NU SKIN ENTERPRISES, INC.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
NUS$4.10-9.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001140361-26-019630
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001140361-26-032055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 83 current paragraphs.
41 unchanged; 33 reworded; 9 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
The year-over-year decline in segment contribution for the second quarter of 2026 primarily reflects the decline in revenue, partially offset by a 1.4 percentage point increase in gross margin from a favorable product mix. The decline in segment contribution for the first half of 2026 is primarily from the decline in revenue.
Current report
The year-over-year decline in segment contribution for the second quarter and first half of 2026 primarily reflects the decline in revenue.
Current report
Rhyz Other. The decrease in revenue for the second quarter and first half of 2026 is primarily from our decision to wind down our separate BeautyBio business. In addition, for the second quarter of 2026, our LifeDNA, Inc. (“LifeDNA”) entity, a DNA assessment and recommendation technology company, was challenged by elevated customer acquisition cost.
Current report
General and administrative expenses decreased to $90.8 million in the second quarter of 2026, compared to $106.7 million in the prior-year period, and decreased to $189.4 million in the first six months of 2026, compared to $219.9 million in the prior-year period. The $15.9 million decline for the second quarter is primarily from a $8.6 million contraction in labor expenses primarily from lower incentive compensation from a decline in performance and a $2.5 million decline in software and related contracts from continued cost management. The $30.5 million decline for the first half of 2026 is primarily from a $14.3 million reduction in labor expense and a $7.9 million decline in software and related contracts. General and administrative expenses as a percentage of revenue increased to 28.4% for the second quarter of 2026, from 27.6% for the prior-year period, and increased to 29.6% for the first six months of 2026, from 29.3% for the prior-year period. In the third quarter of 2026, we anticipate beginning to implement a re-alignment of our organizational resources. As a result of these changes, we are anticipating an approximate incremental $5.0 million in transition cost in the third quarter of 2026, primarily consisting of cash severance charges.
Current report
Goodwill. During the three months ended June 30, 2026, we determined that the continued decline in our stock price and corresponding market capitalization as well as the decline in our manufacturing reporting unit’s forecast were triggering events that required us to perform a quantitative impairment analysis. When we performed an impairment test during the second quarter of 2026, we concluded the estimated fair value of the manufacturing reporting unit was less than the carrying value of equity as of June 30, 2026. As a result, we recorded a non-cash goodwill impairment charge of $78.9 million in the second quarter of 2026.
Current report
Provision for income taxes
Current report
Provision for income taxes for the three- and six-month periods ended June 30, 2026 was $186.6 million and $187.4 million, respectively, compared to $6.3 million and $33.4 million for the prior-year periods. The effective tax rates for the three- and six-month periods ended June 30, 2026 were (295.4)% and (309.3)% of pre-tax income, respectively, compared to 23.0% and 20.6% in the prior-year periods. The change in the effective tax rate in the second quarter of 2026 is primarily due to the valuation allowance established on our U.S. deferred tax assets.
Current report
During the second quarter of 2026, we established a $167.5 million valuation allowance against its U.S. deferred tax assets as it was determined to be more likely than not that these assets will not be realized. This determination was made based on weighing all available evidence, positive and negative, including cumulative losses recognized in the U.S. entity over the past three years. These cumulative losses were mainly due to the impairment of goodwill and other intangibles assets. Therefore, we recorded a full valuation allowance against these U.S. deferred tax assets as of June 30, 2026.
Current report
Net income (loss)
Removed paragraphs (8)
Previous report
. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report
The year-over-year decrease in segment contribution was primarily driven by an increase in general and administrative expenses with a decline in revenue.
Previous report
The year-over-year decline in segment contribution primarily reflects the decline in revenue, as well as a 1.9 percentage-point decrease in gross margin and a 1.5 percentage-point decrease in selling expenses from the reduction.
Previous report
Rhyz Other. The increase in revenue for the first quarter of 2026 is primarily from our LifeDNA, Inc. (“LifeDNA”) entity, a DNA assessment and recommendation technology company, which revenue increased 96.1% for the first quarter of 2026. We are currently evaluating strategic opportunities with LifeDNA, including potentially divesting it, to maximize our return on investment. This was partially offset by a 66.9% decline in revenue at our BeautyBio entity, which we have decided to exit in the first quarter of 2026.
