PRE

Greetings, and welcome to the Prenetics first quarter 2026 earnings conference call. As a reminder, this call is being recorded. Your hosts today are Danny Yeung, Chief Executive Officer and Co-Founder, and Brian Rosen, CFO of IM8, and Stephen Lo, Chief Financial Officer. Mr. Yeung and Mr. Lo will present results of operations for the first quarter ending March 31st, 2026, and provide a corporate update. A press release detailing these results was re-released today and is available on the investor relations section of our company's website, www.prenetics.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on this call and webcast may include predictions, estimates, and other information that might be considered forward-looking. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially and are not a guarantee of future performance. You're cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we're not obligating ourselves to revise or publicly release the results of any revision of these forward-looking statements in light of new information or future events. Throughout today's discussion, we'll attempt to present some important factors relating to our business that may affect our predictions. Unless otherwise specified, all information provided on this call as of today's date, and we undertake no duty to update such information.

For a complete discussion of these factors and other risks, you should review our annual reports with our other documents and disclosures on file with the Securities and Exchange Commission at www.sec.gov. At this time, I'd like to turn the call over to Prenetics Chief Executive Officer, Danny Yeung. Please go ahead, sir.

Great. Thank you. Good morning, everyone. Dialing in from NY today. Thank you so much for joining us. Alongside the earnings release this morning, I encourage everyone to review our latest investor presentation, which is on our website at prenetics.com. There's a lot of new cohort detail in there worth looking through. I just wanna start out by saying 17 months ago, we launched IM8 with a single product, no customers, and zero revenue. Today, we are shipping to 43 countries, delivering approximately 150,000 servings every single day, and we are on tracking to reach roughly $186 million in annualized recurring revenue based on IM8's monthly revenue in May. This is what product market fit looks like at scale. Q1 was our best quarter as a consumer health company. April and May are tracking better still.

I want to frame three things this morning, the company we have become, the engine driving the numbers, and what's ahead. You know, first, the company. The Prenetics that went public in 2022 was a diagnostics and genome testing business built around laboratory testing. A very different revenue model, a different growth profile. The Prenetics you see today is something entirely different. We are now a care play consumer health company anchored by IM8. Recurring subscription revenue, expanding gross margins, global distribution across 43 countries, operating disciplines built around unit economics. Over the past nine months, we've also divested three businesses, ACT Genomics, Europa, and Insighta, redeploying capital into our highest conviction growth asset. The brand, the team, the science, and the channels have all been rebuilt. When you evaluate our results, evaluate them through that lens.

This is, in every meaningful sense, a new company. In regard to Q1, on a continuing operational basis, total revenue was $36 million, up approximately 333% year-over-year. IM8 contributed $33.8 million, nearly 6x year-over-year, and up 23% sequentially over an already strong Q4. IM8 gross margins expanded to 64%, a roughly 400 basis point improvement quarter-over-quarter. Gross profit grew 315% year-over-year to $23.3 million. Active subscribers grew to 82,000. 93% of IM8 revenue came from subscriptions. Servings delivered grew 28% sequentially to $8.8 million for the quarter. That's real consumption, not orders just sitting in pantries. The acceleration has not stopped.

April delivered $14 million IM8 monthly revenue, up 18.6% over March. IM8 monthly revenue in May is tracking to approximately $15.5 million, implying annualized recurring revenue of roughly $186 million. The single most important thing that we did this quarter wasn't a new product, it was completing the international roll out of quarterly subscriptions. We started in the U.S. in Q4 of last year and extended it globally in Q1. The impact has been very substantial. Our average order value has stepped up from approximately $110 for full year 2025 to new customer average order value of $157 in Q4 2025 to $240 in Q1 2026.

A 53% sequential increase and more than 2x of our full year 2025 baseline. Our payback period compresses, cash flow improves, and critically, retention has seemed stronger. Our new customer subscription rate is approximately 79%, essentially unchanged from Q4. People aren't being pushed into long commitment. They're choosing it because the product works. Let me give you the cohort data because this is where the story gets really interesting. On January 2026, our quarterly cohort generated $587 in cumulative revenue per customer in just four months. For context, our January 2025 monthly cohort took 12 months to reach $549. Basically, four orders today equals 12 orders a year ago. We are collecting cash roughly 3x faster per customer than we were just one year ago when we first launched.

