如新 (NUS) 2025 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Q2 2025 Nu Skin Enterprises earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, B.G. Hunt, Vice President of Treasury and Investor Relations. Please go ahead.

您好，感謝您的支持。歡迎參加 Nu Skin Enterprises 2025 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄音。現在，我想將會議交給今天的第一位發言者，財務和投資者關係副總裁 B.G. Hunt。請繼續。

Thanks, James. And good afternoon, everyone. I'm joined by Ryan Napierski, President and CEO, and James D. Thomas, CFO. We're excited to share Nu Skin's results from Q2 of 2025.

謝謝，詹姆斯。大家下午好。與我一起參加的還有總裁兼執行長 Ryan Napierski 和財務長 James D. Thomas。我們很高興與大家分享 Nu Skin 2025 年第二季的業績。

Before I turn the time over to Ryan, let me point out that on today's call, comments will be made that include forward-looking statements. These statements involve important risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for complete discussion on these risks. Also, during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements.

在我將時間交給瑞安之前，請允許我指出，在今天的電話會議上，我們將發表包括前瞻性陳述在內的評論。這些聲明涉及重大風險和不確定性，實際結果可能與討論或預期的結果有重大差異。請參閱今天的收益報告和我們的美國證券交易委員會文件，以了解有關這些風險的完整討論。此外，在通話過程中，我們討論的某些財務數字可能會與我們的財務報表中獲得的可比較數字有所不同。

We believe these non-GAAP numbers assist in comparing period to period results in a more consistent manner. Please refer to our investor website, IR.nuskin.com for any required reconciliation of these non-GAAP numbers.

我們相信這些非公認會計準則數字有助於以更一致的方式比較不同時期的結果。有關這些非 GAAP 數據的任何必要調節，請參閱我們的投資者網站 IR.nuskin.com。

And with that, I'd like to now turn the call over to Ryan.

現在，我想將電話交給瑞安 (Ryan)。

Thanks, B.G. Thanks everyone for joining the call. We spent some time this past quarter with our amazing and talented top leaders in our annual team lead incentive trip in Greece, where we aligned around our vision, strategy, and plans for our next big opportunities, which I'll get to in just a moment. But before I get to the strategy, I'll begin with an overview of our Q2 performance, then provide an update on our key strategic priorities for the remainder of 2025 as we continue pursuing our mission of being a global force for good by empowering people to look, feel, and live better lives.

謝謝，B.G。感謝大家參加電話會議。上個季度，我們與才華橫溢的頂級領導者一起參加了在希臘舉行的年度團隊領導激勵之旅，在那裡，我們就下一個重大機遇的願景、戰略和計劃進行了協調，我稍後會談到這些。但在介紹策略之前，我將首先概述我們第二季度的業績，然後介紹 2025 年剩餘時間內的主要戰略重點，我們將繼續追求我們的使命，即透過讓人們看起來、感覺和過上更好的生活，成為一支全球向善的力量。

I'm pleased to report that we delivered revenue at the high end of our guidance range and significantly exceeded our earnings per share forecast for the second quarter. We achieved revenue of $386.1 million. More notably, we delivered earnings per share of $0.43, well above our guidance range of $0.20 to $0.30. This strong earnings performance reflects our disciplined approach to cost management and operational efficiency improvements that we've been implementing across the organization.

我很高興地報告，我們的收入達到了指導範圍的高端，並大大超過了第二季每股收益的預測。我們實現了 3.861 億美元的收入。更值得一提的是，我們實現了每股收益0.43美元，遠高於我們0.20美元至0.30美元的預期區間。強勁的獲利表現反映了我們在整個組織範圍內實施的嚴謹的成本管理和營運效率改進方法。

As we review our reporting segments, we're seeing encouraging signs in several parts of the business as we navigate the macro environmental uncertainties impacting consumers around the world. We continue to drive strong year-over-year growth in Latin America as our developing market strategy takes hold in the region. This was offset by declines in North America, which has faced increasing macro pressures on the business.

當我們回顧報告分部時，我們看到業務的多個部分出現了令人鼓舞的跡象，因為我們正在應對影響全球消費者的宏觀環境不確定性。隨著我們的發展市場策略在拉丁美洲地區紮根，我們繼續推動該地區強勁的同比增長。但這一成長被北美地區的下滑所抵消，北美地區的業務面臨越來越大的宏觀壓力。

Japan reported growth in the quarter and continues to benefit from a strong subscription-based wellness business. While revenue in South Korea and China was down due to persistent economic challenges, we're seeing signs of sequential improvement.