Previous report
General and administrative expenses decreased to $98.5 million in the first quarter of 2026, compared to $113.2 million in the prior-year period. The $14.7 million decline for the first quarter is from a $5.5 million contraction in labor expenses primarily from $5.2 million of stock-based compensation expense recorded in the first quarter of 2025 related to profit interest units issued to the Mavely founders and a $5.4 million decline in software and related contracts from continued cost management. General and administrative expenses as a percentage of revenue decreased to 30.7% for the first quarter of 2026, from 31.1% for the prior-year period.
Previous report
Provision (benefit) for income taxes
Previous report
Provision for income taxes for the first quarter of 2026 was $0.8 million, compared to $27.1 million for the prior-year period. The effective tax rate was 29.4% of income before provision for income taxes during the first quarter of 2026 compared to 20.1% in the prior-year period. The first quarter of 2026 effective tax rate is higher than the prior-year period due to the tax rate benefit from the sale of Mavely in the first quarter of 2025.
Reworded paragraphs (33)
Previous wording
Revenue for the three-month period ended March 31, 2026 decreased 12.0% to $320.6 million, compared to $364.5 million in the prior-year period. Our revenue in the first quarter of 2026 was positively impacted by 1.1% from foreign-currency fluctuations. Our Customers, Paid Affiliates and Sales Leaders declined 14%, 8% and 13%, respectively, on a year-over-year basis.
Current wording
Revenue for the three-month period ended June 30, 2026 decreased 17.1% to $320.1 million, compared to $386.1 million in the prior-year period, and revenue for the six-month period ended June 30, 2026 decreased 14.6% to $640.7 million, compared to $750.6 million in the prior-year period. Our revenue in the second quarter of 2026 was negatively impacted by 1.0% from foreign-currency fluctuations. Our Customers, Paid Affiliates and Sales Leaders declined 14%, 8% and 9%, respectively, on a year-over-year basis.
Previous wording
The declines for the three-month period ended March 31, 2026 were largely driven by the continued macroeconomic challenges we have been facing in our markets, which have negatively impacted consumer spending and customer acquisition. In addition, while we continue to make progress on our long-term vision, we have experienced headwinds from the transformation process. Our priorities for 2026 focus on business model optimization, driven by the continued rollout of enhancements to our sales performance plan, the continued launch of our Prysm iO intelligent wellness platform and business expansion into India. In the first quarter of 2026, we predominately completed the Sales Leader previews of Prysm iO. We remain focused on the associated Sales Leader activation to enable a successful launch.
Current wording
The declines for the three- and six-month periods ended June 30, 2026 were largely driven by the continued macroeconomic challenges we have been facing in our markets, which have negatively impacted consumer spending and customer acquisition. Our priorities for 2026 focus on business model optimization, driven by the continued rollout of enhancements to our sales performance plan, the continued launch of our Prysm iO intelligent wellness platform and business expansion into India. Our early learnings from the Prysm iOhave resulted in a shift in the strategy from a device placement focus to an assessment model that is more conducive to in-person engagement. In addition, from our preview in India we have identified the need to simplify the model in advance of our full market opening, which is now slated for the first half of 2027.
Previous wording
Earnings per share for the first quarter of 2026 decreased to $0.04, compared to $2.14 in the prior-year period. Our first quarter of 2026 earnings per share was negatively impacted by the decline in revenue and $5.9 million of charges associated with our decision to wind down our separate BeautyBio business. Our 2025 earnings per share benefited from the January 2025 sale of our Mavely business, which generated a pre-tax gain of approximately $176.2 million, partially offset by the associated taxes, an intangible asset group impairment of $25.1 million in our Rhyz Other segment and a non-cash loss on equity investment of $28.1 million.