Extrapolating that trajectory, current cohorts are tracking toward an implied 12-month LTR of $900-$1,100 versus the $571 we delivered on mature cohorts. 81% of the cumulative 12 order revenue in our mature cohorts comes from repeat purchases. That puts our net repeat revenue well ahead of every public DTC peer that discloses a comparable metric. BellRing at 52%, FIGS at 50%, Oddity at 45%. We are operating in a very different league on retention. Given the trajectory and the momentum that we are seeing, we are raising our full year 2026 IM8 revenue guidance to $190 million-$210 million, up from our prior range of $180 million-$200 million.

For Q2, we expect total revenue of $46 million-$48 million, with IM8 contributing $44 million-$46 million, which marks an approximately 33% sequential quarterly growth in just IM8 revenue. Importantly, this guidance excludes the three Q4 product launches, hydration, creatine, and kids gummies. Those are pure upside. I want to also spend a few minutes talking about the three the engine behind the numbers. Three things make this engine work. Each is a moat that compounds. The first one, athlete equity alignment. David Beckham, of course, everyone knows, co-founded IM8. Aryna Sabalenka, world number 1 tennis player, also joined last June, is also a partner. Our roster has only deepened in Q1. In the weeks since we signed up Formula One driver Ollie Bearman. More recently, two-time NBA MVP, Giannis.

In fact, I was just with Giannis in Milwaukee last week. We got some great content that we're going to be able to show very soon. Most recently, we just announced a partnership with Inter Miami after official health supplements partner, which also includes an equity stake in Prenetics, NIL rights with a minimum of four players, including Lionel Messi and an IM8 nutrition center at their training facility. Every one of these partners holds equity in Prenetics. Their incentives compound with ours over years, not campaigns. Let me address something directly because I know it's a question on people's minds. There is an assumption that partnerships like these cost a fortune. In fact, they do not. Because of the strength of our brand and our equity alignment model, we secure highly favorable terms.

Relative out to our revenue base, each of these partnerships are not material to us from a financial cost perspective. They are nowhere near the multimillion dollars per year category that some may assume. We are building a roster no challenger brand can match, and we are building it officially. I can honestly say that each of these individual partners that we do have, they take the product every single day. They tell their friends and family about it, and it spreads very, very fast. The second thing we have as a moat, we believe, is our science. Our scientific advisory board spans individuals, doctors, physicians, scientists from Mayo Clinic, Cedars-Sinai, and even NASA.

We have completed a randomized controlled trial behind our flagship product. Two new randomized controlled trials are underway covering gut health and longevity. We believe we can complete these two trials by the end of the year. RCT, great clinical evidence is extremely rare in supplements. We believe it's worth investing in. That will be a very defensible moat that we can build. Thirdly, we have an AI-driven marketing engine. Just to put into perspective, when we first started out last year, we had about 50 ads running. Today, on any given time, we have about 3,000 live Meta ads, which is a 60x increase since launch. We put out roughly 600 new ads on a weekly basis. Our AI creates a pipeline, tests, iterates, and learns faster than legacy DTC competitors.

A single Aryna Sabalenka Instagram reel last year drove 233 million views and was the number one social ad in Instagram in 2025. Today, we are also diversifying away from Meta concentration. Over the course of 2026, our channel mix is expected to move from approximately 85% Meta to roughly 55%, deploying the same proven engine across TikTok, YouTube, AppLovin to unlock new audiences at improved CAC. Now let me spend a few minutes talking about what's ahead in terms of our product roadmap, because this is really central to our growth story. In Q4 2026, we are launching three new products. We haven't mentioned this previously, but we'll mention it now. These three new products are in the category of hydration, creatine, and kids' gummies. These are not random line extensions.

Each one targets a large, fast-growing category. Each play to a structural advantage we already have, and each gives our existing community more reasons to make IM8 part of their daily lives. Starting with hydration, the global hydration category is roughly $37 billion, growing 8% a year, dominated by the names like Gatorade, Liquid I.V., DripDrop, and LMNT. Here is the opportunity. Most of this category is commoditized sugar and electrolytes. IM8 hydration is built to the same premium, science-backed, clean formulation standard as Daily Ultimate Essentials, third-party tested, NSF certified for sport. Hydration is a category where authentic athlete credibility is the entire game. We have Beckham, Sabalenka, Bearman, Giannis, and now Inter Miami. On court and off the court, no challenger brand can match that alignment. Next, creatine.

