Nu Skin Enterprises (NUS) 15 Feb 232022 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the Fourth Quarter 2022 Nu Skin Enterprises Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Scott Pond, VP of Investor Relations. Please go ahead.

afternoon, good and Victor, everyone. Thanks, call Today President Mark are Napierski, me CEO; on Lawrence, Connie and the and Officer; Tang, Ryan Growth with Chief CFO. Global

statements. made today's SEC actual and filings and discussion refer differ discussed complete include On to will those may involve of be for from anticipated. comments some and a call, results forward-looking these our or These materially uncertainties, today's statements risks release that risks. Please earnings

discussed numbers call, that in in the Also numbers. comparing Please certain our website manner. numbers We may be refer period-to-period consistent from financial obtained non-GAAP investor differ during for our believe numbers comparable these assist results statements. required financial any more of to non-GAAP a financial in reconciliation

it Ryan. to that, And turn with I'll over

Hello, joining us Thanks, Thanks for today. Scott. everybody.

the so impacted a was XXXX environmental year into have to We business and charges. and lot EPS our me $X.XX, globally. at disruptions just dive excluding unanticipated of this. let finished onetime -- of filled year macro that $X.XX revenue with billion a cover, We

year-over-year as in negatively us The million supply the global overall for consumer by and the $XXX impacted $XXX sentiment to as China, which decline factors global which chain. of our accounted approximately due business of shortfall; million; and revenue strict unfavorable majority FX, COVID-related well was in about impacted inflation, which

Pacific. strategic imperatives, in us in our headwinds, these Asia to deliver on X% growth we several Despite foundational revenue and the of made key meaningful Vision X% the which annual XXXX of Southeast Nu U.S. transformation, helped progress

was due year, grew in while to segment FX and Japan reported currency constant also Our in Kong, headwinds. Taiwan the down revenue Hong

the positioned landscape and economy. are capitalize gig to the and personalization, around shifts We beauty that social enormous commerce well remain wellness industries transforming on

review results. me Let our fourth quarter quickly

with a guidance, disciplined non-GAAP ahead favorable Our of along $XXX projection, expense of $X.XX reflecting our revised adjustment. EPS was with well line of control, million while revenue in was tax-related

improvements second conditions the we the in remain many companies, with challenging macro are over expecting half. Like to gradual near term,

approach XXXX, expectations minute. for we're so Mark taking address a conservative just And will to a in setting which

year Nu world's wellness our integrated Vision strategic routes, introduced by direct from to multiyear leading is transformation historic time, the opportunity powered company affiliate selling beauty at Last XXXX, becoming our that this we our platform. and dynamic

including defined to come life, of which We number enable evolution our vision number smart beauty systems; the affiliate-powered the app. go-to-market device affiliate imperatives of are: including one, strategic social X distinct wellness and strategy our build-out to and two, app three, our integrated that apps, number personalized commerce; strategy, Vera EmpowerMe, IoT-connected our to digital of from direct X Stela traditional and our selling our ecosystem, the consumer introduction

key over a of So you let's strategies each milestones and provide the of dive with quarters. these several for roadmap measuring next progress into deeper

from incorporating First, personal the apps personalized industry. and product wellness systems. smart technology nutrition It including EmpowerMe. portfolio, will and comprehensive revolutionary our care insights ML providing IoT-connected our This is and on our recommendations beauty with approach product AI our to consumer in focus and disrupting device

insights the In new purchasing late in via and consumer past, iO we with our insights the landscape surveys, from of research. gathering LumiSpa with entered general a We've customers of XXXX. and gathered launch engaging habits

with insights real and data that We get all usage goals, habits the needs to state we'll like patterns additional and capture will skincare and be integrate of now customers' able time. to of

to which of we through our insight significant believe iO-connected Nu can the in be devices, This depth only Skin advantage a be for captured future. consumer

content personalized lifetime curation be engagement greater will value. product and as our Moving understand effectively able and regimens overall more forward, offer we drive we and consumers, to consumer

noted world's by the With strengthen brand as our to leading device expect Euromonitor. device systems, as position we systems iO beauty

out. consumers In our with a is help well-being. and a device system wellness benefits appearance body breakthrough inside smart recovery, next holistic beauty in device that and revitalized overall and multiple and XXXX, in wellness patent-pending introduce This their beauty body QX. we'll device iO This beginning connected provides new integrated

important device consumers. iO are of portfolio needs part personalized meet seek systems to our we of becoming an increasingly the our as