日本本季報告成長，並繼續受益於強勁的基於訂閱的健康業務。儘管由於持續的經濟挑戰導致韓國和中國的收入下降，但我們看到了連續改善的跡象。

We experienced growth in the Pacific while the rest of Southeast Asia remains sluggish. Europe and Africa also experienced improving trends in customer and new sales leader engagement with our enhanced sales performance plan. And our Rhyz segments performed well with manufacturing reporting 17% of year-over-year in the quarter.

當東南亞其他地區依然低迷時，太平洋地區卻實現了成長。透過我們加強的銷售業績計劃，歐洲和非洲的客戶和新銷售領導參與度也呈現改善趨勢。我們的 Rhyz 部門表現良好，製造業本季年增 17%。

Now let me update you on our strategic priorities for 2025 as we've made significant progress in preparing our sales leaders for these next opportunities. First, we're making good progress in bringing the market our next big innovation, Prysm iO, our truly intelligent wellness platform. As I mentioned in Q1, Prysm iO is built upon more than 20 years of collective scientific research and development and our extensive antioxidant database that contains more than 20 million scans from 10 million participants across more than 50 countries.

現在，讓我向您介紹我們 2025 年的策略重點，因為我們在為銷售領導者做好未來機會的準備方面取得了重大進展。首先，我們在向市場推出下一個重大創新——Prysm iO（我們真正的智慧健康平台）方面取得了良好的進展。正如我在第一季度提到的，Prysm iO 建立在我們 20 多年的集體科學研究和開發以及我們廣泛的抗氧化劑資料庫的基礎上，該資料庫包含來自 50 多個國家/地區的 1000 萬名參與者的 2000 多萬次掃描。

By utilizing AI capabilities to interpret this data through our own proprietary new intelligence platform, we'll be able to provide our customers with truly intelligent, healthy lifestyle insights as well as personalized product recommendations to improve their antioxidant score and support their wellness journey.

透過利用人工智慧功能透過我們自己專有的新智慧平台來解釋這些數據，我們將能夠為客戶提供真正智慧、健康的生活方式見解以及個人化的產品推薦，以提高他們的抗氧化評分並支持他們的健康之旅。

In just fifteen seconds, this palm-sized device will accurately and noninvasively measure carotenoid levels in the skin via the fingertip. As we educate consumers on four primary dimensions of health, diet, fitness, oxidative stress and supplementation, their Prysm iO score can provide insights to motivate them to implement health lifestyle changes aimed at improving their overall health span.

只需十五秒，這個手掌大小的裝置就能透過指尖準確、非侵入性地測量皮膚中的類胡蘿蔔素含量。當我們在健康、飲食、健身、氧化壓力和補充劑四個主要方面對消費者進行教育時，他們的 Prysm iO 分數可以提供見解，激勵他們實施旨在改善整體健康狀況的健康生活方式改變。

We'll begin rolling out Prysm iO in limited quantities for qualified sales leaders during the fourth quarter of this year, followed by broader leader launches around the globe in the first half of 2026 and consumer launches anticipated to the back half of the year.

我們將在今年第四季開始向合格的銷售領導者限量推出 Prysm iO，隨後在 2026 年上半年在全球範圍內向更廣泛的領導者推出，並預計在今年下半年向消費者推出。

The Prysm iO launch will be accompanied by an enhanced and expanded line of geographically customized life pack product solutions as well as other targeted wellness products via our subscription-based retention model. We will be reformulating our leading line of nutritional supplements, leveraging the latest metadata and scientific research to meet geographic dietary needs at various pricing tiers. For example, studies show that vitamin E is often under consumed in many parts of the world, which can negatively affect immune and cardiovascular health. Adjusting vitamin E levels for these areas provides customized product solutions to better meet the needs of diverse consumer segments around the world.

Prysm iO 的推出將伴隨一系列增強和擴展的地理客製化生活包產品解決方案以及其他透過基於訂閱的保留模式而推出的有針對性的健康產品。我們將重新制定我們的主要營養補充品系列，利用最新的元數據和科學研究來滿足不同價格層次的地理飲食需求。例如，研究表明，世界許多地方的維生素 E 攝取量普遍不足，這會對免疫和心血管健康產生負面影響。針對這些區域調整維生素 E 水平可提供客製化的產品解決方案，以更好地滿足世界各地不同消費者群體的需求。

As consumers are growing increasingly more conscientious about their overall well-being, we're excited about the potential impact of Prysm iO and our revolutionary intelligent wellness platform. And with our unique ability to provide customized subscription-based product solutions that support one's overall health and well-being, we are uniquely positioned to play in this rapidly growing wellness movement.