The global creatine category is about $1.3 billion and growing 26% a year, the fastest-growing of the three. Creatine is having a genuine cultural moment, expanding well beyond bodybuilding into cognition, healthy aging, and women's health. The competitors here are Optimum Nutrition, Muscle Milk, Thorne, and Create Wellness. Our differentiator is positioning. IM8 creatine pairs strength with cognition, creatine plus focus. Most creatine on the market is a commodity powder. Ours will be formulated for both physical and mental performance with the same scientific rigor behind everything that we make. Thirdly, kids' gummies. The global kids supplement category is roughly $3.6 billion, growing 8% a year, and frankly, is the category most ripe for disruption. The incumbents, Flintstones, Centrum Kids, L'il Critters, are all legacy brands, often loaded with sugar and artificial ingredients, with very little earned parental trust.

The modern challenger grooms is still young. Our advantage is simple. Parents who trust IM8 for themselves will trust it for their children. Our existing customers are overwhelmingly parents. A clean, science-backed, all-in-one, zero-sugar kids product is the most natural household extension we could make. Here is the critical point that ties it together. Every one of these launches sells into our base of over 80,000-82,000 highly engaged, highly loyal subscribers. These are not standalone bets. They deepen the value of every customer we already have. On our internal modeling at illustrative attach rates against our existing base, these three SKUs add approximately $178-$378 of incremental second-year revenue per customer. To put that in context, that is a meaningful uplift layered on top of the cohort economics I walked through earlier.

They extend the brand into the home, they compound the lifetime value of the base, and none of this revenue is in our guidance. It is all upside. Let me move on to the capital allocation balance sheet. On the balance sheet as of today, we have approximately $147 million in cash and financial assets. In the past week, we sold our entire Bitcoin position, 510 Bitcoin, for $41.3 million in cash proceeds already received. The board has also adopted a policy that the company will not purchase Bitcoin or any other digital assets going forward. Our capital is most productively deployed behind IM8. We will put these proceeds to work in four places: potential expansion of our authorized share repurchase program, accelerated IM8 DTC marketing where unit economics are proven, Q4 product pipeline, and continued international expansion.

On the share buyback, we have repurchased approximately $19 million of the $40 million authorized amount since March 6. I, along with senior management, personally added another $2.75 million of open market purchases in previous trading windows. That is my conviction in this company rooted in my own capital. What's ahead? Let me close with where we're headed. We are operating in a $209 billion global supplements market, growing roughly 8% per year. Even at our current revenue targets for 2026, we represent approximately 0.1% market share with approximately $200 million revenue guidance for 2026. A $1 billion brand at just 0.5% global market share is well within reach. That's before laying in new products, new geographies, and additional subscription frequencies.

The runway and upside is enormous, and we believe we are still in the very early innings. I'll say this plainly, I believe we are building a multi-billion dollar consumer health brand, a generational health brand. The product works, evidenced by the 16,000 five-star reviews you see. The science is real, the athletes are aligned, the engine compounds, and the data is doing the talking. With that, I'd like to welcome Brian Rosen, who joins us today as our Chief Financial Officer of IM8. In fact, it's Brian's first day today. Brian brings with us nearly two decades of finance leadership across premium consumer health and DTC subscription brands, and I believe he'll be a big asset moving forward. Brian, over to you.

Thank you, Danny. Good morning, everyone. Pleasure to be here on the call and on my first day at that. Before Stephen walks through the Q1 numbers in detail, I'll take just a couple moments to introduce myself and explain why I joined. First a little about my background. I've spent nearly two decades at the intersection of consumer health, subscription supplements, and DTC e-commerce, especially in premium brands. Most recently, I was Chief Financial Officer and Senior Vice President of E-commerce Operations at Wellbeam Consumer Health, a private equity-backed wellness platform. Wellbeam's portfolio included BioTrust in healthy aging nutrition, Eu Natural in women's hormonal and specialty supplements, and TruSkin, a clean, plant-powered skincare brand. I had joined TruSkin as CFO in 2020 and helped take it through its acquisition by Wellbeam in 2021.