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of power way wellness and products. marketing and consumers social discover to the will the beauty influencer continue media Next, disrupt

affiliate-powered affiliate promotion. social the continued marketing and and power our to evolve word-of-mouth out model authentic social commitment lead of scale of Our underscores the commerce media reach with through

consumers see authentic seeking salesforce to media trust. they from global they continue products our share unique recommendations We product leveraging ways social in with people love to

the we XXXX, globe. primarily continue our new sales saw unlock our affiliates. around social the to contract initiatives macroeconomic to we intended scalable for test media the In and world, around of due factors Nevertheless, explore to channel power

several a in last well year. U.S. tested a limited initiatives, including as new portion One responsible We on as growth good product-sharing model which for bundles, Price were the products of

increasing selling social like also which Collagen+, Nu and enabled We sharing. several social products introduced Biome new

trend year, new by sharers affiliates social who commerce. our into leaders the outpaced attract paid XXXX, sharers, In introduced business early critical sales are product performance as affiliate a into key insight indicator the to provide of XX%, social we we're model. than business segment to as with by more Last early more encouraged we emerging this greater and

model to other XXXX, a power be new in unleash affiliates, the rewards business recognition Latin our we affiliate-powered enhanced America, the in including America rolling program around of additional will In and out programs initiatives affiliate globe. an and North

to and their to our to empower commerce scale influencers evolve authentic, businesses. army our nano continue will of We social model business global micro

to comprehensive is customer integrating third which third engagement -- the and finally, company, Nu XXXX, the our consumer and and drivers. ecosystem, spectrum productivity, of affiliate affiliate entire from product Vision across and the lifetime CRM other purchase power And of value engagement digital business, discovery of our pillar

introduced we languages limited in features. them. the on them apps, so to that the the how We these Vera products additional consumer's for functionality. globally helps are use April, can English and year enhance working their with needs, X and helps throughout they track identify with see coaches Last Vera apps and product new progress Stela, unique a how products

continue app user Vera experience adding managing engaging we of and and apps use and Stela our by elevate of management efficiently that is streamlining helps businesses business new to and Stela the increase capabilities our and their features. attracting In productivity XXXX, will by one-stop their new affiliates ease customers.

together consultation this AWS capability applying partners, quarter, this new feature into In year. product recommendation personal entirely our we be fact, new later an will our wellness and with AI in

and other extending also permission their Vera features into app are -- into attribution. gain users, the affiliates itself sharing our easily app share We revenue products attribution app Stela our Stela with and customers the being that to visibility receive with into can so recommended

throughout apps. new will digital website North will and extending This of together with beginning platform global experience across we developing we've America begin Infosys in deployment e-commerce e-commerce globally lastly, our a seamless partners, platform and enable XXXX. our been our new QX more And a in that and dynamic

of Vera customers year's the to have monthly average active XXXX, was ratio and monthly QX target of we set approximately For the app approximately our a users this end. by grow average to XX%, active to XX%

for average to ratio paid For year-end the goal monthly monthly average of XX%, users QX for XX%. Stela, active the is to this approximately was close and our affiliates

the and to will X a rider integrated apps as are digital Over theirs. years, and key Vera driver to be our including to next Uber's business our X ecosystem, Stela,

summary, several in XXXX, on conditions made despite the Nu our the some foundational changes business help the initial implementation will propel XXXX, in So of that considerable very we into of progress future. Vision including phase challenging

going dynamic wellness another commitment affiliate world's key have transformation, strategic year becoming galvanized and is initiatives integrated platform. our to to early beauty XXXX company, our from powered be opportunity leading important the by our results and for

to macro environment challenging remains in uncertain the we specifically, year. near in improve the term, expect with steadily While comparisons it the QX throughout

prudent in with in to continue order invest our will management in efforts be cost our expense-reduction to ongoing future. We

conservative achieve Nu to given our macro with guidance, to transparent while our our XXXX. in will progress in being efforts uncertainties, aggressive Vision We our be plans and

So market our let to time me over performance and the the channel through with about that, take turn Connie? Connie you further growth plan. speak to

Thank you, Ryan.

