing the discounted projected future cash flows, which resulted in an impairment charge. The\nestimated fair value was based on expected future cash flows using level 3 inputs and utilized management estimates related to revenue growth rates, profitability margins and discount rates. As a result, during the three months ended March\n31, 2025, the Company recorded an impairment charge of $25.1 million on the BeautyBio asset group, which is part of its Rhyz\nOther segment within restructuring and impairment expenses on the consolidated statement of income. As of the impairment date, the BeautyBio asset group had a remaining carrying value of $2.3 million with a remaining weighted-average amortization period of approximately 7 years.\n\n7.\n\nLong-Term Debt\n\nCredit Agreement\n\nOn June 14, 2022, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with several\nfinancial institutions as lenders and Bank of America, N.A., as administrative agent, which amended and restated the 2018 Credit Agreement. The Credit Agreement provides for a $400 million term loan facility and a $500 million revolving credit facility,\neach with a term of five years.  Both facilities bear interest at the SOFR, plus a margin based on the Company’s consolidated\nleverage ratio. Commitment fees payable under the Credit Agreement are also based on the consolidated leverage ratio as defined in the Credit Agreement and range from 0.175% to 0.30% on the unused portion of the total lender commitments then in\neffect. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 2.5% during the\nfirst year and 5.0% during the second, third, fourth and fifth years after the closing date of the Credit Agreement, with the\nremainder payable at final maturity. The Credit Agreement is guaranteed by certain of the Company’s domestic subsidiaries and collateralized by assets of such subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries. The Credit Agreement requires the Company 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. As of December 31, 2025, the Company was in compliance with all covenants under the Credit Agreement.\n\nThe following table summarizes the Company’s debt facilities as of December 31, 2025 and 2024:\n\nFacility or Arrangement\n\n \n\nOriginal\n\nPrincipal\n\nAmount\n\n \n\nBalance as of\n\nDecember 31,\n\n2025 (1)(2)\n\n \n\nBalance as of\n\nDecember 31,\n\n2024 (1)(2)\n\n \n\nInterest\n\nRate\n\n \n\nRepayment\n\nTerms\n\nCredit Agreement term loan facility\n\n \n\n$400.0 million\n\n \n\n$225.0 million\n\n \n\n \n\n$360.0 million\n\n \n\nVariable 30 day: 5.57%\n\n \n\n21% of the principal amount is payable in increasing quarterly installments over a five-year\nperiod that began on September 30, 2022, with the remainder payable at the end of the five-year term.\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCredit Agreement revolving credit facility\n\n \n\n \n\n \n\n$— million\n\n \n\n$35.0 million\n\n \n\nVariable 30 day: —\n\n \n\nRevolving line of credit expires June 14, 2027.\n\n(1)\n\nAs of December 31, 2025 and 2024, the current portion of the Company’s debt\n(i.e. becoming due in the next 12 months) included $20.0 million and $20.0 million, respectively, of the balance of its term loan under the Credit Agreement.\n\n(2)\n\nThe carrying value of the debt reflects the amounts stated in the above\ntable, less debt issuance costs of $0.8 million and $1.4 million as of December 31, 2025 and 2024, respectively, related to the Credit Agreement, which are not reflected in this table.\n\n84\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nMaturities of all long-term debt at December 31, 2025, are as follows (U.S. dollars in thousands):\n\nYear Ending December 31,\n\n \n\n \n\n \n\n2026\n\n \n\n$\n\n20,000\n\n \n\n2027\n\n \n\n \n\n205,000\n\n \n\n2028\n\n \n\n \n\n—\n\n \n\n2029\n\n \n\n \n\n—\n\n \n\n2030\n\n \n\n \n\n—\n\n \n\nThereafter\n\n \n\n \n\n—\n\n \n\nTotal (1)\n\n \n\n$\n\n225,000\n\n \n\n(1)\n\nThe carrying value of the debt in the above table excludes debt issuance\ncosts of $0.8 million.\n\nCash paid for interest totaled $16.7 million, $35.3 million and $33.3 million for the\nyears ended December 31, 2025, 2024 and 2023.\n\n8.\n\nLeases\n\nThe Company has operating and finance leases for regional offices, manufacturing facilities, retail\ncenters, distribution centers and certain equipment. The Company’s leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 20 years, and some of which include options to terminate the leases within 1 year.\n\nThe weighted-average remaining lease term and weighted-average discount rate are as follows:\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nWeighted-average remaining lease term:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n \n\n6.3\n\n \n\n \n\n \n\n7.2\n\n \n\n \n\n \n\n8.5\n\n \n\nFinance leases\n\n \n\n \n\n3.9\n\n \n\n \n\n \n\n4.8\n\n \n\n \n\n \n\n3.7\n\n \n\nWeighted-average discount rate:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n \n\n3.9\n\n%\n\n \n\n \n\n3.5\n\n%\n\n \n\n \n\n3.6\n\n%\n\nFinance leases\n\n \n\n \n\n6.6\n\n%\n\n \n\n \n\n6.6\n\n%\n\n \n\n \n\n3.7\n\n%\n\nThe components of lease expense were as follows (U.S. dollars in thousands):\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nOperating lease expense\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease cost\n\n \n\n$\n\n23,327\n\n \n\n \n\n$\n\n23,668\n\n \n\n \n\n$\n\n29,186\n\n \n\nVariable lease cost\n\n \n\n \n\n4,812\n\n \n\n \n\n \n\n6,203\n\n \n\n \n\n \n\n4,245\n\n \n\nFinance lease expense\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of right-of-use assets\n\n \n\n \n\n2,129\n\n \n\n \n\n \n\n2,707\n\n \n\n \n\n \n\n4,785\n\n \n\nInterest on lease liabilities\n\n \n\n \n\n632\n\n \n\n \n\n \n\n404\n\n \n\n \n\n \n\n502\n\n \n\nTotal lease expense\n\n \n\n$\n\n30,900\n\n \n\n \n\n$\n\n32,982\n\n \n\n \n\n$\n\n38,718\n\n \n\nSupplemental cash flow information related to leases was as follows (U.S. dollars in thousands):\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nOperating cash outflow from operating leases\n\n \n\n$\n\n23,833\n\n \n\n \n\n$\n\n24,609\n\n \n\n \n\n$\n\n29,055\n\n \n\nOperating cash outflow from finance leases\n\n \n\n$\n\n640\n\n \n\n \n\n$\n\n376\n\n \n\n \n\n$\n\n481\n\n \n\nFinancing cash outflow from finance leases\n\n \n\n$\n\n2,238\n\n \n\n \n\n$\n\n2,886\n\n \n\n \n\n$\n\n3,198\n\n \n\nRight-of-use assets obtained in exchange for operating lease obligations\n\n \n\n$\n\n24,912\n\n \n\n \n\n$\n\n16,469\n\n \n\n \n\n$\n\n27,730\n\n \n\nRight-of-use assets obtained in exchange for finance lease obligations\n\n \n\n$\n\n291\n\n \n\n \n\n$\n\n30\n\n \n\n \n\n$\n\n1,081\n\n \n\n85\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nMaturities of lease liabilities are as follows (U.S. dollars in thousands):\n\nYear Ending December 31,\n\n \n\nOperating\n\nLeases\n\n \n\n \n\nFinance\n\nLeases\n\n \n\n2026\n\n \n\n$\n\n20,972\n\n \n\n \n\n$\n\n2,521\n\n \n\n2027\n\n \n\n \n\n16,264\n\n \n\n \n\n \n\n2,498\n\n \n\n2028\n\n \n\n \n\n12,158\n\n \n\n \n\n \n\n2,462\n\n \n\n2029\n\n \n\n \n\n10,295\n\n \n\n \n\n \n\n2,004\n\n \n\n2030\n\n \n\n \n\n5,492\n\n \n\n \n\n \n\n6\n\n \n\nThereafter\n\n \n\n \n\n19,342\n\n \n\n \n\n \n\n—\n\n \n\nTotal\n\n \n\n \n\n84,523\n\n \n\n \n\n \n\n9,491\n\n \n\nLess: Finance charges\n\n \n\n \n\n8,443\n\n \n\n \n\n \n\n1,116\n\n \n\nTotal principal liability\n\n \n\n$\n\n76,080\n\n \n\n \n\n$\n\n8,375\n\n \n\nThe Company has additional lease liabilities of $37.7\nmillion which have not yet commenced as of December 31, 2025, and as such, have not been recognized on the consolidated balance sheets.\n\n9.\n\nCapital Stock\n\nThe Company’s authorized capital stock consists of 25\nmillion shares of preferred stock, par value $0.001 per share, 500 million shares of Class A common stock, par value $0.001 per share, and 100 million shares of Class B common stock, par value $0.001 per share. As of December 31, 2025 and 2024, there were no preferred or Class B common shares outstanding. Each share of Class A common stock entitles the holder to one vote on matters submitted to a vote of the Company’s stockholders. Stock dividends of Class A common stock may be paid\nonly to holders of Class A common stock. Class A common stock has no conversion rights.