Prior to that, I held CFO roles at Penetrex, NATURELO Premium Supplements, and Rant Inc. All of these were successfully acquired. I've sat in the operator seat through scale, through capital raises, and through exits, and I know what separates the brands that break through from the ones that stall. Why I joined IM8 is pretty simple. Across every transaction I've ever worked on, the breakout brands share three traits. They all have a founder who cares deeply about the product, real science behind the formulations, and a team that treats every order and every dollar with discipline. From my first conversation with Danny, it was obvious this is the exact foundation IM8 is built on.

David Beckham as a co-founding partner, world-class athletes as authentic, equity-aligned users, scientific advisory board members spanning Mayo Clinic, Cedars-Sinai, NASA, RCT grade clinical validation, and an AI and operating model that moves at a pace I'd never seen at this scale. Full disclosure, I've been an IM8 customer for over a year now. I was on The Beckham Stack way before I had met Danny or any of the team. I actually know that the product works because I use it. It was pretty fun to actually meet Danny for the first time, just having used the product for so long. The thing that really ultimately convinced me to join is the cohort data. It's just the math here is tremendous. In my career, I've looked at hundreds of cohort curves on supplement brands, but I've never seen LTV numbers like this.

81% repeat revenue, $240 new customer AOV, 2026 cohorts that are tracking to $900-$1,100 in 12-month revenue per customer. This isn't a marketing story. It's what disciplined unit economics looks like when a brand hits product-market fit at scale. My role here is gonna be quite clear. Build the financial foundation to support the next phase of growth. That means three things. First, scaling the finance organization globally to keep pace with the brand. The business is growing faster than most public companies in the category, and the financial infrastructure has to be ready. Second, sharpening capital allocation and unit economic discipline. We need to measure every dollar of marketing spend against payback and LTV, channel by channel, cohort by cohort.

The CFO's job in a high-growth D2C business is to make sure we're scaling profitably, not just scaling. Third, working hand-in-hand with Danny and the rest of the team to ensure our financial and operational foundation supports the trajectory we have ahead. Looking forward to getting to know our shareholders and the analyst community in the quarters to come. With that, I'll turn the call over to Stephen.

Great. Thank you, Brian. Good morning, everyone. A quick note on today's release before I get into the numbers. We are publishing our preliminary results while we complete our quarter end closing procedures for certain non-cash variable items, specifically loan liabilities from our December 2025 exchange program and the share consideration that we received from the Europa divestiture completed in the first quarter. These items are non-cash and non-operating in nature, therefore, they did not affect revenue, gross profit, operating loss, or adjusted EBITDA. We expect to provide full financial statements once those procedures are complete. Moving on to the financial results. On a continuing operating basis, total revenue for Q1 2026 was $36 million, up approximately 334% year-over-year from $8.3 million in Q1 2025. IM8 contributed $33.8 million.

CircleDNA contributed to $2.2 million. Gross profit was $23.3 million, up approximately 315% year-over-year. Consolidated gross margin was 64.8%. At the IM8 segment level, the gross margin was 64.3%, up from 16.3% in Q4 2025 and 59.6% a year ago. That's a 400 basis point sequential improvement. The margin expansion was driven by five factors compounded together: scale-driven manufacturing efficiencies as production volumes grew across our flagship lines. We negotiated unit economics with key contract manufacturers and ingredient suppliers. Favorable product mix and shift towards high-margin SKUs and subscriptions orders. Packaging optimization and often improved fulfillment and freight efficiencies as order density grew across our 43 international markets.

We expect to sustain these efficiencies through balance of 2026 as volume scale further and supply chain initiatives mature. Loss from operations for this quarter was $8.9 million, compared with $6 million in Q1 2025. Adjusted EBITDA loss was $5.6 million, compared to $4.5 million in Q1 2025. The modest year-over-year increase reflects deliberate marketing investment behind the international quarterly subscription rollout, is investment that as Danny just walked through, it's already showing in our cohort economics. I will also cite that the EBITDA range that we disclosed in the press release, which is not small, that range is driven entirely by the non-cash and non-operating value movements on borrowing liabilities and consideration shares as part of the Europa divestment. Again, these have no impact on operating performance. Moving on to the balance sheet.