Current wording
Earnings per share for the second quarter of 2026 decreased to $(5.14), compared to $0.43 in the prior-year period. Earnings per share for the first six months of 2026 decreased to $(5.12), compared to $2.59 in the prior-year period. Our second quarter 2026 earnings per share were negatively impacted by an impairment charge of $78.9 million and a $167.5 million valuation allowance associated with our U.S. deferred tax assets, as well as the decline in revenue. Our earnings per share for the first six months of 2026 were negatively impacted by the second quarter impairment charge, second quarter valuation allowance, charges associated with our first quarter of 2026 wind down of our separate BeautyBio business and decline in revenue. Our 2025 earnings per share benefited from the January 2025 sale of our Mavely business, which generated a pre-tax gain of approximately $176.2 million, partially offset by the associated taxes, an intangible asset group impairment of $25.1 million in our Rhyz Other segment and a non-cash loss on equity investment of $28.1 million.
Previous wording
The following table sets forth revenue for the three-month periods ended March 31, 2026 and 2025 for each of our reportable segments (U.S. dollars in thousands):
Current wording
The following table sets forth revenue for the three- and six-month periods ended June 30, 2026 and 2025 for each of our reportable segments (U.S. dollars in thousands):
Previous wording
The tables below set forth summarized financial information for each of our reportable segments for the three-month periods ended March 31, 2026 and 2025 (U.S. dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items. We use segment contribution to measure the portion of profitability that the segment managers have the ability to control for their respective segments. For additional information regarding our segments and the calculation of segment contribution, see Note 11 to the consolidated financial statements contained in this report.
Current wording
The tables below set forth summarized financial information for each of our reportable segments for the three- and six-month periods ended June 30, 2026 and 2025 (U.S. dollars in thousands). Segment contribution excludes certain intercompany charges, specifically royalties, license fees, transfer pricing and other miscellaneous items. We use segment contribution to measure the portion of profitability that the segment managers have the ability to control for their respective segments. For additional information regarding our segments and the calculation of segment contribution, see Note 11 to the consolidated financial statements contained in this report.
Previous wording
Americas. The results in our Americas segment reflect a continued decline in our North America markets, while our Latin America markets grew year-over-year. As our Sales Leaders prioritized Prysm iOand associated wellness products, we experienced switching costs in the first quarter of 2026 as many of our Sales Leaders began adapting to a greater focus on wellness products than previously. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 3.7% for the first quarter of 2026.
Current wording
Americas. The results in our Americas segment reflect a continued decline in our North America markets. For the second quarter of 2026, our Latin America markets’ revenue contracted on a reported currency basis, with growth for the first half of 2026. As our Sales Leaders prioritized Prysm iOand associated wellness products during the first half of 2026, we experienced switching costs as many of our Sales Leaders began adapting to a greater focus on wellness products than previously. During the second quarter of 2026, we released enhancements to our sales compensation plan, with a higher focus on aligning incentives around Sales Leader development and retention. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 2.3% and 3.0% for the second quarter and first half of 2026, respectively.
Previous wording
The year-over-year decrease in segment contribution for the first quarter of 2026 primarily reflects the overall decline in revenue, as well as a 3.5 percentage-point increase in selling expenses from additional incentives aimed at assisting the transition to the sales performance plan.
Current wording
The year-over-year decrease in segment contribution for the second quarter and first half of 2026 primarily reflects the overall decline in revenue, as well as a 3.1 and 3.3 percentage-point increase for the second quarter and first half of 2026, respectively, in selling expenses from additional incentives aimed at assisting the transition associated with the sales compensation plan enhancements.
Previous wording
Mainland China. Our Mainland China market continued to be challenged during the first quarter of 2026, with ongoing macroeconomic factors, the associated decrease in consumer spending and a continued shift of market consumer awareness and demand to online product marketplaces. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 4.5% for the first quarter of 2026.
Current wording
Mainland China. Our Mainland China market continued to be challenged during the second quarter and first half of 2026, with ongoing macroeconomic factors, the associated decrease in consumer spending and a continued shift of market consumer awareness and demand to online product marketplaces. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 5.0% and 4.8% for the second quarter and first half of 2026, respectively. During the second quarter of 2026, we released enhancements to the business model, as well as additional incentives for our sales force, which we believe helped drive a 2% increase in Sales Leaders as well as a slowing of the decline of Paid Affiliates for the second quarter of 2026.
Previous wording
The decrease in segment contribution for the first quarter of 2026 primarily reflects the decline in revenue.
