The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other information, including our condensed consolidated financial statements and related notes included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, and Part I, Item 1A, Risk Factors, and our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2025, or the 2025 10-K. Unless the context otherwise requires, all references herein to the “Company,” “we,” “us” or “our,” or similar terms, refer to Herbalife Ltd., a Cayman Islands exempted company with limited liability, and its consolidated subsidiaries. Overview We are a global nutrition company that sells weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products to and through independent members, or Members. In China, we sell our products to and through independent service providers and sales representatives to customers and preferred customers, as well as through Company-operated retail platforms when necessary. We refer to Members that distribute our products and achieve certain qualification requirements as “sales leaders.” We provide high-quality, science-backed products to Members and their customers who seek a healthy lifestyle and we also offer a business opportunity to those Members who seek additional income. We believe enhanced consumer awareness and demand for our products due to global trends such as the obesity epidemic, increasing interest in a fit and active lifestyle, living healthier, and the rise of entrepreneurship, coupled with the effectiveness of personalized selling through a direct sales channel, have been the primary reasons for our continued success. Our products are grouped in four principal categories: weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition, along with literature, promotional, and other items. Our products are often sold through a series of related products and literature designed to simplify weight management and nutrition for consumers and maximize our Members’ cross-selling opportunities. While we continue to monitor the current global financial environment, including the impacts of inflation, foreign exchange rate fluctuations, the wars in Ukraine and the Middle East, trade tensions, including U.S. tariffs and retaliatory tariffs from foreign countries and other factors, we remain focused on the opportunities and challenges in retailing our products and enhancing the customer experience, sponsoring and retaining Members, improving Member productivity, further penetrating existing markets, globalizing successful Daily Methods of Operation, or DMOs, such as Nutrition Clubs, Fit Clubs, and Weight Loss Challenges, introducing new products and globalizing existing products, developing niche market segments and further investing in our infrastructure. We sell our products in five geographic regions: •North America; •Latin America, which consists of Mexico and South and Central America; •EMEA, which consists of Europe, the Middle East, and Africa; •Asia Pacific (excluding China); and •China. On July 15, 2016, we reached a settlement with the U.S. Federal Trade Commission, or FTC, and entered into the Consent Order, which resolved the FTC’s multi-year investigation of the Company. We continue to monitor the impact of the Consent Order and our Audit Committee assists our board of directors in overseeing continued compliance with the Consent Order. While we currently do not expect the settlement to have a long-term and materially adverse impact on our business and our Member base, our business and our Member base, particularly in the U.S., may be negatively impacted. The terms of the Consent Order do not change our going to market through direct selling by independent distributors, and compensating those distributors based upon the product they and their sales organization sell. See Part I, Item 1A, Risk Factors, of the 2025 10-K for a discussion of risks related to the settlement with the FTC. 38 Certain Factors Impacting Results Global inflationary pressures and other macroeconomic factors such as foreign exchange rate fluctuations and geopolitical conflicts can impact our financial condition, results of operations and liquidity. For example, inflationary pressure impacts both our cost structures and our pricing. During the six months ended June 30, 2026, we instituted pricing increases in certain markets to address region or market-specific conditions. We also instituted localized pricing actions in 2025. These actions are discussed further in the Sales by Geographic Region discussion further below. We continue to examine our cost structure and assess additional potential incremental pricing actions in response to ongoing inflationary pressures, including due to rising energy prices, and any tariffs and retaliatory tariffs imposed by the U.S. or foreign governments which could have a significant adverse impact to our business, which includes our Mexico market where our U.S. manufacturing operations provide a significant amount of finished goods inventory to our Mexico operations. The war in the Middle East has not had a direct material impact on our results. However, we are exposed to volatility in energy and oil markets, which could materially impact manufacturing, transportation, and packaging costs. Maritime restrictions in the Strait of Hormuz will continue to influence this risk. Significant increases in fuel, utilities, and petroleum-based inputs may materially increase our cost of goods sold and logistics expenses, and these increases may not be fully offset through pricing actions, which could adversely impact our margins and operating results. The war in Ukraine has also impacted our results there as well as in Russia and certain neighboring markets; we do not have any manufacturing operations in Russia and Ukraine and our combined total assets in Russia and Ukraine, which primarily consists of short-term assets, was approximately 1% of our consolidated total assets as of June 30, 2026. Given the unpredictable and fluid nature of these factors, we are unable to predict the extent to which they will adversely impact our business, financial condition, and results of operations, including the impact they may have on our geographic regions and individual markets. See Summary Financial Results and Sales by Geographic Region for more specific discussion of these and other factors. See Part I, Item 1A, Risk Factors, of the 2025 10-K for a further discussion of risks related to these matters. Presentation “Net sales” represent product sales to our Members, net of “distributor allowances,” and inclusive of any shipping and handling revenues, as described further below. Our Members purchase product from us at a suggested retail price, less discounts referred to as “distributor allowance.” Each Member’s level of discount is determined by qualification based on their volume of purchases. In cases where a Member has qualified for less than the maximum discount, the remaining discount, which we also refer to as a wholesale commission, is received by their sponsoring Members. Distributor allowances may also vary by country depending upon regulatory restrictions that limit or otherwise restrict distributor allowances. We also offer reduced distributor allowances with respect to certain products worldwide. For U.S. GAAP purposes, shipping and handling services relating to product sales are recognized as fulfillment activities on our performance obligation to transfer products and are therefore recorded within net sales as part of product sales and are not considered as separate revenues. In certain geographic markets, we have introduced segmentation of our Member base into two categories: “preferred members” – who are simply consumers who wish to purchase product for their own household use, and “distributors” – who are Members who also wish to resell products or build a sales organization. Additionally, in certain markets we are simplifying our pricing by eliminating certain shipping and handling charges and recovering those costs within suggested retail price. Our international operations have provided and will continue to provide a significant portion of our total net sales. As a result, total net sales will continue to be affected by fluctuations in the U.S. dollar against foreign currencies. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, in addition to comparing the percent change in net sales from one period to another in U.S. dollars, we also compare the percent change in net sales from one period to another period using “net sales in local currency.” Net sales in local currency is not a U.S. GAAP financial measure. Net sales in local currency removes from net sales in U.S. dollars the impact of changes in exchange rates between the U.S. dollar and the local currencies of our foreign subsidiaries, by translating the current period net sales into U.S. dollars using the same foreign currency exchange rates that were used to translate the net sales for the previous comparable period. We believe presenting net sales in local currency is useful to investors because it allows a meaningful comparison of net sales of our foreign operations from period to period. However, net sales in local currency measures should not be considered in isolation or as an alternative to net sales in U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP. 39 Our “gross profit” consists of net sales less “cost of sales,” which represents our manufacturing costs, the price we pay to our raw material suppliers and manufacturers of our products as well as shipping and handling costs, including duties, tariffs, and similar expenses. Our “selling expenses” primarily consists of certain compensation to our Members. Our sales leader Members may also earn sales commissions and bonuses, which are also considered Member compensation. Globally, excluding China, while certain Members may profit from their activities by reselling our products for amounts greater than the prices they pay us, Members that develop, retain, and manage other Members may earn Member compensation for those activities, which is paid based on retail sales volume of certain other Members who are sponsored directly or indirectly by the Member. This Member compensation is a significant operating expense. In China, our independent service providers are compensated for marketing, sales support, and other services; the majority of these service fees to China independent service providers are also recognized as operating expenses. Member compensation, excluding China, also includes the Mark Hughes bonus payable to some of our most senior Members and other discretionary incentive payments to qualifying Members. Collectively, all of these Member compensation operating expenses are within selling expenses. