Q4 2025 Herbalife Ltd Earnings Call

February 18, 2026

The fourth quarter and full year 2025 earnings conference call for Herbalife Ltd. During the company's opening remarks, all participants will be in a listen only mode. Following the opening remarks, we will conduct a question and answer session. As a reminder, today's conference call is being recorded I would now like to turn the call over to.

Aaron Banyas, Vice President and head of Investor Relations to begin today's call.

Thank you and welcome to everyone joining us.

With us today are Stefan Graziano, <unk>, our Chief Executive Officer, and John <unk>, Our Chief Financial Officer before we begin today's call I would like to direct you to the cautionary statement.

Regarding forward looking statements on page two of our presentation and in our earnings release issued earlier today, which are both available under the Investor Relations section of our website.

The presentation and earnings release include a discussion of some of the more important factors that could cause results to differ from those expressed in any forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95.

As is customary the content of today's call and presentation will be governed by this language.

In addition, during today's call we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures excludes certain unusual or nonrecurring items that management believes impact the comparability of the periods referenced.

Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measure.

And with that I will now turn the call over to our CEO Stefan Graziano.

Thank you Aaron and thank you all for joining us today.

As we look back on 2025, I want to take a moment to reflect on what we've accomplished and more importantly, discuss where herbalife is headed and how we are positioning the company for long term growth R.

Our vision is clear to be the world's Premier health and wellness company community and platform and in 2025, we took deliberate steps to ensure our vision is supported by a strong and resilient financial Foundation.

We executed with discipline, reducing our total leverage ratio to two eight times this meaningful step down from three nine times at the end of 2023 underscores the strength of our business and our strong sustainable cash generation.

We also sharpen how we operate how we engage and how we create value for our community the company and our shareholders and we are advancing innovation modernizing our digital ecosystem and deepening engagement across our distributor network.

With the momentum generated in 2025, we entered 2026 and a position of strength.

<unk>, our strategy to build a more innovative and digitally enabled herbalife.

Let's turn briefly to our fourth quarter and full year financial performance Q.

Q4 marked our second consecutive quarter of year over year net sales growth with net sales of $1 3 billion up six 3%.

India delivered its highest quarterly net sales in Q4, and even without India's outperformance. Our Q4 net sales would have still come in above the midpoint of our guidance range adjust.

Adjusted EBITDA for the quarter was $156 million for.

For the full year net sales were up nearly 1% to just over $5 billion and excluding FX net sales were up two 5% compared to 2024.

Full year, adjusted EBITDA was $658 million with margin at 13, 1%, marking our second consecutive year of adjusted EBITDA and margin expansion.

And we exceeded guidance for both the fourth quarter and full year on each of these metrics.

For the year, we generated $333 million in operating cash flows and we continued strengthening the balance sheet.

Paying $283 million of debt in 2025.

It was a strong close to the year and behind these positive financial outcomes is a growing engaged distributor network.

Equipping them for success is one of our top priorities.

This commitment is reflected in the continued strengthening of our distributor network in Q4, North America delivered its second consecutive quarter of double digit year over year growth in new distributors up 19%.

Latin America continued its positive trend achieving its seventh consecutive quarter of year over year growth and while new distributors joining worldwide was down 5% versus a very strong prior year to two year stack provides a more meaningful view on a two year basis, new distributors were up 16% with four of our five regions.

Porting increases reflecting sustained multi year momentum.

These results underscore the foundational work, we have done to support our distributors with enhanced training improved digital tools and comprehensive resources, all tailored to the needs of each region and designed to position them for success we.

We will continue to provide them with innovative products and effective tools and training to help them generate interest drive stronger engagement increased repeat purchases and maximize long term customer value.

Innovative products are a key part to that equation, providing our distributors with products that excite existing customers attract new customers and support increased sales remains central to our strategy.

Driven by this commitment 2025 was a strong year for product innovation as we continued to broaden and strengthen our portfolio across key categories in.

In July we advanced our weight management offering with the successful launch of multi burn in September we broadened our skin care portfolio with HL skin in EMEA, which is based on cutting edge K beauty formulations and supported by an AI powered facial analysis tool and in December we expanded into the high growth healthy.

Lifespan category with LIFO baseline.

Beyond these innovative launches we continued to optimize our global product portfolio to align with the evolving consumer trends and preferences, while tailoring our offerings to resonate with local markets.

In 2026, we are building on this momentum with exciting new product launches that further modernize and expand our portfolio supported by new digital capabilities that enhance human connection.

The human connection has always been at the heart of Herbalife is a distributor led nutrition company. Our strength lies in the one to one relationships our distributors build with their customers or distributors take the time to understand the person's individual needs and support them throughout their health and wellness journey.

These fundamentals remain unchanged.

What is changing is how we deliver them because we see a future of health and wellness that is even more personalized data driven proactive and accessible we are modernizing the experience to make it more connected and more effective we will continue to provide curated product recommendations, while laying the groundwork to deliver personally formulated.

Nutritional supplements overtime. This personalization will leverage data and insights for multiple inputs, such as blood biomarkers and connected devices.

Central to this strategy as protocol or health and wellness operating system.

Since acquiring the protocol technology in April of 2025, our focus has been on building a digital experience that supports the strength of our business leveraging digital tools to enhance not replace the human connection at the core of our go to market strategy.

We've implemented a strategic phased beta rollout designed to integrate and market insights from distributors and customers, enabling us to enhance capabilities and introduce new features in a way that drives the greatest impact.

In December we advanced to the second phase of our beta program with the release of protocol Beta 2.0, which included enhancements to the recently launched distributor marketing pages and coach dashboard.

We believe our phased strategy is working the beta group has engaged providing feedback that is helping us refine the digital experience to ensure it integrates into distributors daily methods of operation and meets real world needs.

<unk> expanded the availability of beta access to distributors and customers in the U S, Canada, and Puerto Rico and will begin extending it to select EMEA markets. This year Proto.

Protocol is more than a digital tool, it's a key strategic component of our platform vision.

Driven by this commitment 2025 was a strong year for product innovation as we continued to broaden and strengthen our portfolio across key categories in.

It adds a connective digital layer that enhances distributor engagement supports customers in building sustainable nutrition and healthy lifestyle habits and generates data that helps our distributor support customers more effectively over time. We believe this approach will broaden our reach making herbalife more attractive to a wider audience of future customer.

In July we advanced our weight management offering with the successful launch of multi burn in September we broadened our skin care portfolio with HL skin in EMEA, which is based on cutting edge K beauty formulations and supported by an AI powered phase two analysis tool and in December we expanded into the high growth health.

And distributors.

By combining protocols data and technology with our recently acquired proprietary manufacturing capabilities. We are set to deliver precision made nutritional supplements tailored to an individual's needs and goals at scale U.

Lifespan category with LIFO baseline.

Beyond these innovative launches we continue to optimize our global product portfolio to align with the evolving consumer trends and preferences, while tailoring our offerings to resonate with local markets.

U S distributors in the initial protocol Beta group will have first access to these personalized nutritional supplements by the end of the first half of 2026.

In 2026, we are building on this momentum with exciting new product launches that further modernize and expand our portfolio supported by new digital capabilities that enhance human connection.

Before I close I want to highlight the exciting announcement, we made earlier today global sports icon Cristiano Ronaldo has acquired a 10% equity stake in HBO protocol software, which is the herbalife subsidiary that holds the protocol technology.

The human connection has always been at the heart of Herbalife as a distributor led nutrition company. Our strength lies in the one to one relationships our distributors build with their customers or distributors take the time to understand a person's individual needs and support them throughout their health and wellness journey.

Christina invested $7 5 million along with the commitment to provide services and sponsorship rights to protocol. It reflects cristiano deep personal commitment to nutrition and performance and our shared vision to scale personalized nutrition and wellness around the world, bringing together science data AI.

These fundamentals remain unchanged.

<unk> and community to improve the lives of millions.

We believe Cristiano his involvement will elevate the visibility of herbalife and protocol, expanding awareness and supporting broader engagement and adoption after.

After 12 years as Chris channels Global Nutrition partner, we are thrilled to welcome him as a strategic investor and business partner.

Nutritional supplements overtime. This personalization will leverage data and insights from multiple inputs, such as blood biomarkers and connected devices.

Over the past 45 years, we have built an incredible company with a strong foundation.

Central to this strategy as protocol or health and wellness operating system.

As the largest publicly traded direct selling company with a global network of more than 2 million independent distributors across 95 markets and over 60000 nutrition clubs worldwide. We are uniquely positioned to extend our leadership in global health and wellness in ways. We believe no other company in the World can replicate we will continue to build on this solid foundation.

Since acquiring the protocol technology in April of 2025, our focus has been on building a digital experience that supports the strength of our business leverage.

Leveraging digital tools to enhance not replace the human connection at the core of our go to market strategy.

Nation, while also forming strategic partnerships like the one we announced today with Christina Ronaldo.

We will also continue to identify opportunities that bring differentiated products services and capabilities that are aligned with our platform vision and add value to our customers distributors company and shareholders.

In December we advance to the second phase of our beta program with the release of protocol Beta two <unk>, which included enhancements to the recently launched distributor marketing pages and coach dashboard.

As we move into 2026, we are carrying forward the momentum of 2025 with confidence in our strategy, our leadership team, our distributor community and our ability to execute with discipline.

We believe our phased strategy is working the beta group has engaged providing feedback that is helping us refine the digital experience to insured integrates into distributors daily methods of operation and meets real world needs.

Now I'll turn it over to John Desimone for a detailed review of our results. Thank.

We've expanded the availability of beta access to distributors and customers in the U S, Canada, and Puerto Rico and will begin extending it to select EMEA markets. This year.

Thank you Stephane turning to our fourth quarter financial highlights on slide eight our remarks today focus on the quarter with a summary of full year results in the appendix.

Protocol is more than a digital tool, it's a key strategic component of our platform vision it.

As Stefan just described we delivered a strong finish to 2025.

Net sales for the fourth quarter were $1 3 billion.

It is a connective digital layer that enhances distributor engagement supports customers in building sustainable nutrition and healthy lifestyle habits and generate data that helps our distributors support customers more effectively over time. We believe this approach will broaden our reach making herbalife more attractive to a wider audience of future customer.

With six 3% growth versus Q4 of 2024.

And exceeding the high end of our guidance of one five to five 5% year over year growth.

Q4 marked our second consecutive quarter of growth and our strongest year over year increase since the second quarter of 2021.

And distributors.

On a constant currency basis net sales increased five 5% year over year also exceeding guidance. We have now delivered year over year constant currency growth in seven of the last nine quarters.

U S distributors in the initial protocol Beta group will have first access to these personalized nutritional supplements by the end of the first half of 2026.

FX rates moves slightly against us versus our Q4 guidance assumptions.

Before I close I want to highlight the exciting announcement, we made earlier today.

We still realized an 80 basis point tailwind Q.

Q4, net sales outperformance was driven by a record quarter in India with net sales of $250 million up nearly 15% year over year and exceeding our expectations.

Sports icon Cristiano Ronaldo has acquired a 10% equity stake in HPLC protocols software, which is the herbalife subsidiary that holds the protocol technology Chris.

Christina invested $7 5 million.

We believe this was fueled by stronger demand following the reduction of the goods and services tax rate on the majority of our products in late September 2025.

Along with our commitment to provide services and sponsorship rights to protocol. It reflects cristiano deep personal commitment to nutrition and performance and our shared vision to scale personalized nutrition and wellness around the world, bringing together science data AI innovation and community to improve the lives of millions.

Importantly.

While India outperformed expectations, even without this upside Q.

Q4, net sales growth would have been above midpoint of our guidance range.

<unk>.

Adjusted EBITDA was $156 million.

We believe Cristiano his involvement will elevate the visibility of herbalife and protocol, expanding awareness and supporting broader engagement and adoption after.

Exceeding the high end of our guidance range of $144 million to $154 million.

After 12 years as Chris channels Global Nutrition partner, we are thrilled to welcome him as a strategic investor and business partner.

Adjusted EBITDA margin was 12, 2% down 20 basis points year over year, driven primarily by FX headwinds of 100 basis points.

Over the past 45 years, we have built an incredible company with a strong foundation.

And an approximately 90 basis point headwind from employee bonus accruals.

Which we previously communicated as a meaningful and expected headwind.