all continue in sales widespread as a our grow market. on factors impact and segments, will acquisition reporting in now, growth on. in we iO consumer been able X has macroeconomic ageLOC focus as of U.S. to we Ryan our across LumiSpa in markets channel constant segments currency were annual our which discussed launched revenue the well our While to had of

followed will smart personalized also markets, the weight approach to system a by several of We launch our second year. in with half the next connected in management device TRMe

us revenue Let continued for and X% on each our challenging our the on of year more In America me subscription grew XXXX, customer color led on Americas, Latin This The give in environment our other macroeconomic markets of this and to enrollment. reporting market offset momentum in our little in to and attributed social growth U.S. a segments. affiliate-powered lead commerce top social decline segment metrics the XX% selling the are segment. activities the focused adoption, to commerce strength customer continues for which drive a for the way U.S., in revenue acquisition. year key in social to the

each revenue ranges than Please environment. as For may to range the X% macroeconomic XXXX, uncertain for due to minus we be projection that note the are projecting from segment, plus larger X%. I normal our provide to

and business decline that Ryan in impacting are continues revenue factors As China and promotional in Mainland other reflected negatively COVID-related challenged activities. noted, our KPIs. be This our to by selling our is

has has restrictions infections. in COVID surge a been to also China in up opening weeks, led it While lifting recent large and

first the remain half As to we year difficult. a anticipate of result, the

growth activities in our are XX% and momentum. future business As of iO-connected the body potential we China XX%. salesforce, device project in we and projecting China, down which typical rebuild a year between this We revitalize introduce our the confident revenue end by of more to the remain time return as our take will China need we system. year in will to we to return Overall, here to and be

this optimism, in currency. launches Taiwan impact our the preview our at gives a year the in The month. heading COVID last Kong, resulting performance was Hong growth the consumer in strong segment, results of of into by us Hong TRMe slight revenue of year markets Kong/Taiwan offset lockdowns in this both largely in of In constant end

volume. the our customer We with project with And past. X% to through Taiwan order increases minus selling discussed up of loyalty customer have in been we to traction segment base growth in gaining from programs this also the acquisition We development X%. range social in have and our

past have inflationary the drives For external and the crisis throughout EMEA we commerce of pressures conflict, in disruptions, business without our consumer year, customer impact typically works and in on and the activities discussed these model social We spending acquisition. that know EMEA strong our region. energy ongoing the

on social coming sharing Nutricentials forward, to customer and Looking Rose X% our annual X%. from range promotion further attraction iO anticipate down with of drive pumps. channel focused to This we we are our Gold momentum year, LumiSpa revenue expanding to up rebuild and

in year, high associated several in Korea early faced and with We in XXXX the headwinds inflation disruptions COVID-related disruptions. South pricing by followed challenging

ageLOC with the impact comp a the the in successful X% XXXX. Meta We for FX negative faced year also of difficult launch and

introduction for Korea newest of that XXXX, first back leader iO and of in with products, half to been year. the of looking half followed the market device and upon TRXX in preview forward of building strong sales launch are TRMe we the the consumer has the our by a our

faced year, we currency, are we X%. currency. local the in XX% achieved Japan, up reported revenue to they FX growth X% headwind a For coming In in down projecting but

key other metrics build into steady, also some sales XXXX. Our activities to with development channel remained leader relatively heading helping momentum,

of half to customer base expand strong expect Collagen+ as year. the Japan Focus market for that launches Japan has and subscriptions, we the been in Beauty first a

projecting to X% For Japan X%. XXXX, grow we are and between

Asia revenue X% constant generated in we the for Pacific, in Southeast currency year. finally, And growth

base is of through strongest customer Asia in these will the markets. for brand TRXX advance Southeast region sales, of continue in TRMe efforts our and XXXX this launch a to increase

the range the called is and to XXXX. which markets acquisitions in In Nu throughout this Asia, of and our revenue will half accelerating Meta, which benefits year, year. customer strong Vision IO our will execute Collagen+ launch combined the year. device We're LumiSpa ageLOC up ageLOC base. our Reset markets region Overall, first anticipate We to on in adoption focused the for also half and of the on the focus efforts our ageLOC system next Sales across ahead X%. programs, from back and with our the channel connected of iO all remained body Southeast of grow X% us XXXX affiliate social commerce to against down productivity expanding continue help of

insights apps, with our we our we systems on gaining connected to customers Stela and and experiences personalized the and are engaging focus smart our value. lifetime greater retaining Vera With from them will also drive device