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for additional details regarding prior period selling expense amounts being reclassified to conform to current period presentation. Because of local country regulatory constraints, we may be required to modify our Member incentive plans as described above. We also pay reduced Member compensation with respect to certain products worldwide. Consequently, the total Member compensation percentage may vary over time. Our “contribution margins” consist of net sales less cost of sales and selling expenses, as discussed further below and described in Note 6, Segment Information, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. “General and administrative expenses” represent our operating expenses, which include labor and benefits, sales events, professional fees, travel and entertainment, Member promotions, occupancy costs, communication costs, bank fees, depreciation and amortization, foreign exchange gains and losses, and other miscellaneous operating expenses. Our “other operating income” consists of government grant income related to China. Our “other expense, net” consists of non-operating income and expenses such as gains or losses on extinguishment of debt. Most of our sales to Members outside the United States are made in the respective local currencies. In preparing our financial statements, we translate revenues into U.S. dollars using average exchange rates. Additionally, the majority of our purchases from our suppliers generally are made in U.S. dollars. Consequently, a strengthening of the U.S. dollar versus a foreign currency can have a negative impact on gross profit and can generate foreign currency losses on intercompany transactions. Foreign currency exchange rates can fluctuate significantly. From time to time, we enter into foreign currency derivatives to partially mitigate our foreign currency exchange risk as discussed in further detail in Part I, Item 3, Quantitative and Qualitative Disclosures about Market Risk, of this Quarterly Report on Form 10-Q. Summary Financial Results Net sales were $1,326.8 million and $2,644.0 million for the three and six months ended June 30, 2026, respectively. Net sales increased $67.7 million, or 5.4%, and $163.2 million, or 6.6%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 5.8% and 5.6% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 5.4% increase in net sales for the three months ended June 30, 2026 was primarily driven by a 5.8% increase in sales volume, and a 3.0% favorable impact of price increases, partially offset by a 3.0% unfavorable impact of sales mix and a 0.4% unfavorable impact of fluctuations in foreign currency exchange rates. The 6.6% increase in net sales for the six months ended June 30, 2026 was primarily driven by a 5.0% increase in sales volume, a 3.1% favorable impact of price increases, and a 1.0% favorable impact of fluctuations in foreign currency exchange rates, partially offset by a 2.5% unfavorable impact of sales mix. 40 Net loss attributable to Herbalife was $26.3 million, or $0.25 per diluted share, and net income attributable to Herbalife was $35.6 million, or $0.33 per diluted share, for the three and six months ended June 30, 2026, respectively. Net income attributable to Herbalife decreased $75.6 million, or 153.3%, and $64.1 million, or 64.3%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decrease in net income attributable to Herbalife for the three months ended June 30, 2026 was mainly due to $94.6 million of loss on extinguishment of debt related to our April 2026 debt refinancing, $27.7 million higher general and administrative expenses driven by higher labor and benefits costs and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), $20.1 million higher selling expenses driven by higher net sales, and $7.0 million higher income taxes; partially offset by $48.3 million higher gross profit driven by higher net sales, and $16.2 million lower interest expense, net, partially as a result of our April 2026 debt refinancing. The decrease in net income attributable to Herbalife for the six months ended June 30, 2026 was mainly due to $94.6 million of loss on extinguishment of debt related to our April 2026 debt refinancing, $58.8 million higher general and administrative expenses driven by higher labor and benefits costs, and higher non-income tax expenses mainly from India GST (see General and Administrative Expenses below for further discussion), and $48.5 million higher selling expenses driven by higher net sales; partially offset by $117.9 million higher gross profit driven by higher net sales, and $21.4 million lower interest expense, net, partially as a result of our April 2026 debt refinancing. Net loss attributable to Herbalife for the three months ended June 30, 2026 included a $94.6 million pre-tax unfavorable impact ($74.6 million post-tax) of loss on debt extinguishment from our April 2026 debt refinancing, $3.3 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $1.3 million pre-tax unfavorable impact ($0.9 million post-tax) of Optimization Program expenses, and a $1.1 million pre-tax unfavorable impact ($0.7 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs. Net income attributable to Herbalife for the six months ended June 30, 2026 included a $94.6 million pre-tax unfavorable impact ($74.6 million post-tax) of loss on debt extinguishment from our April 2026 debt refinancing, $8.7 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $3.5 million pre-tax unfavorable impact ($2.4 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs and a $1.3 million pre-tax unfavorable impact ($0.9 million post-tax) of Optimization Program expenses. The income tax impact of the expenses discussed above is based on forecasted items affecting our 2026 full year effective tax rate. Adjustments to forecasted items unrelated to these expenses, as well as impacts related to interim reporting, will have an effect on the income tax impact of these items in subsequent periods. Net income attributable to Herbalife for the three months ended June 30, 2025 included $7.8 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $3.6 million pre-tax unfavorable impact ($2.6 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, a $0.7 million pre-tax unfavorable impact ($0.5 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, and a $0.4 million pre-tax unfavorable impact ($0.3 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools. Net income attributable to Herbalife for the six months ended June 30, 2025 included $12.9 million favorable deferred income tax impacts relating to the changes in the Company’s corporate entity structure in 2024, a $4.0 million pre-tax unfavorable impact ($2.9 million post-tax) of Restructuring Program expenses, primarily relating to employee retention and separation costs, a $3.6 million pre-tax unfavorable impact ($2.6 million post-tax) of Technology Realignment Program expenses, primarily relating to employee retention and separation costs, and a $2.8 million pre-tax unfavorable impact ($2.3 million post-tax) of expenses relating to our new Digital Technology Program focused on enhancing and rebuilding our Member facing technology platform and web-based Member tools. Results of Operations Our results of operations for the periods below are not necessarily indicative of results of operations for future periods, which depend upon numerous factors, including our ability to sponsor Members and retain sales leaders, further penetrate existing markets, introduce new products and programs that will help our Members increase their retail efforts and develop niche market segments. 41 The following table sets forth selected results of our operations expressed as a percentage of net sales for the periods indicated: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Operations: Net sales 100.0 % 100.0 % 100.0 % 100.0 % Cost of sales 22.3 22.0 22.2 21.9 Gross profit 77.7 78.0 77.8 78.1 Selling expenses(1) 35.1 35.4 35.1 35.4 General and administrative expenses(1) 32.9 32.5 32.8 32.6 Other operating income — (0.4 ) (0.2 ) (0.2 ) Operating income 9.7 10.5 10.1 10.3 Interest expense, net 2.8 4.2 3.2 4.3 Other expense, net 7.2 — 3.6 — (Loss) Income before income taxes (0.3 ) 6.3 3.3 6.0 Income taxes 1.7 2.4 2.0 2.0 Net (loss) income (2.0 )% 3.9 % 1.3 % 4.0 % (1)Prior period amounts were reclassified to conform to current period presentation. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for additional details. Reporting Segment Results We aggregate our operating segments, excluding China, into a reporting segment, or the Primary Reporting Segment. The Primary Reporting Segment includes the North America, Latin America, EMEA, and Asia Pacific regions. China has been identified as a separate reporting segment as it does not meet the criteria for aggregation. See Note 6, Segment Information, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion of our reporting segments. See below for discussions of net sales and contribution margin by our reporting segments. Net Sales by Reporting Segment The Primary Reporting Segment reported net sales of $1,266.4 million and $2,526.6 million for the three and six months ended June 30, 2026, respectively, representing an increase of $87.3 million, or 7.4%, and $190.6 million, or 8.2%, respectively, as compared to the same periods in 2025. In local currency, net sales increased 8.2% and 7.4% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 7.4% increase in net sales for the three months ended June 30, 2026 was primarily due to a 7.3% increase in sales volume and a 3.2% favorable impact of price increases, partially offset by a 2.3% unfavorable impact of sales mix and a 0.8% unfavorable impact of fluctuations in foreign currency exchange rates. The 8.2% increase in net sales for the six months ended June 30, 2026 was primarily due to a 6.1% increase in sales volume, a 3.3% favorable impact of price increases, and a 0.8% favorable impact of fluctuations in foreign currency exchange rates, partially offset by a 2.0% unfavorable impact of sales mix. For a discussion of China’s net sales for the three and six months ended June 30, 2026 as compared to the same periods in 2025, see the China section of Sales by Geographic Region below. Contribution Margin by Reporting Segment As discussed above under “Presentation,” contribution margin consists of net sales less cost of sales and selling expenses. The Primary Reporting Segment reported contribution margin of $543.3 million, or 42.9% of net sales, and $1,087.2 million, or 43.0% of net sales for the three and six months ended June 30, 2026, respectively, representing an increase of $35.6 million, or 7.0%, and $79.7 million, or 7.9%, respectively, as compared to the same periods in 2025. The 7.0% increase in contribution margin for the three months ended June 30, 2026 was primarily the result of a 7.3% favorable impact of sales volume increases and a 5.2% favorable impact of price increases, partially offset by a 3.5% unfavorable impact of sales mix and a 1.1% unfavorable impact of foreign currency fluctuations. The 7.9% increase in contribution margin for the six months ended June 30, 2026 was primarily the result of a 6.1% favorable impact of sales volume increases and a 5.3% favorable impact of price increases, partially offset by a 3.0% unfavorable impact of sales mix. 42 China reported contribution margin of $21.2 million and $41.6 million for the three and six months ended June 30, 2026, respectively, representing a decrease of $7.4 million, or 25.9%, and of $10.3 million, or 19.8%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 25.9% decrease in contribution margin for the three months ended June 30, 2026 was primarily the result of a 28.7% unfavorable impact of sales volume decreases, and a 2.3% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by a 7.7% favorable impact of foreign currency fluctuations. The 19.8% decrease in contribution margin for the six months ended June 30, 2026 was primarily the result of a 23.7% unfavorable impact of sales volume