Given the 2024 annual employee bonus was fully accrued by the end of Q3 of 2024, and therefore, we had no bonus expense in last year's fourth quarter.

These pressures were partially offset by pricing benefits adjusted EBITDA excludes and approximately $11 million transition charge related to the September 2025, India GST amendments as the company no longer expects to fully utilize certain input GST credits generated before the law changed.

Nation, while also forming strategic partnerships like the one we announced today with Christina Ronaldo.

Capex for the fourth quarter was $19 million at the low end of our guidance range of $18 million to $28 million.

As we move into 2026, we are carrying forward the momentum of 2025 with confidence in our strategy, our leadership team, our distributor community and our ability to execute with discipline.

Capitalized SaaS implementation costs were approximately $9 million in the quarter.

Gross profit margin was 77, 5% for the quarter down 30 basis points year over year.

Now I'll turn it over to John Desimone for a detailed review of our results. Thank.

Gross margin was pressured by approximately 100 basis points of FX headwinds.

Thank you Stefan.

Turning to our fourth quarter financial highlights on slide eight our remarks today focus on the quarter with a summary of full year results in the appendix.

30 basis points of unfavorable sales mix and 30 basis points of input cost inflation.

As Stefan just described we delivered a strong finish to 2025.

These were partially offset by 80 basis points of pricing benefits.

Net sales for the fourth quarter were $1 3 billion.

10 basis points from lower outbound freight costs, and 30 basis points from other favorable cost changes.

With six 3% growth versus Q4 of 2024 and exceeding the high end of our guidance of one five to five 5% year over year growth.

Fourth quarter net income attributable to herbalife of $85 million includes $54 million.

Noncash deferred tax benefits related to the release of valuation allowances in certain of our European subsidiaries.

Q4 marked our second consecutive quarter of growth and our strongest year over year increase since the second quarter of 2021.

Which were established in the fourth quarter of 2024.

On a constant currency basis net sales increased five 5% year over year also exceeding guidance. We have now delivered year over year constant currency growth in seven of the last nine quarters.

Following changes to our corporate entity structure adjusted net income for the quarter was $48 million.

Adjusted diluted EPS of <unk> 45.

Includes a seven FX headwinds versus the fourth quarter of 2024.

While FX rates moved slightly against us versus our Q4 guidance assumptions we.

Our adjusted effective tax rate was 34, 7% down from 46% for the Q4 of 2024, which drove an approximately four cent favorable impact to adjusted diluted EPS.

We still realized an 80 basis point tailwind.

Q4, net sales outperformance was driven by a record quarter in India with net sales of $250 million up nearly 15% year over year and exceeding our expectations.

The lower effective tax rate in 2025 was driven primarily by the geographic mix of income, partially offset by noncash updates to our assessment of uncertain tax positions.

We believe this was fueled by stronger demand following the reduction of the goods and services tax rate on a majority of our products in late September 2025.

For the full year 2025, our adjusted effective tax rate was 29, 1% slightly above our expectations of 27% to 28% due to discrete items in the quarter.

Importantly.

While India outperformed expectations, even without this upside Q.

Q4, net sales growth would have been above midpoint of our guidance range.

But still below last year's tax rate of 32%.

Adjusted EBITDA was $156 million.

Full year 2026, we expect our adjusted effective tax rate to be approximately 30% in line with 2025.

Exceeding the high end of our guidance range of $144 million to $154 million.

Adjusted EBITDA margin was 12, 2% down 20 basis points year over year, driven primarily by FX headwinds of 100 basis points.

Operating cash flow was another highlight this quarter at $98 million up 41% year over year.

For the full year operating cash flow totaled $333 million up 17% versus 2024, and underscoring the durability of our cash generation.

And an approximately 90 basis point headwind from employee bonus accruals.

Which we previously communicated as a meaningful and expected headwind.

Credit agreement EBITDA for the fourth quarter was $173 million.

Given the 2024 annual employee bonus was fully accrued by the end of Q3 of 2024, and therefore, we had no bonus expense in last year's fourth quarter.

We also repaid $30 million of debt in the quarter, maintaining a total leverage ratio of two eight times.

These pressures were partially offset by pricing benefits adjusted EBITDA excludes approximately $11 million transition charge related to the September 2025, India GST amendments as the company no longer expects to fully utilize certain input GST credits generated before the law changed.

While also increasing our cash balance by approximately $50 million.

For additional details regarding the adjustments between adjusted EBITDA and credit agreement EBITDA as well as the calculation of our total leverage ratio. Please refer to the presentation appendix and the earnings press release.

Capex for the fourth quarter was $19 million at the low end of our guidance range of $18 million to $28 million.

Turning to slide nine.

Reported net sales for the quarter increased six 3% year over year, while constant currency net sales were up five 5%.

Capitalized SaaS implementation costs were approximately $9 million in the quarter.

We achieved year over year volume growth on a worldwide basis for the second consecutive quarter up three 1%.

Gross profit margin was 77, 5% for the quarter.

<unk> 30 basis points year over year.

Gross margin was pressured by approximately 100 basis points of FX headwinds.

Pricing benefits were approximately $40 million in the quarter and country mix represented approximately $10 million headwind to net sales.

30 basis points of unfavorable sales mix and 30 basis points of input cost inflation.

FX had a favorable impact of approximately $9 million in the fourth quarter, representing year over year tailwind of 80 basis points I mentioned earlier.

These were partially offset by 80 basis points of pricing benefits.

10 basis points from lower outbound freight costs.

30 basis points from other favorable cost changes.

Moving to slide 10.

We have the regional net sales results for the fourth quarter.

Fourth quarter net income attributable to herbalife of $85 million includes.

<unk> five regions delivered year over year net sales growth in the fourth quarter on both a reported and local currency basis.

Includes $54 million.

Of noncash deferred tax benefits related to the release of valuation allowances in certain of our European subsidiaries.

On a sequential basis. These same regions showed sequential improvement on both a reported and local currency basis Latin.

Which were established in the fourth quarter of 2024.

Latin America delivered its second consecutive quarter of double digit year over year growth reported.

Following changes to our corporate entity structure adjusted net income for the quarter was $48 million.

Reported net sales increased 18%.

With local currency results up 11%.

Adjusted diluted EPS of <unk> 45.

Includes a <unk> <unk> FX headwinds versus the fourth quarter of 2024.

Results reflected favorable year over year pricing and sales mix approx.

Approximately 3% volume growth and a 660 basis point FX tailwind.

Our adjusted effective tax rate was 34, 7%.

Down from 46% for the Q4 of 2024, which drove an approximately four cent favorable impact to adjusted diluted EPS.

Within the Latin America region, Mexico posted another solid quarter with reported net sales up 19% year over year and local currency net sales up 9% driven.

The lower effective tax rate in 2025 was driven primarily by the geographic mix of income, partially offset by noncash updates to our assessment of uncertain tax positions.

Driven primarily by favorable year over year pricing approximately 3% volume growth.

And significant FX headwinds.

EMEA reported net sales growth for the third consecutive quarter.

For the full year 2025, our adjusted effective tax rate was 29, 1%.

With reported net sales up 9% in local currency net sales up 5%.

Above all right.

Higher year over year pricing favorable sales mix and FX tailwind were partially offset by less than a 2% decline in volume and.

28%.

Due to discrete items in the quarter.

Quarter.

But still below last year's tax rate of 32%.

Well below last year's rate.

32%.

For full year 2026, we expect our adjusted effective tax rate to be approximately 30% in line with 2025.

In Asia Pacific reported net sales increased 5% year over year, while local currency net sales were up 9% driven by approximately 9% volume growth and favorable pricing, partially offset by unfavorable sales mix and FX movements as.

Yes 2026.

Effective tax rate.

Third.

In line with 2025.

Operating cash flow was another highlight this quarter at $98 million up 41% year over year.

Cash flow was another highlight this quarter.

8 million.

The 1% year over year.

For the full year operating cash flow totaled $333 million up 17% versus 2024, and underscoring the durability of our cash generation.

For the full year.

As I mentioned earlier, India delivered its highest quarterly net sales in the fourth quarter with reported net sales up 15% year over year and 21% up in local currency.

Operating cash.

$33 million.

17%.

2020.

The scoring the durability of our cash generation.

Credit agreement EBITDA for the fourth quarter was $173 million.

Topline growth was driven primarily by an approximately 18% increase in volume along with a favorable year over year pricing and sales mix, partially offset by FX headwinds and.

Great agreement.

Thanks, Paul.

And the $3 million.

We also repaid $30 million of debt in the quarter, maintaining a total leverage ratio of two eight times, while also increasing our cash balance by approximately $50 million.

Also repeated.

$30 million of debt in the quarter.

Our total leverage ratio of two eight times.

In North America sales declined by less than 1% year over year on volumes that were down less than 2%.

While also increasing our cash balance.

By approximately $50 million.

For additional details regarding adjustments.

This is consistent with the expectations, we previously communicated.

Adjusted EBIT.

Credit agreement EBITDA as.

Execution remains strong and momentum continues to build as we enter 2026.

As well as the calculation of total leverage ratio.

<unk> for the presentation.

And the earnings press release.

We expect the North American region to deliver full year net sales growth in 2026.

Turning to slide nine.

Reported net sales for the quarter increased six 3% year over year, while constant currency net sales were up five 5%.

Reported net sales for the quarter decreased.

China net sales were down 4% year over year on a reported basis and 6% on a local currency basis, driven primarily by an 11% year over year decline in volume.

3% year over year.

Constant currency net sales were up five 5%.

We achieved year over year volume growth on a worldwide basis for the second consecutive quarter up three 1%.

Year over year volume.

Worldwide basis.

Consecutive quarter up 40.

This was partially offset.

41%.

Pricing benefits were approximately $40 million in the quarter and country mix represented approximately $10 million headwind to net sales.

By favorable impacts from changes in the benefits and timing of the China customer loyalty program as well as favorable FX.

Pricing benefits.

Sure.

$40 million in the quarter.

Country mix.

The $10 million headwind to net sales.

Turning to slide 11.

FX had a favorable impact of approximately $9 million in the fourth quarter, representing year over year tailwind of 80 basis points I mentioned earlier.

FX had a favorable impact.

We see the key drivers of the year over year improvement in fourth quarter adjusted EBITDA. Despite.

The $9 million in the fourth.

And approximately 100 basis point, FX headwind and an approximately $11 million employee bonus accrual headwind given the 2020 for bonus was fully accrued by the end of Q3 2024 as I previously mentioned adjusted EBITDA for the quarter was $156 million with margins of 12, 2%.

80 basis points I mentioned earlier.

Moving to slide 10.

We have the regional net sales results for the fourth quarter.

Digital net sales results for the fourth quarter.

Three of our five regions delivered year over year net sales growth in the fourth quarter on both a reported and local currency basis.

<unk>.

Net sales bookings.

Hum.

And local currency basis.

On a sequential basis. These same regions showed sequential improvement on both a reported and local currency basis, Latin America delivered its second consecutive quarter of double digit year over year growth.

On a sequential basis.

Regions sequentially.

On a constant currency basis, adjusted EBITDA was $168 million underscoring the continued underlying strength of our business.

Question on.

Both of them.

Local currency basis.

Latin America delivered.

Quarter of double digit year over year growth.

Looking at the bridge, we first see the drivers of the year over year change in gross profit.

Reported net sales increased 18% with local currency results up 11%.

Reported net sales increased 18%.

Including our second consecutive quarter of volume growth, along with pricing benefits, partially offset by unfavorable sales mix and input cost inflation driven by lower absorption rates.

Local currency results up 11%.

Results reflected favorable year over year pricing and sales mix.

Yourself.

Year over year pricing and sales mix.

Approximately 3% volume growth and a 660 basis point FX tailwind.

3% volume growth.

Thanks.

Basis points FX tailwind.

Within the Latin America region, Mexico posted another solid quarter with reported net sales up 19% year over year and local currency net sales up 9%.

Salaries represented approximately $8 million headwind, largely reflecting merit increases implemented in the first quarter of 2025.

But in the latter Matt.

Solid quarter.

Okay.

19% year over year.

Local currency sales up 9%.

Promotional related expenses declined by approximately $6 million year over year.

Driven primarily by favorable year over year pricing approximately 3% volume growth.

Primarily by feet.

Year over year price.

And lastly, unfavorable year over year FX movements.

3% volume growth.

And significant FX headwinds.