Current wording
The decrease in segment contribution for the second quarter and first half of 2026 primarily reflects the decline in revenue and associated fixed cost pressures on general and administrative expenses.
Previous wording
Southeast Asia/Pacific. The decline in revenue, Customers, Paid Affiliates and Sales Leaders for the first quarter of 2026 is primarily attributable to slowing momentum from the general macroeconomic factors in the markets. We remain focused on expansion of our developing market strategy in this region. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 3.8% for the first quarter of 2026.
Current wording
Southeast Asia/Pacific. The decline in revenue, Customers, Paid Affiliates and Sales Leaders for the second quarter and first half of 2026 is primarily attributable to slowing momentum from the general macroeconomic factors in the markets. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 1.4% and 2.6% for the second quarter and first half of 2026, respectively.
Previous wording
The year-over-year decrease in segment contribution for the first quarter of 2026 primarily reflects the decline in revenue as well as a slight increase in general and administrative cost associated with our pre-market activities in India in preparation for the full market opening in late 2026.
Current wording
The year-over-year decrease in segment contribution for the second quarter and first half of 2026 primarily reflects the decline in revenue as well as an increase in selling expenses and general and administrative cost associated with our pre-market activities in India in preparation for the full market opening in the first half of 2027.
Previous wording
Japan. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders is partially attributable to consumer inflationary pressures which depressed spending. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 2.8% for the first quarter of 2026.
Current wording
Japan. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders is partially attributable to consumer inflationary pressures which depressed spending. In addition, our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 8.8% and 5.9% for the second quarter and first half of 2026.
Previous wording
Europe & Africa. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders reflects continued softness in these markets, as well as the macroeconomic factors that have led to a decline in the purchasing power of our customers. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 9.3% for the first quarter of 2026.
Current wording
Europe & Africa. The reduction in revenue, Customers, Paid Affiliates and Sales Leaders reflects continued softness in these markets, as well as the macroeconomic factors that have led to a decline in the purchasing power of our customers. In addition, our reported revenue reflects a benefit from favorable foreign currency fluctuations of 1.8% and 5.3% for the second quarter and first half of 2026, respectively.
Previous wording
Hong Kong/Taiwan. The declines in our Hong Kong/Taiwan segment for the first quarter of 2026 is attributable to macroeconomic issues, which are resulting in less purchasing power for our consumers. Our reported revenue reflects benefits from favorable foreign currency fluctuations of 2.4% for the first quarter of 2026.
Current wording
Hong Kong/Taiwan. The declines in our Hong Kong/Taiwan segment for the second quarter and first half of 2026 are attributable to macroeconomic issues, which are resulting in less purchasing power for our consumers. Our Taiwan market has shown indicators of stabilization with local currency growth for the second quarter and first half of 2026.
Previous wording
The decrease in segment contribution for the first quarter of 2026 is partially attributable to a 2.1 percentage-point increase in selling expenses associated with our recent compensation plan enhancements, as well as the decline in revenue paired with the fixed nature of general and administrative expenses, partially offset by a 2.0 percentage point improvement in gross margin from less product write-offs and product promotions.
Current wording
The decrease in segment contribution for the second quarter of 2026 is primarily attributable to the decline in revenue. The decrease in segment contribution for the first half of 2026 is primarily from the decline in revenue as well as a 1.5 percentage-point increase in selling expenses associated with our recent compensation plan enhancements, as well as the decline in revenue paired with the fixed nature of general and administrative expenses, partially offset by a 1.3 percentage point improvement in gross margin from less product write-offs and product promotions.
Previous wording
South Korea. Our South Korea market was challenged by difficult macroeconomic trends, including inflationary pressures, political instability, and our associated price increases which negatively impacted our revenue, Customers, Paid Affiliates and Sales Leaders for the first quarter of 2026. In addition, in the first quarter of 2026, we lowered our commission to remain in compliance with the local law.