隨著消費者越來越關注自己的整體健康，我們對 Prysm iO 和我們革命性的智慧健康平台的潛在影響感到非常興奮。憑藉我們獨特的能力，我們可以提供支持人們整體健康和福祉的客製化訂閱產品解決方案，因此我們在這個快速發展的健康運動中佔據著獨特的地位。

Our second key priority is our developing market strategy, which continues to deliver remarkable results in Latin America, which reported up more than 100% year-over-year in revenue, customers, and sales leaders. Nu Skin has historically been known for our premium market positioning in the beauty and wellness space, and as we envision a more expansive future for our company, it is imperative that we broaden our positioning to appeal to emerging segments in both existing and new markets.

我們的第二個重點是發展市場策略，該策略在拉丁美洲繼續取得顯著成果，其收入、客戶和銷售領先者數量同比增長超過 100%。如新一直以來都以在美容和健康領域的高端市場定位而聞名，隨著我們展望公司更加廣闊的未來，我們必須拓寬我們的定位，以吸引現有市場和新市場的新興細分市場。

We continue to learn and gain insights that help us expand this strategy into other markets, including India, which represents an enormous opportunity given the 1.4 billion population and rapidly growing beauty and wellness industries. As we prepare for India, we're following this simplified and scalable business model, including a localized product portfolio containing a new masstige brand called Cerranu that is priced for India's growing middle class. This targeted product offering combined with a refined compensation plan and a digital first operating infrastructure will enable a more focused and scalable path to growth for this emerging market.

我們不斷學習並獲得洞察力，幫助我們將這項策略擴展到其他市場，包括印度，對於擁有 14 億人口和快速成長的美容和保健產業的人來說，這是一個巨大的機會。在為印度市場做準備時，我們遵循了這種簡化且可擴展的商業模式，包括一個本地化的產品組合，其中包含一個名為 Cerranu 的新大眾品牌，其價格適合印度日益壯大的中產階級。這種有針對性的產品與完善的薪酬計劃和數位優先營運基礎設施相結合，將為這個新興市場提供更有針對性和可擴展的成長道路。

We're on track with our plans in India for a Q4 pre-market opening for qualified India eligible sales leaders and are building towards a formal launch anticipated in mid-2026. We remain excited about the prospects for India and our other developing markets which we anticipate will become a much larger portion of our revenue moving forward.

我們正在按計劃在印度進行第四季度的上市前活動，為符合條件的印度合格銷售領導人提供服務，併計劃於 2026 年中期正式推出。我們對印度和其他發展中市場的前景仍然感到興奮，我們預計這些市場未來將成為我們收入的更大一部分。

And thirdly, we're pleased to see overall margin expansion through Project Accelerate, our ongoing initiative to improve operational efficiencies to strengthen our bottom line. We're focused on three key drivers; improving gross margin in the core NU Skins business to 78% through product portfolio optimization; selling expense alignment to better reward growth in our sales force; and GNA prudence around the globe.

第三，我們很高興看到透過「加速計畫」實現整體利潤率的擴大，這是我們為提高營運效率、增強獲利能力而採取的持續措施。我們專注於三個關鍵驅動因素：透過產品組合優化將核心 NU Skins 業務的毛利率提高到 78%；銷售費用調整以更好地獎勵銷售團隊的成長；以及全球 GNA 的審慎態度。

Overall, our efforts led to significant improvements in our Q2 operating margin to 8%. We have also strengthened our balance sheet to become a cash to debt positive, which provides us with greater flexibility amid market fluctuations and an improved ability to invest in growth initiatives and return value to shareholders.

總體而言，我們的努力使第二季的營業利潤率顯著提高至 8%。我們也加強了資產負債表，使現金與債務比率變為正數，這為我們在市場波動中提供了更大的靈活性，並提高了投資成長計畫和為股東帶來回報的能力。

One last point I'd like to mention is about Rhyz, our innovation incubator. As we experienced with our recently transacted Mavely business, which generated approximately $200 million in value to the balance sheet, Rhyz plays a strategically significant role for our enterprise. Notably, Rhyz Manufacturing, which grew 17% year-over-year, enables us to gain speed to market for new cutting-edge beauty and wellness innovations.

最後我想提一點關於我們的創新孵化器 Rhyz。正如我們最近交易的 Mavely 業務所經歷的那樣，該業務為資產負債表創造了約 2 億美元的價值，Rhyz 在我們的企業中發揮著重要的戰略作用。值得注意的是，Rhyz Manufacturing 的銷售額年增了 17%，這使我們能夠加快將尖端美容和健康創新產品推向市場的速度。

For example, our US business recently introduced M-Smart, a drink mix in that helps support a healthy blood glucose response after meals and brought it to market in less than 2 months. Another Rhyz business, LifeDNA, a genetic wellness assessment business, continues to perform ahead of expectations and we anticipate will support our broader intelligent wellness platform vision in the future.