decreases, and a 1.7% unfavorable impact of cost changes related to self-manufacturing and sourcing, partially offset by an 8.0% favorable impact of foreign currency fluctuations. Sales by Geographic Region Net sales by geographic region were as follows: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 % Change June 30, 2026 June 30, 2025 % Change (Dollars in millions) North America $ 273.0 $ 272.4 0.2 % $ 520.6 $ 526.8 (1.2 )% Latin America 245.0 210.2 16.6 % 487.0 416.9 16.8 % EMEA 277.8 287.9 (3.5 )% 552.6 561.2 (1.5 )% Asia Pacific 470.6 408.6 15.2 % 966.4 831.1 16.3 % China 60.4 80.0 (24.5 )% 117.4 144.8 (18.9 )% Worldwide $ 1,326.8 $ 1,259.1 5.4 % $ 2,644.0 $ 2,480.8 6.6 % Changes in net sales are directly associated with the retailing of our products, recruitment of new Members, and retention of sales leaders. Our strategies involve providing quality products, improved DMOs, including daily consumption approaches such as Nutrition Clubs, easier access to product, systemized training and education of Members on our products and methods, leveraging technology to make it easier for our Members to do business, and continued promotion and branding of Herbalife products. Management’s role, in-country and at the region and corporate level, is to provide Members with a competitive, broad, and innovative product line, offer leading-edge business tools and technology services, and encourage strong teamwork and Member leadership to make doing business with Herbalife simple. We continue to provide our Members with enhanced technology tools, which includes updated brand sites, for ordering, business performance, and customer retailing to make it easier for them to do business with us and to optimize their customers’ experiences. Management uses the Marketing Plan, which reflects the rules for our global network marketing organization that specify the qualification requirements and general compensation structure for Members, coupled with educational, training, and motivational programs and promotions to encourage Members to increase retailing, retention, and recruiting, which in turn affect net sales. Such programs include sales events such as Extravaganzas, Leadership Development Weekends and World Team Schools where large groups of Members network with other Members, learn retailing, retention, and recruiting techniques from our leading Members, and become more familiar with how to market and sell our products and business opportunities. Accordingly, management believes that these development and motivation programs increase the productivity of the sales leader network. The expenses for such programs are included in general and administrative expenses. We also use event and non-event product promotions to motivate Members to increase retailing, retention, and recruiting activities. These promotions have prizes ranging from qualifying for events to product prizes and vacations. In a number of markets, we have segmented our Member base into “preferred members” and “distributors” for more targeted and efficient communication and promotions for these two differently motivated types of Members. In certain other markets that have not been segmented, we use Member data to similarly categorize Members for communication and promotion efforts. DMOs are being generated in many of our markets and are globalized where applicable through the combined efforts of Members and country, regional and corporate management. While we support a number of different DMOs, one of the most popular DMOs is the daily consumption DMO. Under our traditional DMO, a Member typically sells to its customers on an infrequent basis (e.g., monthly) which provides fewer opportunities for interaction with their customers. Under a daily consumption DMO, a Member interacts with its customers on a more frequent basis, including such activities as weekly weigh-ins, which enables the Member to better educate and advise customers about nutrition and the proper use of the products and helps promote daily usage as well, thereby helping the Member grow his or her business. Specific examples of globalized DMOs include the Nutrition Club concept in Mexico and the Weight Loss Challenge in the United States. Management’s strategy is to review the applicability of expanding successful country initiatives throughout a region, and where appropriate, support the globalization of these initiatives. 43 The factors described above help Members increase their business, which in turn helps drive sales volume growth in our business, and thus, net sales growth. The discussion below of net sales details some of the specific drivers of changes in our business and causes of sales fluctuations during the three and six months ended June 30, 2026, as compared to the same periods in 2025, as well as the unique growth or contraction factors specific to certain geographic regions or significant markets within a region during these periods. Net sales fluctuations, both Company-wide and within a particular geographic region or market, are primarily the result of changes in sales volume, changes in prices, or changes in foreign currency translation rates. The discussion of changes in net sales quantifies the impact of those drivers that are quantifiable such as changes in foreign currency translation rates, and cites the estimated impact of any significant price changes. The remaining drivers, which management believes are the primary drivers of changes in volume, are typically qualitative factors whose impact cannot be quantified. Global inflationary pressures, supply chain challenges and other macroeconomic factors such as foreign exchange rate fluctuations, geopolitical conflict, and rising trade tensions, including U.S. tariffs and retaliatory tariffs from foreign countries, may impact both our cost structures and our pricing, with potential adverse sales volume impact. However, given the unpredictable, unprecedented, and fluid nature of these factors, we are unable to predict the extent to which they will adversely impact our business, financial condition, and results of operations, including the impact it may have on our regions and individual markets. We continue to examine our cost structure and assess potential incremental pricing actions in response to ongoing inflationary pressures which could impact our net sales and sales volumes. See below for a more detailed discussion of each geographic region and individual market. North America The North America region reported net sales of $273.0 million and $520.6 million for the three and six months ended June 30, 2026, respectively. Net sales increased $0.6 million, or 0.2%, and decreased $6.2 million, or 1.2%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 0.2% and decreased 1.2% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 0.2% increase in net sales for the three months ended June 30, 2026 was primarily due to a 2.9% favorable impact of price increases, partially offset by a 1.9% decrease in sales volume and a 0.8% unfavorable impact of sales mix. The 1.2% decrease in net sales for the six months ended June 30, 2026 was primarily due to a 3.4% decrease in sales volume, partially offset by a 2.7% favorable impact of price increases. North America’s sales volume decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, and the decreases were less than the prior year period decreases. Net sales in the U.S. were $266.3 million and $507.6 million for the three and six months ended June 30, 2026, respectively. Net sales increased $1.0 million, or 0.4%, and decreased $5.4 million, or 1.1%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. We are supporting Members and Members’ Nutrition Clubs, which are an important DMO in the market, with new product launches, a training and recognition program, targeted communications and sales incentives, as well as modernizing our technological tools including E-commerce tools, in order to enhance our Members’ ability to market and sell our products and promote business opportunities. During the first quarter of 2026, our preferred members in the North America region began transitioning to our new E-commerce platform and we implemented updates to our preferred member loyalty program. In July 2026, we launched Bioniq, our next generation of personalized products, as well as new products within our Life I/O portfolio in North America, which includes a protein-based product and a ketone-based energy product. These launches are part of our ongoing efforts to provide innovative product offerings and support Member engagement. We will continue to monitor market adoption and the impact of these initiatives on future operating results. The majority of the region implemented 3.0% price increases during January 2026. The majority of the region implemented 2.3% price increases during January 2025. Latin America The Latin America region reported net sales of $245.0 million and $487.0 million for the three and six months ended June 30, 2026, respectively. Net sales increased $34.8 million, or 16.6%, and $70.1 million, or 16.8%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 8.2% and 7.5% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 16.6% increase in net sales for the three months ended June 30, 2026 was primarily due to a 8.4% favorable impact of fluctuations in foreign currency exchange rates, a 4.9% favorable impact of price increases, a 1.9% increase in sales volume, and a 1.4% favorable impact of sales mix. The 16.8% increase in net sales for the six months ended June 30, 2026 was primarily due to a 9.3% favorable impact of fluctuations in foreign currency exchange rates, a 6.1% favorable impact of price increases, and a 1.5% favorable impact of sales mix, partially offset by a 0.1% decrease in sales volume. Latin America’s sales volume increased for the second quarter of 2026 as compared to the same period in 2025, and the increase was less than the prior year period increase, and sales volume slightly decreased for the first half of 2026, after having an increase for the same period in 2025. 