\n\nWeighted-average common shares outstanding\n\nThe following is a reconciliation of the weighted-average common\nshares outstanding for purposes of computing basic and diluted net income per share (in thousands):\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBasic weighted-average common shares outstanding\n\n \n\n \n\n49,293\n\n \n\n \n\n \n\n49,662\n\n \n\n \n\n \n\n49,711\n\n \n\nEffect of dilutive securities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStock awards and options\n\n \n\n \n\n1,008\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n149\n\n \n\nDiluted weighted-average common shares outstanding\n\n \n\n \n\n50,301\n\n \n\n \n\n \n\n49,662\n\n \n\n \n\n \n\n49,860\n\n \n\nFor the years ended December 31, 2025, 2024 and 2023, other stock options totaling 1.6 million, 1.5 million and 1.8 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.\n\nDividends\n\nQuarterly cash dividends for the years ended December 31, 2025, 2024, and 2023 totaled $11.8 million, $11.9 million, and $77.6 million or $0.06 per share\nin all quarters of 2025 and 2024 and $0.39 for all quarters of 2023. The board of directors has declared a quarterly cash dividend of $0.06 per share of Class A common stock to be paid on March 11, 2026 to\nstockholders of record on February 27, 2026.\n\nRepurchases of common stock\n\nIn July 2018, the Company’s board of directors approved a stock repurchase plan with an authorization amount of $500\nmillion. The repurchases are used primarily for strategic initiatives and to offset dilution from the Company’s equity incentive plans. During the year ended December 31, 2025, the Company purchased 2.0 million shares under the 2018 plan for $20.0 million. During\nthe year ended December 31, 2024, the Company purchased no shares. During the year ended December 31, 2023, the Company purchased 0.6 million shares under the 2018 plan for $13.0\nmillion. At December 31, 2025, $142.3 million was available for repurchases under the 2018 stock repurchase plan.\n\n86\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n10.\n\nStock–Based Compensation\n\nAt December 31, 2025, the Company had the following stock-based employee compensation plans:\n\nEquity Incentive Plans\n\nIn April 2010, the Company’s board of directors approved the Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (the “2010 Omnibus Incentive Plan”). This plan was\napproved by the Company’s stockholders at the Company’s 2010 Annual Meeting of Stockholders held in May 2010. The 2010 Omnibus Incentive Plan provides for granting of a variety of equity-based awards including stock options, stock appreciation\nrights, restricted stock, restricted stock units, other share-based awards, performance cash, performance shares and performance units to executives, other employees and independent consultants of the Company and its subsidiaries, as well as\ndirectors of the Company. Options granted under the 2010 Omnibus Incentive Plan are generally non-qualified stock options, but the 2010 Omnibus Incentive Plan permits some stock options granted to qualify as “incentive stock options” under the U.S.\nInternal Revenue Code. The exercise price of a stock option generally is equal to the fair market value of the Company’s common stock on the stock option grant date. The contractual term of a stock option granted under the 2010 Omnibus Incentive Plan\nis seven years. Currently, all shares issued upon the exercise of stock options are from the Company’s treasury shares. Subject to certain\nadjustments, 7.0 million shares were authorized for issuance under the 2010 Omnibus Incentive Plan. In June 2013, the Company’s\nstockholders approved an Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 3.2\nmillion shares. In May 2016, the Company’s stockholders approved a Second Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 3.8 million shares. In June 2020, the Company’s stockholders\napproved a Third Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 5.9 million shares.\n\nIn April 2024, the Company’s board of directors approved the Nu Skin Enterprises, Inc. 2024 Omnibus Incentive Plan (the “2024 Omnibus Incentive Plan”). This plan was\napproved by the Company’s stockholders at the Company’s 2024 Annual Meeting of Stockholders held in June 2024. The 2024 Omnibus Incentive Plan provides for granting of a variety of equity-based awards including stock options, stock appreciation\nrights, restricted stock, restricted stock units, other share-based awards, performance cash, performance shares and performance units to executives, other employees and independent consultants of the Company and its subsidiaries, as well as\ndirectors of the Company. Subject to certain adjustments, the number of shares authorized for issuance under the 2024 Omnibus Incentive Plan was the sum of 1.2 million shares plus the number of shares which, as of the 2024 Omnibus Incentive Plan’s effective date, were available for issuance under the Third Amended and Restated 2010 Omnibus\nIncentive Plan. In May 2025, the Company’s stockholders approved an Amended and Restated 2024 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 790,000 shares.\n\nOptions under the plans as of December 31, 2025 and changes during the year ended December 31, 2025 were as follows:\n\n \n\nShares\n\n(in thousands)\n\n \n\n \n\nWeighted-\n\naverage\n\nExercise\n\nPrice\n\n \n\n \n\nWeighted-\n\naverage\n\nRemaining\n\nContractual\n\nTerm (in years)\n\n \n\n \n\nAggregate\n\nIntrinsic\n\nValue\n\n(in thousands)\n\n \n\nOptions activity – performance based\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOutstanding at December 31, 2024\n\n \n\n \n\n701.5\n\n \n\n \n\n$\n\n36.77\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nExercised\n\n \n\n \n\n—\n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForfeited/cancelled/expired\n\n \n\n \n\n(77.4\n\n)\n\n \n\n \n\n67.53\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOutstanding at December 31, 2025\n\n \n\n \n\n624.1\n\n \n\n \n\n \n\n32.96\n\n \n\n \n\n \n\n1.26\n\n \n\n \n\n$\n\n—\n\n \n\nExercisable at December 31, 2025\n\n \n\n \n\n624.1\n\n \n\n \n\n \n\n32.96\n\n \n\n \n\n \n\n1.26\n\n \n\n \n\n \n\n—\n\n \n\nThe aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last\ntrading day of the respective years and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2025. This amount varies\nbased on the fair market value of the Company’s stock.\n\n87\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nCash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2025, 2024 and 2023, were as follows (U.S. dollars in thousands):\n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCash proceeds from stock options exercised\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n8,322\n\n \n\nTax benefit / (expense) realized for stock options exercised\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n482\n\nIntrinsic value of stock options exercised\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,338\n\n \n\nNonvested restricted stock awards as of December 31, 2025 and changes during the year ended December 31, 2025 were as follows:\n\n \n\nNumber\n\nof Shares\n\n(in thousands)\n\n \n\n \n\nWeighted-\n\naverage\n\nGrant Date\n\nFair Value\n\n \n\nNonvested at December 31, 2024\n\n \n\n \n\n1,483.8\n\n \n\n \n\n$\n\n21.36\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n1,689.8\n\n \n\n \n\n \n\n7.43\n\n \n\nVested\n\n \n\n \n\n(529.3\n\n)\n\n \n\n \n\n24.33\n\n \n\nForfeited\n\n \n\n \n\n(146.0\n\n)\n\n \n\n \n\n14.15\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNonvested at December 31, 2025\n\n \n\n \n\n2,498.3\n\n \n\n \n\n$\n\n11.68\n\n \n\nNonvested performance share units as of December 31, 2025 and changes during the year ended December 31, 2025 were as follows:\n\n \n\n \n\nNumber\n\nof Shares\n\n(in thousands)\n\n \n\n \n\nWeighted-\n\naverage\n\nGrant Date\n\nFair Value\n\n \n\nNonvested at December 31, 2024\n\n \n\n \n\n667.2\n\n \n\n \n\n$\n\n17.75\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGranted\n\n \n\n \n\n894.3\n\n \n\n \n\n \n\n7.49\n\n \n\nVested\n\n \n\n \n\n(48.2\n\n)\n\n \n\n \n\n11.90\n\n \n\nForfeited\n\n \n\n \n\n(243.8\n\n)\n\n \n\n \n\n22.77\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNonvested at December 31, 2025\n\n \n\n \n\n1,269.5\n\n \n\n \n\n$\n\n9.78\n\n \n\nStock-based compensation expense is recognized on a straight-line basis, except for performance-based awards for which expense is recognized using a graded-attribution\nmethod if the results are materially different than the straight-line method. The Company recognized $13.0 million, $13.3 million and $14.4 million of expense\nrelated to service condition restricted stock units in 2025, 2024 and 2023, respectively. For performance stock options and performance stock units, an expense is recorded each period for the estimated expense associated with the projected\nachievement of the performance-based targets. The Company recognized no expense related to performance stock options in 2025, 2024 and\n2023; and $5.7 million, $1.5\nmillion and $1.2 million of expense related to performance stock units in 2025, 2024 and 2023, respectively.