Financial Analysis

17. Commitments and Contingencies The Company is subject to government regulations pertaining to product formulation, labeling and packaging, product claims and advertising, and the Companys 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 Companys sales force is not in compliance with existing statutes, laws, rules or regulations could have a material adverse effect on the Companys operations. In addition, in any country or jurisdiction, the adoption of new statutes, laws, rules or regulations or changes in the interpretation of 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 Companys compliance with applicable statutes, laws, rules and regulations will not be challenged by foreign authorities or that such challenges will not have a material adverse effect on the Companys financial position, results of operations or cash flows. The Company and its Subsidiaries are defendants in litigation, investigations 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 estimated loss from such contingencies is recognized as a charge to income if it is probable that a liability has b …

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10. StockBased Compensation At December 31, 2025, the Company had the following stock-based employee compensation plans: Equity Incentive Plans In April 2010, the Companys board of directors approved the Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (the 2010 Omnibus Incentive Plan). This plan was approved by the Companys stockholders at the Companys 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 rights, 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 directors 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. Internal Revenue Code. The exercise price of a stock option generally is equal to the fair market value of the Companys common stock on the stock option grant date. The contractual term of a stock option granted under the 2010 Omnibus Incentive Plan is seven years. Currently, all shares issued upon the exercise of stock options are from the Companys treasury shares. Subject to certain adjustments, 7.0 million shares were authorized for issuance under the 201 …

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11. Fair Value and Equity Investments Fair Value The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information. The 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): Fair Value at December 31, 2025 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 39,084 $ $ $ 39,084 Life insurance contracts 48,410 48,410 Total $ 39,084 $ 48,410 $ 87,494 Fair Value at December 31, 2024 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 23,914 $ $ $ 23,914 Derivative financial instruments asset 4,708 4,708 Life insurance contracts 44,091 44,091 Total $ 23,914 $ 4,708 $ 44,091 $ 72,713 The 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 sheets: Cash equivalents and current investments: Cash equivalents and current investments 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 …

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5. Goodwill The Companys 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 million and $0, respectively, as of both December 31, 2025 and December 31, 2024. The following table presents goodwill allocated to the Companys reportable segments for the periods ended December 31, 2025 and 2024 (U.S. dollars in thousands): Nu Skin Rhyz Americas Southeast Asia/Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Goodwill as of December 31, 2025 $ $ $ $ $ $ $ $ 78,875 $ 4,750 $ 83,625 Goodwill as of December 31, 2024 $ $ $ $ $ $ $ $ 78,875 $ 4,750 $ 83,625 Accumulated impairment losses for each segment as of December 31, 2025 and December 31, 2024 are as follows: Nu Skin Rhyz Americas Southeast Asia/Pacific Mainland China Japan Europe & Africa South Korea Hong Kong/ Taiwan Manufacturing Rhyz Other Total Segments Accumulated impairment losses $ 9,449 $ 18,537 $ 32,179 $ 16,019 $ 2,875 $ 29,261 $ 6,634 $ $ 19,587 $ 134,541 All of the Companys goodwill is recorded in U.S. dollar functional currency and allocated to the respective segments. Goodwill is not amortized; rather, it is subject to annual impairment tests. During the three months ended June 30, 2024, the Company determined that the continued decline in the Companys stock price and corresponding d …

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12. Income Taxes Consolidated (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): 2025 2024 2023 U.S. $ 114,222 $ (237,693 ) $ (37,152 ) Foreign 81,975 62,642 63,730 Total $ 196,197 $ (175,051 ) $ 26,578 The 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): 2025 2024 2023 Current Federal $ $ 998 $ State 4,987 708 3,903 Foreign 30,986 25,314 29,179 35,973 27,020 33,082 Deferred Federal 3,837 (60,354 ) (18,039 ) State (1,127 ) (1,593 ) (1,440 ) Foreign (2,690 ) 6,470 4,380 20 (55,477 ) (15,099 ) Provision (benefit) for income taxes $ 35,993 $ (28,457 ) $ 17,983 The principal components of deferred taxes are as follows (U.S. dollars in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Inventory differences $ 131,774 $ 108,895 Foreign tax credit and other foreign benefits 9,802 36,689 Stock-based compensation 4,826 3,882 Accrued expenses not deductible until paid 25,883 26,529 Foreign currency exchange 285 Net operating losses 9,874 19,710 Interest Expense Limitation 163(j) 2,832 Capitalized research and development 27,342 27,917 R&D credit carryforward 3,205 2,594 Other 290 285 Gross deferred tax assets 213,281 229,333 Deferred tax liabilities: Foreign currency exchange 1,341 Foreign withholding taxes 11,728 10,936 Intangibles step-up 1,397 1,020 Am …