And FX tailwind.

Resulted in approximately $12 million reduction in adjusted EBITDA.

EMEA reported net sales growth for the third consecutive quarter.

EMEA.

A third consecutive quarter.

With reported net sales up 9% in local currency net sales up 5%.

Before moving on I want to highlight a presentation change we made to the financial statements to simplify how we report distributor related compensation.

It's important to get sales up 9%.

Local currency net sales up 5%.

Year over year pricing favorable sales mix and FX tailwind were partially offset by less than a 2% decline in volume in.

Higher year over year price.

Verbal sales.

FX tailwind.

And to better align with how we model these costs internally and have externally presented them in this segment disclosure in our 10-K and 10-Q.

Partially offsetting.

2% decline in volume.

In Asia Pacific.

Fortinet.

5% year.

Yes.

In summary, we have separated selling expenses from SG&A.

Up nine.

<unk> volume.

We've taken the service fees of our China independent service providers and combine them with distributor compensation previously reported as royalty overrides.

Favorable price.

Unfavorable sales mix and FX movements.

As I mentioned earlier, India delivered its highest quarterly net sales in the fourth quarter with reported net sales up 15% year over year and 21% up in local currency.

As I mentioned earlier.

Yes.

What are we net sales in the fourth quarter.

These expenses are now presented together within selling expenses on the P&L.

Reported net sales up 2% year over year.

Up in local currency.

Similar updates were made to the balance sheet and cash flow presentation.

Topline growth was driven primarily by an approximately 18% increase in volume along with a favorable year over year pricing and sales mix, partially offset by FX headwinds.

Top line growth driven primarily by an approximate.

Importantly, this had no impact on prior period results our key financial metrics. This was simply a presentation change that combined distributor.

This increase in volume.

Year over year pricing and sales mix.

Partially offset by FX headwinds.

In North America sales declined by less than 1% year over year on volumes that were down less than 2%.

In North America.

Less than 1% year over year.

And service provider related payments within our financial statements.

Volumes that were down less than 2%.

This is consistent with the expectations, we previously communicated.

This is extra.

For those looking for continued visibility into China independent service provider fees that information remains available in our segment reporting disclosures in both the 10-K and 10-Q.

Expectations.

Obviously communicated.

Execution remains strong and momentum continues to build as we enter 2026.

<unk> remained strong momentum continues to build as we enter 2026.

We expect the North American region to deliver full year net sales growth in 2026.

For additional details please refer to the presentation Appendix earnings press release and Form 10-K.

We expect North American region.

<unk> net sales growth in 2026.

China net sales were down 4% year over year on a reported basis and 6% on a local currency basis, driven primarily by an 11% year over year decline in volume.

I don't know.

Moving to slide 12, I'll provide an update on the capital structure.

4% year on a reported basis.

And 6% on a local currency basis.

We ended the quarter with $353 million of cash up nearly $50 million from the ended the third quarter of this year.

Primarily.

11%.

The client volume.

This was partially offset.

By favorable impacts from changes in the benefits and timing of the China customer loyalty program as well as favorable FX.

During the quarter, we made the scheduled $5 million amortization payment on the term loan b and repaid the $25 million outstanding under the revolving credit facility as of September 30.

Hi.

Genius and the benefits and timing.

The China customer loyalty program as.

As well favorable FX.

Turning to slide 11.

We see the key drivers of the year over year improvement in fourth quarter adjusted EBITDA. Despite.

Key drivers year over year.

As of December 31, the revolver was undrawn.

While our adjusted EBITDA.

Right.

Over the last two years, we have paid down over $530 million of debt and reduced our leverage ratio from three nine times to two eight times.

FX headwinds.

And then.

2 million.

A bonus accrual.

The 2024 pounds.

In Q3, two points before I previously mentioned.

Our financial profile today is much stronger than it was two years ago.

Adjusted EBITDA for the quarter was $156 million.

Yes.

$6 million.

And depending on market conditions, we may consider refinancing portions of our existing debt. While there can be no assurances regarding time youre outcomes, a successful transaction could meaningfully lower our borrowing costs.

Margins of 12, 2% on.

One 2%.

On a constant currency basis, adjusted EBITDA was $168 million underscoring the continued underlying strength of our business.

Adjusted EBITDA was $68 million.

Underscoring the continued underlying strength of our business.

Looking at the bridge, we first see the drivers of the year over year change in gross profit.

Looking at the bridge.

Regardless of whether or not we pursue any capital structure initiatives, we remain committed to reducing our gross debt to $1 4 billion.

Year over year.

The change in gross profit.

Including our second consecutive quarter of volume growth, along with pricing benefits, partially offset by unfavorable sales mix and input cost inflation driven by lower absorption rates.

Excluding.

Volume growth.

Along with pricing Ben.

By the end of 2028.

Partially offset by favorable sales mix.

Turning to slide 13, I will walk through our outlook for the first quarter and full year 2026.

You put cost inflation.

Lower absorption rates.

Salaries represented approximately $8 million headwind, largely reflecting merit increases implemented in the first quarter of 2025.

Alloys represented approximately $8 million.

We are continuing to provide net sales and adjusted EBITDA guidance on both a reported and constant currency basis.

Largely.

Yes.

First quarter 2025.

For guidance on a reported basis.

Promotional related expenses declined by approximately $6 million year over year.

Promotional related expenses declined by $6 million year over year.

We use the average daily exchange rates for the first three weeks of January 2026.

And lastly, unfavorable year over year FX movements.

And.

Year over year FX movements.

For the first quarter, we expect foreign exchange to have an approximately $31 million positive impact on net sales.

Results in approximately $12 million reduction in adjusted EBITDA.

And $12 million.

EBITDA.

Before moving on I.

Before moving on.

While currency is expected to be a meaningful benefit to the top line in the quarter, it's expected to be neutral to EBITDA for the quarter due to timing.

I wanted to highlight a presentation change we made to the financial statements to simplify how we report distributor related compensation and.

Hi.

And patients.

The financial statements.

How we report.

Related compensation.

And to better align with how we model these costs internally and have externally presented them in the segment disclosure in our 10-K and 10-Q.

Better.

On a reported basis, we expect first quarter net sales growth of 3% to 7% year over year.

Model across interim.

Sure.

Then the segment disclosure.

Including an approximately 250 basis point tailwind from currency on.

10-Q.

In summary, we have separated selling expenses from SG&A.

In summary.

Operating expenses from SG&A.

On a constant currency basis, we expect net sales growth of.

We've taken the service fees of our China independent service providers and combine them with distributor compensation previously reported as royalties overrides.

Hey can service.

Yes, Sir.

5% to four 5% year over year.

And combine them.

Distributor compensation previously quarterly royalty overrides.

Adjusted EBITDA for the first quarter is expected to be in the range of $155 million.

These expenses are now presented together within selling expenses on the P&L.

Yes.

To $175 million on both a reported and constant currency basis.

Our expenses on the P&L.

Similar updates were made to the balance sheet and cash flow presentation.

Similar to.

The balance sheet.

Cash flow presentation.

Planned capital expenditures for the first quarter are expected to be $10 million to $20 million.

Importantly, this had no impact on prior period results our key financial metrics. This was simply a presentation change that combined distributor.

Importantly had no impact on prior period results.

Moving to our full year guidance for the full year, we expect reported net sales growth of 1% to 6% year over year, including approximately a 100 basis point tailwind from currency.

Key financial metrics.

And presentations.

Main distributor.

And service provider related payments within our financial statements.

And Airbus provider related.

Within our financial statements.

For those looking for continued visibility into China independent service provider fees that information remains available in our segment reporting disclosures in both the 10-K and 10-Q.

On a constant currency basis net sales are expected to be flat to up 5% year over year.

For those.

We have visibility on the independent service provider.

Thanks Nathan.

And you're reporting disclosures.

Adjusted EBITDA is expected to be in the range of $670 million to $710 million or.

10-K and 10-Q.

For additional details please refer to the presentation Appendix earnings press release and Form 10-K.

Additional resin.

Patient opinion earn.

$665 million to $705 million on a constant currency basis.

Our earnings press release.

Form 10-K.

Moving to slide 12, I'll provide an update on the capital structure.

Moving to slide 12.

I'll provide an update on our capital structure.

With respect to tariffs our 2026 guidance includes a preliminary estimate of the impact of tariffs enacted through yesterday.

We ended the quarter with $353 million of cash up nearly $50 million from the ended the third quarter of this year.

We ended the quarter with.

$3 million.

$50 million.

The third quarter of this year.

During the quarter, we made the scheduled $5 million amortization payment on the term loan b and repaid the $25 million outstanding under the revolving credit facility as of September 30th.

Which we are currently expecting to be immaterial.

During the quarter.

Items amortization on the.

For 2026, we expect capital expenditures to be in the range of $50 million to $80 million.

Term loan a.

Yeah.

Any $5 million.

Separately, we anticipate capitalized SaaS implementation costs of $40 million to $60 million, which are incremental capex.

The credit.

Credit facility September 30th.

As of December 31st the revolver was undrawn.

But let me first.

It was undrawn.

Over the last two years.

Over the last.

Lastly for the full year 2026, and we expect an adjusted effective tax rate to be approximately 30%.

Before moving to Q&A I want to close my opening remarks with one final comment.

John DeSimone: Much stronger than it was two years ago. Depending on market conditions, we may consider refinancing portions of our existing debt. While there can be no assurances regarding timelier outcomes, a successful transaction could meaningfully lower our borrowing costs. Regardless of whether or not we pursue any capital structure initiatives, we remain committed to reducing our gross debt to $1.4 billion by the end of 2028. Turning to slide 13, I will walk through our outlook for the first quarter and full year 2026. We are continuing to provide net sales and adjusted EBITDA guidance on both a reported and constant currency basis. For guidance on a reported basis, we use the average daily exchange rates for the first three weeks of January 2026.

The financial performance of this business has transformed significantly over the past few years, our sales trajectory looks much different now than it did two years ago as we carry a lot of momentum into 2026 our.

We may consider refinancing portions of our existing debt, while there can be no assurances regarding time your outcomes.

A successful transaction could meaningfully lower our borrowing costs.

Our adjusted EBITDA margin continues to expand and has improved by 180 basis points over the two year period.

Regardless of whether or not we pursue any capital structure initiatives, we remain committed to reducing our gross debt to $1 4 billion buy.

And we've generated substantial cash over the prior two years, despite meaningfully higher interest costs.

By the end of 2028.

We've used that cash to pay down over $530 million of debt, while lowering our leverage ratio from three nine times to two eight times.

Turning to slide 13.

I will walk through our outlook for the first quarter and full year 2026.

We are continuing to provide net sales and adjusted EBITDA guidance on both a reported and constant currency basis.

While our performance over the last two years has improved substantially more importantly, we believe we have a strong foundation, both strategically and financially to further generate shareholder value over the long term.

For guidance on a reported basis, we use the average daily exchange rates for the first three weeks of January 2026.

John DeSimone: For Q1, we expect foreign exchange to have an approximately $31 million positive impact on net sales. While currency is expected to be a meaningful benefit to the top line in the quarter, it's expected to be neutral to EBITDA for the quarter due to timing. On a reported basis, we expect Q1 net sales growth of 3% to 7% year-over-year, including an approximately 250 basis point tailwind from currency. On a constant currency basis, we expect net sales growth of 0.5% to 4.5% year-over-year. Adjusted EBITDA for Q1 is expected to be in the range of $155 million to $175 million on both a reported and constant currency basis.

For the first quarter, we expect foreign exchange to have an approximately $31 million positive impact on net sales.

This concludes our opening remarks, operator, please open the call for questions.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please standby, while we compile the Q&A roster.

While currency is expected to be a meaningful benefit to the topline in the quarter, it's expected to be neutral to EBITDA for the quarter due to timing.

On a reported basis, we expect first quarter net sales growth of 3% to 7% year over year.

Our first question comes from the line of Jason Bender from Citi.

Including an approximately 250 basis point tailwind from currency.

Great. Thanks.

On a constant currency basis, we expect net sales growth.

Hey, guys. Thanks for taking the question Hey, Hey.

5% to four 5% year over year.

So I know you guys don't traditionally give guidance by region, but I was hoping you could do a little bit of around the world and give some more color on how youre thinking about.

Adjusted EBITDA for the first quarter is expected to be in the range of $155 million to $175 million on both a reported and constant currency basis.