\n\nAs of December 31, 2025, there was no unrecognized\nstock-based compensation expense related to nonvested stock option awards. As of December 31, 2025, there was $18.4 million of unrecognized\nstock-based compensation expense related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.4\nyears.\n\n11.\n\nFair Value and Equity Investments\n\nFair Value\n\nThe carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term\nnature of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information.\n\n88\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (U.S. dollars in thousands):\n\n \n\n \n\nFair Value at December 31, 2025\n\n \n\n \n\n \n\nLevel 1\n\n \n\n \n\nLevel 2\n\n \n\n \n\nLevel 3\n\n \n\n \n\nTotal\n\n \n\nFinancial assets (liabilities):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash equivalents and current investments\n\n \n\n$\n\n39,084\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n39,084\n\n \n\nLife insurance contracts\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n48,410\n\n \n\n \n\n \n\n48,410\n\n \n\nTotal\n\n \n\n$\n\n39,084\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n \n\n48,410\n\n \n\n \n\n$\n\n87,494\n\n \n\n \n\n \n\nFair Value at December 31, 2024\n\n \n\n \n\n \n\nLevel 1\n\n \n\n \n\nLevel 2\n\n \n\n \n\nLevel 3\n\n \n\n \n\nTotal\n\n \n\nFinancial assets (liabilities):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash equivalents and current investments\n\n \n\n$\n\n23,914\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n23,914\n\n \n\nDerivative financial instruments asset\n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,708\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n4,708\n\n \n\nLife insurance contracts\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n44,091\n\n \n\n \n\n \n\n44,091\n\n \n\nTotal\n\n \n\n$\n\n23,914\n\n \n\n \n\n$\n\n4,708\n\n \n\n \n\n$\n\n44,091\n\n \n\n \n\n$\n\n72,713\n\n \n\nThe following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance\nsheets:\n\nCash equivalents and current investments: Cash equivalents and current\ninvestments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company\nconsiders all cash equivalents and current investments as Level 1. Current investments include $0 and $1.4 million as of December 31, 2025 and 2024, respectively, that is restricted for the Company’s voluntary participation in a consumer protection\ncooperative in South Korea, along with investments in corporate securities.\n\nLife insurance contracts: ASC 820 preserves practicability exceptions to fair\nvalue measurements provided by other applicable provisions of U.S. GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash\nsurrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust\nas disclosed in Note 14, “Deferred Compensation Plan.”\n\nDerivative financial instruments asset and liability: Derivative financial instruments are measured at fair value based on observable market information and appropriate valuation methods.  See Note 15, “Derivative Financial Instruments” for more information on derivative financial instruments.\n\nContingent consideration: Contingent consideration represents the obligations\nincurred in connection with acquisitions. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding the future business results, discount rates, discount periods and probabilities\nassigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on\nsignificant inputs unobservable in the market and thus represents a level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or\ndecrease in the fair value of the contingent consideration obligation.\n\nThe following table provides a summary of changes in fair value of the Company’s Level 3 life insurance contracts (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nBeginning balance at January 1\n\n \n\n$\n\n44,091\n\n \n\n \n\n$\n\n45,041\n\n \n\nActual return on plan assets\n\n \n\n \n\n4,319\n\n \n\n \n\n \n\n6,250\n\nSales and settlements\n\n \n\n \n\n—\n\n \n\n \n\n(7,200\n\n)\n\nEnding balance at December 31\n\n \n\n$\n\n48,410\n\n \n\n \n\n$\n\n44,091\n\n \n\n89\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe following table provides a summary of changes in fair value\nof the Company’s Level 3 contingent consideration (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nBeginning balance at January 1\n\n \n\n$\n\n—\n\n \n\n$\n\n(6,300\n\n)\n\nChanges in fair value of contingent consideration\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nPayments\n\n \n\n \n\n—\n\n \n\n \n\n \n\n6,300\n\n \n\nEnding balance at December 31\n\n \n\n$\n\n—\n\n \n\n$\n\n—\n\nEquity\nInvestments\n\nThe\nCompany maintains equity investments in companies which are accounted for under the measurement alternative described in ASC 321-10-35-2 for equity securities that lack readily determinable fair values. The carrying amount of an equity security\nheld by the Company without readily determinable fair values was $0 and $28.1 million as of December 31, 2025 and 2024, respectively. In prior years, the Company recognized $18.1 million of cumulative upward fair value adjustments, based on the valuation of additional equity issued by the investee which was deemed to be an observable transaction of\na similar investment under ASC 321. During the year ended December 31, 2025, based on significant deterioration of the business prospects of the investment, the Company recorded a $28.1 million impairment of the investment. These charges were recorded within Other income (expense), net on the Consolidated Statement of Income. The 2025 estimated fair value\nwas determined using a market-based method with level 3 inputs, including revenue and earnings multiples. The Company also had equity securities held without readily determinable fair values of $14.3 million and $7.6 million as of December 31, 2025 and 2024,\nrespectively.\n\n12.\n\nIncome Taxes\n\nConsolidated (loss) income before provision for income taxes consists of the following for the years ended December 31, 2025, 2024 and 2023 (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nU.S.\n\n \n\n$\n\n114,222\n\n \n\n \n\n$\n\n(237,693\n\n)\n\n \n\n$\n\n(37,152\n\n)\n\nForeign\n\n \n\n \n\n81,975\n\n \n\n \n\n \n\n62,642\n\n \n\n \n\n \n\n63,730\n\n \n\nTotal\n\n \n\n$\n\n196,197\n\n \n\n \n\n$\n\n(175,051\n\n)\n\n \n\n$\n\n26,578\n\n \n\nThe provision (benefit) for current and deferred taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following (U.S. dollars in thousands):\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCurrent\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n998\n\n \n\n \n\n$\n\n—\n\n \n\nState\n\n \n\n \n\n4,987\n\n \n\n \n\n \n\n708\n\n \n\n \n\n \n\n3,903\n\n \n\nForeign\n\n \n\n \n\n30,986\n\n \n\n \n\n \n\n25,314\n\n \n\n \n\n \n\n29,179\n\n \n\n \n\n \n\n \n\n35,973\n\n \n\n \n\n \n\n27,020\n\n \n\n \n\n \n\n33,082\n\n \n\nDeferred\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n \n\n3,837\n\n \n\n \n\n \n\n(60,354\n\n)\n\n \n\n \n\n(18,039\n\n)\n\nState\n\n \n\n \n\n(1,127\n\n)\n\n \n\n \n\n(1,593\n\n)\n\n \n\n \n\n(1,440\n\n)\n\nForeign\n\n \n\n \n\n(2,690\n\n)\n\n \n\n \n\n6,470\n\n \n\n \n\n \n\n4,380\n\n \n\n \n\n \n\n \n\n20\n\n \n\n \n\n \n\n(55,477\n\n)\n\n \n\n \n\n(15,099\n\n)\n\nProvision (benefit) for income taxes\n\n \n\n$\n\n35,993\n\n \n\n \n\n$\n\n(28,457\n\n)\n\n \n\n$\n\n17,983\n\n \n\n90\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe principal components of deferred taxes are as follows (U.S. dollars in thousands):\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred tax assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nInventory differences\n\n \n\n$\n\n131,774\n\n \n\n \n\n$\n\n108,895\n\n \n\nForeign tax credit and other foreign benefits\n\n \n\n \n\n9,802\n\n \n\n \n\n \n\n36,689\n\n \n\nStock-based compensation\n\n \n\n \n\n4,826\n\n \n\n \n\n \n\n3,882\n\n \n\nAccrued expenses not deductible until paid\n\n \n\n \n\n25,883\n\n \n\n \n\n \n\n26,529\n\n \n\nForeign currency