例如，我們的美國業務最近推出了 M-Smart，這是一種有助於維持餐後健康血糖反應的飲料混合物，並在不到 2 個月的時間內將其推向市場。Rhyz 的另一項業務是基因健康評估業務 LifeDNA，其表現繼續超出預期，我們預計未來它將支持我們更廣泛的智慧健康平台願景。

So, with that, I'll turn the time over to James, we'll provide more financial details, including our updated guidance for the remainder of 2025. James?

因此，我將把時間交給詹姆斯，我們將提供更多財務細節，包括我們對 2025 年剩餘時間的最新指導。詹姆斯？

Thank you, Ryan. Good afternoon and thank you for joining us today for our Q2 Earnings call. I'm pleased to provide an overview of our performance for the second quarter of the year, including key highlights, challenges, and our outlook for the rest of 2025. As always, I'll walk through the financial results, touch on some key business dynamics, discuss our outlook for Q3 and the rest of the year, as well as provide an update on how we're navigating the current macroeconomic environment.

謝謝你，瑞安。下午好，感謝您今天參加我們的第二季財報電話會議。我很高興概述我們今年第二季的業績，包括主要亮點、挑戰以及 2025 年剩餘時間的展望。像往常一樣，我將介紹財務結果，談及一些關鍵的業務動態，討論我們對第三季和今年剩餘時間的展望，並提供我們如何應對當前宏觀經濟環境的最新情況。

Turning to our financial results for the quarter, I'm pleased to report solid performance in several key areas. For the second quarter, we delivered revenue near the top end of the range at $386 million with neutral foreign currency impact. Earnings per share came in at $0.43. This surpassed our guidance by $0.13 and demonstrated significant improvement over the prior year $0.21 adjusted earnings per share due to our cost efficiency efforts deployed over the last two years. Our Q2 gross margin was 68.8% compared to 70% in the prior year, primarily due to the revenue mix between Rhyz entities and the new skin core following the sell of Mavely.

談到本季的財務業績，我很高興地報告幾個關鍵領域的穩健表現。第二季度，我們的營收接近預期最高水平，達到 3.86 億美元，且不受外匯影響。每股收益為0.43美元，超出我們預期0.13美元，較上年調整後每股收益0.21美元有顯著提升，這得益於我們過去兩年來在成本效率方面的努力。我們第二季的毛利率為 68.8%，而去年同期為 70%，這主要歸因於 Rhyz 實體和出售 Mavely 之後的新皮膚核心之間的收入組合。

Within our core Nu Skin business, gross margin was 77.5%, up 140 basis points from the prior year, resulting in four quarters of sequential adjusted gross margin improvement. We're continuing to see the benefits of our portfolio optimization and operational refinement efforts. Selling expense as a percentage of revenue was 33.2% for the quarter, a decline from the prior year primarily reflecting the impact of the Mavely sell on the overall revenue mix between our core Nu Skins business and Rhyz. Within the core Nu Skin segment, selling expense was 40%, down from 42.2% in the prior year. The decline was largely driven by lower sales performance in the US, China, and Southeast Asia Pacific markets compared to the prior year.

在我們的核心 Nu Skin 業務中，毛利率為 77.5%，比上年增長 140 個基點，導致連續四個季度的調整後毛利率有所提高。我們繼續看到投資組合優化和營運改善工作帶來的好處。本季銷售費用佔收入的 33.2%，較上年有所下降，主要反映了 Mavely 的出售對我們的核心 Nu Skins 業務和 Rhyz 之間的整體收入組合的影響。在核心 Nu Skin 部門中，銷售費用為 40%，低於上年的 42.2%。下降的主因是美國、中國和東南亞太平洋市場的銷售業績較上年同期下降。

For the core, we anticipate selling expense to remain around 40% as the enhanced compensation plan continues to gain adoption. General and administrative expenses were down $11.2 million compared to Q2 of 2024, reflecting cost reduction efforts in labor and a migration to a shared service model for technology. It did increase on a percentage basis due to the overall declines in revenue.

對於核心部分，隨著增強薪酬計劃的不斷採用，我們預計銷售費用將保持在 40% 左右。與 2024 年第二季相比，一般和行政費用減少了 1,120 萬美元，反映了勞動力成本的降低以及向技術共享服務模式的遷移。由於整體收入下降，其百分比確實有所增加。

Operating margin for the quarter was 8%, up 260 basis points from adjusted operating margin of 5.4%. In the prior year due to our disciplined approach to operational efficiencies. Improving our operating margin remains a long-term priority, which positions us to reinvest in the business through growth initiatives like Prysm iO and new market expansion into India. We will remain disciplined and adaptable, especially when navigating the continued top line pressures and evolving market conditions and are very pleased with our operating income results year-to-date.