And over now financial I performance. to will details go our into turn it to Mark Mark? on more

financial and XXXX QX review all us joining of detail. full you, XXXX to Thank give additional then and thanks initial and today. a that provide high-level for Connie, QX will you year include I projections financial and

Relations our visit please information, more website. For Investor

billion, of foreign with company's excluding or or $XXX negative throughout year charges of Earnings reallocation change. per strategic were and For impairment a resource X% the announced $X.XX $X.XX XXXX, the restructuring year $X.XX million. a method associated generated with incurred share impact tax we currency previously and revenue for the

quarter, or strengthen, $XX results. at $XXX.X at guidance the with foreign impact The U.S. impacted to fourth of X% our million, we prior our negative million. generated the currency dollar of For midpoint a continued which negatively revenue

valuation credits offset per Both foreign restructuring at for our previously IRS-approved to quarter previous a a method change, were by $X.XX non-GAAP charges guidance or earnings allowed excluding share which $X.XX reported allowance. and tax favorable and and us exceeded recent impairment tax utilize which the

tax quarter earnings XXXX benefited XXX% per excluding negative fourth and from reported impairment. X.X% negative or a share rate a restructuring Our

margin reported exchange was Nu gross was Gross business be currency QX continued geographic XX.X%. by rates global inflationary Our XX.X% for to foreign our the and pressure. revenue impacted and Skin margin mix, core

XX.X%, the expense of was period. XX revenue below prior-year as Selling points percent basis a

expense XX.X%. selling the business, For core Nu was Skin

year-over-year operational prior original our part efficiencies, XX.X%, throughout concentrating to million against of budget. with $XXX cost As strict focus our million and flat saved we expense administrative year, the general G&A By management on on the declined $XX.X year. over XXXX

margin Operating impairment previously restructuring XX.X% to or XXXX. the the excluding X.X% mentioned quarter This in was quarter X.X% excluding compares charges X% for and charges. fourth or of

expense income $X.X expense reflects million compared $X.X million period. other the The in a a expense prior-year to line

uncertain returning times. We value to continue even to sheet prioritize balance shareholders a and strong during

with $XX During dividends million paid authorization. $XX of on $XXX.X the the million remaining quarter, million in current we repurchased and our stock,

announcement separate approved Board a Directors dividend marks our today, both the In of annual an paying our and which of increase, dividend. XXnd consecutive year increasing

our compared includes levels which partners, from was inventory segment, due XX.X% in prior-year XXXX. Rhyz down to our their customers rebalancing Our the manufacturing to when primarily higher quarter,

and market in overall up our Rhyz profit firm continue products grow Skin our manufacturing anticipate Nu our benefit core XX% entities new X% for our to by chain, supply segment rate. to Our significantly We helping speed to business our XXXX. lowers to generate increase that U.S. tax

incurred to track. In million remain down. year, last began $XX the and project charge million the restructuring which quarter original an the additional on expect fourth million as first wind an efforts, $X restructuring $XX.X Our in quarter, we

pertaining Also, XXXX. finalized all we XXXX. closed an toward Grow The are focused recently results. implications remain in reflected the of matter in of that which resources aligning Vision our outstanding on Tech, We to reported Nu resolution our legal exit was

key for ranges revenue and XXXX give provide regarding guidance me statement some annual items. and Let financial now and additional detail QX several line EPS

uncertain in guidance our Vision us to on with operate mentioned, give and a Ryan continue slightly XXXX, prompting are wider multiyear Nu As ranges. to path we a we transform world, very to business

revenue currency of softest impact million, X%. including $XXX XXXX, a guidance to quarter, foreign is million QX approximately seasonally negative $XXX For our our

and with reflects strong challenges QX. while continued QX in largely year from from a historical decline lapping projection macro Our are sequential last line our average

$X.XX guidance QX Our to and or a to excluding EPS is restructuring tax $X.XX of projected $X.XX and XX%. impairment $X.XX charges rate to XX%

to we Vision be our demonstrate initiative While will XXXX. I we believe quarter, throughout challenging face able progress towards sequential first XXXX a Nu

which projecting year impact. billion $X.XX full X% of to X% foreign we currency the to XXXX, unfavorable are includes $X.XX For revenue a billion,