exchange\n\n \n\n \n\n285\n\n \n\n \n\n \n\n—\n\n \n\nNet operating losses\n\n \n\n \n\n9,874\n\n \n\n \n\n \n\n19,710\n\n \n\nInterest Expense Limitation – 163(j)\n\n \n\n \n\n —\n\n \n\n \n\n \n\n 2,832\n\n \n\nCapitalized research and development\n\n \n\n \n\n27,342\n\n \n\n \n\n \n\n27,917\n\n \n\nR&D credit carryforward\n\n \n\n \n\n3,205\n\n \n\n \n\n \n\n2,594\n\n \n\nOther\n\n \n\n \n\n290\n\n \n\n \n\n \n\n285\n\n \n\nGross deferred tax assets\n\n \n\n \n\n213,281\n\n \n\n \n\n \n\n229,333\n\n \n\nDeferred tax liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign currency exchange\n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,341\n\n \n\nForeign withholding taxes\n\n \n\n \n\n11,728\n\n \n\n \n\n \n\n10,936\n\n \n\nIntangibles step-up\n\n \n\n \n\n1,397\n\n \n\n \n\n \n\n1,020\n\n \n\nAmortization of intangibles\n\n \n\n \n\n5,846\n\n \n\n \n\n \n\n11,215\n\n \n\nOther\n\n \n\n \n\n1,642\n\n \n\n \n\n \n\n6,580\n\n \n\nGross deferred tax liabilities\n\n \n\n \n\n20,613\n\n \n\n \n\n \n\n31,092\n\n \n\nValuation allowance\n\n \n\n \n\n(21,261\n\n)\n\n \n\n \n\n(24,337\n\n)\n\nDeferred taxes, net\n\n \n\n$\n\n171,407\n\n \n\n \n\n$\n\n173,904\n\n \n\nAt December 31, 2025, the Company had foreign operating loss carryforwards of $27.2 million for tax purposes, which will be available to offset future taxable income. If not used, $11.5 million of carryforwards will expire between 2026 and 2037, while $15.7 million do not expire.\nTax effected, the foreign operating losses are $8.3 million. A valuation allowance has been placed on foreign operating loss carryforwards\nof $8.2 million. In addition, a valuation allowance of $9.8 million has been recorded on a portion of the foreign tax credit carryforwards which will expire between 2028\nand 2035, and all of the remaining federal and Utah R&D credit carryforwards of $3.2 million which will expire between 2032 and 2045.\n\nThe Company uses the tax law ordering approach when determining when excess tax benefits have been realized.\n\nValuation allowances have been recognized for all remaining foreign\ntax credits, all remaining federal and Utah R&D credits and the majority of the foreign net operating loss carryforwards.  On January 2, 2025 the\nCompany sold its subsidiary Mavely, which affected its U.S. earnings. The gain from the sale in the U.S. increased the Company’s ability to utilize foreign and R&D tax credits. The remaining R&D credits as of December\n31,2025 are not expected to be realized and a valuation allowance was placed against them. The other remaining valuation allowances were recognized for assets which it is more likely than not some portion or all of the deferred tax asset will\nnot be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary difference, projected future taxable income, tax planning strategies\nand recent financial operations. When the Company determines that there is sufficient positive evidence to utilize the remaining foreign tax credits or the foreign net operating losses, the valuation allowance will be released which would\nreduce the provision for income taxes.\n\n91\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe deferred tax asset valuation adjustments for the years ended December 31, 2025, 2024 and 2023 are as follows (U.S. dollars in thousands):\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBalance at the beginning of period\n\n \n\n$\n\n24,337\n\n \n\n \n\n$\n\n47,142\n\n \n\n \n\n$\n\n33,557\n\n \n\nAdditions charged to cost and expenses\n\n \n\n \n\n8,088\n\n(1)\n\n \n\n \n\n2,245\n\n(4)\n\n \n\n \n\n13,183\n\n(6)\n\nDecreases\n\n \n\n \n\n(5,134\n\n)(2)\n\n \n\n \n\n(27,086\n\n)(5)\n\n \n\n \n\n(1,825\n\n)(7)\n\nAdjustments\n\n \n\n \n\n(6,030\n\n)(3)\n\n \n\n \n\n2,036\n\n(3)\n\n \n\n \n\n2,227\n\n(3)\n\nBalance at the end of the period\n\n \n\n$\n\n21,261\n\n \n\n \n\n$\n\n24,337\n\n \n\n \n\n$\n\n47,142\n\n \n\n(1)\n\nIncrease in\nvaluation is due primarily to net operating losses in foreign markets, branch foreign tax credits, and Utah R&D credits.\n\n(2)\n\nThe decrease was due to utilization and expiration of foreign net operating losses.\n\n(3)\n\nRepresents the net currency effects of translating valuation allowances at\ncurrent rates of exchange.\n\n(4)\n\nIncrease in valuation is due primarily to net operating losses in foreign markets\n\n(5)\n\nThe decrease was due primarily to the release of the valuation allowance against $18.3 million of foreign tax credits and $2.3\nmillion of R&D credits.\n\n(6)\n\nIncrease in valuation is due primarily to net operating losses in foreign markets and $6.1 million that was recorded on the foreign tax credit carryforward.\n\n(7)\n\nThe decrease was due to expiration of foreign net operating losses.\n\nThe components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands):\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nNet noncurrent deferred tax assets\n\n \n\n$\n\n171,717\n\n \n\n \n\n$\n\n174,249\n\n \n\nNet noncurrent deferred tax liabilities\n\n \n\n \n\n310\n\n \n\n \n\n \n\n345\n\n \n\nDeferred taxes, net\n\n \n\n$\n\n171,407\n\n \n\n \n\n$\n\n173,904\n\n \n\nThe Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in proposed assessments that may result in additional tax\nliabilities.\n\nThe actual tax rate for the years ended December 31, 2025, 2024 and 2023 compared to the statutory U.S. Federal tax rate is as follows:\n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nIncome taxes at statutory rate\n\n \n\n \n\n21.00\n\n%\n\n \n\n \n\n21.00\n\n%\n\nExcess tax benefit from equity award\n\n \n\n \n\n(0.73\n\n)%\n\n \n\n \n\n5.04\n\n%\n\nDeferred compensation\n\n \n\n \n\n1.35\n\n%\n\n \n\n \n\n(4.28\n\n)%\n\nExecutive salary limitation\n\n \n\n \n\n(1.15\n\n)%\n\n \n\n \n\n1.59\n\n%\n\nState taxes\n\n \n\n \n\n0.38\n\n%\n\n \n\n \n\n7.34\n\n%\n\nForeign exchange\n\n \n\n \n\n0.20\n\n%\n\n \n\n \n\n(1.91\n\n)%\n\nNon-U.S. income taxed at different rates\n\n \n\n \n\n(2.55\n\n)%\n\n \n\n \n\n12.70\n\n%\n\nForeign withholding taxes\n\n \n\n \n\n(0.89\n\n)%\n\n \n\n \n\n13.31\n\n%\n\nChange in reserve for uncertain tax positions\n\n \n\n \n\n(3.77\n\n)%\n\n \n\n \n\n1.74\n\n%\n\nValuation allowance recognized foreign tax credit & others\n\n \n\n \n\n11.89\n\n%\n\n \n\n \n\n24.66\n\n%\n\nForeign-Derived Intangible Income (FDII)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(14.11\n\n)%\n\nAcquisition adjustments\n\n \n\n \n\n(1.55\n\n)%\n\n \n\n \n\n(0.05\n\n)%\n\nGoodwill impairment\n\n \n\n \n\n(7.86\n\n)%\n\n \n\n \n\n—\n\n \n\nOther\n\n \n\n \n\n(0.06\n\n)%\n\n \n\n \n\n0.63\n\n%\n\n \n\n \n\n \n\n16.26\n\n%\n\n \n\n \n\n67.66\n\n%\n\n92\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\nIncome taxes at U.S statutory rate\n\n \n\n$\n\n41,201\n\n \n\n \n\n \n\n21.00\n\n%\n\nState and Local Income Taxes, Net of Federal Income Tax Effect(1)\n\n \n\n \n\n3,057\n\n \n\n \n\n \n\n1.56\n\n%\n\nForeign Tax Effects:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nChina\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWithholding Tax\n\n \n\n \n\n4,179\n\n \n\n \n\n \n\n2.13\n\n%\n\nOther\n\n \n\n \n\n1,010\n\n \n\n \n\n \n\n0.51\n\n%\n\nKorea\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWithholding Tax\n\n \n\n \n\n2,855\n\n \n\n \n\n \n\n1.46\n\n%\n\nOther\n\n \n\n \n\n152\n\n \n\n \n\n \n\n0.08\n\n%\n\nArgentina\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOther\n\n \n\n \n\n2,995\n\n \n\n \n\n \n\n1.53\n\n%\n\nOther Foreign Jurisdictions\n\n \n\n \n\n4,874\n\n \n\n \n\n \n\n2.48\n\n%\n\nEffect of Cross-Border Tax Laws:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign-Derived Intangible Income\n\n \n\n \n\n(6,649\n\n)\n\n \n\n \n\n(3.39\n\n)%\n\nTax Credits:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nR&D Credits\n\n \n\n \n\n(12,134\n\n)\n\n \n\n \n\n(6.18\n\n)%\n\nForeign Tax Credits\n\n \n\n \n\n(8,058\n\n)\n\n \n\n \n\n(4.11\n\n)%\n\nChanges in Valuation Allowances\n\n \n\n \n\n6,376\n\n \n\n \n\n \n\n3.25\n\n%\n\nNon-Taxable or Nondeductible Items:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEmployee Stock Options\n\n \n\n \n\n2,076\n\n \n\n \n\n \n\n1.06\n\n%\n\nOther\n\n \n\n \n\n(1,249\n\n)\n\n \n\n \n\n(0.64\n\n)%\n\nChanges in Unrecognized Tax Benefits\n\n \n\n \n\n(4,692\n\n)\n\n \n\n \n\n(2.39\n\n)%\n\nEffective Tax Rate\n\n \n\n \n\n35,993\n\n \n\n \n\n \n\n18.35\n\n%\n\n(1)\n\nState and Local taxes in California and New Jersey made up\nthe majority (greater than 50 percent) of the tax effect in this category.