本季營業利益率為 8%，較調整後的營業利潤率 5.4% 上升 260 個基點。去年，我們採取了嚴謹的方法來提高營運效率。提高我們的營業利潤率仍然是我們的長期優先事項，這使我們能夠透過 Prysm iO 等成長計劃和向印度的新市場擴張對業務進行再投資。我們將保持紀律和適應性，特別是在應對持續的收入壓力和不斷變化的市場條件時，我們對今年迄今的營業收入結果非常滿意。

I'd now like to turn to our balance sheet and liquidity position. We generated strong cash flow from operations in the quarter of $35.8 million which enabled us to achieve our goal of becoming net cash positive ahead of schedule, the first time we've been in this position in more than four years. This net cash position provides us with strong financial flexibility, enabling us to navigate economic uncertainties more confidently invest strategically in growth and return value to shareholders. We ended the quarter with $264 million in cash.

現在我想談談我們的資產負債表和流動性狀況。我們本季的營運現金流強勁，達到 3,580 萬美元，這使我們能夠提前實現淨現金為正的目標，這是我們四年多來首次實現這一目標。這種淨現金狀況為我們提供了強大的財務靈活性，使我們能夠更有信心地應對經濟不確定性，策略性地投資於成長並為股東帶來回報。本季末我們的現金為 2.64 億美元。

In line with our capital allocation strategy, we returned approximately $3 million to shareholders in the form of a dividend. We did not repurchase any stock and have $157.4 million remaining under our current share repurchase authorization.

根據我們的資本配置策略，我們以股利的形式向股東返還了約 300 萬美元。我們沒有回購任何股票，目前的股票回購授權還剩餘 1.574 億美元。

Looking ahead to the remainder of 2025, we're encouraged with the performance of the business through the second quarter. At the same time, we remain mindful of ongoing global uncertainties, including potential tariff impacts and evolving geopolitical conditions. Given these factors and continued uncertainty around consumer durability in our key markets, we're taking a disciplined and measured approach by narrowing our revenue outlook for the back half of 2025 and increasing our earnings per share as we've proven our ability to deliver profitability, notwithstanding market headwinds and pressures on the business.

展望 2025 年剩餘時間，我們對第二季的業務表現感到鼓舞。同時，我們仍然關注持續存在的全球不確定性，包括潛在的關稅影響和不斷變化的地緣政治條件。考慮到這些因素以及我們主要市場在消費者耐用性方面持續存在的不確定性，我們採取了嚴謹而慎重的做法，縮小了 2025 年下半年的收入預期，並提高了每股收益，因為我們已經證明了我們有能力實現盈利，儘管面臨市場逆風和業務壓力。

We project third quarter revenue between $360 million and $390 million factoring in an expected foreign currency headwind of approximately 1%. Q3 earnings per share is anticipated to be in the range of $0.25 to $0.35. For 2025, we project revenue of $1.48 billion to $1.55 billion and earnings per share of $3.05 to $3.25 with adjusted earnings per share of $1.15 to $1.35.

我們預計第三季營收將在 3.6 億美元至 3.9 億美元之間，考慮到預計約 1% 的外匯逆風。預計第三季每股收益在0.25美元至0.35美元之間。我們預計2025年營收為14.8億美元至15.5億美元，每股收益為3.05美元至3.25美元，調整後每股收益為1.15美元至1.35美元。

To conclude, we are pleased with our Q2 performance and continue to stay focused on driving our strategy forward despite ongoing global challenges. We remain confident in our ability to adapt and are committed to driving operational performance, managing costs, accelerating growth in key regions, and maintaining a strong financial position. We look forward to updating you on our progress as we move through the third quarter of 2025.

總而言之，我們對第二季度的業績感到滿意，儘管全球挑戰持續存在，但我們仍將繼續專注於推動我們的策略向前發展。我們對自己的適應能力充滿信心，並致力於提高營運績效、管理成本、加速關鍵地區的成長並維持強勁的財務狀況。我們期待在 2025 年第三季向您通報我們的進展。

And with that, operator, we'll now open up the call for questions.

接線員，我們現在開始提問。

(Operator Instructions)

（操作員指示）

Dave Storms, Stonegate.

戴夫‧斯托姆斯 (Dave Storms)，Stonegate。

Just wanted to start at the top here maybe with maybe just some thoughts on the puts and takes on your guidance. Great to see you guys narrow that range, but are there any initiatives or geographies that maybe have an outsized impact that'll put you on the higher end or lower end of that guidance?

我只是想從這裡開始，也許只是對您的指導提出一些想法。很高興看到你們縮小了這個範圍，但是是否有任何舉措或地區可能會產生巨大的影響，從而使你們處於該指導的高端或低端？

Hey Dave. Yeah, just maybe I'll share my thoughts and then obviously, James can dive into a little bit better, but I think as I mentioned through first half performance, we continue to see Latin America overperforming expectations a little bit offset through North America, which is a key market and we're working to improve there. Again, puts and takes as you said, it's Korea and China. Korea, we're seeing improving trends there. China's always a big question mark, especially with the macro uncertainties there, the economically and just geopolitically.