$X.XX per share earnings expecting restructuring $X.XX and of charges. $X.XX are $X.XX to We impairment to or excluding

to our with X.X% charges, X.X% XX%. operating and to anticipate XX% X.X% restructuring margin a to be to impairment or tax rate We excluding of X.X%

on will of is walk gross several items. rate through to fluctuate, you be geographically. tax generated our I depending Our XXXX profit XXXX now P&L line where project will projected to margin XX%. We XX.X%

strong year. course footprint to sequential gross geographic U.S. shift a We we We a the have margin margin of primarily should erosion this the dollar. and anticipate extent, gross to our will improvements experienced see over due some stabilize and in

We the XX% selling in remain range. to anticipate that expense will XX.X%

and on investing as for the and be to in XX% a general while year innovations, emerging product efficiencies strategically continue dollar we to markets. expense down expect but cost administrative to We technology XX%, see basis

expense, interest income foreign losses Other interest expense, which risen losses investments, gains can rates anticipate have increase as year that and interest will expense although this we on includes do significantly. significantly, currency fluctuate and gains and

capital $XX We $XX We million. the million will year, are increase from project cash $XX and an approximately expense $XX between be of amortization $XX to $XX million. million and $XXX Depreciation approximate will to and million million for spend operations be million, year-over-year. of modeling million $XXX

from beauty and XXXX how discussed all an platform. earlier, we will our direct is opportunity into Ryan Nu a selling Vision wellness business business As about traditional transform integrated

accelerate in EmpowerMe, we and believe strategic and current commerce environment impacted, that platform. business our near-term of as key the to future expand volatile enterprise the imperatives remains our will services social invest opportunities therefore, our affiliate-powered our While macro projections are we

stated our target. to We are operating along committed operational improvement our XX% to the way continuing income

and confidence in ability our during times gives navigate effectively. further sheet turbulent expense strong discipline management this to journey me Our balance proven

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

Instructions]. [Operator

from will from line question Mark of first come Our Stifel. Astrachan the

I related decent us that anticipating guess are projections the some few sort improvement China, just sort could for pretty if year, just interesting questions. of look a your at a through Maybe regions -- through first, outside the of of revenue all walk pretty take you seems you it Mainland 'XX.

how much do get of you're track improving? each the So to for to line what things about is respective be guess, that should region sight that of of that I sort is have whether much of that look you sense comparison? that? And investors a How on of

way, good so by follow-up Mark. growth exception you. and question. China opportunities each noted, with the because Yes, can hear you it's a the we the probably of see for Mark, in projections, comment And as I'm to revenue Yes, we from that of of on sure interest, that's maybe segments,

And we're second the throughout of half out year. to about looking the really is playing your we at, this kind point what way see progress

I and I'm FX will over lessen et think factors, over will cetera, macro -- talking of the time. rest inflation, time, world, lessen impact

perspective, out, that it business core launches also does device a our from Asia especially of TRMe excited iO product some our we're well. businesses, just in where with this really body see we pretty upcoming And but scheduled about,

that to expect remainder the the of throughout build to We growth year. see continue

see do growth, we opportunities each for regions. So currency, of particularly in those constant in

out be years. key. look As X our few we -- those and I But the as mentioned just far very next we're iO as much be revenue and more importance truly going over those, is But which about what going of watching device that to percentage, is go. leading the talking Mark, to a as to for, KPIs, so

a traditional be to apps, digital adoption to from perspective, important. will -- affiliates And versus leaders, these that continue of then the sales the more in which of improve. we are commerce anticipate really growth social which KPI, affiliate The

things we So the I should those are watch. think

carried that's anticipated on most year, Maybe of China lockdown, year. as QX. you'll mid-QX in last last we a were to QX was to fairly strict of unanticipated And QX, opening through really seeing signs interest recall specifically, which in QX, China guide that, had of an quarter. of the our then that. of we It strong sure and up went government And related in was that into I'm

in So comp a we do QX. have tough

a we when can flourishes COVID, people about. global know, going also our there's infection really And and as know, given business on of lot out be We there.