\n\nThe 2025 rate reconciliation is disaggregated in accordance with ASU 2023-09, which was adopted prospectively in 2025. The increase in the effective tax rate for 2025 is primarily due to the $8.1 million of additional research and development credits determined creditable during the year, the sale of Mavely, the impairment of the\nBeautyBio asset group and the impairment of an equity investment. The decrease in the effective tax rate for 2024 is primarily due to the company having an overall book loss but still paying taxes primarily in foreign jurisdictions.\n\n93\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nThe actual taxes paid for the year ended December 31, 2025 was as follows:\n\n \n\n \n\n2025\n\n \n\nU.S. Federal\n\n \n\n$\n\n4,000\n\n \n\nState\n\n \n\n \n\n5,312\n\n \n\nForeign:\n\n \n\n \n\n \n\n \n\nArgentina\n\n \n\n \n\n3,010\n\n \n\nChina\n\n \n\n \n\n9,544\n\n \n\nIndonesia\n\n \n\n \n\n4,984\n\n \n\nJapan\n\n \n\n \n\n3,100\n\n \n\nKorea\n\n \n\n \n\n3,390\n\n \n\nOther\n\n \n\n \n\n7,477\n\n \n\nTotal Taxes Paid\n\n \n\n$\n\n40,817\n\n \n\nCash paid for income taxes totaled $30.4 million and $32.4 million for the years ended December 31, 2024 and 2023, respectively.\n\nThe cash paid for income taxes is disaggregated in accordance with ASU 2023-09. The cumulative amount of undistributed earnings of the Company’s non-U.S. Subsidiaries\nheld for indefinite reinvestment is approximately $60.0 million, at December 31, 2025.  If this amount were repatriated to the United\nStates, the amount of incremental taxes would be approximately $6.0 million.\n\nOn July 4, 2025, U.S. legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the Act”) and\ncommonly referred to as the One Big Beautiful Bill Act was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Act has\nnot materially impacted the Company’s effective tax rate.\n\n13.\n\nEmployee Benefit Plan\n\nThe Company has a 401(k) defined-contribution plan which permits participating employees to defer up to a maximum of 100% of their compensation, subject to limitations established by the IRS. Employees age 18 and older are eligible to contribute to the plan starting the first day of employment. After completing at least one day of service, employees are eligible to receive matching contributions from the Company. In 2025, 2024, and 2023 the Company provided matching contributions of up to 4% of employees’ compensation each year. The Company’s matching contributions cliff vest after two years of service. The Company recorded compensation expense of $2.9 million, $4.0 million and $3.6 million for the years\nended December 31, 2025, 2024 and 2023, respectively, related to its contributions to the plan. The Company may make additional discretionary contributions to the plan of up to 10% of employees’ base pay. The Company’s discretionary contributions vest 20%\nper year for an employee’s first five years of service. For the years ended December 31, 2025, 2024 and 2023, the Company did not make any additional discretionary contributions.\n\n14.\n\nDeferred Compensation Plan\n\nThe Company has a deferred compensation plan for select management personnel, highly compensated employees, and members of the Company’s board of directors. Under this\nplan, the Company may make discretionary contributions to participants’ deferred compensation accounts; prior to 2021, the Company historically contributed 10% of base salary for\n\nparticipants above a specified job level. In addition, each participant has the option to defer a portion of their compensation up to a maximum of 80%\nof their base salary and 100% of their bonuses or director fees. Participant contributions are immediately vested. Company contributions\nmade on or prior to December 31, 2020 will vest 50% after ten years of service and 5% each year of\nservice thereafter. In addition, any unvested company contributions will fully vest on the earlier of: (a) the participant attaining 60 years\nof age; and (b) death or disability.\n\n94\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nEffective January 1, 2021, the Company amended its deferred compensation plan. Under the revision, the Company shall make matching contributions up to 5% of base salary for participants above a specified job level. The revision continues to authorize the Company to make discretionary contributions to participants’ deferred compensation accounts. In view of the opportunity to receive a 5% match, the Company reduced its discretionary contributions to 5% of base salary each year, though the Company is not obligated to make these contributions.  Under the revision, the\namounts contributed by the Company, adjusted for earnings and losses thereon, will vest 20% per year over five years, subject to acceleration upon the occurrence of certain events, including the completion of at least ten years of employment above a specified job level. All amounts a participant elects to defer, adjusted for earnings and losses thereon, are 100% vested at all times.\n\nThe Company recorded compensation expense of $1.1 million,\n$(5.0) million and $2.8\nmillion for the years ended December 31, 2025, 2024 and 2023, respectively, related to its contributions to the plan. The total long-term deferred compensation liability under the deferred compensation plan was $44.9 million and $43.0 million for the\nyears ended December 31, 2025 and 2024, respectively, related to its contributions to the plan and is included in accrued expenses for anticipated payments within the next 12 months and the remainder in other long-term liabilities.\n\nAll benefits under the deferred compensation plan are unsecured obligations of the Company. The Company has contributed assets to a “rabbi trust” for the payment of\nbenefits under the deferred compensation plan. As the assets of the trust are available to satisfy the claims of general creditors if the Company becomes insolvent, the amounts held in the trust are accounted for as an investment on the Company’s\nconsolidated balance sheets of $48.4 million and $44.1 million for the years ended December 31, 2025 and 2024, respectively.\n\n15.\n\nDerivative Financial Instruments\n\nRisk Management Objective of Using Derivatives\n\nThe Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide\nvariety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its\nassets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future\nknown and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts\nand its known or expected cash payments principally related to the Company’s borrowings.\n\nCash Flow Hedges of Interest Rate Risk\n\nThe Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish\nthis objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for\nthe Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.  During 2025, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.\n\nFor derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive\nIncome and subsequently reclassified into interest expense/income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to\ninterest expense/income as interest payments are made/received on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $0 will be reclassified as a reduction to interest expense.\n\nAs of December 31, 2024, the Company had four outstanding\ninterest rate derivatives that were designated as cash flow hedges of interest rate risk with a total notional amount of $200 million.\nDuring July of 2025, the Company’s four interest rate derivatives with a total notional amount of $200 million matured, leaving no\noutstanding derivatives as of December 31, 2025.\n\n95\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nFair Values of Derivative Instruments on the Balance Sheet\n\nThe table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet:\n\n \n\n \n\n \n\nFair Values of\n\nDerivative Instruments\n\n \n\n \n\n \n\n \n\n \n\nDecember 31,\n\n \n\nDerivatives in Cash Flow Hedging Relationships:\n\nBalance Sheet Location\n\n2025\n\n \n\n \n\n2024\n\n \n\nInterest Rate Swap - Asset\n\n \n\n Prepaid expenses and other\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n4,708\n\n \n\nEffect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income\n\nThe tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income.