Current wording
South Korea. Our South Korea market was challenged by difficult macroeconomic trends, including inflationary pressures, political instability, and our associated price increases which negatively impacted our revenue, Customers, Paid Affiliates and Sales Leaders for the second quarter and first half of 2026. In addition, in the first quarter of 2026, we lowered our commission to remain in compliance with the local law. Our reported revenue reflects negative impacts from unfavorable foreign currency fluctuations of 5.8% and 3.3% for the second quarter and first half of 2026, respectively.
Previous wording
Manufacturing. Our Manufacturing segment revenue decreased 18.7% for the first quarter of 2026. The decrease is partially due to a tough comparison with a strong first quarter of 2025, as well as customer order delays related to the tariff and associated economic uncertainty.
Current wording
Manufacturing. Our Manufacturing segment revenue decreased 23.2% and 21.1% for the second quarter and first half of 2026, respectively. The decrease is partially due to a challenging comparison with a strong first half of 2025, as well as customer order delays related to the tariff and associated economic uncertainty.
Previous wording
The decrease in segment contribution is primarily due to our decision to wind down our separate BeautyBio business and the associated $3.1 million inventory charge, $1.8 million of intangible impairment and $1.0 million in other associated costs.
Current wording
The decrease in segment contribution for the second quarter and first half of 2026 is primarily due to our decision to wind down our separate BeautyBio business and the associated $3.1 million inventory charge, $1.8 million of intangible impairment and $1.0 million in other associated costs recorded in the first quarter of 2026, as well as elevated customer acquisition cost for LifeDNA.
Previous wording
Revenue for the three-month period ended March 31, 2026 decreased 12.0% to $320.6 million, compared to $364.5 million in the prior-year period. Our revenue in the first quarter of 2026 was positively impacted by 1.1%, from foreign-currency fluctuations. For a discussion and analysis of these decreases in revenue, see “Overview” and “Segment Results,” above.
Current wording
Revenue for the three-month period ended June 30, 2026 decreased 17.1% to $320.1 million, compared to $386.1 million in the prior-year period. Revenue for the six-month period ended June 30, 2026 decreased 14.6% to $640.7 million compared to $750.6 million in the prior-year period. Our revenue in the second quarter of 2026 was negatively impacted by 1.0%, from foreign-currency fluctuations. For a discussion and analysis of these decreases in revenue, see “Overview” and “Segment Results,” above.
Previous wording
Gross profit as a percentage of revenue was 66.9% for the first quarter of 2026, compared to 67.8% for the prior-year period. Gross profit as a percentage of revenue for our Nu Skin business increased 0.2 percentage points to 76.9% for the first quarter of 2026.
Current wording
Gross profit as a percentage of revenue was 68.2% for the second quarter of 2026, compared to 68.8% for the prior-year period, and 67.5% for the first six months of 2026, compared to 68.3% for the prior-year period. Gross profit as a percentage of revenue for our Nu Skin business increased 0.2 percentage points to 77.7% for the second quarter of 2026 and increased 0.2 percentage points to 77.3% for the first six months of 2026.
Previous wording
Selling expenses as a percentage of revenue increased to 34.3% for the first quarter of 2026, compared to 32.5% for the prior-year period. Core Nu Skin selling expenses as a percentage of revenue increased 1.8 percentage points to 40.5% for the first quarter of 2026. Selling expenses for our core Nu Skin business are driven by the specific performance of our individual Sales Leaders. Given the size of our sales force and the various components of our compensation and incentive programs, selling expenses as a percentage of revenue typically fluctuate plus or minus approximately 100 basis points from period to period.
Current wording
Selling expenses as a percentage of revenue increased to 33.7% for the second quarter of 2026, compared to 33.2% for the prior-year period, and increased to 34.0% for the first six months of 2026, compared to 32.9% for the prior-year period. Core Nu Skin selling expenses as a percentage of revenue decreased 0.2 percentage points to 39.8% for the second quarter of 2026 and increased 0.8 percentage points to 40.1% for the first six months of 2026. Selling expenses for our core Nu Skin business are driven by the specific performance of our individual Sales Leaders. Given the size of our sales force and the various components of our compensation and incentive programs, selling expenses as a percentage of revenue typically fluctuate plus or minus approximately 100 basis points from period to period. In the third quarter of 2026, we are holding our global Nu Skin LIVE! event in Japan. As a result of the global LIVE! event, we are anticipating an approximate incremental $5.0 million in selling expenses for the third quarter of 2026.