see of So its and pace reactivation population in probably way alleviating kind the we that the the slowly and there. moderates way the with government way into

conservative to do can we growth year. But because to QX. see in possibility China always But must the say, returning And guide the a our by we China of we of be the unexpected. with of end need be

there. And so that's we to kind outlook continue watch that, to but need of our

related unrealistic sales to know, to piece, just in just of probably what as are don't embedding with model And large about China do business terms gatherings. usual back you -- how getting specific there But there? is I the you the think

it? bake then our new think, revenue I on about 'XX? How is talked, flexible And neglected, a the feel like that unrelated, but had the call that Mark implementing into what's Mark, compensation from we last I You models so for just standpoint. structure the should innovation is impacting for

revenue we're We'll come new Maybe back innovation. sure want make on third to I to question, product you're revenue about talking Mark. that clear perhaps? from

Exactly, yes.

Okay.

Okay.

continue new ranges as about So done what fill and Yes, let on of then of we well. the a past. backwards can point, see can revenue, in intimately Connie so general sales But realm that comment kind She your maybe and the direct we've it in to or locally. me there within product companies team China, works traditional more the of past. talk of Mark, moving with to we to kind

et meetings, from question encouraging, We important not severe been absolutely we the alleviate certainly, ability that meetings government anticipate has business, motivating cetera. as channel, in to human the time recognizing. really and terms us, approves no do believe for having over especially There's beings. that's of going China in that as more interaction of And our the in salesforce, face-to-face to value are our

continuing market. to we Nevertheless, approach into lean digital-first to are a

the digital in invest We continue there our business. to proportion to

do so to that. continue And we'll

literally for out good business. and That's But market allows to and thing I mean in more for walking that a that our shops face-to-face, people is our the and around. anticipation more coffee be meet to

that motivation been see meetings from larger and in XXXX as a the reduced -- in us, be back way reduced has has years X to going way, KPIs, will China. and, period the and for salesforce reactivating the has for observation all helpful the particular, significantly, from by training dormant certainly, And you

anticipate we alleviation some So there.

would to Connie, add anything that? you

is Yes. drivers incentives activities not we rejuvenate our add, are confident -- have them but promotional attract allow I customers sales and for would and these and that simply and important most reengage motivation channel, know there have the only and what's are to also can revitalize to not been possible.

ability to And those be that bring execute to communicate we and market, so confidence the strong on to will and those some actually that to would drivers even have reignite. that key

This think half opening the to as we combination of marketplace year, as tactical. we we're in is and that what second be realize the is seeing up, it those is emotional in of will as -- the it of some And optimistic results. business we're practical the the much able

track, would part around internally talked lot a having and couple our we new I'll regular a Mark, a which do We've innovation. you make that that numbers of that And to is reporting actually package. need What about be we define you better of Great. for metric give revenue. product

numbers, the And you future. give in to some something and going we'll expand that's that so just general upon I'm

total. year, made of be Meta, like up that our XX% we iO we're about New What Ryan we as that product to we XX% revenue, our iO and about next our XXXX. revenue so mentioned about, think Collagen+ devices in devices, about looking of talk our products for

business is going from we'll that be that have augment then we'll And be move new our push next to of of to number. we our that our a so would it devices as introduce big iO beyond up of year, -- roughly And number X% products would business. also this that's XX%

Got please? maybe Mark, And CapEx the fourth in quickly, just it. Great. D&A and quarter,

Yes.

out you I'll year. CapEx for break So it didn't the by quarter. I give

CapEx will million So about $XX be million. to year the for $XX

'XX? I mean for

the -- CapEx for XXXX, -- -- it was, for was right I I've got here. Oh, it believe

the $XX it the million. million for year was about and was $XX.X For quarter

please? D&A, And Great.

Yes. amortization year. $XX.X million $XX.X Depreciation and the for for and million was quarter the

[Operator Instructions].