Sales for the different geographic segments.

Planned capital expenditures for the first quarter are expected to be $10 million to $20 million.

John DeSimone: Planned capital expenditures for the first quarter are expected to be $10 to 20 million. Moving to our full year guidance. For the full year, we expect reported net sales growth of 1% to 6% year over year, including approximately 100 basis points tailwind from currency. On a constant currency basis, net sales are expected to be flat to up 5% year over year. Adjusted EBITDA is expected to be in the range of $670 to 710 million, or $665 to 705 million on a constant currency basis. With respect to tariffs, our 2026 guidance includes a preliminary estimate of the impact of tariffs enacted through yesterday, which we are currently expecting to be immaterial.

Segment in 2006, I know you called out you're expecting growth in the U S. But if you could kind of flesh out the comments for your other geographies, especially given the.

Moving to our full year guidance for the full year, we expect reported net sales growth of 1% to 6% year over year, including approximately 100 basis point tailwind from currency.

Really strong India results and how the GST impact should kind of flow through until we lap those changes that would be great.

On a constant currency basis net sales are expected to be flat to up 5% year over year.

Yeah. So.

So we don't guide by region I don't want to give maybe a little bit of commentary.

Adjusted EBITDA is expected to be in the range of $670 million to $710 million.

It'll be very high level, I will say that.

<unk>.

We're expecting.

Or $665 million to $705 million on a constant currency basis.

Net sales growth.

In every region with the exception of China.

With respect to tariffs our 2026 guidance includes a preliminary estimate of the impact of tariffs enacted through yesterday.

China is expected more of a 2027 event.

And Thats about I.

I think all.

Really feel comfortable giving out.

We are currently expecting to be immaterial.

John DeSimone: For 2026, we expect capital expenditures to be in the range of $50 to 80 million. Separately, we anticipate capitalized SaaS implementation costs of $40 to 60 million, which are incremental to CapEx. Lastly, for the full year 2026, we expect an adjusted effective tax rate to be approximately 30%. Before moving to Q&A, I want to close my opening remarks with one final comment. The financial performance of this business has transformed significantly over the past two years. Our sales trajectory looks much different now than it did two years ago, as we carry a lot of momentum into 2026. Our adjusted EBITDA margin continues to expand and has improved by 180 basis points over the two-year period, and we've generated substantial cash over the prior two years, despite meaningfully higher interest costs.

For 2026, we expect capital expenditures to be in the range of $50 million to $80 million.

Okay.

Got it and then.

As it relates to protocol.

Separately, we anticipate capitalized SaaS implementation costs of $40 million to $60 million, which are incremental capex.

Obviously theres a lot of excitement building around the organization on that I was hoping you could kind of frame your expectations in terms of the sales contribution you're expecting from that program and kind of what you assumed in 2020 'twenty six guidance and then.

Lastly for the full year 2026, and we expect an adjusted effective tax rate to be approximately 30%.

Before moving to Q&A I want to close my opening remarks with one final comment.

I guess it kind of stay in the realm of guidance just on the EBITDA side too.

You've exceeded your quarterly guidance in each of the last eight quarters.

The math is right you're only guiding to 20 to 30 bps of margin expansion in 2006, which seems like you've built in a lot of flexibility. There. So I'm just curious to understand kind of what your assumptions are and what's driving.

Our adjusted EBITDA margin continues to expand and has improved by 180 basis points over the two year period.

And we've generated substantial cash over the prior two years, despite meaningfully higher interest costs.

That degree of expansion.

That's a lot of questions, let me see if I can.

John DeSimone: We've used that cash to pay down over $530 million of debt, while lowering our leverage ratio from 3.9 times to 2.8 times. While our performance over the last two years has improved substantially, more importantly, we believe we have a strong foundation, both strategically and financially, to further generate shareholder value over the long term. This concludes our opening remarks. Operator, please open the call for questions.

And we've used that cash to pay down over $530 million of debt, while lowering our leverage ratio from three nine times to two eight times.

All right that's okay. It's great.

On the political side, there's very little from a top line built in at this point that a lot more upside from vertical.

Risk.

While our performance over the last two years has improved substantially.

We're in beta beta phase right now we launched <unk>.

More importantly, we believe we have a strong foundation, both strategically and financially.

Commercially in the U S in July and there'll be a build from there of course so.

We haven't built a ton and we have a few other beta tests will launch this year and some other markets, but again the data doesn't drive the kind of volume is more of a.

Further generate shareholder value over the long term.

This concludes our opening remarks, operator, please open the call for questions.

Acclimation process and build.

Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Chasen Bender from Citi.

<unk>.

So again more upside than downside risk there.

On SG&A.

As one complexity, which is the GST in India.

One of the drivers.

Sales in India as the government lowered its GST rate, which is the goods and services tax so think of it as a sales tax from 18% to 5% and a lot of our products, that's a big price decrease for consumers.

Our first question comes from the line of Jason Bender from Citi.

Chasen Bender: Great. Thanks. Afternoon, guys. Thanks for taking the question.

Great. Thanks afternoon, guys. Thanks for taking the question Hey, Hey.

It's been very beneficial.

However on services, which is what our distributors provide to us and what we pay to them in all our intercompany services.

John DeSimone: Hey.

Chasen Bender: Hey, hey, hey. So I, I know you guys don't traditionally give guidance by region, but I was hoping you could do a little bit of around the world and give some more color on how you're thinking about sales for the different geographic segments in 2026. I know you called out you're expecting growth in the US, but if you could kind of flesh out the comments for your other geographies, especially given the really strong India results and how the GST impact should kind of flow through until we lap those changes, that'd be great.

So I know you guys don't traditionally give guidance by region, but I was hoping you could do a little bit of around the world and give some more color on how youre thinking about sales for the different geographic.

That rate did not get lower it's still 18%, we used to be able to offset those input and the output credits.

So one of the things that's happening next year in with GST. As this is a net of about $16 million incremental cost between G&A and.

Segment in 2006, I know you called out you're expecting growth in the U S. But if you could kind of flesh out the comments for your other geographies, especially given the.

Really strong India results and how the GST impact should kind of flow through until we lap those changes that would be great.

Remember comp net net is $16 $16 million.

Negative impact on the bottom line. So our margins ex GST would be about 30 basis points higher than what youre seeing in guidance. So I.

Yeah.

John DeSimone: Yeah, so we don't guide by region. I do want to give maybe a little bit of commentary. It'll be very high level. I will say that, we're expecting net sales growth in, in every region, with the exception of China. You know, China's expected more of a 2027 event. And that's about, I think, all I really feel comfortable giving out.

So we don't guide by region I don't want to give maybe a little bit of commentary it.

I know guidance.

It'll be very high level, I will say that.

We're getting margin enhancement improvement next year anyway, I think that's important.

Sure.

But there's also a slight drag on the percentage from the GST in India. However, the GST in India is great for our business because it's driving.

We're expecting.

Net sales growth.

In every region with the exception of China.

China is expected more of a 2027 event.

Got it that's helpful color. Thank you for indulging my multi part question and I'll try to sneak two total questions.

And that's about I.

I think all.

Really feel comfortable giving out.

Thanks, guys. Thanks Jay.

Chasen Bender: Okay. Okay, got it. And then as it relates to Protocol, you know, obviously there's a lot of excitement building around the organization on that. I was hoping you could kind of frame your expectations in terms of the sales contribution you're expecting from that program and kind of what you assumed in 2026 guidance. And then, I guess, to kind of stay in the realm of guidance, just on the EBITDA side, too. You know, you've exceeded your quarterly guidance in each of the last 8 quarters, and, you know, if my math is right, you're only guiding to 20 to 30 basis points of margin expansion in 2026, which seems like you've built in a lot of flexibility there.

Okay.

Thank you one moment for our next question.

Okay.

Got it and then.

Our next question comes from the line of Nicholas Sherwood from Maxim Group.

As it relates to protocol.

Hi, good afternoon, and thank you for taking my question kind of looking at the product categories Energy sports and fitness was the fastest grower in 2025 can you kind of talk about where that momentum came from and how do you expect to continue that in 2006.

Well, if you look historically.

I guess it kind of stay in the realm of guidance just on the EBITDA side to you you've exceeded your quarterly guidance in each of the last eight quarters.

Over the last few years.

I don't know how many years it goes back quite a ways, we've been seeing that category outpaced.

My math is right you're only guiding to 20 to 30 bps of margin expansion in 2006, which seems like you've built in a lot of flexibility. There. So I'm just curious to understand kind of what your assumptions are and what's driving.

The company.

So you see a slight decrease in the percentage of our sales management and slightly increased our targeted nutrition.

Chasen Bender: So I'm just curious to understand kind of what your assumptions are and what's driving, you know, that degree of expansion.

Yes.

And it comes from a various number of regional.

Launched sports, India Hasnt growth this year and the sports products I don't have a breakdown by market for each one of those categories. So that's just the general picture of what's happening in the business.

And that degree of expansion.

John DeSimone: So, Jake, that's a lot of questions, so let me see if I can hit them all.

So today, that's a lot of questions. So let me see if I can.

Chasen Bender: Yeah.

John DeSimone: So, right. No, that's okay. It's great. On the Protocol side, there's very little from a top line built in at this point. There's a lot more upside from Protocol than risk. You know, we're in beta, beta phase right now. We launched commercially in the US in July, and it'll be a build from there, of course. So, we haven't built a ton in. We have a few other beta tests we'll launch this year in some other markets, but again, the beta doesn't drive a ton of volume. It's more of an acclimation process and a build. So again, more upside than downside risk there. On SG&A, there's one complexity, which is the—it's GST in India.

Alright, that's okay that's great.

On the protocol side, there's very little from a topline built in at this point that a lot more upside from vertical.

There was also a little bit of an uplift.

Nutrition clubs.

Risk.

Lift off which is a very popular.

We're in beta beta phase right now we like <unk>.

Product specifically designed in.

Commercially in the U S in July and there'll be a build from there or so.

Each 24 product brands.

Helped a little bit.

Both here as well.

Haven't built a ton and we have a few other beta test will launch this year and some other markets, but again the data doesn't drive the kind of volume is more of a acclimation process and build.

Okay. Thank you and kind of talking about nutrition clubs I noticed in the 10-K there is.

Wording about doing training in Europe, Middle East and Africa nutrition.

So again more upside than downside risk there.

Nutrition clubs for the distributors there can you kind of go into any more detail on sort of.

On SG&A.

As one complexity, which is the GST in India. So one of the drivers of sales in India as the government lowered its GST rate, which is the goods and services tax so think of it as a sales tax from 18.

Ending that nutrition infrastructure in that market or other markets, yes, Nick I think you're referring to the breakfast budget clubs, which is a particular model that it started in the UK, which there's a lot of interest and we.

John DeSimone: So one of the drivers of sales in India is the government lowered its GST rate, which is a goods and services tax, so think of it as a sales tax, from 18% to 5% on a lot of our products. That's a big price decrease for consumers, and it's been very beneficial. However, on services, which is what our distributors provide to us and what we pay to them in all our intercompany services, that rate did not get lowered. It's still 18%. We used to be able to offset those, the input and the output credits, and now we don't. So one of the things that's happening next year in, with GST is this: there's a net about $16 million incremental cost between GNA and member comp. The net-net is sixteen, $16 million, on negative impact on the bottom line.

2% to 5% and a lot of our products, that's a big price decrease with consumers.

We do kind of biannual master classes, where we'll have thousands of people actually that will come in either virtually or physically.

It's been very beneficial.

However on services, which is what our distributors provide to us and what we pay to them in all our intercompany services that right did not get lower it's still.

To learn about this particular model that started in the United Kingdom, which now.

In other markets as well.

18%, we used to be able to offset those input output credits an hour. So one of the things that's happening next year in with GST. As this is a net of about $16 million incremental cost between G&A and.

It's a really powerful small club.

<unk> routes, where people are literally coming to the cloud every single day, they're interacting with the distributors the weighing themselves talking about what else was there anything there, but taking products and it's really a community driven one.

We actually have a little bit of an uptick as well here in the United States with some of the distributors that have gone to the UK and understanding our model. So that's.

Remember comp net net is $16 $16 million.

On negative impact on the bottom line. So our margins ex GST would be about 30 basis points higher than what you're seeing in guidance. So.