44 Net sales in Mexico were $161.0 million and $315.1 million for the three and six months ended June 30, 2026, respectively. Net sales increased $23.8 million, or 17.3%, and $51.4 million, or 19.5%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 4.7% and 4.7% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had a favorable impact of $17.5 million and $39.0 million on net sales for the three and six months ended June 30, 2026, respectively. Mexico’s sales volume was flat for the three and six months ended June 30, 2026, as compared to the same periods in 2025. We believe recent localized initiatives, new product launches, and other promotional efforts have provided additional support for Members and Members’ Nutrition Club operations, which continue to be an important DMO in the market. The market saw a 3.7% price increase during February 2026 and smaller price increases on certain products during January 2026. The market saw a 4.2% price increase during February 2025. Across several other markets, net sales increased and were greatest for Peru and Colombia for the three and six months ended June 30, 2026, compared to the same periods in 2025. The majority of markets in the region instituted price increases to address market-specific conditions during the first half of 2026 and 2025. We believe local promotional efforts and new product launches may have been a contributing factor for the increases in sales volume for certain markets in the region during the six months ended June 30, 2026. Certain markets in the region continue to see difficult economic conditions, including political and social instability. Inflationary pressures are improving but remained elevated, and foreign exchange rate fluctuations in certain markets in the region have challenged our Members’ operations and customer demand. Promotional efforts within the region include increasing in-person activities, adding programs, supporting on a market-by-market basis the Nutrition Club DMO, utilizing segmented promotions and sales incentives, and launching new products. EMEA The EMEA region reported net sales of $277.8 million and $552.6 million for the three and six months ended June 30, 2026, respectively. Net sales decreased $10.1 million, or 3.5%, and $8.6 million, or 1.5%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 5.6% and 6.0% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 3.5% decrease in net sales for the three months ended June 30, 2026 was primarily due to a 12.1% decrease in sales volume, partially offset by a 5.3% favorable impact of price increases, a 2.1% favorable impact of fluctuations in foreign currency exchange rates, and a 1.2% favorable impact of sales mix. The 1.5% decrease in net sales for the six months ended June 30, 2026 was primarily due to a 11.5% decrease in sales volume, partially offset by a 5.1% favorable impact of price increases and a 4.5% favorable impact of fluctuations in foreign currency exchange rates. EMEA region’s sales volume decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, and the decreases were more than the prior year period decreases. The EMEA region has no single market that accounts for a significant portion of our consolidated net sales. Certain markets in the region continue to experience adverse economic conditions, such as inflation, weakened consumer confidence, and foreign exchange rate fluctuations, as well as political uncertainty and also experienced declines in net sales for the current quarter and first half of 2026, as compared to the same periods in 2025. The net sales decrease for the three months ended June 30, 2026 as compared to the same period in 2025, was primarily driven by decreases in net sales in Italy and Germany and the net sales decrease for the six months ended June 30, 2026 as compared to the same period in 2025, was primarily driven by decreases in net sales in Germany and Spain. These decreases in net sales for the three and six months ended June 30, 2026, as compared to the same periods in 2025, were partially offset by increased purchases by Russian Members through Kazakhstan, resulting in increases in net sales for Kazakhstan. Focus areas for Herbalife and our Members in the region include promotions and events, simplification of the marketing plan, launching new products, enhancing both online and in person training programs and meetings to help distributors improve their business, supporting Members' Nutrition clubs and other DMOs, and other promotional activities in order to grow our sales in the region. During the second quarter of 2026, we launched Bioniq, our next generation of personalized products in certain markets within the region, including a subscription-based offering. The launch did not have a direct material impact to our net sales during the period. The majority of the markets in the region instituted price increases to address market-specific conditions during the six months ended June 30, 2026 and 2025. 45 Asia Pacific The Asia Pacific region, which excludes China, reported net sales of $470.6 million and $966.4 million for the three and six months ended June 30, 2026, respectively. Net sales increased $62.0 million, or 15.2%, and $135.3 million, or 16.3%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 23.1% and 21.9% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 15.2% increase in net sales for the three months ended June 30, 2026 was primarily due to a 26.2% increase in sales volume and a 0.9% favorable impact of price increases, partially offset by a 7.9% unfavorable impact of fluctuations in foreign currency exchange rates and a 4.0% unfavorable impact of sales mix. The 16.3% increase in net sales for the six months ended June 30, 2026 was primarily due to a 24.1% increase in sales volume and a 1.1% favorable impact of price increases, partially offset by a 5.6% unfavorable impact of fluctuations in foreign currency exchange rates and a 3.3% unfavorable impact of sales mix. The Asia Pacific region saw sales volume increases for the three and six months ended June 30, 2026, compared to the same periods in 2025, after having decreases for the same periods in 2025. Net sales in India were $270.6 million and $546.0 million for the three and six months ended June 30, 2026, respectively. Net sales increased $67.0 million, or 32.9%, and $133.1 million, or 32.2% for the three and six months ended June 30, 2026 as compared to the same periods in 2025. In local currency, net sales increased 47.0% and 42.9% for the three and six months ended June 30, 2026 as compared to the same periods in 2025, respectively. The fluctuation of foreign currency exchange rates had an unfavorable impact of $28.6 million and $44.1 million on net sales for the three and six months ended June 30, 2026, respectively. The sales volume in India increased 45.1% and 40.9% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. India’s sales volume increased for the second quarter of 2026, after having a decrease for the same period in 2025 and the sales volume increase in the India market for the first half of 2026 was more than the sales volume increase experienced during the same period in 2025. To stimulate consumer spending, the India government announced a reduction in Goods and Services Tax (“GST”) rates across multiple sectors, effective on September 22, 2025, which resulted in a tax rate reduction from 18% to 5% for the majority of our products being sold to our Members. We believe the continued impact of this GST rate reduction may have contributed to higher net sales and growth in the India market during the three and six months ended June 30, 2026 as compared to the same periods in 2025. We continue to promote our brand, such as through launching new products, sports sponsorships, and in-person events. The India market had no price increase during the six months ended June 30, 2026 and twelve months ended December 31, 2025. Net sales in Vietnam were $64.6 million and $142.1 million for the three and six months ended June 30, 2026, respectively. Net sales increased $4.4 million, or 7.3%, and $6.5 million, or 4.8%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales increased 8.9% and 7.1% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The fluctuation of foreign currency exchange rates had an unfavorable impact of $1.0 million and $3.2 million on net sales for the three and six months ended June 30, 2026, respectively. The sales volume in Vietnam increased 6.1% and 4.5% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Further changes to Vietnam's direct-selling regulations became effective on July 1, 2026. While certain provisions required immediate compliance, most provisions do not require compliance and implementation until July 1, 2027. We continue to assess the implementation and interpretation of these regulations and monitor their potential impact on our business in Vietnam. Focus areas for the Vietnam market include sports sponsorships, promotional initiatives, and sales events. Members’ Nutrition Club operations continue to be an important DMO in the market which management continues to support. The market implemented a 2.5% price increase in both March 2026 and March 2025. Across several other markets, net sales decreased for the three months ended June 30, 2026 as compared to the same period in 2025, with the greatest decreases in South Korea and Hong Kong, and net sales also decreased for the six months ended June 30, 2026 as compared to the same period in 2025, with the greatest decreases in South Korea and Hong Kong, partially offset by increases in Malaysia and Taiwan. In addition, macroeconomic conditions across the region improved as inflationary pressures in certain markets generally moderated. Our efforts in the region include programs and promotional initiatives to incentivize sales, and launching new products. Most markets in the region instituted price increases to address market-specific conditions during the six months ended June 30, 2026 and 2025. 46 China The China region reported net sales of $60.4 million and $117.4 million for the three and six months ended June 30, 2026, respectively. Net sales decreased $19.6 million, or 24.5%, and $27.4 million, or 18.9%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. In local currency, net sales decreased 29.0% and 23.3% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The 24.5% decrease in net sales for the three months ended June 30, 2026 was primarily due to a 28.7% decrease in sales volume, partially offset by a 4.5% favorable impact of fluctuations in foreign currency exchange rates. The 18.9% decrease in net sales for the six months ended June 30, 2026 was primarily due to a 23.7% decrease in sales volume, partially offset by a 4.4% favorable impact of fluctuations in foreign currency exchange rates. China’s sales volume decreased for the three and six months ended June 30, 2026 as compared to the same periods in 2025, and the decreases were more than the prior year period decreases. The China region had no price increase during the six months ended June 30, 2026 and 2025. In China we continue to enhance our digital capabilities and offerings, such as improving the integration of our technological and enhanced tools to make it easier for our Members to do business, encouraging a customer-based approach, and supporting Nutrition Clubs. We have expanded our product line for the China market and continue to conduct sales promotions in the region. Sales by Product Category Net sales by product category were as follows: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 % Change June 30, 2026 June 30, 2025 % Change (Dollars in millions) Weight Management $ 712.8 $ 690.9 3.2 % $ 1,413.7 $ 1,362.1 3.8 % Targeted Nutrition 401.0 374.2 7.2 % 807.9 740.5 9.1 % Energy, Sports, and Fitness 172.8 154.6 11.8 % 338.0 299.0 13.0 % Outer Nutrition 21.2 19.0 11.6 % 45.8 38.6 18.7 % Literature, Promotional, and Other 19.0 20.4 (6.9 )% 38.6 40.6 (4.9 )% Total $ 1,326.8 $ 1,259.1 5.4 % $ 2,644.0 $ 2,480.8 6.6 % The trends and business factors described in the above discussions of the individual geographic regions apply generally to all product categories. Gross Profit Gross profit was $1,030.5 million and $982.2 million for the three months ended June 30, 2026 and 2025, respectively, and $2,056.6 million and $1,938.7 million for the six months ended June 30, 2026 and 2025, respectively. Gross profit as a percentage of net sales was 77.7% and 78.0% for the three months ended June 30, 2026 and 2025, respectively, or an unfavorable net decrease of 34 basis points, and 77.8% and 78.1% for the six months ended June 30, 2026 and 2025, respectively, or an unfavorable net decrease of 36 basis points. The decrease in gross profit as a percentage of net