Cash and cash equivalents at the end of the quarter is $56 million. We have no debt. We also held $34.8 million in Bitcoin and approximately $15 million in current financial assets measured at fair value through P&L, that actually represents our investment in investment funds. Subsequent to our quarter end, we sold our entire 510 Bitcoin position for $41.3 million in cash proceeds, which we have already received in full. With the completion of this divestment, our estimated cash balance has increased to approximately $91.3 million, combined with our financial investment in funds and escrow cash, we have financial resources of about $147 million. Under $40 million cash repurchase program, we have actually deployed approximately $19 million, we bought approximately 968,000 shares.

With the management team personally investing an additional $2.75 million in open market purchases in our previous trading windows. Looking ahead, based on Q1 results and April IM8 monthly revenue of $14 million, that's really up 18.6% month-over-month. We are raising our full year 2026 IM8 revenue guidance to $119 million-$210 million, up from our prior $180 million-$200 million range. For Q2 specifically, we expect total revenue of $36 million-$48 million, with IM8 contributing $34 million-$46 million, representing approximately 33% sequential quarterly growth over IM8's Q1 revenue of $33.8 million. As Danny noted, in Q4 this year, we plan to have three product launches: hydration, creatine, and kids gummies.

These are not included in this guidance and represent incremental upside. With that, let's open the line for questions. Operator, please.

Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. One moment please while we poll for questions. Our first question is coming from Ryan Meyers from Lake Street Capital. Your line is now live.

Hey, guys. Thanks for taking my question. Brian, it's great to meet you and, you know, welcome to the story. Looking forward to getting knowing you better. You know, just to kick things off, curious, how have you guys seen customer acquisition efficiency trend, especially as you called out in your slide deck, looking to diversify sort of the channels in which you guys are marketing. Maybe how would that make things more efficient as well?

Yeah. Hey, Ryan. Good, good to hear from you. In terms of our customer acquisition, right? As I mentioned earlier, roughly 85% of our current spend is on Meta and 15% on Google, right? That's been quite consistent, yeah, from when we launched until now. We do believe there's a bigger audience globally, that's why we have already started diversifying our customer acquisition channels into TikTok, yeah, AppLovin, and YouTube, right? Right now, we've already experimented in spending, I would say, you know, $3,000-$5,000 daily on these other platforms. Of course, when we're spending a few thousand dollars, it's really, as I mentioned earlier, it's about testing, learning, reiterating before we scale these up. Yeah, we do believe, you know, by the end of the year.

We will be able to be successful in unlocking new growth and new channels and new audiences, which will help with our customer acquisition.

Got it. That's helpful. Lastly for me, if we think about the KPIs you gave, total customer orders were down, I think, 4% quarter-over-quarter.

I think you alluded to there's just some changing in the product mix that drove that. Anything to read into there with the customer orders, and then have you seen that rebound here?

Yeah

In the second quarter?

The customer orders was down actually from a deliberate purpose, yeah. As mentioned, in Q1, we deliberately shifted a lot of these customer orders into quarterly. If you actually look at the actual servings on a quarterly basis, that's the key figure. That servings per quarter actually increased, yeah. When you think about the quarterly and monthly, because people are buying three months at a time, your customer orders will decrease. The actual number of servings will increase, right? Our servings actually increased, you know, more than, you know, 20% quarter-over-quarter. I think that's a key figure moving forward to look at, because it's not a direct apples to apples comparison, because last quarter we didn't have, you know, the quarterly subscriptions based into the orders.

No, that makes sense. Thanks for taking my question.

Yeah.

Thank you. Next question is coming from George Kelly from Roth Capital Partners. Your line is now live.

Hi, George.

Hey, everyone. Hey, Danny. Thanks for taking the questions. A few for you. First, what happened in April and May? It was a big acceleration. I'm just curious if you could detail sort of what drove that.

I mean, we're constantly iterating and testing, right? Again, we've gotten, you know, in the Q1, one of the key things was actually how do we increase our velocity in terms of creative diversity on Meta and increase the number of quality of ads. This is where I mentioned earlier, now we have roughly about, you know, 3,000 ads on Meta. We're running, you know, 600 ads-800 new ads on a weekly basis. We've really gotten a lot of creative output in this past, you know, few months. You know, again, It's not overnight that you can just say, "Increase it." Even on Meta, there's a lot of testing that we have to do on a daily basis to be able to increase spend.