John DeSimone: So our margins ex GST would be about 30 basis points higher than what you're seeing in guidance. So, I know guidance, you know-- By the way, we're getting margin enhancement and improvement next year anyway. I think that's an important point, but there's also a slight drag on the percentage from the GST in India. However, the GST in India is great for our business because it's driving a lot more volume.

That's part of the strategy that we have in terms of master classes, and making sure that our distributors understand what's happening in different markets. So they can see how it relates to their own and to be able to kind of imported into models in areas and geographies. It makes sense for them.

I know guidance.

We're getting margin enhancement improvement next year anyway, I think that's an important point.

It's also a slight drag on the percentage from the GST in India. However, the GST in India is great for our business because it's driving.

Thank you and then my last question is positive sales leader retention rates, especially in North America, and Latin America in 2025, how how much is related to some of these training programs that have been going on for almost two years now such as the mastermind program.

Chasen Bender: Got it. That's helpful, Colin. Thank you for indulging my, my multi-part question, and I tried to sneak it into, into two total questions. Thanks, guys.

Got it that's helpful color. Thank you for indulging my multi part question and I'll try to sneak it into the two total questions.

Thanks, guys.

John DeSimone: No problem. Thanks, Jason.

Thanks Jay.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Nicholas Sherwood from Maxim Group.

Thank you one moment for our next question.

Our next question comes from the line of Nicholas Sherwood from Maxim Group.

Kind of what where are you seeing is why so many more.

Sales leaders were retained.

Nicholas Sherwood: Hi, good afternoon. Thank you for taking my question. Kind of looking at the product categories, energy, sports, and fitness was the fastest grower in 2025. Can you kind of talk about where that momentum came from and how you expect to continue that in 2026?

Hi, good afternoon, and thank you for taking my question.

<unk> five compared to 2024, yeah. Thank you see an incremental improvement we have a very strong sales leader base and so all of these programs are designed to support them better better education better support.

Looking at the product categories energy sports and fitness was the fastest grower in 2025 can you kind of talk about where that momentum came from them.

To continue that in 2026.

John DeSimone: Well, if you look historically, over the last few years, matter of fact, I don't even know how many years, but it goes back quite a ways. We've been seeing that category outpace our overall performance as a company. You see a slight decrease in the percent of our sales coming from weight management, and a slight increase coming from targeted nutrition and from sports. It comes from a various number of regions. I also think we launched sports in India, had some growth this year in the sports products. I don't have a breakdown by market for each one of those categories, but that's just a general picture of what's happening in the business.

Well, if you look historically.

The account management program, which has key account managers that are working with certain levels of leadership and going through their business metrics.

Over the last few years.

How many years it goes back quite a ways, we have been seeing that category outpaced our own.

Everything helps.

Yeah.

So you see a slight decrease in the percentage of our sales coming from weight management and slightly increased our targeted nutrition sports.

I just revert back to my experience.

The distributor leader of an organization.

The more educated people are more understanding the better strategy to have towards their business. It all makes a difference. So I think it's hard to point to one thing I think it's really the.

It comes from a various number of regions, but I also think we launched sports India had some growth this year and the sports products.

Have a breakdown by market for each one of those categories. So that's just a general picture of what's happening in the business.

The totality of the things that we've been doing over the last couple of years.

Definitely all the pieces to make a difference.

Chasen Bender: There was also a little bit of an uplift with Nutrition Clubs, with Lift Off, which is a very popular product that specifically was designed in the H24 product brand. So that's helped a little bit with the growth there as well.

There was also a little bit of a one off.

Nutrition.

Nutrition clubs.

Okay. Thank you I'll return to the queue.

Which is a very popular.

Product specifically designed in the H 'twenty four.

Thank you one moment for our next question.

<unk> brand.

Our next question comes from the line of William Reuter from Bank of America.

A little bit.

Here as well.

Nicholas Sherwood: Okay, thank you. And kind of talking about Nutrition Clubs, I noticed in the 10-K there's wording about doing training in Europe, Middle East, and Africa on Nutrition Clubs for the distributors there. Can you kind of go into any more detail on sort of expanding that Nutrition Club infrastructure in that market or other markets?

Okay. Thank you and kind of talking about nutrition clubs I noticed in the 10-K there is.

Good afternoon.

Hi, So my first question is.

Wording about doing training in Europe, Middle East and Africa.

Is around products and how much. They may have contributed to expanded sales in fiscal year 'twenty five versus previous years.

<unk> costs for the distributors. There can you kind of go into any more detail on sort of expanding that nutrition infrastructure in that market or other markets.

Was there an increase in that percentage of what you offer that was part of the contribution.

John DeSimone: Yeah, Nick, I think you're referring to the Breakfast Budget Clubs, which is a particular model that has started in the UK, which there's a lot of interest in. We do kind of biannual master classes, where we'll have thousands of people actually that'll come, either virtually or physically, to learn about this particular model that started in the United Kingdom, which now is starting to take root in other markets as well. It's a really powerful, small club, grassroots, where people are literally coming to the club every single day. They're interacting with distributors, they're weighing themselves, they're talking about what kind of food they're eating, they're taking products, and it's really a community-driven one.

Nick I think you're referring to the breakfast budget club, which is a particular model that it started in the U K, which there's a lot of interest in <unk>.

Well no.

Just talk to kind of North America, we had a very successful launch of multi burn.

We do kind of biannual master classes, where we will have thousands of people actually that'll come in either virtually or.

That was launched at extravaganza, just previous prior extravaganza, which.

Physically.

<unk> helped us to have.

To learn about this particular model that started in the United Kingdom, which now is starting to pick routes and other markets as well.

The performance that we had in Q3 overall.

Overall, I think we're doing a good job.

We had the launch of the.

It's a really powerful small club grab.

Skin, it's truly HL skin, which was again a successful launch and I think we have been launching successfully products probably the most of that's ever happened in the history of the company.

Grass roots, where people are literally coming on every single day, they're interacting with distributors the weighing themselves talking about what they're eating there, but taking products and it's really a community driven one.

Two very successful launches so.

John DeSimone: We actually have a little bit of an uptake as well here in the United States with some of the distributors that have gone to the UK and understanding the model. So that's part of the strategy that we have in terms of master classes and making sure that our distributors understand what's happening in different markets, so they can see how it relates to their own, and to be able to kind of import it into models, areas, and geographies that make sense for them.

I think there is learnings that are taking place.

We actually have a little bit of an uptick as well here in the United States with some of the distributors that have gone to the U K and understanding our model. So that's part of the strategy that we have in terms of master classes, and making sure that our distributors understand what's happening in different markets. So they can see how it relates to their own and to be able to kind of.

As we rollout more products.

Just getting more effectiveness, how we're rolling out product lines and products.

Got it and then just secondarily for me.

You have been increasing your number of distributor events over the last two years really.

What is your expectation for fiscal year 'twenty six in terms of are you going to be doing more events are going to be doing fewer larger events and what the total spending on those maybe on a year over year basis.

Imported into models in areas and geographies it makes sense for them.

Nicholas Sherwood: Thank you. And then my last question is, you know, positive sales leader retention rates, you know, especially in North America and Latin America in 2025. How much is that attributed to, you know, some of these training programs that have been going on for almost 2 years now, such as the Mastermind program? Where are you seeing as why so many more sales leaders were retained in 2025 compared to 2024?

Thank you and then my last question is you know positive sales leader retention rates.

Yes, I'll, let J D hit the total spend overall, we really go by the market.

Especially in North America, and Latin America in 2025.

How much is that attributed to some of these training programs that have been going on for almost two years now such as the mastermind program.

And regions, India had increased.

More extravaganzas, which are the big one based on the needs.

Where are you, saying is why so many more.

Asia Pacific last year went to two extravaganzas instead of one so it really depends I think overall, we try to stay in line.

Sales leaders where return.

<unk> five compared to 2024.

John DeSimone: Yeah, I think you see an incremental improvement. We have a very strong sales leader base, and so all of these programs that are designed to support them better, better education, better some support-

I think you see an incremental improvement.

What the spending is based on the region.

Strong sales leader base and so all of these programs that are designed to support them better better education and better support.

But I would say in general we try to do more events more attendance, we've been tracking increases on an annual basis.

Stephan Gratziani: ... The Key Account Management program, which, you know, has key account managers that are working with certain levels of leadership and going through their business metrics. I think everything helps. You know, I just revert back to my experience as a distributor leader of an organization, and the more educated people are, the more understanding, the better strategy they have towards their business. It all makes a difference. So I think it's hard to point to one thing. I think it's really the totality of the things that we've been doing over the last couple of years, but it definitely, all the pieces make a difference.

The key account management program, which has he account managers that are working with certain levels of leadership and going through their business metrics.

Obviously coming out of Covid, where we didn't have events, there's been a ramp up but I'll, let J D. I'll refer to JD on the on the <unk>.

Costs overall.

Everything helps.

Yes.

Just revert back to my experience as a distributor leader of an organization and.

All lines, we look at when we think of supporting our.

Distributors and events is just one of those lines and event costs are expected to go up next year.

The more educated people are more understanding the better strategy to have towards their business. It all makes a difference. So I think it's hard to point to one thing I think it's really the.

More than sales.

But we're funding it both from the sale and from some other lines.

The totality of the things that we've been doing over the last couple of years, but it.

Yeah.

And the advertising promotion here.

Definitely all of the pieces make a difference.

So it's not a material change.

John Baumgartner: Okay, thank you. I'll return to the queue.

Okay. Thank you I'll return to the queue.

Got it alright, thank you I'll pass to others.

Thanks Bill.

Operator: Thank you. One moment for our next question. Our next question comes from the line of William Reuter from Bank of America.

Thank you one moment for our next question.

Our next question comes from the line of William Reuter from Bank of America.

Our next question comes from the line of John Baumgartner from Mizuho Securities.

William Reuter: Good afternoon.

Good afternoon.

Stephan Gratziani: Hello.

William Reuter: Hi. My first question is around products and how much they may have contributed to expanded sales in fiscal year 2025 versus previous years. Was there an increase in that percentage of what you offer that was part of the contribution?

Good afternoon, and thanks for the question.

Hi, sorry.

First question is.

Good afternoon, Hey, John I would like to ask Stefan I'd like to ask as you're making these investments in the personalized technology and more specialized new products the multi burn the life it.

Is around products and how much. They may have contributed to expanded sales in fiscal year 'twenty five versus previous years.

Was there an increase in that percentage of what you offer that was part of the contribution.

It really feels like a new herbalife, that's much more geared towards health and wellness market has gone and as you move down this path with an evolving product portfolio, how do we think about product customer fit.

Stephan Gratziani: Well, oh, Bill, just to talk to kind of North America, you know, we had a very successful launch of Multi Burn that was launched at Extravaganza, just prior to Extravaganza, which, you know, really helped us to have the performance that we had in Q3. Overall, I think we're doing a good job. In EMEA, we had the launch of the skin, which really, HL Skin, which was again a successful launch. And I think we have been launching successfully products, probably the most it's ever happened in the history of the company. It's two very successful launches. So, you know, we continue. I think there's learnings that are taking place and, you know, as we roll out more products, we're just getting more effective at how we're rolling out product lines and products.

Well.

Just talk to kind of North America, we had a very successful launch of multi burn.

Is there a need to maybe also augment your legacy customer base with maybe higher income households, where consumers who are more intense users of supplements just how do you think about complementing and evolving product offering with also evolving or expanding your consumer base to maximize the revenue opportunity.

That was launched at extravaganza, just previously private extravaganza, which really.

It really helped us to have the performance that we had in Q3 overall.

Overall, I think we're doing a good job in EMEA, we had the launch of the skin, which really H L skin, which was again a successful launch and I think we have been launching successfully.

Yes, it's a great. It's a great question John.

I think the strength of our business when you look across the geographic regions.

Have different.

Levels of people using our products through different models for different reasons.

<unk>, probably the most that's ever happened in the history of the company.

Number one we believe there is a more sophisticated customer that has higher expectations.

Two very successful launches. So we continue I think there is learnings that are taking place.

In certain markets the United States for example, Europe. Another example, there's other markets that lag a little bit just in terms of what they're seeing in.

As we roll out more products.

Just getting more effective at.

How we're rolling out product lines and products.