D.A. Our Linda next Davidson. question from come of line from will the Bolton-Weiser

This Bolton-Weiser. is Christina on Linda for

be to U.S. maybe One question the So I driving is ? curious on know, my what the do the of of growth the of question another launch guess kind you model. from been would new what first what the have I'm And business? feedback with you getting think Price

one, so Connie growth the on I'll Christina, One feedback maybe the U.S. in the model Price will the Yes. and additional are, some questions comment, have -- your And two thoughts.

we're still models As affiliates. that to concept a order this I other One early new Price mentioned, new iO to couple LumiSpa the applied promotions in a improve potential we One concept. and really our of Price earning -- testing of product is

in a well, relatively -- Asian our a especially it's very it's And new of concept, markets. many

whether to learning not So undecided as we're roll still continue we'll or to go. that out. We're it we as

our important future is key a growth. that's earnings as Well, know affiliate we part of do early

continue we're Price really go the and ready So but record not what and how play say on things, will in our One new to business. test we'll to exactly

I really some And as of and kind had turn X to periods. that U.S. of then out pleased growth industry I'll years solid we've the with of been the it growth, for really yes, is what the lockdown in COVID have even as has remember, of growth. see sustained you -- mean, U.S., As we tapered of Connie, has the we've continue to consecutive it a to kind the bit pulled

been we've we've able that maintain pleased growth. to So that been

into. has a good to And social sustain primary are and difficult, to the we that While being lean commerce has certainly, been thing. of that driver able continue much comps more the the activity been thing that

on thoughts any But those? of either Connie, additional

only find test work to attraction able and I support leads affiliate that not been particular the earning U.S. customer affiliate think drives acquisition. that No, strong to tactics early the to refine that a base and of market has in opportunity models and strong but

understand found, adaptable, us improving became particular not in media. also increasing but our with subscription were meaning amplify, to from social for standpoint, to socially in engage products They only and last that We are products on messaging were enrollment. to that they also attractive year, simpler relevant and a and that to also extremely demonstrate simpler

development that, they So continued earnings, with opportunities along really we customer that U.S. affiliate with where coupled that, felt the to can a realize the compelling to in growth earlier with lead

[Operator Instructions].

the of will question Citi. next from Our Bender line come Chasen from

I how this give upgrading customers devices? percentage as iO how do them big to many sales. idea often a sense just back devices be want of of to And you you a of specifically, could come already see us Can have how devices? the

reason I customers tech But drive adoption, the something can get or that kind is do that you else? to be to devices. those the upgrade for iO whether that anything connectivity of already is promotion and a have targeted there compelling else

Yes. Chasen. Great question,

device those the importance terms systems attached devices the that of in and the and and systems our for remember of to portfolio. So are that are systems iO of iO integration devices broader -- us, across

product iO, LumiSpa and studies benefit connectivity. we is -- where LumiSpa IO clinical have around example, customer related Collagen+, that benefit a user For which a or

And a about than that, revenue get when but level our we we generally and value but XX% So to into global devices is asking, don't that, think of today. when of detail approximately -- -- little device of more maybe even systems Mark? the we the see you're XX%

lower. It's about little A XX%.

XX%? About

Yes.

Yes, it you're -- the produce. we fluctuates on Meta comes in. products other And right,

The cadence.

XXXX. a look to XX% device important as that the plus we we and to portfolio personalized system But those to iO said, the goal, tail want needs really because -- to And we future, -- our is aspire we lengthen get systems-plus engines, in recommendation by product that. revenue really indicator we so out on as that's -- the the or system balance

a the to window iO from personalization perspective, think are connectivity. a big business systems And so forward we drive when our into about that device how

need where that kind X/X X/X of we balance is get so to to. And believe we to

course, very X% we're QX. of revenue But I it's mentioned early. just less LumiSpa iO today was because than of

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these to start of you may And expense? implications overall would point any have consider promotions? selling what at to ultimately, And that for institutionalize types

Absolutely. Yes.

mentioned I XX% sales fairly activity more XX%. data outpaced last over So healthy affiliates previously a leader so, see than and year, our margin, can that little as in you by a our or the the

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test and refine we And of a -- use to expand. testing so we're model

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up. wouldn't we expect So to that drive

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a So of I here being thank being you part for and this.

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truly believe to will provides that maintain our emerge building prudent focus it; a our that and are who stronger. b, and ultimately sustainable balance companies sheet company's value a resources towards future; those investors a, the for I have that, and healthy clear c, assets vision

much our our time. to XXXX Vision This Nu vision, the the future a build for more the state world path normal as is is certain our roadmap world as a and more it's at future. Skin returns we brighter over Nu and

to call. on look on you joining thank do to for next forward quarter updating progress the So you plan. We us

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

may disconnect. day. have now a Everyone, You great