Just because we want to increase spend, we can't do that unless you have this creative diversity engine, right? Also, to be fair, I think the announcement of, you know, Giannis, you know, Ollie Bearman more recently Inter Miami, all these have halo effects on the brand and reputation and the credibility, which then aligns to, you know, having seen this increased momentum in April and May, you know, while we're maintaining, you know, the cap levels that we previously had.

Okay.

Yeah.

A follow-up.

Also we've also seen a increase in the retention from our January cohorts in terms of the renewal factors, right. Because again, when January, we only had the cohorts available to renew in April, so that also played a factor, which we've also seen the quarterly subscribers have a 10% higher retention from monthly subscribers when we think about the first the four-month period.

Okay. Okay. Understood. Second question, I guess a follow-up to one of Ryan's questions. Can you speak specifically to TikTok? How early days is it there? Have you really done much through TikTok? Maybe talk about your efforts in building an affiliate network and sort of plans and timing on when you could really ramp TikTok spend.

Sure. Yeah. TikTok is, again, one of the key priorities, you know, for this quarter. I think right now, give you an example, we have roughly about 500 affiliates on TikTok. We're spending from a testing perspective, you know, $3,000-$5,000 on a daily basis. We expect to get to a 1,000 affiliate by end of the month and continue to grow from there. We're very optimistic about TikTok. In fact, we just had a call with, you know, TikTok senior management. They're also very excited for us to be on the platform and be there in a big way. Yeah.

I do believe in the next, you know, I would say three to six months, you'll see significant progress on TikTok and given our what we've been able to do on Meta, I'm 100% convinced that we'll be able to do the same on TikTok, which now is a platform where, you know, lots of consumers are shopping on.

Okay. That's helpful. Last one for me, I guess it's a multi-part question. I didn't see marketing spend, IM8 marketing spend anywhere in the press release. Maybe it's there, but.

Could you give us your quarterly marketing spend? Second question is around adjusted EBITDA guidance for the year. I didn't see that either. Is there any update to your prior adjusted EBITDA guide?

Yes. Stephen, what was our total marketing spend for Q1?

Yep. The marketing spend was $22 million.

Yeah. Marketing spend, total was $22 million. What was the other follow-up question? In terms of adjusted EBITDA, right?

Adjusted EBITDA guidance for the year, if there's any changes.

Got it.

From the prior one.

We previously guided adjusted EBITDA was roughly around, gonna be in the range of $15 million-$20 million. All right? I think, you know, if you look at our growth rate, again, going from $60 million last year full-year revenue to $190 million-$210 million in full-year revenue this year, we've been able to keep the adjusted EBITDA loss very similar to last year. I believe we're growing very fast by the capital efficient manners.

Okay. I guess the adjusted EBITDA guide is unchanged.

Correct.

Okay. Thanks a lot. Appreciate it.

Thank you. Next question is coming from Alex Hantman from Sidoti & Company. Your line is now live.

Thank you, and thanks for taking questions, and welcome to the team, Brian.

Yeah. Thanks, Alex.

First question from us, you know.

Yep.

Hey, guys. For the guidance raise, I think you talked a little bit about the conservatism baked into that. You know, the new SKUs are not included yet. Is there anything else we should think about that could drive, you know, upside, you know, beyond the upper end of guidance?

I mean, yeah. I think the new channels, I certainly there's gonna be additional upside there, right? Of course, you know, we don't have any quantified data there with like, you know, TikTok, YouTube, AppLovin, et cetera. There's new channels there. To be fair, I think even there's still gonna be significant upside even on Meta as we scale, right? When we're on TikTok, when we're on AppLovin, on YouTube, these actually directly will impact Meta as well. Yeah. I do as well mention that, you know, the three new SKUs, we haven't factored this into our guidance just because, again, we're gonna be launching the Q4.

I think it's too soon to make any revenue projections, but, you know, from our track record and what we've done, even with our launch of our Daily Ultimate Longevity last October, you've seen that we've been able to successfully launch new products into the market. We do believe with our marketing, you know, flywheel and playbook, that we'll have success, you know, with the new products because there's a lot of opportunity in the market still for the hydration category, creatine and kids gummies. I think one thing that really separates us from a lot of the competitors is that we're a truly global brand, shipping to 43 countries. I think there are additional upsides, not for this year, but for 2027, 2028, is that we haven't even talked about China yet, right?