William Reuter: Got it. And then just secondarily for me, you know, you have been increasing your number of distributor events over the last two years, really. What is your expectation for fiscal year 2026 in terms of, are you gonna be doing more events? Are you gonna be doing fewer, larger events? And what the total spending on those may be on a year-over-year basis?

Got it and then just secondarily for me.

What is the competition is doing overall as a company we believe that.

You have been increasing your number of distributor events over the last two years really.

World will come to a place where everyone wants a more personalized solution and for some that means.

Spoke personalized formulation in a product in certain markets and others. It means just the best data that leads for the certain individuals the best product for them and so.

Stephan Gratziani: Yeah, I'll let JD hit the total spend. Overall, we really go by the markets, and regions. You know, India had increased to more Extravaganzas, which are the big one based on the needs. Asia Pacific last year went to 2 Extravaganzas instead of 1. So it really depends. I think overall, we try to stay in line with, you know, what the spending is based on the region. But I would say in general, we try to do more events, more attendance. We've been, you know, tracking increases on an annual basis. Obviously, coming out of COVID, where we didn't have events, you know, there's been a ramp-up, but I'll let JD. I'll refer to JD on the costs overall.

Yeah, I'll, let J D hit the total spend overall, we really go by the market.

We are expanding the breadth of what we're offering to attract more people and I appreciate by the way the comment just on kind of a new herbalife. That's the goal that we can go out and attract customers like you've seen with multi burn with baseline. We believe ultimately with personally formulated product, which actually there is I don't want to see.

And in regions, India had increased to.

More extravaganzas, which are the big one based on the needs are.

Asia Pacific last year went to two extravaganzas instead of one so it really depends I think overall, we try to stay in line.

You know what the spending is based on the region.

Zero competition, but.

But I would say in general we try to do more events more attendance, we've been tracking increases on an annual basis.

Three small competition for we want to own that category and so we believe that it's going to attract customers that we would never would have had at the same time, we want to double down and be more strategic on the current business that we have because it's an existing $5 billion business across 95 markets and so we.

Obviously coming out of Covid, where we didn't have events, there's been a ramp up but I'll, let J D. I'll refer to J D on the on the cost overall.

John DeSimone: Yeah, there's multiple lines we look at when we think of supporting our distributors, and events is just one of those lines. And event costs are expected to go up next year, a little more than sales is gonna go up. But we're funding it both from the sales and from some other lines in the advertising and promotion area. So it's not a material change overall.

Yes, there's multiple lines, we look at when we think of supporting our distributors and events is just one of those lines and event costs are expected to go up next year, a little more than sales.

Our strategy is across everything actually want to expand we want to attract more but we actually want to engage more of our current customer and go deeper in the product lines that we have in.

It's going to go up but we're funding it both from the sales and from some other lines.

One of the things no one's mentioned, yet so I'll just make mention of it right now the other announcement that we made today around Cristiano Ronaldo.

And the advertising promotion here.

So number one you have an athlete that is probably number one has the most following in the world in terms of any any athlete.

So it's not a material change.

William Reuter: Got it. All right. Thank you. I'll pass to others.

Got it alright, thank you I'll pass to others. Thanks, Thanks Bill.

Stephan Gratziani: Thanks. Thanks, Bill.

<unk> now 40 years old, but it's still competing at the highest level in terms of performance and it's someone that has his entire career has been built around <unk>.

Operator: Thank you. One moment for our next question. Our next question comes from the line of John Baumgartner from Mizuho Securities.

Thank you one moment for our next question.

Our next question comes from the line of John Baumgartner from Mizuho Securities.

John Baumgartner: Good afternoon. Thanks for the question. Good afternoon.

Good afternoon, and thanks for the question good afternoon, Hey, John I'd like to ask Stephane.

Measured and having inputs into is on health and wellness and performance and then personally.

Stephan Gratziani: Hey, John.

John Baumgartner: I'd like to ask Stephan, I'd like to ask, as you're making these investments in the personalized technology and more specialized new products, the Multi Burn, the Life IO, it really feels like a new Herbalife that's much more geared to where the health and wellness market is going. As you move down this path with an evolving product portfolio, how do you think about product-customer fit? You know, is there a need to maybe also augment your legacy customer base with maybe higher income households or consumers who are more intense users of supplements? Just, you know, how do you think about complementing an evolving product offering with also evolving or expanding your consumer base to maximize the revenue opportunity?

To ask because youre, making these investments in the personalized technology and more specialized new products the multi burn the life Io.

Customizing by formulation and by curation, what to take in terms of supplementation.

How we got together 12 years ago in terms of a partnership and so then his lifestyle right in terms of how much sleep because you get the recovery all of those things that he does to recover it to be at the top of this performance.

Is there a need to maybe also augment your legacy customer base with maybe higher income households are consumers, who are more intense users of supplements just how do you think about complementing and evolving product offering with also evolve and are expanding your consumer base to maximize the revenue opportunity.

This is the philosophy around protocol. This is where the company we are going and this is why we have this alignment in this partnership because we believe the future of health and wealth and this is what protocol and Herbalife is really about is data in.

Stephan Gratziani: Yeah, it's a great, it's a great question, John. I think the strength of our business when you look across the geographic regions is you have different levels of people using the products through different models for different reasons. You know, number one, we believe there is a more sophisticated customer that has higher expectations in certain markets. The United States, for example, Europe, another example. There's other markets that lag a little bit just in terms of, you know, what they're seeing and, you know, what the competition is doing. Overall, as a company, you know, we believe that the world will come to a place where everyone wants a more personalized solution, and for some, that means a bespoke, personalized formulation in a product in certain markets.

Yeah, It's a great. It's a great question John.

And the more data and the precise data that you have that leads to your health and wellness and where you are in your goals with the output of what your precise nutrition should be which is where personally formulated comes in and <unk>.

I think the strength of our business. When you look across the geographic regions is you have different levels of people using our products through different models for different reasons.

Number one we believe there is a more sophisticated customer that has higher expectations.

Curation comes in then the lifestyle aspect of it which is making sure that everything else you're doing besides your data in in Europe, and what Youre, taking youre doing the best you can for your lifestyle, because that's where our real long term change comes and results come and then we believe with our community, which is our superpower the $2 million.

In certain markets the United States for example, Europe. Another example, there's other markets that lag a little bit just in terms of you know what theyre seeing and you know what the competition is doing overall as a company. We believe that the world will come to a place where everyone wants a more personalized.

<unk> that they are in the best place to do what they've been doing for 45 years, which has helped people get the best results possible. So again I know it is.

Solution and for some that means.

Spoke personalized formulation and our products in certain markets and others. It means just the best data that leads for the certain individuals the best product for them and so.

Question around the products.

Stephan Gratziani: In others, it means just the best data that leads for the certain individual, the best product for them. So, you know, we're expanding the breadth of what we're offering to attract more people. And I appreciate, by the way, the comment just on kind of a new Herbalife. That's the goal, that we can go out and attract customers like you've seen with Multi Burn, with Baseline. And we believe ultimately with a personally formulated product, which actually there's, I don't want to say zero competition, but very small competition for. We want to own that category. So, you know, we believe that it's going to attract customers that we would never would have had.

It was probably a little bit more than you asked for but we will go broader we're going to go and get more different types of customers and we're going to support the existing and go deeper in the credit markets and portfolios that we have so we're super excited about where we're going in the future.

We're expanding the breadth of what we're offering to attract more people and I appreciate by the way the comment just on kind of a new herbalife that's the goal.

That was great. Thanks, and then my follow up on India. The volume growth there had decelerated going back to I think around mid 2024, but you saw a really nice bounce back in Q4, 25, and John you mentioned, the GST benefit and I'm curious the extent to which you saw any sort of related one off benefit.

Can go out and attract customers like you've seen with multi burner with baseline. We believe ultimately with personally formulated product, which actually there is I don't want to see zero competition, but.

Three small competition for we want to own that category and so we believe that it's going to attract customers that we would never would have had at the same time, we want to double down and be more strategic on the current business that we have because it's a it's an existing $5 billion business across 95 markets and so we.

Supporting volume this quarter relative to the extent to which this reduced GST you can ride that as a tailwind until it's lapped late in 2026. Thank you.

Stephan Gratziani: At the same time, we want to double down and be more strategic on the current business that we have, because it's an existing $5 billion business across 95 markets. And so, you know, we, you know, our strategy is across everything, actually. We want to expand, we want to attract more, but we actually want to engage more of our current customer and go deeper in the product lines that we have. You know, one of the things, and we, no one's mentioned it yet, so I'll just make mention of it right now. The other announcement that we made today around Cristiano Ronaldo, you know, so number one, you have an athlete that is probably, number one, has the most following in the world in terms of any, any athlete.

Yes, so we expect it to be a tailwind until we lap it in late September of 2026.

You know our strategy is across everything actually want to expand you won't attract more but we actually want to engage more of our current customer and go deeper in the product lines that we have you know.

<unk>.

Yeah.

It may be is declining tailwind I mean, the GSC is not going to change in distribution rate at least that's our expectations right, but maybe the excitement around it will get used a little bit, but it will definitely our expectations. It will definitely be a tailwind.

One of the things I mean, no one's mentioned it yet so I'll just make mention of it right now.

The other announcement that we made today around Cristiano Ronaldo.

So number one you have an athlete that is probably number one has the most following in the world in terms of any any athlete number two he's now 40 years old, but it's still competing at the highest level in terms of performance and it's someone that has his entire career has been built around.

Next nine months.

Great. Thanks for your time.

Thanks, John.

Thank you one moment for our next question.

Stephan Gratziani: Number 2, he's now 40 years old, but is still competing at the highest level in terms of performance. And it's someone that has... his entire career has been built around measuring and having inputs into his own health and wellness and performance, and then personally, you know, customizing by formulation and by curation, what to take in terms of supplementation. That's, that's how we got together 12 years ago in terms of a partnership. And so then his lifestyle, right, in terms of how much sleep does he get, the recovery, all of the things that he does to recover, to be at the top of his performance. This is the philosophy around Protocol.

Our next question comes from the line of Caroline Copelco from Barclays.

Hi, Carolyn <unk> on for Hale Holden My question relates to the policy.

Measuring and having inputs into his own health and wellness and performance and then personally.

Sir Peter to remember model we.

We've seen pretty outside the distributor growth, especially on a two year stack.

Customizing by formulation and by curation what to take in terms of supplementation. That's how we got together 12 years ago in terms of a partnership and so then his lifestyle right in terms of how much sleep that you get the recovery all of those things that he does to recover to be at the top of this performance.

I was wondering if you could expand on the relationship between distributor growth in members growth.

Intuitively with the current market you might think more people want to be distributors looking for extra income.

The other side people might have less discretionary income for health and wellness. So is there a mismatch there.

This is the philosophy around protocol. This is where the company we are going and this is why we have this alignment in this partnership because we believe the future of health and wellness and this is what protocol and Herbalife is really about is data in.

Thank you Alan and thanks for the question.

Stephan Gratziani: This is where the company we are going, and this is why we have this alignment and this partnership, because we believe the future of health and wellness, and this is what Protocol and Herbalife is really about: data in, and the more data and the precise data that you have that leads to your health and wellness and where you are and your goals, with the output of what your precise nutrition should be, where, which is where personally formulated comes in and curation comes in. Then the lifestyle aspect of it, which is making sure that everything else you're doing besides your data in and what you're taking, you're doing the best that you can for your lifestyle, because that's where real long-term change comes and results come.

I think I, just want to make sure, but youre talking about preferred members I think which is more of the customer types that you are talking about yes.

Okay. Good yeah, well look it's both right.

The opportunity that people are looking for to have a financial opportunity I think we're all clear that.

And the more data and the precise data that you have that leads to your health and wellness and where you are in your goals with the output of what your precise nutrition should be worth which is where personally formulated comes in and.

That remains and will continue to remain something that theres, a large attraction and interest and need for at the same time you said it.

Health and wellness and people taking care of themselves.

Duration comes in then the lifestyle aspect of it which is making sure that everything else you're doing besides your data and your and what you are taking you're doing the best you can for your lifestyle, because that's where our real long term change comes and results come and then we believe with our community, which is our superpower the $2 million history.

You know them, reaching their goals and what's important to them is also a major factor, but the one thing that you might see just in terms of the distributor recruiting numbers versus the preferred member numbers is that we did launch two years ago, something that we called Herbalife Premier League, which put a bit of a focus on distributor recruiting.