嘿，戴夫。是的，也許我會分享我的想法，然後顯然詹姆斯可以更深入地探討一下，但我認為正如我提到的上半年表現，我們繼續看到拉丁美洲的表現超出預期，但北美略有抵消，這是一個關鍵市場，我們正在努力改善那裡。再說一遍，正如你所說，是韓國和中國。韓國，我們看到那裡的趨勢正在改善。中國始終是一個大問號，尤其是那裡的宏觀不確定性，包括經濟和地緣政治。

So those are probably for me the ones that are like top of mind would be those, North America, China, Korea, whereas Europe, Southeast Asia and Japan and LATAM, I think are going to are going to do better, but James, any additional color would be good.

因此，對我來說，最先想到的可能是北美、中國、韓國，而歐洲、東南亞、日本和拉丁美洲，我認為會做得更好，但是詹姆斯，任何額外的顏色都會很好。

As we look across the landscape across the first two quarters of the year, there was a lot of shifts between geographies and the performance between the outcomes of our reported numbers through Q2. When we looked in the back half and we're forecasting out forward, Ryan touched on the ones where we see. We've rolled through that overperformance and then has also adjusted those other markets that have underperformed through the first half and looked at the energy maps and the programs that we have running in each of those regions. He touched on the highlights for us. Latin America continues to perform well. Japan continues to hold steady and the other markets and regions we're looking forward to our Q4 launch of our Prysm iO as well as getting ready and staging for the opening of India.

回顧今年前兩個季度的情況，我們發現不同地區的情況以及我們第二季度報告的數據結果之間的表現存在很大差異。當我們回顧後半部分並預測未來時，瑞安談到了我們所看到的。我們已經克服了這種超額表現，然後也調整了上半年表現不佳的其他市場，並研究了能源圖和我們在每個地區運作的計畫。他向我們講述了其中的亮點。拉丁美洲繼續表現良好。日本繼續保持穩定，我們期待在其他市場和地區推出我們的 Prysm iO，並為印度的開業做好準備。

And then maybe just double clicking on the shrank scene in Latin America there. Are you able to highlight what's really working there and how much runway is left? Does Prysm iO turn into -- is that pouring gas on the fire for Latin America or just how you see that playing out in the near term?

然後也許只需雙擊拉丁美洲的萎縮場景。您能否強調那裡真正有效的措施以及還剩下多少發展空間？Prysm iO 會不會變成——這會為拉丁美洲帶來火上加油嗎？或者您只是認為這會在短期內產生影響？

Yeah, Latin America has been an interesting journey for us, obviously at the macro level it's always been a region that has enormous potential in direct selling but for us has maybe been underrepresented. What we're pleased with there, we took a different approach there about two years ago, aligning with our leaders there around how we would simplify the model to really get a focus that would enable us to scale more profitably. And what we ended up finding out is the more we focused and simplified the model from an operational efficiency perspective, the better salesforce aligned and focused.

是的，拉丁美洲對我們來說是一段有趣的旅程，顯然從宏觀層面來看，它一直是一個在直銷方面具有巨大潛力的地區，但對我們來說，可能還沒有得到充分的重視。我們對此感到滿意的是，大約兩年前，我們採取了不同的方法，與那裡的領導者就如何簡化模型進行協調，以真正集中精力，使我們能夠更有利可圖地擴大規模。我們最終發現，我們越從營運效率的角度關注和簡化模型，銷售人員的協調和專注程度就越高。

And so, to the true extent less was more and from there, that was born into kind of a three pronged strategy from the product side, the business model side, and then the operational side. So at the product level really retuning the portfolio to hit at the right price points with a good retail profit from a sales leader perspective. So working through margins there and that was important.

因此，真正意義上的少即是多，由此誕生了一種三管齊下的策略：產品面向、商業模式面向、營運面向。因此，從銷售領導者的角度來看，在產品層面上真正重新調整產品組合以達到正確的價格點並獲得良好的零售利潤。因此，努力突破利潤空間非常重要。

On the business model side, as I mentioned, it's critical in those markets that there's a healthy and reliable retail profit that's made to the seller in addition to the incentives that we align around growing the channel. And so, striking the right balance between that selling and referring together with our new sales performance plan is working really well and then that last prong of scalable infrastructure there. So really focusing much more on the technical and technology based support rather than hard cost infrastructure has proven to be helpful there being able to get to the needs of the consumers and affiliates down there. So I think those those are really the elements of when we talk about the developing market strategy, even in India same three types of elements will be focused on the portfolio, the business model, and the flexible digital first infrastructure.

