Herbalife (HLF) Financials

Herbalife’s latest quarter shows a clear improvement in profitability and cash generation versus the same period last year, but the balance sheet remains highly leveraged and still carries a negative equity position.

In Q1 2026, Herbalife generated $1.32 billion in revenue, up from $1.27 billion in Q1 2025 and $1.24 billion in Q3 2024. Gross profit also improved to $1.03 billion, while operating income increased to $138.4 million. Net income attributable to common shareholders came in at $61.9 million, up from $50.4 million a year earlier, though still below some of the stronger periods seen in 2024.

Cash flow was also solid. Herbalife produced $113.8 million in operating cash flow during Q1 2026, which more than covered $10.9 million in capital spending. Cash and equivalents rose to $451.2 million from $305.5 million at the end of Q3 2025. That said, the company still leans heavily on debt markets, and long-term debt remains large at nearly $2.0 billion.

The most important concern is leverage. Herbalife ended Q1 2026 with $3.31 billion in total liabilities versus $2.88 billion in total assets, leaving negative common equity of $441.5 million. That is not a fatal issue by itself for a debt-heavy company, but it does show how stretched the capital structure remains. Interest expense also continues to absorb a meaningful portion of operating profit.

Over the last several years, revenue has been relatively stable in the $1.2 billion to $1.3 billion quarterly range, but earnings have been more volatile. The good news is that Herbalife has recently shown better operating discipline, with Q1 2026 operating margin improving to about 10.5% from 7.8% in Q1 2025. The bad news is that the company’s balance sheet and debt burden still limit flexibility.

• Revenue growth resumed in Q1 2026, reaching $1.32 billion versus $1.22 billion in Q1 2025.
• Operating income improved to $138.4 million from $122.8 million a year ago.
• Net income increased to $61.9 million attributable to common shareholders.
• Operating cash flow was strong at $113.8 million in the quarter.
• Cash balance increased materially to $451.2 million, giving the company more near-term liquidity.
• Capital spending stayed modest at $10.9 million, helping free cash flow stay positive.
• Revenue has been fairly stable over the last four years, generally around the low-$1.2 billion range per quarter.
• Gross margin remains healthy, with Q1 2026 gross profit of about 77.9% of revenue.
• Negative equity persists, with total common equity at negative $441.5 million in Q1 2026.
• Debt remains heavy, including $1.98 billion of long-term debt and $9.2 million of short-term debt.

Bottom line: Herbalife is showing signs of operational improvement, especially in earnings and cash flow, but investors still need to weigh that against a highly leveraged balance sheet and persistent negative equity. The stock’s story remains one of execution and debt management as much as growth.