Stephan Gratziani: And then we believe with our community, which is our superpower, the 2 million distributors, that they are in the best place to do what they've been doing for 45 years, which is help people get the best results possible. So again, I know it was a question around the products. I, it was probably a little bit more than you asked for, but, you know, we will go broader. We're going to go and get more different types of customers, and we're going to support the existing and go deeper in the current markets and portfolios that we have. So we're super excited about where we're going in the future.

<unk> that they are in the best place to do what they've been doing for 45 years, which has helped people get the best results possible. So again I know it was a.

<unk>.

And when.

When we did that there was a little bit of a focus on distributors more than preferred customers for the first year that we ran the program. It ended up having more of a focus on the distributors. We made an adjustment in 2025 to actually account for preferred customers because a lot of markets and their models and flow.

A question around the products it was probably a little bit more than you asked for but we will go broader we're going to go and get more different types of customers and we're going to support the existing and go deeper in the credit markets and portfolios that we have so we're super excited about where we're going in the future.

They really kind of led with preferred customers. So I think as you see those numbers.

John Baumgartner: That was great. Thanks, Stefan. And then my follow-up, India. The volume growth there had decelerated going back to, I think, around mid-2024. But you saw a really nice bounce back in Q4 2025. And John, you mentioned the GST benefit, and I'm curious the extent to which you saw any sort of related one-off benefits supporting volume this quarter, relative to the extent to which this reduced GST, you can ride that as a tailwind until it's lapped, you know, late in 2026. Thank you.

That was great. Thanks, and then my follow up India. The volume growth there had decelerated going back to I think around mid 2024, but you saw a really nice bounce back in Q4, 25, and John you mentioned, the GST benefit and I'm curious the extent to which you saw any sort of related one off benefit.

There might be some level of fluctuation.

All in all it really depends on the distributor models.

We could have more preferred debt. So for example preferred customers in India. It drives a lot of growth for us, it's not direct distributor recruiting to try it because its really attuned to their model and the way that they actually build the business. There. So I would say both both remain highly interested in an attractive and our distributors are focused on.

Supporting volume this quarter relative to the extent to which this reduced GST you can ride that as a tailwind and so it's a lap late in 2026. Thank you.

Both.

John DeSimone: Yeah. So it is. We expect it to be a tailwind until we lap it in late September 2026. It may be a declining tailwind. I mean, the GST is not going to change from this reduced rate. At least that's not our expectations, right? But maybe the excitement around it will get reduced a little bit, but it'll definitely, in our expectations, it will definitely be a tailwind for the next nine months.

Yes. So it is we expect it to be a tailwind until we lap it in late September of 2026.

Okay. Thank you.

Thank you.

One moment for our next question.

Yeah.

Our next question comes from the line of Doug Lane from water Tower research.

It may be is declining tailwind I mean, the GSE is not going to change in distribution rate at least that's our expectations right, but maybe the excitement around it will get used a little bit, but it'll definitely our expectations. It will definitely be a tailwind for the next nine months.

Hey, good afternoon everybody.

I just wanted to follow up on that.

Protocol here you may be small IP acquisitions last year, and I don't remember herbalife, making a lot of acquisitions in the past and now you have Ronaldo with an equity partnership in one of your.

John Baumgartner: Great. Thanks for your time.

Great. Thanks for your time.

John DeSimone: Thanks, John.

Thanks, John.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Carolyn Popelka from Barclays.

Thank you one moment for our next question.

Parts of your business and I don't remember Youre doing a lot of equity partnerships in the past. So is this just one off opportunistic or is this part of them part of a new strategy going forward.

Our next question comes from the line of Caroline Copelco from Barclays.

Carolyn Popelka: Hi, this is Carolyn Popelka on for Hale Holden. My question relates to the distributor-to-member model. We've seen pretty outsized distributor growth, especially on a two-year stack. So I was wondering if you could expand on the relationship between distributor growth and members growth. I think intuitively, with the current market, you might think more people want to be distributors looking for extra income. But on the other side, people might have less discretionary income for health and wellness. So is there a mismatch there?

Hi, Carolyn Kay on for Hale Holden My question relates to <unk>.

Hey, Doug this is John.

Sure Peter can remember model we.

Most of that question is going to go to Stefan Let me see if I can set it up financially anyway for this audience.

We've seen pretty outside the distributor growth, especially on a two year stack.

I was wondering if you could expand on the relationship between distributor growth in members growth.

So.

Our civil part of our strength is our distribution reach right. We're in 95 countries tens of thousands of communities.

Intuitively with the current market you might think more people want to be distributors looking for extra income, but on the other side people might have less discretionary income for health and wellness.

Great reach into the consumer base around the world.

We are interested from an acquisition standpoint in companies that are relatively small they have great content that don't have that distribution and so we can buy the content and leverage that strength of ours and for the investors, but I think it's important to understand is it augments the core business guidance setup.

Is there a mismatch there.

Stephan Gratziani: Hey, Carolyn, thanks for the question. I think I just want to make sure, but you're talking about Preferred Members, I think, which is more the customer type that you're talking about?

Hey, Caroline Thanks for the question I think I, just want to make sure, but you're talking about preferred members I think which is more of the customer type that youre talking about yeah.

Carolyn Popelka: Yes.

Stephan Gratziani: Okay, good. Yeah. Well, look, it's both, right? The opportunity that people are looking for to have a financial opportunity, I think we're all clear that that remains and will continue to remain something that there's a large attraction and interest and need for. At the same time, you said it, you know, health and wellness and people taking care of themselves and, you know, reaching their goals, and what's important to them is also a major factor. But the one thing that you might see, just in terms of the distributor recruiting numbers versus the Preferred Member numbers, is that we did launch two years ago, something that we called Herbalife Premier League, which put a bit of a focus on distributor recruiting.

Okay. Good yeah, well look it's both right the opportunity that people are looking for to have a financial opportunity I think we're all clear that.

The second is it's not a huge use of cash was still looking to do small acquisitions, but still good.

Total debt down to $1 4 billion.

That remains and will continue to remain something that theres, a large attraction and interest and need for at the same time. You said, it's you know health and wellness and people taking care of themselves and you know them, reaching their goals and what's important to them is also a major factor, but the one thing that you might see just in terms of the distributor recruiting.

By the end of 2028 and that content can be technology content. It can be product content. In addition of course, if we can partner with somebody that can help expand our business in a way that makes economic sense to do that too. So it all has to fit our vision and some investors that Stefan maybe talk more a little bit about the vision.

Numbers versus the preferred member numbers is.

Yeah, Doug. Thanks for the question I think it comes down to when you think about the four things that we've done historically for 45 years.

We did launch two years ago, something that we called Herbalife Premier League, which put a bit of a focus on distributor recruiting.

And what to measure by the inputs for health and wellness by the way I will just kind of my experience. When I came in at <unk> 1991, you were primarily weight loss I had a customer of the question would be how much do you want to lose the measurements would be how much did you weigh. This morning, and then let me take a tape measure and let's measure your hits your waste your size your arms.

Stephan Gratziani: When we did that, there was a little bit of a focus on distributors more than preferred customers. For the first year that we ran the program, it ended up having more of a focus on the distributors. We made an adjustment in 2025 to actually account for preferred customers, because a lot of markets and their models and flows, they really kind of led with preferred customers. So I think as you see those numbers, that, you know, there might be some level of fluctuation. All in all, it really depends on the distributor models. We could have more preferred customers, for example, preferred customers in India; it drives a lot of growth for us. It's not direct distributor recruiting that drives, because it's really attuned to their model and the way that they actually build the business there. So I would say both.

And.

And let's start with those measurements and then let's track so we've always been measuring.

They really kind of led with preferred customers. So I think as you see those numbers.

It's just today in the world of health and wellness what people measure has grown exponentially and so we believe that there is a lot of value in what people are looking at that are insights into their health and their wellness. So in terms of acquisitions and partnerships and things building on what John mentioned in the what to measure space.

There might be some level of fluctuation.

All in all it really depends on the distributor models.

We could have more preferred so for example preferred customers in India. It drives a lot of growth for us, it's not direct distributor recruiting to try it because its really attuned to their model and the way that they actually build the business. There. So I would say both both remain highly interested in an attractive and our distributors are focused on.

There could be some interesting opportunities that policy in that area on the what to take space because for 45 years, we've been telling people what to take which is our herbalife products, but we believe also that in that space. If there are opportunities of products that we believe are beneficial or technologies like personally formulation of <unk>.

Stephan Gratziani: Both remain highly interested and attractive, and our distributors are focused on both.

Both.

William Reuter: Okay, thank you.

Okay. Thank you.

Stephan Gratziani: Thank you.

Thank you.

Operator: One moment for our next question. Our next question comes from the line of Doug Lane from Water Tower Research.

One moment for our next question.

Technologies these could be things that could be interesting because like John said, it aligns with our platform.

Our next question comes from the line of Doug Lane from water Tower research.

What to do space. It's the same thing right, so telling someone and I used to sit down with the customer and light on a piece of paper. This is how youre going to take to shake the day three times your tablets have one normal meal here some protein and takes that you should have we don't do things on paper anymore.

Doug Lane: Yes, hi, good afternoon, everybody. I just want to follow up on the Protocol here. You know, you made these small IP acquisitions last year, and I don't remember Herbalife making a lot of acquisitions in the past. And now you have Ronaldo with an equity partnership in one of your parts of your business. I don't remember you doing a lot of equity partnerships in the past. So is this just one-off opportunistic, or is this part of a new strategy going forward?

Hey, good afternoon everybody.

I just wanted to follow up on the.

Protocol here you may be small IP acquisitions last year, and I don't remember herbalife, making a lot of acquisitions in the past and now you have Ronaldo with an equity partnership in one of your parts of your business and I don't remember you're doing a lot of equity partnerships in the past. So is this just one off opportunistic or is this part of them part of a new.

All happens through a digital layer. So when you think of protocol and you think of actually helping people know what to do and by the way where their measurements are going to come into and then telling them what to take her personally formulating something for them. They need a digital application layer and so not just to be able to tell them what to do but to help them do it like a reminder.

<unk> strategy going forward.

John DeSimone: Hey, Doug, this is John. I think most of that question is going to go to Stephan, but let me see if I can set it up financially anyway for this audience. So, you know, our superpower, our strength is our distribution reach, right? We're in 95 countries, tens of thousands of communities, great reach into the consumer base around the world. We are interested, from an acquisition standpoint, in companies that are relatively small, that have great content, that don't have that distribution, and so we can buy the content and leverage that strength of ours. And for investors, what I think is important to understand is it augments the core business. It's not instead of. Second, it's not a huge use of cash.

Hey, Doug. This is John I think most of that question is going to go to Stefan Let me see if I can set it up financially anyway for this audience.

<unk>.

So.

Are you drinking enough water are you taking in enough protein are you are you eating within the eating window. So so those four buckets what to measure the what's it take to what to do and support in doing it and then the who didn't do it with which is the distributor that we want to connect closer to their customers and so that they can see.

Our superpower, our strength is our distribution reach right. We're in 95 countries tens of thousands of communities.

Great reach into the consumer base around the world.

We are interested from an acquisition standpoint and companies that are relatively small they have great content that don't have that distribution and so we can buy the content and leverage that strength of ours and for the investors, but I think it's important to understand is it augments the core business trying to set up.

Port their customers better to create more value for the customers and gained more value a longer customer someone it refers more solid buys more longer and so and ultimately someone that says I love what you do I love with you about it and I want to be a part of it.

Second is it's not a huge use of cash we're still looking to do small acquisitions, but still good.

John DeSimone: We're still looking to do small acquisitions, but still get our total debt down to $1.4 billion by the end of 2028. That content can be technology content, it can be product content. In addition, of course, if we can partner with somebody that can help expand our business in a way that makes economic sense, we're looking to do that too. So it all has to fit our vision, and so I'm going to pass it to Stephan. He can maybe talk more a little bit about the vision and, you know, how things fit.

To help other people so.

Acquisitions as we look at this it's really about what really fits in our platform vision and in terms of partnerships.

Total debt down to $1 4 billion.

By the end of 2028 and that content can be technology content. It can be product content. In addition of course, if we can partner with somebody that can help expand our business in a way that makes economic sense to do that too. So it all has to fit our vision and so I can pass it to Stephane you can maybe talk more a little bit about the division and helping set yes.