在商業模式方面，正如我所提到的，在這些市場中，除了我們圍繞通路成長而製定的激勵措施之外，為賣家帶來健康可靠的零售利潤也至關重要。因此，在銷售和推薦之間取得適當的平衡，結合我們的新銷售績效計劃，效果非常好，然後是可擴展基礎設施的最後一部分。因此，事實證明，更多地關注技術和基於技術的支援而不是硬成本基礎設施是有幫助的，能夠滿足那裡的消費者和附屬機構的需求。所以我認為這些確實是我們談論發展市場策略時的要素，即使在印度，同樣的三種要素也將集中在產品組合、商業模式和靈活的數位優先基礎設施上。

Prysm, I think, will be an additional help there. Latin America historically has been a beauty origin market, the majority of our business down there is that, but we have some good nutritional products like our collagen line down there that kind of stands the two. Our sales leaders are really excited about Prysm and think there's a great opportunity moving forward with this expanded life pack line, which is our premium nutritional supplement that works really hand in hand with Prysm and we have a new formula called LifePak Elements that will be introducing down there next year that that we anticipate will further strengthen the offering down there.

我認為 Prysm 將會提供額外的幫助。拉丁美洲一直是美容產品的原產地市場，我們的大部分業務都在那裡，但我們在那裡也有一些優質的營養產品，例如我們的膠原蛋白系列，可以與兩者相媲美。我們的銷售領導對 Prysm 感到非常興奮，並認為擴展的 Life Pack 系列為未來發展提供了絕佳的機會，這是我們的優質營養補充劑，可以與 Prysm 緊密結合，我們有一種名為 LifePak Elements 的新配方將於明年在那裡推出，我們預計這將進一步加強我們在那裡的產品供應。

Turning to at the consolidated level, the cost optimization that you've been kind of driving here. It seems to really be making strong progress. When you're thinking about it going forward, how many levers do you still see to pool there? Is there any low hanging fruit that could continue to drive margin improvement year-over-year like we saw this quarter?

談到合併層面，您一直在推動成本優化。看來它確實取得了長足的進步。當您考慮未來發展時，您還認為有多少槓桿可以集中在那裡？是否有任何唾手可得的成果可以像我們本季看到的那樣繼續推動利潤率逐年提高？

Yeah, I'll take that question, Dave. It's -- for us, we talked about earlier about four consecutive quarters of sequential growth in gross margin. That is the result of cumulative efforts across the last two years, mainly and working through the inventory and the terms to get that flow through our cost of sales, so the lower overhead to roll through. We still believe that there's still opportunity there as we've lowered our inventory levels and managed that to be really in line with our overall revenue.

是的，我會回答這個問題，戴夫。對我們來說，我們之前談到毛利率連續四個季度成長。這是過去兩年來不斷努力的結果，主要是透過庫存和條款來實現銷售成本的流動，從而降低管理費用。我們仍然相信那裡仍有機會，因為我們已經降低了庫存水準並設法使其與我們的整體收入保持一致。

Selling expense, we continue to optimize. For us, that's something that helps the field and generates the top line and so we're really focused on spending efficiently where we can to make sure that we're optimizing performance. And then G&A, we're going to continue to focus on our operational footprint like the developing market strategy that Ryan talked about in Latin America. We're looking across the scope of all of our markets and continue to look and find opportunities where we can use technology in place of physical presence or labor and continue to find opportunities where we can deliver more dollars to the bottom line. So we're going to continue our efforts and we feel confident in our ability to navigate forward.

銷售費用，我們不斷優化。對我們來說，這有助於該領域並產生收入，因此我們真正專注於盡可能有效地支出，以確保優化效能。然後是一般及行政事務，我們將繼續關注我們的營運足跡，例如 Ryan 談到的拉丁美洲的發展中市場策略。我們正在審視所有市場的範圍，並繼續尋找能夠利用技術代替實體存在或勞動力的機會，並繼續尋找能夠為最終目標帶來更多收益的機會。因此，我們將繼續努力，並且我們對自己前進的能力充滿信心。

Maybe just one more for me. You ended the quarter with a strong balance sheet, and you mentioned that it gives you a lot of flexibility. Just if you could help us maybe prioritize what your capital allocation priorities are going to be in the back half of the year given that flexibility?

對我來說也許再多一個就好了。您在本季結束時擁有強勁的資產負債表，並且您提到這為您提供了很大的靈活性。考慮到這種靈活性，您是否能幫助我們確定下半年您的資本配置重點？

Yeah, and maybe I could -- I'll have James kind of go into the detail on capital allocation, but I mean, obviously for us, investing in growth of the business is critical and kind of doubling down on our two growth opportunities, Dave, for us, that are always front and center, first from an innovation standpoint. Prysm iO, as we're building upon the extensive database that we've created over the last 20 years to now take that forward in a new device that is really -- literally can fit in anyone's pocket anywhere. This device coupled with our extensive database, and then the app, the intelligent wellness app coming along is a major -- for us, It's a major focus and source of investment as we lead out into this this new world.