Previous wording
Interest expense increased to $4.3 million in the first quarter of 2026, compared to $3.3 million in the prior-year period. The increase is primarily due to our interest rate swap arrangements that we entered into in 2020 maturing on July 31, 2025, at which time our effective interest rate increased.
Current wording
Interest expense increased to $3.3 million in the second quarter of 2026, compared to $2.5 million in the prior-year period. Interest expense for the first six months of 2026 increased to $7.6 million compared to $5.8 million for the prior-year period. The increase is primarily due to our interest rate swap arrangements that we entered into in 2020 maturing on July 31, 2025, at which time our effective interest rate increased.
Previous wording
Other income (expense), net was $2.8 million for the first quarter of 2026 compared to $(28.4) million for the prior-year period. In the first quarter of 2025, we recorded a $28.1 million unrealized loss on investment. See Note 8 to the consolidated financial statements contained in this report for more information on the unrealized equity investment and the associated loss.
Current wording
Other income (expense), net was $(0.5) million for the second quarter of 2026 compared to $(0.8) million for the prior-year period, and $2.3 million for the first six months of 2026 compared to $(29.2) million for the prior-year period. In the first quarter of 2025, we recorded a $28.1 million unrealized loss on investment. See Note 8 to the consolidated financial statements contained in this report for more information on the unrealized equity investment and the associated loss.
Previous wording
As a result of the foregoing factors, net income for the first quarter of 2026 was $1.8 million compared to $107.5 million in the prior-year period.
Current wording
As a result of the foregoing factors, net income for the second quarter of 2026 was $(249.8) million compared to $21.1 million in the prior-year period. Net income for the first six months of 2026 was $(248.0) million, compared to $128.6 million for the first six months of 2025.
Previous wording
Historically, our principal uses of cash have included operating expenses (particularly selling expenses) and working capital (principally inventory purchases), as well as capital expenditures, stock repurchases, dividends, and debt repayment. We have at times incurred long-term debt, or drawn on our revolving line of credit, to fund strategic transactions, stock repurchases, capital investments and short-term operating needs. We typically generate positive cash flow from operations due to favorable margins and have generally relied on cash from operations to fund operating activities. However, in the first three months of 2026, we had a net outflow of $3.9 million in cash from operations, compared to $0.4 million of cash provided by operations in the prior-year period. The decrease in cash flow from operations primarily reflects cash payments made in the first quarter of 2026 related to prepaid corporate income taxes. Cash and cash equivalents, including current investments, as of March 31, 2026 and December 31, 2025 were $200.4 million and $239.8 million, respectively, with the decrease being primarily driven by $13.7 million of capital expenditures, $6.5 million for the purchase of noncontrolling interest in LifeDNA and $5.0 million in share repurchases.
Current wording
Historically, our principal uses of cash have included operating expenses (particularly selling expenses) and working capital (principally inventory purchases), as well as capital expenditures, stock repurchases, dividends, and debt repayment. We have at times incurred long-term debt, or drawn on our revolving line of credit, to fund strategic transactions, stock repurchases, capital investments and short-term operating needs. We typically generate positive cash flow from operations due to favorable margins and have generally relied on cash from operations to fund operating activities. In the first six months of 2026, we generated $6.7 million in cash from operations, compared to $36.2 million in the prior-year period. The decrease in cash flow from operations primarily reflects incremental inventory purchases. Cash and cash equivalents, including current investments, as of June 30, 2026 and December 31, 2025 were $191.4 million and $239.8 million, respectively, with the decrease being primarily driven by $19.4 million of capital expenditures, $10.0 million in net debt payments, $6.5 million for the purchase of noncontrolling interest in LifeDNA, $5.8 million of dividend payments and $5.0 million in share repurchases.
Previous wording
Working capital. As of March 31, 2026, working capital was $265.9 million, compared to $284.0 million as of December 31, 2025. Our decrease in working capital is primarily attributable to changes in our cash balance as explained above.
Current wording
Working capital. As of June 30, 2026, working capital was $251.8 million, compared to $284.0 million as of December 31, 2025. Our decrease in working capital is primarily attributable to changes in our cash balance as explained above.