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8. Leases The Company has operating and finance leases for regional offices, manufacturing facilities, retail centers, distribution centers and certain equipment. The Companys 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. The weighted-average remaining lease term and weighted-average discount rate are as follows: Year Ended December 31, 2025 2024 2023 Weighted-average remaining lease term: Operating leases 6.3 7.2 8.5 Finance leases 3.9 4.8 3.7 Weighted-average discount rate: Operating leases 3.9 % 3.5 % 3.6 % Finance leases 6.6 % 6.6 % 3.7 % The components of lease expense were as follows (U.S. dollars in thousands): Year Ended December 31, 2025 2024 2023 Operating lease expense Operating lease cost $ 23,327 $ 23,668 $ 29,186 Variable lease cost 4,812 6,203 4,245 Finance lease expense Amortization of right-of-use assets 2,129 2,707 4,785 Interest on lease liabilities 632 404 502 Total lease expense $ 30,900 $ 32,982 $ 38,718 Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands): Year Ended December 31, 2025 2024 2023 Operating cash outflow from operating leases $ 23,833 $ 24,609 $ 29,055 Operating cash outflow from finance leases $ 640 $ 376 $ 481 Financing cash outflow from finance leases $ 2,238 $ 2,886 $ 3,198 Right-of-use assets obtained in exchange for operating lease obligati …

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7. Long-Term Debt Credit Agreement On June 14, 2022, the Company entered into an Amended and Restated Credit Agreement (the Credit Agreement) with several financial 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, each with a term of five years. Both facilities bear interest at the SOFR, plus a margin based on the Companys consolidated leverage 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 effect. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 2.5% during the first year and 5.0% during the second, third, fourth and fifth years after the closing date of the Credit Agreement, with the remainder payable at final maturity. The Credit Agreement is guaranteed by certain of the Companys 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, th …

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Recent accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (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 other income tax-related disclosures. ASU 2023-09 is effective for the Companys annual periods beginning January 1, 2025. The Company adopted this standard prospectively and included the additional required disclosures for the annual period ended December 31, 2025. See Note 12 - Income Taxes for further information. In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Topic 220). This standard 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 evaluating the potential effect that the updated standard will have on its financial statement disclosures. In January 2025, the FASB issued ASU 2025-01, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update clarifies the effective date of ASU 2024-03 (Disaggregation of Income Statement Expenses) to require all public business entities to adopt the guidance for annual peri …

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13. Employee Benefit Plan The 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 Companys 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 ended 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 Companys discretionary contributions vest 20% per year for an employees first five years of service. For the years ended December 31, 2025, 2024 and 2023, the Company did not make any additional discretionary contributions. …

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18. Restructuring and Severance Charges In the third quarter of 2022, the Company adopted a strategic plan (2022 Plan) to focus resources on the Companys strategic priorities and optimize future growth and profitability. The global program includes workforce reductions and footprint optimization. The Company incurred total cumulative charges under the program of approximately $53.3 million, with $40.8 million in cash charges of severance and lease termination cost and approximately $12.5 million of non-cash charges of impairment of fixed assets, acceleration 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 termination 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 as of December 31, 2023. Restructuring expense by segment 2022 Plan Year Ended December 31, (U.S. dollars in thousands) 2023 2022 Nu Skin Americas $ 918 $ 1,687 Southeast Asia/Pacific 131 1,809 Mainland China 1,352 13,181 Japan 1,515 699 Europe & Africa (113 ) 2,143 South Korea 422 1,533 Hong Kong/Taiwan (201 ) 2,464 Total Nu Skin 4,024 23,516 Rhyz Manufacturing 13 401 Rhyz Other Total Rhyz 13 401 Corporate and other 5,750 19,577 Total $ 9,787 $ 43,494 In the fourth quarte …

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16. Segment Information The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segmentsAmericas, Southeast Asia/Pacific, Mainland China, Japan, Europe & Africa, South Korea, and Hong Kong/Taiwanand two Rhyz segmentsManufacturing and Rhyz Other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz Other segment includes other investments by our Rhyz strategic investment arm. The Chief Executive Officer is the chief operating decision maker (CODM). These segments reflect the way the CODM evaluates the Companys business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers. Profitability by segment as determined under US GAAP is driven primarily by the Companys transfer pricing policies. Segment contribution, which is the Companys segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, 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 Companys executive and administrative offices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level. Effective June 2023, the Company closed its Israel market. As a result the Europe, Middle East and Africa (EMEA) s …

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9. Capital Stock The Companys authorized capital stock consists of 25 million 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 Companys stockholders. Stock dividends of Class A common stock may be paid only to holders of Class A common stock. Class A common stock has no conversion rights. Weighted-average common shares outstanding The following is a reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands): Year Ended December 31, 2025 2024 2023 Basic weighted-average common shares outstanding 49,293 49,662 49,711 Effect of dilutive securities: Stock awards and options 1,008 149 Diluted weighted-average common shares outstanding 50,301 49,662 49,860 For 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. Dividends Quarterly 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 sha …

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