This is what Christina and although this is why we are partners. This is why he has invested because he believes in this vision.

One thing that I will say that this is not a diversification.

Of business for US we don't make these acquisitions, because we think that our direct sales model, we need to diversify and move into other channels. This is an acquisition strategy to support our superpower, which are the 2 million distributors and 95 market.

Stephan Gratziani: Yeah, Doug, thanks for the question. I think it comes down to when you think about the four things that we've done historically for 45 years, it's been the what to measure, right? The inputs for health and wellness. By the way, I'll just kind of... My experience, when I came in in 1991, we were primarily weight loss. If I had a customer, the question would be, how much do you want to lose? The measurements would be, how much did you weigh this morning? Let me take a tape measure, let's measure your hips, your waist, your thighs, your arms, and let's start with those measurements, then let's track. We've always been measuring. It's just today, in the world of health and wellness, what people measure has grown exponentially.

Thanks for the question I think it comes down to when you think about the four things that we've done historically for 45 years.

It's been what to measure by the inputs for health and wellness by the way I'll just kind of my experience. When I came in at 1991, you were primarily weight loss. If I had a customer the question would be how much do you want to lose the measurements would be how much did you weigh. This morning, and then let me take a tape measure and let's measure your hits your waste your size your arms.

The business that we have today is because of them and our whole goal is to give them more interested.

<unk>.

<unk> talked to people bring more people into their business their ecosystem, our ecosystem and deliver more value.

So I think John said, it's small products and services capabilities that can deliver more value to our vision and to our platform and to our distributors into our customers. That's really how we're looking at this.

And let's start with those measurements and then let's track so we've always been measuring.

Stephan Gratziani: So we believe that there's a lot of value in what people are looking at that are insights into their health and their wellness. So in terms of acquisitions and partnerships and, and, and things, building on what John mentioned, in the what to measure space, there could be some interesting opportunities. That's all I'll say in that area. On the what to take space, because for 45 years we've been telling people what to take, which is our Herbalife products, right? We believe also that in that space, if there are opportunities of products that we believe are beneficial or technologies, like personalized formulation of product technologies, these could be things that could be interesting, because like John said, it aligns with our platform. On the what to do space, it's the same thing, right?

No that makes sense. Thanks Stefan.

I appreciate it thanks for the question.

Thank you at this time I would now like to turn the conference back over to Stefan Graziano <unk> for closing remarks.

Well. Thank you everybody to keep this brief but I think we can say that we returned to growth we delivered growth in Q3 Q4 and for the full year of 2025.

Regarding growth in Q1 and for the full year of 2026.

I think the performance is reflected in the team that's really disciplines, we're being fiscally responsible we strengthened the foundation expanding margins generating strong cash flows fortify the balance sheet reduced total leverage down to $2 eight from $3 nine or.

<unk> technologies these could be things that could be interesting because like John said, it aligns with our platform on the what to do space. It's the same thing right, so telling someone and I used to sit down with the customer.

Stephan Gratziani: Telling someone, I used to sit down with a customer and write on a piece of paper, this is how you're going to... You're going to take two shakes a day, three times your tablets, have one normal meal. You know, here's some protein intakes that you should have. We don't do things on paper anymore. It all happens through a digital layer. When you think of protocol, and you think of actually helping people know what to do, and by the way, where their measurements are going to come into, and then telling them what to take or personally formulating something for them, you need a digital application layer. Not just to be able to tell them what to do, but to help them do it. Like a reminder, are you drinking enough water? Are you taking in enough protein?

We are positioning the company for sustainable and profitable growth.

Right on a piece of paper. This is how you're going to take to shake the day three times. Your tablets have one normal meal here some protein and takes that you should have we don't do things on paper anymore. If it all happens to a digital layer. So when you think of protocol and you think of actually helping people know what to do.

And we're looking at things differently.

Number one we understand that our superpower is our distributors in this space and this foundation that was built over 45 years. So now as we announced today a partnership with Cristiana, Ronaldo, which is going to give herbalife.

And by the way where their measurements are going to come into and then telling them what to take her personally formulating something for them. They need a digital application layer and so not just to be able to tell them what to do but to help them do it like a reminder are you drinking enough water are you taking in enough protein are you are you eating within the eating windows. So so those four buckets.

Protocol, and what we can deliver to the world more visibility than ever before.

We recently made some acquisitions, we've are giving us an extension and will give us the possibility of leading in terms of where we believe nutrition is going for the future and we're focused we have not and by the way. This is not a departure from who we are.

Stephan Gratziani: Are you, you know, are you eating within the eating window? So, so those four buckets, the what to measure, the what to take, the what to do and support in doing it, and then the who to do it with, which is the distributor, that we want to connect closer to their customers. And so that they can support their customers better, to create more value for the customers and gain more value. A longer customer, someone that refers more, someone that buys more and longer. And so, and ultimately, someone that says, "I love what you do. I love what you're about, and I want to be a part of this, and I want to help other people." So acquisitions, as we look at this, it's really about what really fits in our platform vision.

But what to measure what to take the what to do in supporting doing it and then the who didn't do it with which is the distributor that we want to connect closer to their customers and so that they can support their customers better to create more value for the customers and gain more value a longer customer someone that refers more someone advisor.

The results that we have today is really about what we've been doing for the last two years. It's the culmination of so many things that we've implemented market optimization efforts. The diamond development Mastermind key account management programs, the Premier League, bringing in Eric or to support our distributor leadership.

More on longer and so and ultimately someone that says I love what you do I love, what you hear about it and I want to be a part of it.

Product launches master classes and GMO in so many different things so doubling down on our existing business doubling down on the fact that we believe that the direct sales channel and our distributors.

Want to help other people so.

Acquisitions as we look at this it's really about what really fits in our platform vision and in terms of partnerships.

Stephan Gratziani: And in terms of partnerships, this is what Cristiano Ronaldo, this is why we are partners. This is why he's invested, because he believes in this vision. The one thing that I will say, that this is not a, you know, diversification of business for us. We, we don't make these acquisitions because we think that our direct sales model, you know, we need to diversify and move into other channels. This is an acquisition strategy to support our superpower, which are the 2 million distributors in 95 markets, that the business that we have today is because of them. And our whole goal is to give them more interested products, opportunities to talk to people, bring more people into their business, their ecosystem, our ecosystem, and deliver more value.

Herbalife and the 45 years and the 60000 nutrition clubs around the world puts us in a position to do something that no. Other company can do and so.

This is what Christina and although this is why we are partners. This is why he has invested because he believes in this vision, but one thing that I will say that this is not a diversification.

So we thank you for.

A business for us we don't make these acquisitions, because we think that our direct sales model, we need to diversify and move into other channels. This is an acquisition strategy to support our superpower, which are the 2 million distributors 95 markets.

Being with us and it's kind of joke, a little bit of an inside joke, because I think I'm ending every quarter every quarter by saying stay tuned next quarter.

And <unk> been doing that so I. Thank you for that and I'll just end with saying stay tuned until next quarter. Thank you everyone.

The business that we have today is because of them and our whole goal is to give them more interested.

This concludes today's conference call. Thank you for participating you may now disconnect.

<unk> opportunities to talk to people bring more people into their business their ecosystem, our ecosystem and deliver more value.

Stephan Gratziani: And so, you know, I think John said it: small products and services, capabilities that can deliver more value to our vision and to our platform, and to our distributors, and to our customers. That's really how we're looking at this.

So you know I think John said, it's small products and services capabilities that can deliver more value to our vision and to our platform and so our distributors into our customers. That's really how we're looking at this.

John DeSimone: ... No, that makes sense. Thanks, Stephan.

No that makes sense. Thanks Stefan.

Stephan Gratziani: Appreciate it. Thanks for the question.

I appreciate it thanks for the question.

Operator: Thank you. At this time, I would now like to turn the conference back over to Stephan Gratziani for closing remarks.

Thank you at this time I would now like to turn the conference back over to Stephane Graziano <unk> for closing remarks.

Stephan Gratziani: Well, thank you, everyone. I'm going to keep this brief, but I think we can say that we've returned to growth. We delivered growth in Q3, Q4, and for the full year of 2025. We're guiding growth in Q1 and for the full year of 2026. I think the performance is reflected in the team that's really disciplined. We're being fiscally responsible. We strengthened the foundation, expanded margins, generating strong cash flows, fortified the balance sheet, reduced total leverage down to 2.8 from 3.9. We're positioning the company for sustainable and profitable growth, and we're looking at things differently. Number one, we understand that our superpower is our distributors and this base and this foundation that was built over 45 years.

Well. Thank you everyone having to keep this brief but I think we can say that we've returned to growth we delivered growth in Q3 Q4 and for the full year of 2025.

Regarding growth in Q1 and for the full year of 2026.

I think the performance is reflected in the team that's really disciplined we're being fiscally responsible we strengthened the foundation expanding margins generating strong cash flows fortify the balance sheet reduced total leverage down to $2 eight from $3 nine are.

Our positioning the company for sustainable and profitable growth and we're looking at things differently.

Stephan Gratziani: So now, as we announced today, a partnership with Cristiano Ronaldo, which is going to give Herbalife protocol and what we can deliver to the world, more visibility than ever before. We recently made some acquisitions that we believe are giving us an expansion and will give us the possibility of leading in terms of where we believe nutrition is going for the future. We're focused. We have not... By the way, this is not a departure from who we are. This, the results that we have today is really about what we've been doing for the last two years. It's the culmination of so many things that we've implemented.

Protocol, and what we can deliver to the world more visibility than ever before.

We recently made some acquisitions that we believe are giving us an expansion and will give us the possibility of leading in terms of where we believe nutrition is going for the future and we're focused we have not and by the way. This is not a departure from who we are the.

The results that we have today is really about what we've been doing for the last two years. It's the culmination of so many things that we've implemented market optimization efforts. The diamond development Mastermind key account management programs are the Premier League, bringing in Eric already to support our distributor leadership.

Stephan Gratziani: Market optimization efforts, the Diamond Development Mastermind, key account management programs, the Premier League, you know, bringing in Eric Borre to support our distributor leadership, product launches, master classes in DMO, and so many different things. So doubling down on our existing business, doubling down on the fact that we believe that the direct sales channel and our distributors and Herbalife in the 45 years and the 60,000 nutrition clubs around the world, puts us in a position to do something that no other company can do. And so we thank you for being with us. And it's kind of joke, a little bit of an inside joke, because I think I'm ending every quarter by saying, "Stay tuned next quarter," and you've been doing that. So I thank you for that, and I'll just end with saying, stay tuned until next quarter.

Product launches masterclasses in demo and so many different things.

Doubling down on our existing business doubling down on the fact that we believe the direct sales channel and our distributors.

Herbalife and the 45 years and the 60000 nutrition clubs around the world puts us in a position to do something that no. Other company can do and so we thank you for being with us and it's kind of joke, a little bit of an inside joke, because I think I'm ending every court every quarter by saying stay tuned.

Next quarter.

And you've been doing that so I. Thank you for that and I'll just end with saying stay tuned until next quarter. Thank you everyone.

Stephan Gratziani: Thank you, everyone.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

Yeah.

[music].

Hum.

[music].

Okay.

[music].

Okay.

[music].

Sure.

[music].

Sure.

[music].

Okay.

Yes.

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

[music].

Yes.

Okay.

Yes.

[music].

Okay.

Yes.

[music].

Yes.

[music].

Okay.

Yes.

Okay.

Sure.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

[music].

Okay.

Thank you.

Okay.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Thanks.

[music].

Okay.

Yes.

Sure.

Okay.

Yes.

Okay.

[music].

Yes.

[music].

Okay.

Yes.

Okay.

Yes.

Yeah.

Thanks.

Okay.

Yes.

Okay.

Yeah.

Alright.

Okay.

[music].

Yes.

Thank you.

Yes.

Okay.

Thanks.

Okay.

Thank you.

Yes.

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Okay.

[music].

Yes.

[music].

Yeah.

Hum.

Okay.

Yeah.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yeah.

Okay.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Yes.

Okay.

Yes.

[music].

Okay.

Thank you.

Okay.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yeah.

Okay.

Yes.

[music].

Yeah.

Yes.

Okay.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Yes.

[music].

Yeah.

Okay.

Sure.

Yes.

[music].

Q4 2025 Herbalife Ltd Earnings Call

Request a DemoDemo

HLF

Herbalife

Earnings