是的，也許我可以——我會讓詹姆斯詳細介紹一下資本配置，但我的意思是，顯然對我們來說，投資於業務增長是至關重要的，戴夫，對我們來說，加倍重視我們的兩個增長機會，這兩個增長機會始終是最重要的，首先是從創新的角度來看。Prysm iO，我們正在建立過去 20 年創建的龐大資料庫，現在將其發展成一種新設備，這種設備實際上可以放在任何地方任何人的口袋裡。該設備與我們廣泛的數據庫相結合，然後是應用程序，隨之而來的智能健康應用程序對我們來說是一個重大的 - 這是我們進入這個新世界的主要關注點和投資來源。

And then of course, leading into developing markets. Again, we have a scalable model, we're taking a very different approach digital first there. So we're not talking about you know massive fixed cost infrastructure investments, rather we're really building it out to be scalable and so, as we go into India, that's a priority and making certain that we're really allocating investment into the growth first. But James, maybe you can talk more about capital allocation.

然後當然是進入發展中市場。再說一次，我們有一個可擴展的模型，我們首先採取了一個非常不同的數位化方法。因此，我們談論的不是大規模的固定成本基礎設施投資，而是真正將其建設成可擴展的，因此，當我們進入印度時，這是優先事項，並確保我們確實將投資首先分配給成長。但是詹姆斯，也許你可以多談談資本配置。

Yeah. Our capital allocation strategy has been consistent. We fund the business, we look for opportunities where we can find the growth like Ryan mentioned. Right now, Prysm iO India, and then other several initiatives inside the business we're heavily funding.

是的。我們的資本配置策略一直保持一致。我們為企業提供資金，尋找能夠成長的機會，正如瑞安所提到的。目前，我們正在大力資助 Prysm iO India 以及該行業內的其他幾個項目。

The second one is making sure that we're able to service our debt, that we can manage our obligations going forward where we're in a really healthy position. And the third is to continue to pay a strong dividend, return value to shareholders through both our dividend and then when opportunity permits to be able to be in the market to repurchase shares.

第二個是確保我們有能力償還債務，確保我們能夠在真正健康的情況下管理我們的義務。第三是繼續支付豐厚的股息，透過股息向股東回報價值，然後在機會允許時能夠在市場上回購股票。

And so, that's really what we have when we're looking forward. And we also look for other opportunities where we can take advantage of a potential opportunity that may arise to go after growth.

所以，這確實是我們期待時所擁有的。我們也在尋找其他機會，利用可能出現的潛在機會來追求成長。

Thank you. I am showing no further questions at this time. I would like to turn it back to Ryan Napierski for closing remarks.

謝謝。我目前沒有其他問題。我想請 Ryan Napierski 做最後發言。

Well, we really appreciate everyone joining the call. If you have additional questions, please reach out to B.G, James, myself to answer those. We're very excited about the future as it's unfolding. We were pleased with our first half results and are now very focused on the second half in preparations for 2026.

好吧，我們非常感謝大家參加這次電話會議。如果您還有其他問題，請聯絡 B.G、James 或我自己來解答。我們對正在展開的未來感到非常興奮。我們對上半年的業績感到滿意，現在我們非常專注於下半年，為 2026 年做準備。

We're going to be driving these three priorities across the business of accelerating innovation with Prysm iO and our intelligent wellness platform are strengthening our core business with developing and emerging markets beginning with India and then driving operational performance and efficiency all with an endgame of strengthening shareholder value as we provide greater opportunities for our empowered salesforce, affiliates and powerful leaders around the world where we provide them opportunities to grow and empowerment initiatives is where we find success in our business. So that's what we're acutely focused on. We'll look forward to updating you in coming quarters and so, please join the calls and reach out with any questions. Thank you.

我們將在整個業務中推動這三個優先事項，透過 Prysm iO 和我們的智慧健康平台加速創新，從印度開始加強我們在發展中和新興市場的核心業務，然後提高營運績效和效率，最終增強股東價值，因為我們為全球授權的銷售人員、附屬公司和強大的領導者提供更多機會，我們為他們提供成長的機會，而授權舉措是我們業務成功的關鍵舉措。這就是我們高度關注的重點。我們期待在未來幾季向您通報最新情況，因此，請加入電話會議並提出任何問題。謝謝。

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

感謝大家參加今天的會議。這確實結束了程序，您現在可以斷開連接了。