Previous wording
Capital expenditures. Capital expenditures for the three months ended March 31, 2026 were $13.7 million. We expect that our capital expenditures in 2026 will be primarily related to:
Current wording
Capital expenditures. Capital expenditures for the six months ended June 30, 2026 were $19.4 million. We expect that our capital expenditures in 2026 will be primarily related to:
Previous wording
Credit Agreement. On March 27, 2026, 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 2022 Credit Agreement. The Credit Agreement provides for a $175.0 million term loan facility and a $75.0 million revolving credit facility, each with a term of five years. Both facilities bear interest at the SOFR, plus a margin based on the Company's 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 will amortize in equal quarterly installments in amounts resulting in an annual amortization of $20.0 million per annum, with the remainder 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. As of March 31, 2026, we had $50.0 million of outstanding borrowings under our revolving credit facility, and $175.0 million on our term loan facility. The carrying value of the debt also reflected debt issuance costs of $1.4 million as of March 31, 2026, related to the Credit Agreement. The Credit Agreement requires the Company to maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00.
Current wording
Credit Agreement. On March 27, 2026, 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 2022 Credit Agreement. The Credit Agreement provides for a $175.0 million term loan facility and a $75.0 million revolving credit facility, each with a term of five years. Both facilities bear interest at the SOFR, plus a margin based on the Company’s 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 will amortize in equal quarterly installments in amounts resulting in an annual amortization of $20.0 million per annum, with the remainder 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. As of June 30, 2026, we had $45.0 million of outstanding borrowings under our revolving credit facility, and $170.0 million on our term loan facility. The carrying value of the debt also reflected debt issuance costs of $1.3 million as of June 30, 2026, related to the Credit Agreement. The Credit Agreement requires the Company to maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00.
Previous wording
Stock repurchase plan. In 2018, our board of directors approved a stock repurchase plan authorizing us to repurchase up to $500.0 million of our outstanding shares of Class A common stock on the open market or in private transactions. During the first quarter of 2026, we repurchased 0.5 million shares of our Class A common stock under the plan for $5.0 million. As of March 31, 2026, $137.3 million was available for repurchases under the plan. Our stock repurchases are used primarily to offset dilution from our equity incentive plans and for strategic initiatives.
Current wording
Stock repurchase plan. In 2018, our board of directors approved a stock repurchase plan authorizing us to repurchase up to $500.0 million of our outstanding shares of Class A common stock on the open market or in private transactions. During the second quarter of 2026, we repurchased no shares of our Class A common stock under the plan. As of June 30, 2026, $137.3 million was available for repurchases under the plan. Our stock repurchases are used primarily to offset dilution from our equity incentive plans and for strategic initiatives.
Previous wording
Dividends. In February 2026, our board of directors declared quarterly cash dividends of $0.06 per share. This quarterly cash dividend of $2.9 million was paid on March 11, 2026 to stockholders of record on February 27, 2026. In May 2026, our board of directors declared a quarterly cash dividend of $0.06 per share to be paid on June 10, 2026 to stockholders of record on May 29, 2026. Currently, we anticipate that our board of directors will continue to declare quarterly cash dividends and that the cash flows from operations will be sufficient to fund our future dividend payments. However, the continued declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net earnings, financial condition, cash requirements, future prospects and other relevant factors.
Current wording
Dividends. In February 2026, our board of directors declared quarterly cash dividends of $0.06 per share. This quarterly cash dividend of $2.9 million was paid on March 11, 2026 to stockholders of record on February 27, 2026. In May 2026, our board of directors declared quarterly cash dividends of $0.06 per share. This quarterly cash dividend of $2.9 million was paid on June 10, 2026 to stockholders of record on May 29, 2026. In August 2026, our board of directors declared a quarterly cash dividend of $0.06 per share to be paid on September 9, 2026 to stockholders of record on August 28, 2026. Currently, we anticipate that our board of directors will continue to declare quarterly cash dividends and that the cash flows from operations will be sufficient to fund our future dividend payments. However, the continued declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net earnings, financial condition, cash requirements, future prospects and other relevant factors.