\n\n  \n\n \n\nAmount of Gain\n\nRecognized in OCI on Derivatives\n\n \n\n \n\nYear Ended December 31,\n\n \n\nDerivatives in Cash Flow Hedging Relationships:\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n Interest Rate Swaps\n\n \n\n$\n\n236\n\n \n\n \n\n$\n\n2,297\n\n \n\n$\n\n2,910\n\n \n\n \n\n \n\n \n\nAmount of Gain\n\nReclassified from Accumulated\n\nOther Comprehensive Loss into Income\n\n \n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\nDerivatives in Cash Flow Hedging Relationships:\n\n \n\n Income Statement Location\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n Interest Rate Swaps\n\n \n\nInterest expense\n\n \n\n$\n\n4,944\n\n \n\n \n\n$\n\n10,278\n\n \n\n$\n\n9,959\n\n16.\n\nSegment Information\n\nThe Company reports revenue from nine segments,\nconsisting of its seven geographic Nu Skin segments—Americas, Southeast Asia/Pacific, Mainland China, Japan, Europe & Africa, South Korea, and Hong Kong/Taiwan—and two Rhyz segments—Manufacturing and Rhyz Other.\nThe Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz Other segment includes other investments by our Rhyz strategic investment arm. The Chief Executive Officer is the chief operating decision maker\n(“CODM”). These segments reflect the way the CODM evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers.\n\nProfitability by segment as\ndetermined under US GAAP is driven primarily by the Company’s transfer pricing policies. Segment contribution, which is the Company’s segment profitability metric presented in the table below, excludes certain intercompany charges, specifically\nroyalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Nu Skin other expenses. Nu Skin other expenses also include costs related to the Company’s executive and administrative\noffices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level.\n\nEffective June 2023, the Company closed its Israel market. As a result the Europe, Middle East and Africa (“EMEA”) segment has been renamed Europe & Africa.\n\nThe accounting policies of the segments are the same as those described in Note 2, “Summary of Significant Accounting Policies.” The Company evaluates the performance of its segments\nbased on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations.\n\n96\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nSummarized\n\nfinancial information for the Company’s reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset\ninformation for each reportable segment.\n\n \n\n \n\nYear Ended December 31, 2025\n\n \n\n \n\n \n\nNu Skin\n\n \n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n \n\nSoutheast\n\nAsia/Pacific\n\n \n\n \n\nMainland\n\nChina\n\n \n\n \n\nJapan\n\n \n\n \n\nEurope &\n\nAfrica\n\n \n\n \n\nSouth\n\nKorea\n\n \n\n \n\nHong Kong/\n\nTaiwan\n\n \n\n \n\nManufacturing(1)\n\n \n\n \n\nRhyz\n\nOther\n\n \n\n \n\nTotal\n\nSegments\n\n \n\nRevenue\n\n \n\n$\n\n282,975\n\n \n\n \n\n$\n\n209,802\n\n \n\n \n\n$\n\n195,553\n\n \n\n \n\n$\n\n174,364\n\n \n\n \n\n$\n\n150,151\n\n \n\n \n\n$\n\n130,216\n\n \n\n \n\n$\n\n117,378\n\n \n\n \n\n$\n\n205,788\n\n \n\n \n\n$\n\n17,794\n\n \n\n \n\n$\n\n1,484,021\n\n \n\nCost of sales\n\n \n\n \n\n73,198\n\n \n\n \n\n \n\n51,044\n\n \n\n \n\n \n\n34,631\n\n \n\n \n\n \n\n36,067\n\n \n\n \n\n \n\n38,947\n\n \n\n \n\n \n\n26,402\n\n \n\n \n\n \n\n19,892\n\n \n\n \n\n \n\n163,707\n\n \n\n \n\n \n\n4,697\n\n \n\n \n\n \n\n448,585\n\n \n\nOther segment items (2)\n\n \n\n \n\n149,289\n\n \n\n \n\n \n\n111,983\n\n \n\n \n\n \n\n115,367\n\n \n\n \n\n \n\n89,325\n\n \n\n \n\n \n\n88,571\n\n \n\n \n\n \n\n66,355\n\n \n\n \n\n \n\n60,314\n\n \n\n \n\n \n\n34,268\n\n \n\n \n\n \n\n43,690\n\n \n\n \n\n \n\n759,162\n\n \n\nSegment contribution\n\n \n\n$\n\n60,488\n\n \n\n \n\n$\n\n46,775\n\n \n\n \n\n$\n\n45,555\n\n \n\n \n\n$\n\n48,972\n\n \n\n \n\n$\n\n22,633\n\n \n\n \n\n$\n\n37,459\n\n \n\n \n\n$\n\n37,172\n\n \n\n \n\n$\n\n7,813\n\n \n\n \n\n$\n\n(30,593\n\n)\n\n \n\n$\n\n276,274\n\n \n\n \n\n \n\nYear Ended December 31, 2024\n\n \n\n \n\n \n\nNu Skin\n\n \n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n \n\nSoutheast\n\nAsia/Pacific\n\n \n\n \n\nMainland\n\nChina\n\n \n\n \n\nJapan\n\n \n\n \n\nEurope &\n\nAfrica\n\n \n\n \n\nSouth\n\nKorea\n\n \n\n \n\nHong Kong/\n\nTaiwan\n\n \n\n \n\nManufacturing(1)\n\n \n\n \n\nRhyz\n\nOther\n\n \n\n \n\nTotal\n\nSegments\n\n \n\nRevenue\n\n \n\n$\n\n322,516\n\n \n\n \n\n$\n\n244,846\n\n \n\n \n\n$\n\n235,235\n\n \n\n \n\n$\n\n181,557\n\n \n\n \n\n$\n\n164,164\n\n \n\n \n\n$\n\n163,706\n\n \n\n \n\n$\n\n130,610\n\n \n\n \n\n$\n\n201,430\n\n \n\n \n\n$\n\n85,188\n\n \n\n \n\n$\n\n1,729,252\n\n \n\nCost of sales\n\n \n\n \n\n83,461\n\n \n\n \n\n \n\n64,950\n\n \n\n \n\n \n\n44,059\n\n \n\n \n\n \n\n36,852\n\n \n\n \n\n \n\n42,766\n\n \n\n \n\n \n\n33,600\n\n \n\n \n\n \n\n24,932\n\n \n\n \n\n \n\n164,145\n\n \n\n \n\n \n\n14,532\n\n \n\n \n\n \n\n509,297\n\n \n\nOther segment items (2)\n\n \n\n \n\n171,338\n\n \n\n \n\n \n\n134,666\n\n \n\n \n\n \n\n145,086\n\n \n\n \n\n \n\n93,907\n\n \n\n \n\n \n\n100,389\n\n \n\n \n\n \n\n79,360\n\n \n\n \n\n \n\n70,989\n\n \n\n \n\n \n\n35,825\n\n \n\n \n\n \n\n116,465\n\n \n\n \n\n \n\n948,025\n\n \n\nSegment contribution\n\n \n\n$\n\n67,717\n\n \n\n \n\n$\n\n45,230\n\n \n\n \n\n$\n\n46,090\n\n \n\n \n\n$\n\n50,798\n\n \n\n \n\n$\n\n21,009\n\n \n\n \n\n$\n\n50,746\n\n \n\n \n\n$\n\n34,689\n\n \n\n \n\n$\n\n1,460\n\n \n\n \n\n$\n\n(45,809\n\n)\n\n \n\n$\n\n271,930\n\n \n\n \n\n \n\nYear Ended December 31, 2023\n\n \n\n \n\n \n\nNu Skin\n\n \n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n \n\nSoutheast\n\nAsia/Pacific\n\n \n\n \n\nMainland\n\nChina\n\n \n\n \n\nJapan\n\n \n\n \n\nEurope &\n\nAfrica\n\n \n\n \n\nSouth\n\nKorea\n\n \n\n \n\nHong Kong/\n\nTaiwan\n\n \n\n \n\nManufacturing(1)\n\n \n\n \n\nRhyz\n\nOther\n\n \n\n \n\nTotal\n\nSegments\n\n \n\nRevenue\n\n \n\n$\n\n398,222\n\n \n\n \n\n$\n\n267,206\n\n \n\n \n\n$\n\n298,079\n\n \n\n \n\n$\n\n207,833\n\n \n\n \n\n$\n\n192,352\n\n \n\n \n\n$\n\n236,099\n\n \n\n \n\n$\n\n153,589\n\n \n\n \n\n$\n\n181,395\n\n \n\n \n\n$\n\n35,214\n\n \n\n \n\n$\n\n1,969,989\n\n \n\nCost of sales\n\n \n\n \n\n104,162\n\n \n\n \n\n \n\n71,364\n\n \n\n \n\n \n\n46,915\n\n \n\n \n\n \n\n41,191\n\n \n\n \n\n \n\n54,095\n\n \n\n \n\n \n\n46,326\n\n \n\n \n\n \n\n27,488\n\n \n\n \n\n \n\n136,875\n\n \n\n \n\n \n\n5,274\n\n \n\n \n\n \n\n533,690\n\n \n\nOther segment items (2)\n\n \n\n \n\n215,117\n\n \n\n \n\n \n\n148,099\n\n \n\n \n\n \n\n188,905\n\n \n\n \n\n \n\n112,566\n\n \n\n \n\n \n\n119,665\n\n \n\n \n\n \n\n115,682\n\n \n\n \n\n \n\n85,519\n\n \n\n \n\n \n\n32,199\n\n \n\n \n\n \n\n50,504\n\n \n\n \n\n \n\n1,068,256\n\n \n\nSegment contribution\n\n \n\n$\n\n78,943\n\n \n\n \n\n$\n\n47,743\n\n \n\n \n\n$\n\n62,259\n\n \n\n \n\n$\n\n54,076\n\n \n\n \n\n$\n\n18,592\n\n \n\n \n\n$\n\n74,091\n\n \n\n \n\n$\n\n40,582\n\n \n\n \n\n$\n\n12,321\n\n \n\n$\n\n(20,564\n\n)\n\n \n\n$\n\n368,043\n\n \n\n(1)\n\nThe Manufacturing segment had $38.0 million, $40.8 million and $56.5\nmillion of intersegment revenue for the years ended December 31, 2025, 2024 and 2023, respectively.  Intersegment\nrevenue is eliminated in the consolidated financial statements and in the table above.\n\n(2)\n\nOther segment items primarily include selling expenses and general and administrative expenses.\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nTotal Segment Revenue\n\n \n\n$\n\n1,484,021\n\n \n\n \n\n$\n\n1,729,252\n\n \n\n \n\n$\n\n1,969,989\n\n \n\nCore Nu Skin Adjustment\n\n \n\n \n\n1,138\n\n \n\n \n\n \n\n2,832\n\n \n\n \n\n \n\n(858\n\n)\n\nTotal Revenue\n\n \n\n$\n\n1,485,159\n\n \n\n \n\n$\n\n1,732,084\n\n \n\n \n\n$\n\n1,969,131\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n 2025\n\n \n\n \n\n \n\n2024\n\n \n\n \n\n \n\n2023\n\n \n\nTotal Segment Contribution\n\n \n\n$\n\n276,274\n\n \n\n \n\n$\n\n271,930\n\n \n\n \n\n$\n\n368,043\n\n \n\nCorporate and Other \n\n \n\n \n\n(210,511\n\n)\n\n \n\n \n\n(423,515\n\n)\n\n \n\n \n\n(319,775\n\n)\n\nOperating income (loss)\n\n \n\n \n\n65,763\n\n \n\n \n\n \n\n(151,585\n\n)\n\n \n\n \n\n48,268\n\n \n\nInterest expense\n\n \n\n \n\n13,948\n\n \n\n \n\n \n\n26,409\n\n \n\n \n\n \n\n25,560\n\n \n\nGain on sale\n\n \n\n \n\n176,162\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther income (expense), net\n\n \n\n \n\n(31,780\n\n)\n\n \n\n \n\n2,943\n\n \n\n \n\n \n\n3,870\n\n \n\nIncome (loss) before provision for income taxes\n\n \n\n$\n\n196,197\n\n \n\n \n\n$\n\n(175,051\n\n)\n\n \n\n$\n\n26,578\n\n \n\n97\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nDepreciation and Amortization\n\n \n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNu Skin\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n$\n\n177\n\n \n\n \n\n$\n\n369\n\n \n\n \n\n$\n\n449\n\n \n\nSoutheast Asia/Pacific\n\n \n\n \n\n758\n\n \n\n \n\n \n\n838\n\n \n\n \n\n \n\n1,062\n\n \n\nMainland China\n\n \n\n \n\n7,956\n\n \n\n \n\n \n\n10,644\n\n \n\n \n\n \n\n11,048\n\n \n\nJapan\n\n \n\n \n\n220\n\n \n\n \n\n \n\n278\n\n \n\n \n\n \n\n1,327\n\n \n\nEurope & Africa\n\n \n\n \n\n1,059\n\n \n\n \n\n \n\n1,098\n\n \n\n \n\n \n\n1,093\n\n \n\nSouth Korea\n\n \n\n \n\n744\n\n \n\n \n\n \n\n1,022\n\n \n\n \n\n \n\n1,399\n\n \n\nHong Kong/Taiwan\n\n \n\n \n\n1,336\n\n \n\n \n\n \n\n1,775\n\n \n\n \n\n \n\n2,614\n\n \n\nTotal Nu Skin\n\n \n\n \n\n12,250\n\n \n\n \n\n \n\n16,024\n\n \n\n \n\n \n\n18,992\n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nManufacturing\n\n \n\n \n\n13,219\n\n \n\n \n\n \n\n13,729\n\n \n\n \n\n \n\n13,293\n\n \n\nRhyz Other\n\n \n\n \n\n1,969\n\n \n\n \n\n \n\n7,253\n\n \n\n \n\n \n\n5,836\n\n \n\nTotal Rhyz\n\n \n\n \n\n15,188\n\n \n\n \n\n \n\n20,982\n\n \n\n \n\n \n\n19,129\n\n \n\nCorporate and other\n\n \n\n \n\n24,823\n\n \n\n \n\n \n\n32,804\n\n \n\n \n\n \n\n32,802\n\n \n\nTotal\n\n \n\n$\n\n52,261\n\n \n\n \n\n$\n\n69,810\n\n \n\n \n\n$\n\n70,923\n\n \n\nCapital Expenditures\n\n \n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNu Skin\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n$\n\n52\n\n \n\n \n\n$\n\n102\n\n \n\n \n\n$\n\n236\n\n \n\nSoutheast Asia/Pacific\n\n \n\n \n\n312\n\n \n\n \n\n \n\n115\n\n \n\n \n\n \n\n645\n\n \n\nMainland China\n\n \n\n \n\n2,201\n\n \n\n \n\n \n\n5,701\n\n \n\n \n\n \n\n20,052\n\n \n\nJapan\n\n \n\n \n\n128\n\n \n\n \n\n \n\n402\n\n \n\n \n\n \n\n104\n\n \n\nEurope & Africa\n\n \n\n \n\n77\n\n \n\n \n\n \n\n412\n\n \n\n \n\n \n\n411\n\n \n\nSouth Korea\n\n \n\n \n\n75\n\n \n\n \n\n \n\n36\n\n \n\n \n\n \n\n585\n\n \n\nHong Kong/Taiwan\n\n \n\n \n\n194\n\n \n\n \n\n \n\n610\n\n \n\n \n\n \n\n1,212\n\n \n\nTotal Nu Skin\n\n \n\n \n\n3,039\n\n \n\n \n\n \n\n7,378\n\n \n\n \n\n \n\n23,245\n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nManufacturing\n\n \n\n \n\n6,016\n\n \n\n \n\n \n\n10,164\n\n \n\n \n\n \n\n11,162\n\n \n\nRhyz Other\n\n \n\n \n\n16\n\n \n\n \n\n \n\n2,137\n\n \n\n \n\n \n\n34\n\n \n\nTotal Rhyz\n\n \n\n \n\n6,032\n\n \n\n \n\n \n\n12,301\n\n \n\n \n\n \n\n11,196\n\n \n\nCorporate and other\n\n \n\n \n\n25,206\n\n \n\n \n\n \n\n21,904\n\n \n\n \n\n \n\n24,049\n\n \n\nTotal\n\n \n\n$\n\n34,277\n\n \n\n \n\n$\n\n41,583\n\n \n\n \n\n$\n\n58,490\n\n \n\nRevenue by Major Market\n\nA major market is defined as one with\ntotal revenue greater than 10% of consolidated total revenue and also includes the Company’s country of domicile (the United States). Based on this criteria, the Company has identified four major markets: Mainland China, South Korea, United States, and Japan. There are approximately 45 other markets, each of which individually is less than 10%. No single customer accounted for\n10% or more of net sales for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred:\n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nUnited States\n\n \n\n$\n\n388,218\n\n \n\n \n\n$\n\n526,059\n\n \n\n \n\n$\n\n514,947\n\n \n\nMainland China\n\n \n\n \n\n195,553\n\n \n\n \n\n \n\n235,235\n\n \n\n \n\n \n\n298,079\n\n \n\nJapan\n\n \n\n \n\n174,364\n\n \n\n \n\n \n\n181,557\n\n \n\n \n\n \n\n207,833\n\n \n\nSouth Korea\n\n \n\n \n\n130,216\n\n \n\n \n\n \n\n163,706\n\n \n\n \n\n \n\n236,099\n\n \n\nAll others\n\n \n\n \n\n596,808\n\n \n\n \n\n \n\n625,527\n\n \n\n \n\n \n\n712,173\n\n \n\nTotal\n\n \n\n$\n\n1,485,159\n\n \n\n \n\n$\n\n1,732,084\n\n \n\n \n\n$\n\n1,969,131\n\n \n\n98\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nRevenue by Product Line\n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBeauty\n\n \n\n$\n\n568,113\n\n \n\n \n\n$\n\n681,765\n\n \n\n \n\n$\n\n858,625\n\n \n\nWellness\n\n \n\n \n\n689,062\n\n \n\n \n\n \n\n757,217\n\n \n\n \n\n \n\n886,093\n\n \n\nOther\n\n \n\n \n\n227,984\n\n \n\n \n\n \n\n293,102\n\n \n\n \n\n \n\n224,413\n\n \n\nTotal\n\n \n\n$\n\n1,485,159\n\n \n\n \n\n$\n\n1,732,084\n\n \n\n \n\n$\n\n1,969,131\n\n \n\nLong-Lived Assets by Major Market\n\nA major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company’s country of domicile (the\nUnited States). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the United States consist primarily of\nproperty, plant and equipment, including the Company’s corporate offices and distribution facilities. Long-lived assets by major market are set forth below for the periods ended December 31, 2025, 2024 and 2023:\n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nUnited States\n\n \n\n$\n\n281,616\n\n \n\n \n\n$\n\n294,513\n\n \n\n \n\n$\n\n339,163\n\n \n\nMainland China\n\n \n\n \n\n105,948\n\n \n\n \n\n \n\n107,260\n\n \n\n \n\n \n\n122,728\n\n \n\nSouth Korea\n\n \n\n \n\n17,855\n\n \n\n \n\n \n\n18,435\n\n \n\n \n\n \n\n23,578\n\n \n\nJapan\n\n \n\n \n\n8,620\n\n \n\n \n\n \n\n10,329\n\n \n\n \n\n \n\n13,322\n\n \n\nAll others\n\n \n\n \n\n44,836\n\n \n\n \n\n \n\n31,204\n\n \n\n \n\n \n\n35,451\n\n \n\nTotal\n\n \n\n$\n\n458,875\n\n \n\n \n\n$\n\n461,741\n\n \n\n \n\n$\n\n534,242\n\n \n\n17.\n\nCommitments and Contingencies\n\nThe Company is subject to government regulations pertaining to product formulation, labeling and packaging, product claims and advertising, and the\nCompany’s direct selling system. The Company is also subject to the jurisdiction of numerous foreign tax and customs authorities. Any assertions or determination that either the Company or the Company’s sales force is not in compliance with\nexisting statutes, laws, rules or regulations could have a material adverse effect on the Company’s operations. In addition, in any country or jurisdiction, the adoption of new statutes, laws, rules or regulations or changes in the interpretation\nof existing statutes, laws, rules or regulations could have a material adverse effect on the Company and its operations. No assurance can be given that the Company’s compliance with applicable statutes, laws, rules and regulations will not be\nchallenged by foreign authorities or that such challenges will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company and its Subsidiaries are defendants in litigation,\ninvestigations and other proceedings involving various matters. The Company is subject to loss contingencies, including various legal and regulatory proceedings, asserted and potential claims that arise in the ordinary course of business. An\nestimated loss from such contingencies is recognized as a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.\n\nThe Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities.  The\nCompany believes it has appropriately provided for income taxes for all years. Several factors drive the calculation of its tax reserves. Some of these factors include: (i) the expiration of various statutes of limitations; (ii) changes in tax law\nand regulations; (iii) issuance of tax rulings; and (iv) settlements with tax authorities. Changes in any of these factors may result in adjustments to the Company’s reserves, which would impact its reported financial results.\n\n18.\n\nRestructuring and Severance Charges\n\nIn the third quarter of 2022, the Company adopted a strategic plan (“2022 Plan”) to focus resources on the Company’s strategic priorities and\noptimize future growth and profitability. The global program includes workforce reductions and footprint optimization. The Company incurred total cumulative charges under the\nprogram of approximately $53.3 million, with $40.8 million in cash charges of severance and lease termination cost and approximately\n\n$12.5 million of non-cash charges of impairment of fixed assets,\nacceleration of depreciation and impairment of other intangibles related to the footprint optimization. During 2023, the Company incurred charges to be settled in cash of $4.0 million in severance charges, $1.9 million in lease\ntermination cost, and $2.2 million in other associated cost, and non-cash charges of $1.7 million in accelerated depreciation. In 2023, the Company made cash payments of $19.8 million, leaving no restructuring accrual related to this plan\nas of December 31, 2023.