sales for the three months ended June 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 47 basis points; unfavorable other cost changes of 22 basis points; the unfavorable impact of higher inventory write-downs of 20 basis points; and unfavorable cost changes related to self-manufacturing and sourcing of 9 basis points primarily related to increased allocated overhead costs; partially offset by the favorable impact of price increases of 64 basis points. The decrease in gross profit as a percentage of net sales for the six months ended June 30, 2026 as compared to the same period in 2025 included unfavorable changes in sales mix of 37 basis points; unfavorable cost changes related to self-manufacturing and sourcing of 31 basis points; the unfavorable impact of foreign currency fluctuations of 25 basis points; and unfavorable other cost changes of 21 basis points; partially offset by the favorable impact of price increases of 67 basis points; and the favorable impact of lower inventory write-downs of 11 basis points. Our future gross profit as a percentage of net sales could be negatively impacted if our raw materials and freight costs were to increase as a result of the war and conflict in the Middle East. 47 Generally, gross profit as a percentage of net sales may vary from period to period due to the impact of foreign currency fluctuations, changes in sales mix, price increases, cost changes related to inflation, self-manufacturing and sourcing, and inventory write-downs. Selling Expenses Selling expenses were $466.0 million and $445.9 million for the three months ended June 30, 2026 and 2025, respectively, and $927.8 million and $879.3 million for the six months ended June 30, 2026 and 2025, respectively. Selling expenses as a percentage of net sales were 35.1% and 35.4% for the three months ended June 30, 2026 and 2025, respectively, and 35.1% and 35.4% for the six months ended June 30, 2026 and 2025, respectively. The decrease in selling expenses as a percentage of net sales for both the three and six months ended June 30, 2026 as compared to the same periods in 2025 was primarily due to favorable changes in mix of products and countries. Generally, selling expenses as a percentage of net sales may vary from period to period due to changes in the mix of products and countries. General and Administrative Expenses General and administrative expenses were $436.2 million and $408.5 million for the three months ended June 30, 2026 and 2025, respectively, and $867.6 million and $808.8 million for the six months ended June 30, 2026 and 2025, respectively. General and administrative expenses as a percentage of net sales was 32.9% and 32.5% for the three months ended June 30, 2026 and 2025, respectively, and 32.8% and 32.6% for the six months ended June 30, 2026 and 2025, respectively. The $27.7 million increase in general and administrative expenses for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily driven by $12.0 million in higher non-income tax expenses mainly from higher India GST expenses and $9.0 million higher labor and benefits costs. The $58.8 million increase in general and administrative expenses for the six months ended June 30, 2026 as compared to the same period in 2025 was primarily driven by $26.7 million in higher labor and benefits costs and $20.0 million in higher non-income tax expenses mainly from higher India GST expenses. Other Operating Income We did not recognize any government grant income related to our regional headquarters and distribution centers within China during the three months ended June 30, 2026. The $4.8 million of other operating income for the three months ended June 30, 2025 consisted of $4.8 million of government grant income for China. The $5.5 million of other operating income for six months ended June 30, 2026 consisted of $5.5 million of government grant income for China. The $4.8 million of other operating income for the six months ended June 30, 2025 consisted of $4.8 million of government grant income for China. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion. Interest Expense, Net Interest expense, net was as follows: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 (in millions) Interest expense $ 40.0 $ 55.4 $ 89.5 $ 110.0 Interest income (2.6 ) (1.8 ) (5.3 ) (4.4 ) Interest expense, net $ 37.4 $ 53.6 $ 84.2 $ 105.6 The decrease in interest expense, net for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was primarily due to a decrease in our weighted-average interest rate as a result of April 2026 debt refinancing transactions and a decrease in our overall weighted-average borrowings. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion. 48 Other Expense, Net The $94.6 million of other expense, net for both the three and six months ended June 30, 2026 consisted of a loss on the extinguishment of the 2024 Credit Facility and the 2029 Secured Notes as a result of the April 2026 refinancing (See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further discussion). Income Taxes Income taxes were $22.8 million and $29.8 million for the three months ended June 30, 2026 and 2025, respectively, and $53.2 million and $50.2 million for the six months ended June 30, 2026 and 2025, respectively. The income tax expense decreased for the three months ended June 30, 2026 as compared to the same period in 2025, primarily due to an increase in the tax benefits from discrete events, which includes the tax impact of the loss on extinguishment of debt, partially offset by changes in the geographic mix of our income. The income tax expense increased for the six months ended June 30, 2026 as compared to the same period in 2025, primarily due to changes in the geographic mix of our income, partially offset by an increase in the tax benefits from discrete events, which includes the tax impact of the loss on extinguishment of debt. Liquidity and Capital Resources We have historically met our short- and long-term working capital and capital expenditure requirements, including funding for expansion of operations, through net cash flows provided by operating activities. Variations in sales of our products directly affect the availability of funds. There are no material contractual restrictions on our ability to transfer and remit funds among our international affiliated companies. However, there are foreign currency restrictions in certain countries which could reduce our ability to timely obtain U.S. dollars. Even with these restrictions and the current inflationary environment, which is improving but has remained elevated in certain markets during the six months ended June 30, 2026, we believe we will have sufficient resources, including cash flow from operating activities and longer-term access to capital markets, to meet debt service obligations in a timely manner and be able to continue to meet our objectives. Historically, our debt has not resulted from the need to fund our normal operations, but instead has resulted primarily from our share repurchase programs. Since inception in 2007, total share repurchases amounted to approximately $6.5 billion. While a significant net sales decline could potentially affect the availability of funds, many of our largest expenses are variable in nature, which we believe protects our funding in all but a dramatic net sales downturn. Our $370.5 million cash and cash equivalents as of June 30, 2026 and our senior secured credit facility, in addition to cash flow from operations, can be used to support general corporate purposes, including any future strategic investment opportunities, share repurchases, and dividends. For the six months ended June 30, 2026, we generated $146.7 million of operating cash flow as compared to $96.2 million of operating cash flow generated for the same period in 2025. The increase in our operating cash flow was the result of $35.5 million of higher net income excluding non-cash and reconciling items disclosed within our condensed consolidated statement of cash flows, partially offset by $15.0 million of unfavorable changes in operating assets and liabilities. The $35.5 million of higher net income excluding non-cash and reconciling items was primarily driven by higher gross profit driven by higher net sales, and lower interest expense, net; partially offset by higher selling expenses, and general and administrative expenses (See Summary Financial Results above for further discussion). The $15.0 million of unfavorable changes in operating assets and liabilities included unfavorable changes in accounts payable, and other driven by Oracle Software-as-a-Service (SaaS) implementation costs; partially offset by a favorable change in other current liabilities and inventories. The favorable change in other current liabilities is mainly driven by higher employee bonus payments in 2025, favorable changes in advance sales deposits, and favorable changes in accrued member events and promotions. Capital expenditures, including accrued capital expenditures, were $23.6 million and $39.8 million for the six months ended June 30, 2026 and 2025, respectively. The majority of these expenditures during the six months ended June 30, 2026 represented investments in management information systems, including initiatives to develop enhanced Member tools. We expect to incur total capital expenditures of approximately $50 million to $70 million for the full year 2026, which includes normal ongoing digital technology costs and enhancing member and retail customer facing technology. We also had capitalized implementation costs for cloud-based software applications (SaaS) of $18.0 million and $8.9 million for the six months ended June 30, 2026 and 2025, respectively, which are included in prepaid expenses and other current assets and other assets within our condensed consolidated balance sheet. Amortization expenses are recognized in general and administrative expenses within our condensed consolidated statements of income (loss). We expect to incur capitalizable implementation costs for cloud-based software applications of approximately $35 million to $55 million for the full year 2026. 49 Separate from the capital expenditures described above, we made certain acquisitions. During 2026, we acquired certain assets of Bioniq for total base consideration of $55 million, payable over a five-year period. We made the first payment of $10 million shortly after the Closing Date, which is reflected separately in investing activities within our condensed consolidated statement of cash flows. During 2025, we acquired certain assets of Pruvit, Pro2col LLC, and of Link BioSciences Inc. for an aggregate consideration of approximately $25.5 million, which is reflected separately in investing activities within our condensed consolidated statement of cash flows. Both the 2026 and 2025 acquisitions are subject to post-closing performance targets that may lead to additional cash payments to the sellers. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for further information relating to our acquisitions. In March 2026, we hosted our annual global honors event where sales leaders from around the world met, shared best practices, and conducted leadership training, and our management awarded Members $74.8 million of Mark Hughes bonus payments related to their 2025 performance. In March 2025, our management awarded Members $74.3 million of Mark Hughes bonus payments related to their 2024 performance. During the first quarter of 2024, we initiated a Restructuring Program to streamline our organizational structure to make it more efficient and effective and to allow our management team to work more closely to the markets, distributors, and customers. The Restructuring Program delivered annual savings of approximately $80 million with approximately $50 million of savings realized in 2024 and approximately $80 million of savings realized in 2025 and thereafter. We have incurred total pre-tax expenses of approximately $76.1 million from inception through the end of the Restructuring Program, which was completed as of December 31, 2025. During the three and six months ended June 30, 2025, we incurred $0.7 million and $4.0 million expenses, respectively, which were recognized in general and administrative expenses within the condensed consolidated statement of income (loss). During April 2025, we initiated a process and organizational redesign project of our global technology infrastructure, or the Technology Realignment Program, to better align with new technologies, enhance operational efficiency, and optimize support of business goals and processes. The Technology Realignment Program is expected to deliver annual savings of approximately $13 million beginning in 2026 with approximately $6 million of savings realized in 2025. We have incurred total pre-tax expenses of approximately $12.6 million through June 30, 2026, of which $1.1 million and $3.6 million for the three months ended June 30, 2026 and 2025, respectively, and $3.5 million and $3.6 million for the six months ended June 30, 2026 and 2025, respectively, were recognized in general and administrative expenses within the condensed consolidated statement of income (loss). We expect to incur total pre-tax expenses of approximately $15 million to achieve the projected run-rate savings. Since the Technology Realignment Program is still ongoing and is expected to be completed in 2026, these estimated amounts are preliminary and based on Management’s estimates and actual results could differ from such estimates. During the second quarter of 2026, we initiated a program to optimize our global operating footprint and improve organizational efficiency, or the Optimization Program, which includes the movement and consolidation of certain activities within our global business service centers across multiple regions, as well as other related initiatives. These actions are being undertaken as part of an ongoing enterprise-wide initiative under which we continue to evaluate opportunities to improve operational efficiency and reduce costs. During the three and six months ended June 30, 2026, we incurred $1.3 million of pre-tax expenses, which were recognized in general and administrative expenses within the condensed consolidated statements of income (loss). Since the Optimization Program is still in the early stages, we cannot reasonably estimate the amount and timing of future costs, which remain subject to change based on the scope and progression of activities and any additional opportunities identified. Senior Secured Credit Facility On April 12, 2024, concurrently with the issuance of the $800.0 million aggregate principal amount of senior secured notes, or the 2029 Secured Notes, as described further below, we entered into the eighth amendment to our credit facility. The eighth amendment to the credit facility, among other things, refinanced and replaced in full the credit facility with, (i) a Term Loan B Facility, or the 2024 Term Loan B, with an aggregate principal amount of $400.0 million and (ii) a revolving credit facility, or the 2024 Revolving Credit Facility, with an aggregate principal amount of $400.0 million, collectively the 2024 Credit Facility. The 2024 Term Loan B Facility was issued to the lenders at a 7.00% discount, or $28.0 million, and we incurred approximately $10.3 million of debt issuance costs in connection with the 2024 Credit Facility. 50 Borrowings that utilized SOFR under the 2024 Credit Facility used Adjusted Term SOFR. The applicable interest rates on our borrowings under the 2024 Term Loan B, as amended, bore interest at either, the Adjusted Term SOFR plus a margin of 6.75%, or the base rate plus a margin of 5.75%. Depending on our total leverage ratio, borrowings under the 2024 Revolving Credit Facility bore interest at either the Adjusted Term SOFR plus a margin of between 5.50% and 6.50%, or the base rate plus a margin of between 4.50% and 5.50%. The 2024 Term Loan B required quarterly payments that equaled to 5.0% of the aggregate principal amount of the 2024 Term Loan B per annum, commencing in September 2024. We paid a commitment fee on the 2024 Revolving Credit Facility of, depending on our total leverage ratio, between 0.35% to 0.45% per annum on the undrawn portion of the 2024 Revolving Credit Facility. On April 29, 2026, concurrently with the issuance of the $800.0 million aggregate principal amount of senior secured notes due 2033 or the 2033 Secured Notes, as described further below, we entered into the ninth amendment to our existing credit facility. The ninth amendment to the credit facility, among other things, refinanced and replaced in full the 2024 Credit Facility with, (i) a Term Loan A Facility, or the 2026 Term Loan A, with an aggregate principal amount of $225.0 million and (ii) a revolving credit facility, or the 2026 Revolving Credit Facility, with an aggregate principal amount of $425.0 million, collectively the 2026 Credit Facility. All obligations under the 2026 Credit Facility are unconditionally guaranteed by certain direct and indirect wholly-owned subsidiaries of Herbalife Ltd. and secured on a senior secured basis by the equity interests of certain of Herbalife Ltd.’s subsidiaries and substantially all of the assets of the domestic loan parties. Interest is due at least quarterly on amounts outstanding under the 2026 Credit Facility. Proceeds from the 2026 Credit Facility together with the proceeds from the 2033 Secured Notes and available cash were used to repay indebtedness, including all borrowings outstanding under the 2024 Credit Facility, effectively terminating its $365.0 million outstanding principal balance on the 2024 Term Loan B and fully redeeming the $800.0 million outstanding principal balance on the 2029 Secured Notes described further below. For accounting purposes, pursuant to ASC 470, Debt, these transactions were accounted for as an extinguishment of the 2024 Credit Facility. As a result, we recognized $343.4 million as a reduction to long-term debt representing the carrying value of the 2024 Credit Facility repaid in full in the second quarter of 2026. We also recognized a loss on extinguishment of $21.8 million, as a result, which was recorded in other expense, net within our condensed consolidated statement of income (loss) during the second quarter of 2026. Borrowings utilizing SOFR under the 2026 Credit Facility use Term SOFR. The applicable interest rates on our borrowings under the 2026 Term Loan A and 2026 Revolving Credit Facility, as amended, bear interest at, depending on our total leverage ratio, either the Term SOFR plus a margin of between 2.50% and 3.25%, or the base rate plus a margin of between 1.50% and 2.25%. The base rate represents the highest of the Federal Funds Rate plus 0.50%, one-month Term SOFR plus 1.00%, and the prime rate quoted by The Wall Street Journal, subject to a floor of 1.00%. The 2026 Term Loan A requires quarterly payments that equal to 5.0% of the aggregate principal amount of the 2026 Term Loan A per annum, commencing in September 2026. We will pay a commitment fee on the 2026 Revolving Facility of, depending on our total leverage ratio, between 0.25% to 0.35% per annum on the undrawn portion of the 2026 Revolving Credit Facility. The 2026 Term Loan A and 2026 Revolving Credit Facility mature upon the earlier of (i) April 29, 2031, or (ii) December 16, 2027 if the outstanding principal on the 2028 Convertible Notes exceeds $250.0 million and we exceed certain leverage ratios as of that date, or (iii) December 1, 2028 if the outstanding principal on the 2029 Notes exceeds $300.0 million and we exceed certain leverage ratios as of that date. The 2026 Credit Facility contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations or prohibitions on declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, making loans and investments, incurring additional indebtedness, granting liens, and effecting mergers, asset sales and transactions with affiliates. In addition, the 2026 Credit Facility contains customary events of default. The 2026 Term Loan A and 2026 Revolving Credit Facility requires us to maintain a maximum total leverage ratio of 4.00:1.00. The financial covenants also include a maximum first lien net leverage ratio of 2.50:1.00 and a minimum fixed charge coverage ratio of 2.00:1.00. As of June 30, 2026 and December 31, 2025, we were in compliance with our financial covenants under the 2026 Credit Facility and 2024 Credit Facility, respectively. We are permitted to make voluntary prepayments. These prepayments, if any, will be applied against remaining quarterly installments owed under the 2026 Term Loan A in order of maturity with the remaining principal due upon maturity, unless directed otherwise by us. 51 During the six months ended June 30, 2026, we borrowed an aggregate amount of $603.5 million, including $506.5 million under the 2026 Credit Facility, which included $281.5 million of borrowings under the 2026 Revolving Credit Facility, and $97.0 million under the 2024 Credit Facility, all of which was under the 2024 Revolving Credit Facility, and repaid a total amount of $613.5 million, including $146.5 million on amounts outstanding under the 2026 Credit Facility, all of which was under the 2026 Revolving Credit Facility, and $467.0 million on amounts outstanding under the 2024 Credit Facility, which included $97.0 million of repayments on amounts outstanding under the 2024 Revolving Credit Facility. During the six months ended June 30, 2025, we borrowed an aggregate amount of $270.8 million under the 2024 Credit Facility, all of which was under the 2024 Revolving Credit Facility, and repaid a total amount of $280.8 million on amounts outstanding under the 2024 Credit Facility, which included $270.8 million of repayments on amounts outstanding under the 2024 Revolving Credit Facility. As of June 30, 2026 and December 31, 2025, the U.S. dollar amount outstanding under the 2026 Credit Facility was $360.0 million and 2024 Credit Facility was $370.0 million, respectively. Of the $360.0 million outstanding under the 2026 Credit Facility as of June 30, 2026, $225.0 million was outstanding under the 2026 Term Loan A and $135.0 million was outstanding under the 2026 Revolving Credit Facility. Of the $370.0 million outstanding under the 2024 Credit Facility as of December 31, 2025, $370.0 million was outstanding under the 2024 Term Loan B. There were no borrowings outstanding under the 2024 Revolving Credit Facility as of December 31, 2025. In addition, as of both June 30, 2026 and December 31, 2025, we had an issued but undrawn letter of credit against the 2026 Revolving Credit Facility and 2024 Revolving Credit Facility, as applicable, of approximately $45 million which reduced our remaining available borrowing capacity under the 2026 Revolving Credit Facility and 2024 Revolving Credit Facility, as applicable. As a result of the issued but undrawn letter of credit, as of June 30, 2026 and December 31, 2025, the remaining available borrowing capacity under the 2026 Revolving Credit Facility and 2024 Revolving Credit Facility, as applicable, was approximately $245 million and $355 million, respectively. There were no outstanding foreign currency borrowings under either the 2026 Credit Facility and 2024 Credit Facility as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 the weighted-average interest rate for borrowings under the 2026 Credit Facility and the 2024 Credit Facility for the applicable outstanding period was 8.88% and as of December 31, 2025 the weighted-average interest rate for borrowings under the 2024 Credit Facility was 11.64%. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on the 2026 Credit Facility, 2024 Credit Facility, and the refinancing thereof. Senior Secured Notes due 2029 In April 2024, we issued $800.0 million aggregate principal amount of senior secured notes due 2029, or the 2029 Secured Notes. The 2029 Secured Notes were guaranteed on a senior secured basis by us and each of our existing and future subsidiaries that was a guarantor of the obligations of any domestic borrower under our 2024 Credit Facility. The 2029 Secured Notes paid interest at a rate of 12.250% per annum payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2024. The 2029 Secured Notes had a maturity date of April 15, 2029. The primary purpose of the issuance of the 2029 Secured Notes was to, along with proceeds from the 2024 Credit Facility, repay in full our existing credit facility and a partial redemption and private repurchase of the 2025 Notes. In April 2026, we fully redeemed the 2029 Secured Notes for an aggregate purchase price of approximately $853 million, which included $49.0 million related to the 6.125% call premium and approximately $4 million of accrued and unpaid interest. As of June 30, 2026, there was no outstanding principal on the 2029 Secured Notes. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our 2029 Secured Notes, and the refinancing thereof. Senior Secured Notes due 2033 In April 2026, we issued $800.0 million aggregate principal amount of senior secured notes due 2033, or the 2033 Secured Notes. The 2033 Secured Notes are guaranteed on a senior secured basis by us and each of our existing and future subsidiaries that is a guarantor of the obligations of any domestic borrower under our 2026 Credit Facility. The 2033 Secured Notes pay interest at a rate of 7.750% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2026. The 2033 Secured Notes mature on May 1, 2033. The primary purpose of the issuance of the 2033 Secured Notes was to, along with proceeds from the 2026 Credit Facility, repay in full the 2024 Credit Facility and fully redeem the 2029 Secured Notes. As of June 30, 2026, the outstanding principal on the 2033 Secured Notes was $800.0 million. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our 2033 Secured Notes. 52 Convertible Senior Notes due 2028 In December 2022, we issued $277.5 million aggregate principal amount of convertible senior notes due 2028, or the 2028 Convertible Notes. The 2028 Convertible Notes are senior unsecured obligations which rank effectively subordinate to any of our existing and future secured indebtedness, including amounts outstanding under the 2026 Credit Facility, to the extent of the value of the assets securing such indebtedness. The 2028 Convertible Notes pay interest at a rate of 4.25% per annum payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2023. Unless redeemed, repurchased or converted in accordance with their terms prior to such date, the 2028 Convertible Notes mature on June 15, 2028. The primary purpose of the issuance of the 2028 Convertible Notes was to repurchase a portion of the 2024 Convertible Notes. As of June 30, 2026, the outstanding principal on the 2028 Convertible Notes was $277.5 million. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our 2028 Convertible Notes. Senior Notes due 2025 In May 2020, we issued $600.0 million aggregate principal amount of senior notes due 2025, or the 2025 Notes. The 2025 Notes were senior unsecured obligations which ranked effectively subordinate to any of our existing and future secured indebtedness, including amounts outstanding under the 2024 Credit Facility, to the extent of the value of the assets securing such indebtedness. The 2025 Notes paid interest at a rate of 7.875% per annum payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021. The 2025 Notes matured on September 1, 2025. In April 2024, we redeemed $300.0 million of the 2025 Notes for an aggregate purchase price of $309.1 million, which included $3.2 million of accrued interest. Separately, in April 2024, we also repurchased $37.7 million of the 2025 Notes in a private transaction for an aggregate purchase price of $38.9 million, which included $0.5 million of accrued interest. In February 2025, we redeemed $65.0 million aggregate principal amount of the 2025 Notes for an aggregate purchase price of $67.3 million, which included $2.3 million of accrued and unpaid interest to the redemption date. Additionally, in June 2025, we redeemed $50.0 million aggregate principal amount of the 2025 Notes for an aggregate purchase price of $51.3 million, which included $1.3 million of accrued and unpaid interest to the redemption date. In September 2025, we repaid the $147.3 million remaining aggregate principal amount of the 2025 Notes upon maturity, as well as $5.8 million of accrued and unpaid interest. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our 2025 Notes. Senior Notes due 2029 In May 2021, we issued $600.0 million aggregate principal amount of senior notes due 2029, or the 2029 Notes. The 2029 Notes are senior unsecured obligations which rank effectively subordinate to any of our existing and future secured indebtedness, including amounts outstanding under the 2026 Credit Facility, to the extent of the value of the assets securing such indebtedness. The 2029 Notes pay interest at a rate of 4.875% per annum payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The 2029 Notes mature on June 1, 2029, unless redeemed or repurchased in accordance with their terms prior to such date. The primary purpose of the issuance of the 2029 Notes was to repurchase the senior notes due in 2026 as well as for general corporate purposes, which may include shares repurchases and other capital investment projects. As of June 30, 2026, the outstanding principal on the 2029 Notes was $600.0 million. See Note 4, Long-Term Debt, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for a further discussion on our 2029 Notes. Cash and Cash Equivalents The majority of our foreign subsidiaries designate their local currencies as their functional currencies. As of June 30, 2026, the total amount of our foreign subsidiary cash and cash equivalents was $299.9 million, of which $20.8 million was held in U.S. dollars. As of June 30, 2026, the total amount of cash and cash equivalents held by Herbalife Ltd. and its U.S. entities, inclusive of U.S. territories, was $70.6 million. For earnings not considered to be indefinitely reinvested deferred income taxes have been provided. For earnings considered to be indefinitely reinvested, deferred income taxes have not been provided. Should we make a determination to remit the cash and cash equivalents from our foreign subsidiaries that are considered indefinitely reinvested to Herbalife Ltd. for the purpose of repatriation of undistributed earnings, we would need to accrue and pay taxes. As of December 31, 2025, we do not have any plans to repatriate these unremitted earnings to Herbalife Ltd.; therefore, we do not have any liquidity concerns relating to these unremitted earnings and related cash and cash equivalents. See Note 12, Income Taxes, to the Consolidated Financial Statements included in our 2025 10-K for additional discussion on our unremitted earnings. 53 Off-Balance Sheet Arrangements As of June 30, 2026 and December 31, 2025, we had no material off-balance sheet arrangements except for those described in Note 4, Long-Term Debt, and Note 5, Contingencies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. Dividends We have not declared or paid cash dividends since 2014. The declaration of future dividends is subject to the discretion of our board of directors and will depend upon various factors, including our earnings, financial condition, Herbalife Ltd.’s available distributable reserves under Cayman Islands law, restrictions imposed by the 2026 Credit Facility and the terms of any other indebtedness that may be outstanding, cash requirements, future prospects, and other factors deemed relevant by our board of directors. Share Repurchases The 2026 Credit Facility permits us to repurchase our common shares as long as no default or event of default exists and other conditions, such as specified consolidated leverage ratios, are met. During the three and six months ended June 30, 2026 and 2025, we did not repurchase any of our common shares through open-market purchases. See Note 10, Shareholders’ Deficit, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for a further discussion on our share repurchases. Working Capital and Operating Activities As of June 30, 2026 and December 31, 2025, we had working capital of $195.3 million and $131.8 million, respectively. The $63.5 million increase in working capital was primarily due to increases in cash and cash equivalents, and receivables, along with a decrease in member compensation liabilities; partially offset by a decrease in prepaid expenses and other current assets. We expect that cash and funds provided from operations, available borrowings under the 2026 Credit Facility, and longer-term access to capital markets will provide sufficient working capital to operate our business, to make expected capital expenditures, and to meet foreseeable liquidity requirements for the next twelve months and thereafter. The majority of our purchases from suppliers are generally made in U.S. dollars, while sales to our Members generally are made in local currencies. Consequently, strengthening of the U.S. dollar versus a foreign currency can have a negative impact on gross profit and can generate transaction gains or losses on intercompany transactions. For discussion of our foreign exchange contracts and other hedging arrangements, see Part I, Item 3, Quantitative and Qualitative Disclosures about Market Risk, of this Quarterly Report on Form 10-Q. Contingencies See Note 5, Contingencies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for information on our contingencies as of June 30, 2026. 54 Critical Accounting Policies and Estimates U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. We regularly evaluate our estimates and assumptions related to revenue recognition, allowance for product returns, inventory, goodwill and purchased intangible asset valuations, deferred income tax asset valuation allowances, uncertain tax positions, tax contingencies, and other loss contingencies. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses. Actual results could differ from those estimates. We consider the following policies to be most critical in understanding the judgments that are involved in preparing the financial statements and the uncertainties that could impact our operating results, financial condition and cash flows. We are a nutrition company that sells a wide range of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products. Our products are manufactured by us in our Changsha, Hunan, China extraction facility; Suzhou, China facility; Lake Forest, California facility; and Winston-Salem, North Carolina facility; and by third-party providers, and then are sold to Members who consume and sell Herbalife products to retail consumers or other Members. As of June 30, 2026, we sold products in 95 markets throughout the world and we are organized and managed by geographic region. We aggregate our operating segments into one reporting segment, except China, as management believes that our operating segments have similar operating characteristics and similar long-term operating performance. In making this determination, management believes that the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers to whom products are sold, the methods used to distribute the products, the nature of the regulatory environment, and their economic characteristics. We generally recognize revenue upon delivery when control passes to the Member. Product sales are recognized net of product returns, and discounts referred to as “distributor allowances.” We generally receive the net sales price in cash or through credit card payments at the point of sale. Member compensation, included in selling expenses within our condensed consolidated statements of income (loss), is generally recorded when revenue is recognized. See Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for a further discussion of distributor compensation in the U.S. Allowances for product returns, primarily in connection with our buyback program, are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Historically, product returns and buybacks have not been significant. Product returns and buybacks were approximately 0.1% of net sales for each of the three and six months ended June 30, 2026 and 2025. We adjust our inventories to lower of cost and net realizable value. Additionally, we adjust the carrying value of our inventory based on assumptions regarding future demand for our products and market conditions. If future demand and market conditions are less favorable than management’s assumptions, additional inventory write-downs could be required. Likewise, favorable future demand and market conditions could positively impact future operating results if previously written down inventories are sold. We have obsolete and slow moving inventories which have been adjusted downward $19.4 million and $19.9 million to present them at their lower of cost and net realizable value in our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025, respectively. Goodwill and marketing-related intangible assets not subject to amortization are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. As part of the annual goodwill impairment test, which is performed at the reporting unit level, we may conduct an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In a qualitative assessment, we would consider the macroeconomic conditions, including any deterioration of general conditions and industry and market conditions, including any deterioration in the environment where the reporting unit operates, increased competition, changes in the products/services and regulatory and political developments, cost of doing business, overall financial performance, including any declining cash flows and performance in relation to planned revenues and earnings in past periods, other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation, and events affecting the reporting unit, including changes in the carrying value of net assets. If we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, then we would perform the quantitative goodwill impairment test as required. If we determine that it is not more likely than not that the fair value of the reporting unit is less than the carrying value, then no further testing is required. During fiscal year 2025, we performed a qualitative assessment and determined that it is not more likely than not that the fair value of each reporting unit is less than its respective carrying value. 55 For our marketing-related intangible assets, we may also utilize a qualitative assessment similar to the one described above, with the exception that the test is performed at the consolidated level rather than at the reporting unit level. During fiscal year 2025, we performed a qualitative assessment of our marketing-related intangible assets and determined that it is not more likely than not that the fair value of the assets is less than their carrying value. If we are required to determine the fair value of each reporting unit using the quantitative method, we primarily use an income approach in order to determine the fair value of a reporting unit and compare it to its carrying amount. The determination of the fair value of the reporting units requires us to make significant estimates and assumptions. These estimates and assumptions include estimates of future revenues and expense growth rates, capital expenditures and the depreciation and amortization related to these capital expenditures, discount rates, and other inputs. Due to the inherent uncertainty involved in making these estimates, actual future results could differ. Changes in assumptions regarding future results or other underlying assumptions could have a significant impact on the fair value of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value. If we are required to determine the fair value of our marketing-related intangible assets using the quantitative method, we use a discounted cash flow model, or the income approach, under the relief-from-royalty method to determine the fair value of our marketing-related intangible assets in order to confirm there is no impairment required. An impairment loss is recognized to the extent that the carrying amount of the assets exceeds their fair value. As of June 30, 2026 and December 31, 2025, we had goodwill of approximately $125.9 million and $100.5 million, respectively, or an increase of $25.4 million. Of the $25.4 million increase, $26.8 million was due to the business acquisition of Bioniq, as further described in Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, partially offset by a $1.4 million decrease due to foreign currency translation adjustments. As of both June 30, 2026 and December 31, 2025, we had marketing-related intangible assets of approximately $310.0 million. No goodwill or marketing-related intangibles impairment was recorded during the three and six months ended June 30, 2026 and 2025. Contingencies are accounted for in accordance with FASB ASC Topic 450, Contingencies, or ASC 450. ASC 450 requires that we record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible as required by ASC 450. Accounting for contingencies such as legal and non-income tax matters requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Many of these legal and tax contingencies can take years to be resolved. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. As part of the process of preparing our condensed consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate prior to the completion and filing of tax returns for such periods. These estimates involve complex issues and require us to make judgments about the likely application of the tax law to our situation, as well as with respect to other matters, such as anticipating the positions that we will take on tax returns prior to us actually preparing the returns and the outcomes of disputes with tax authorities. The ultimate resolution of these issues may take extended periods of time due to examinations by tax authorities and statutes of limitations. In addition, changes in our business, including acquisitions, changes in our international corporate structure, changes in the geographic location of business functions or assets, changes in the geographic mix and amount of income, as well as changes in our agreements with tax authorities, valuation allowances, applicable accounting rules, applicable tax laws and regulations, rulings and interpretations thereof, developments in tax audit and other matters, and variations in the estimated and actual level of annual pre-tax income can affect the overall effective income tax rate. 56 We evaluate the realizability of our deferred income tax assets by assessing the valuation allowance and by adjusting the amount of such allowance, if necessary. Although realization is not assured, we believe it is more likely than not that the net carrying value will be realized. The amount of the carryforwards that is considered realizable, however, could change if estimates of future taxable income are adjusted. The ability to forecast income over multiple years at a jurisdictional level is subject to uncertainty especially when our assessment of valuation allowances factor in longer term income forecasts. The impact of increasing or decreasing the valuation allowance could be material to our condensed consolidated financial statements. In addition, during the quarter ended December 31, 2024, we initiated changes to our corporate entity structure including intra-entity transfers of intellectual property to one of our European subsidiaries. This reorganization resulted in the recognition of a step-up in tax basis on the fair value of the intellectual property and required management to make significant estimates and assumptions to determine the fair value of such assets, using a discounted cash flow model. Significant assumptions in valuing the intellectual property include, but are not limited to, revenue growth rates, projected operating income, and the discount rate. See Note 12, Income Taxes, to the Consolidated Financial Statements included in Part IV, Item 15, Exhibits, Financial Statement Schedules, of the 2025 10-K for additional information on our net deferred income tax assets and valuation allowances. We account for uncertain tax positions in accordance with FASB ASC Topic 740, Income Taxes, or ASC 740, which provides guidance on the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, we must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Our policy is to account for net foreign tested income as a period cost if and when incurred. We account for foreign currency transactions in accordance with FASB ASC Topic 830, Foreign Currency Matters. In a majority of the countries where we operate, the functional currency is the local currency. Our foreign subsidiaries’ asset and liability accounts are translated for condensed consolidated financial reporting purposes into U.S. dollar amounts at period-end exchange rates. Revenue and expense accounts are translated at the average rates during the year. Our foreign currency translation adjustments are included in accumulated other comprehensive loss on our accompanying condensed consolidated balance sheets. Foreign currency transaction gains and losses and foreign currency remeasurements are generally included in general and administrative expenses in the accompanying condensed consolidated statements of income (loss). New Accounting Pronouncements See discussion under Note 2, Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, for information on new accounting pronouncements. 57