Previous wording
Cash from foreign subsidiaries. As of March 31, 2026 and December 31, 2025, we held $200.4 million and $239.8 million, respectively, in cash and cash equivalents, including current investments. These amounts include $159.8 million and $170.7 million as of March 31, 2026 and December 31, 2025, respectively, held in our operations outside of the U.S. Substantially all of our non-U.S. cash and cash equivalents are readily convertible into U.S. dollars or other currencies, subject to procedural or other requirements in certain markets, as well as an indefinite-reinvestment designation, as described below.
Current wording
Cash from foreign subsidiaries. As of June 30, 2026 and December 31, 2025, we held $191.4 million and $239.8 million, respectively, in cash and cash equivalents, including current investments. These amounts include $150.2 million and $170.7 million as of June 30, 2026 and December 31, 2025, respectively, held in our operations outside of the U.S. Substantially all of our non-U.S. cash and cash equivalents are readily convertible into U.S. dollars or other currencies, subject to procedural or other requirements in certain markets, as well as an indefinite-reinvestment designation, as described below.
Previous wording
We typically fund the cash requirements of our operations in the U.S. through intercompany dividends, intercompany loans and intercompany charges for products, use of intangible property, and corporate services. However, some markets impose government-approval or other requirements for the repatriation of dividends. For example, in Mainland China, we are unable to repatriate cash from current operations in the form of dividends until we file the necessary statutory financial statements for the relevant period. As of March 31, 2026, we had $32.5 million in cash denominated in Chinese RMB. We also have experienced delays in repatriating cash from Argentina. As of March 31, 2026 and December 31, 2025, we had $28.0 million and $23.9 million, respectively, in intercompany receivables with our Argentina subsidiary. We also have intercompany loan arrangements in some of our markets, including Mainland China, that allow us to access available cash, subject to certain limits in Mainland China and other jurisdictions. We also have drawn on our revolving line of credit to address cash needs until we can repatriate cash from Mainland China or other markets, and we may continue to do so. Except for $60.0 million of earnings in Mainland China that we designated as indefinitely reinvested during the second quarter of 2018, we currently plan to repatriate undistributed earnings from our non-U.S. operations as necessary, considering the cash needs of our non-U.S. operations and the cash needs of our U.S. operations for dividends, stock repurchases, capital investments, debt repayment and strategic transactions. Repatriation of non-U.S. earnings is subject to withholding taxes in certain foreign jurisdictions. Accordingly, we have accrued the necessary withholding taxes related to the non-U.S. earnings.
Current wording
We typically fund the cash requirements of our operations in the U.S. through intercompany dividends, intercompany loans and intercompany charges for products, use of intangible property, and corporate services. However, some markets impose government-approval or other requirements for the repatriation of dividends. For example, in Mainland China, we are unable to repatriate cash from current operations in the form of dividends until we file the necessary statutory financial statements for the relevant period. As of June 30, 2026, we had $41.5 million in cash denominated in Chinese RMB. We also have experienced delays in repatriating cash from Argentina. As of June 30, 2026 and December 31, 2025, we had $31.1 million and $23.9 million, respectively, in intercompany receivables with our Argentina subsidiary. We also have intercompany loan arrangements in some of our markets, including Mainland China, that allow us to access available cash, subject to certain limits in Mainland China and other jurisdictions. We also have drawn on our revolving line of credit to address cash needs until we can repatriate cash from Mainland China or other markets, and we may continue to do so. Except for $60.0 million of earnings in Mainland China that we designated as indefinitely reinvested during the second quarter of 2018, we currently plan to repatriate undistributed earnings from our non-U.S. operations as necessary, considering the cash needs of our non-U.S. operations and the cash needs of our U.S. operations for dividends, stock repurchases, capital investments, debt repayment and strategic transactions. Repatriation of non-U.S. earnings is subject to withholding taxes in certain foreign jurisdictions. Accordingly, we have accrued the necessary withholding taxes related to the non-U.S. earnings.
Previous wording
There were no significant changes in our critical accounting policies or estimates during the first quarter of 2026.
Current wording
There were no significant changes in our critical accounting policies or estimates during the second quarter of 2026.