\n\n99\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nRestructuring expense by segment – 2022 Plan\n\n \n\n \n\nYear Ended December 31,\n\n \n\n(U.S. dollars in thousands)\n\n \n\n2023\n\n \n\n \n\n2022\n\n \n\nNu Skin\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n$\n\n918\n\n \n\n \n\n$\n\n1,687\n\n \n\nSoutheast Asia/Pacific\n\n \n\n \n\n131\n\n \n\n \n\n \n\n1,809\n\n \n\nMainland China\n\n \n\n \n\n1,352\n\n \n\n \n\n \n\n13,181\n\n \n\nJapan\n\n \n\n \n\n1,515\n\n \n\n \n\n \n\n699\n\n \n\nEurope & Africa\n\n \n\n \n\n(113\n\n)\n\n \n\n \n\n2,143\n\n \n\nSouth Korea\n\n \n\n \n\n422\n\n \n\n \n\n \n\n1,533\n\n \n\nHong Kong/Taiwan\n\n \n\n \n\n(201\n\n)\n\n \n\n \n\n2,464\n\n \n\nTotal Nu Skin\n\n \n\n \n\n4,024\n\n \n\n \n\n \n\n23,516\n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nManufacturing\n\n \n\n \n\n13\n\n \n\n \n\n \n\n401\n\n \n\nRhyz Other\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal Rhyz\n\n \n\n \n\n13\n\n \n\n \n\n \n\n401\n\n \n\nCorporate and other\n\n \n\n \n\n5,750\n\n \n\n \n\n \n\n19,577\n\n \n\nTotal\n\n \n\n$\n\n9,787\n\n \n\n \n\n$\n\n43,494\n\n \n\nIn the fourth quarter of 2023, the Company adopted a strategic plan (“2023 Plan”) to focus resources on the Company’s global priorities and optimize future\ngrowth and profitability. The global program includes workforce reductions and fixed asset impairments associated with our consolidation of technology assets. Total charges under the program included approximately $27.9 million in cash charges of severance, approximately $1.1 million in other cash charges and approximately $38.8 million in\nnon-cash charges, including approximately $36.6 million in fixed asset impairments. The Company has incurred all expected charges\nunder the 2023 Plan.\n\n●\n\nDuring the fourth quarter of 2023, the Company incurred charges to be settled in cash of $10.0 million in severance charges. During the fourth quarter of 2023, the Company made cash payments of $0.3 million, leaving an ending restructuring accrual of $9.7\nmillion.\n\n●\n\nDuring 2024, the Company incurred charges to be settled in cash of $17.9 million in severance charges and $1.0 million of other associated cost, and\nnon-cash charges of $36.6 million of fixed asset impairments and $2.2 million of other non-cash charges.\n\n●\n\nDuring 2024, the Company made cash payments of $22.4\nmillion, leaving an ending restructuring accrual of $6.2 million.\n\n●\n\nDuring 2025, the Company made cash payments of $6.2\nmillion, resulting in no remaining restructuring accrual related to this plan as of December 31, 2025.\n\nRestructuring\n\nexpense by segment – 2023 Plan\n\n(U.S. dollars in thousands)\n\n \n\nYear Ended December 31,\n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNu Skin\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmericas\n\n \n\n$\n\n3,571\n\n \n\n \n\n$\n\n598\n\n \n\nSoutheast Asia/Pacific\n\n \n\n \n\n2,086\n\n \n\n \n\n \n\n862\n\n \n\nMainland China\n\n \n\n \n\n4,304\n\n \n\n \n\n \n\n2,910\n\n \n\nJapan\n\n \n\n \n\n25\n\n \n\n \n\n \n\n—\n\n \n\nEurope & Africa\n\n \n\n \n\n2,243\n\n \n\n \n\n \n\n554\n\n \n\nSouth Korea\n\n \n\n \n\n1,646\n\n \n\n \n\n \n\n—\n\n \n\nHong Kong/Taiwan\n\n \n\n \n\n504\n\n \n\n \n\n \n\n432\n\n \n\nTotal Nu Skin\n\n \n\n \n\n14,379\n\n \n\n \n\n \n\n5,356\n\n \n\nRhyz\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nManufacturing\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nRhyz Other\n\n \n\n \n\n1,080\n\n \n\n \n\n \n\n—\n\n \n\nTotal Rhyz\n\n \n\n \n\n1,080\n\n \n\n \n\n \n\n—\n\n \n\nCorporate and other\n\n \n\n \n\n42,256\n\n \n\n \n\n \n\n4,647\n\n \n\nTotal\n\n \n\n$\n\n57,715\n\n \n\n \n\n$\n\n10,003\n\n \n\n100\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nReport of Independent\nRegistered Public Accounting Firm\n\nTo the Board of\nDirectors and Stockholders of Nu Skin Enterprises, Inc.\n\nOpinions on the Financial Statements and Internal Control over Financial Reporting\n\nWe have audited the accompanying consolidated balance sheets of Nu Skin Enterprises, Inc. and its subsidiaries (the “Company”) as of December 31,\n2025 and 2024, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively\nreferred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013)\nissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).\n\nIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the\nCompany as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States\nof America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013)\nissued by the COSO.\n\nBasis for Opinions\n\nThe Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial\nreporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express\nopinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain\nreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material\nrespects.\n\nOur audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated\nfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial\nstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal\ncontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of\ninternal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial\nreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i)\npertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to\npermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the\ncompany; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any\nevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n101\n\n[Table of Contents](#TABLEOFCONTENTS)\n\nCritical Audit Matters\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was\ncommunicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex\njudgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate\nopinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nIncome Taxes\n\nAs described in Notes 2 and 12 to the consolidated financial statements, the Company recorded a provision for income taxes of $36 million for\nthe year ended December 31, 2025 and reported $171 million in deferred tax assets net of a valuation allowance of $21 million and $21 million in deferred tax liabilities. The Company also reported uncertain tax positions of $22 million as\nof December 31, 2025. The Company pays 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 the Company and its\nforeign affiliates. The Company takes an asset and liability approach for financial accounting and reporting of income taxes. Deferred tax assets and liabilities are created in this process and are calculated using anticipated tax rates\nand are then netted by jurisdiction. Management establishes valuation allowances when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company has recorded unrecognized tax benefits related to\nmultiple foreign and domestic jurisdictions. As disclosed by management, potential changes in unrecognized tax benefits can arise from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes\nof limitation and possible completion of tax examinations.\n\nThe principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter are (i) the\nsignificant judgment by management when developing the provision for income taxes, deferred tax assets and the liability for unrecognized tax benefits, which in turn, led to significant auditor judgment, subjectivity and effort in performing\naudit procedures and evaluating audit evidence relating to these account balances and tax positions; and (ii) the audit effort included the involvement of professionals with specialized skill and knowledge.\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the\nconsolidated financial statements. These procedures included testing the effectiveness of controls relating to income taxes. These procedures also included, among others, (i) testing the accuracy of the consolidated income tax provision,\nincluding the rate reconciliation, return to provision adjustments, and permanent and temporary differences; (ii) evaluating management’s assessment of the realizability of deferred tax assets on a jurisdictional basis; (iii) evaluating the\nidentification of reserves for uncertain tax positions and the reasonableness of the “more likely than not determination” in consideration of the expiration of various statutes of limitations, changes in tax law and regulations, terms of\nintercompany agreements, and issuance of tax rulings and settlements with tax authorities. Professionals with specialized skill and knowledge were used to assist in the evaluation of the reasonableness of management’s estimates and\napplication of local and international income tax law.\n\n/s/ PricewaterhouseCoopers LLP\n\nSalt Lake City, Utah\n\nFebruary 12, 2026\n\nWe have served as the Company’s auditor since 1994, which includes periods before the Company became subject to SEC reporting requirements.\n\n102\n\n[Table of Contents](#TABLEOFCONTENTS)"}