China is gonna be a significant opportunity for us once we decide when to launch there. India, we haven't even talked about, right? There is gonna be significant upside in the future. yeah, I do believe in 2026 wise, you know, we're, yeah, we're very comfortable with our projections as of now.

Thank you. One more. You know, on the prepared remarks, you talked about the randomized controlled trials, you know, with potential applications to gut health and longevity. Could you talk a little bit more about, you know, trial design and maybe what type of data you plan to get and how you plan to use it compared to, I think you did a study previously.

Right. This is gonna be a very robust twin study. We've actually detailed one slide in terms of our RCT trial in the investor deck. It's 120 people for the gut health, 180 people for the longevity. We're gonna be testing biomarkers before and after individuals are on the product for eight weeks and 12 weeks. This will be a very robust trial, and we're gonna be starting recruitment within the next 30 days-45 days. We're very excited about this.

What gives us confidence that we will see positive results is, you know, the amount of enormous reviews that we have gotten back from our customers on both our platform as well as even you look at Trustpilot, where we now have, you know, 4.6 rating across 1,300 reviews. In total, we have more than 16,000 5-star reviews. Again, I think I mentioned this earlier, it's incredibly rare that any supplement brand will do a RCT on a finished product. You know, a lot of companies, they may do it on certain ingredients or use brand ingredients, but never on a finished product. The fact that we're looking to invest in this is a, you know, sign of conviction of the product.

Thanks, Danny. Speaking of biomarkers, last one from us. Now I know the Superpower partnership has been live for a little bit.

Yeah.

Any early, any sort of early read on engagement or support, you know, for a test supplement retest framework showing up yet?

Yeah. We've launched a Superpower partnership just in the U.S., given that's where, you know, Superpower is launched. You know, early results are positive. They haven't done the retesting. Yeah, there is, I think, about, you know, 10%-15% uptake rate of individuals which are purchasing the product along with a blood test. We believe over time, you know, individuals can quantify the effect of IM8 based upon a baseline blood marker test and, you know, after taking the product for 90 days, which is exactly what we're doing in the RCT trials.

Thank you very much.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Well, thank you, everyone. Yeah, I know there's been a lot of, yeah, talk about, you know, in terms of our growth, can it be maintained, can it be sustained? I think we've shown in Q1 that it can definitely be not just sustained, but growth growing. In Q2, we're seeing continued momentum. That just gives me such a strong conviction, as we start and, you know, go further into the months of 2026. We believe we are building a once in a lifetime generational health supplements brand that in the next three to four years could literally be 1 of the world's biggest supplement brands. Thank you everyone for following our journey, and it's an exciting time here.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Greetings, and welcome to the Prenetics Fourth Quarter and Full Year 2025 Earnings Conference Call. As a reminder, this call is being recorded. Your hosts today are Danny Yeung, Chief Executive Officer and Co-Founder; and Stephen Lo, Chief Financial Officer. Mr. Yeung and Mr. Lo will present results of operations for the fourth quarter and full year ended December 31st, 2025, and provide a corporate update. A press release detailing these results was released today and is available on the Investor Relations section of our company's website, www.prenetics.com. Before we begin the formal presentation. I would like to remind everyone that statements made on the call and webcast may include predictions, estimates and other information that might be considered forward-looking. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially and are not guarantee of future performance. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. Unless otherwise specified, all information provided on this call is as of today's date, and we undertake no duty to update such information. For a more complete discussion of these factors and other risks, you should review our annual reports and other documents and disclosures on file with the Securities and Exchange Commission at www.sec.gov. At this time, I'll turn the call over to Prenetics' Chief Executive Officer, Danny Yeung. Please go ahead, sir.

Great. Thank you. Thank you, and good morning, everyone. Welcome to our Fourth Quarter and Full Year 2025 Earnings Call. For those who have been following our story, thank you very much for your continued support. And for those new to Prenetics, you are joining us at a pivotal inflection moment. 2025 was the most transformative year in our company's history. We achieved record revenue of $92.4 million, a 480% increase year-over-year, driven by the explosive launch of IM8, our premium consumer health brand cofounded with David Beckham. In just our first year, IM8 reached a $120 million annualized revenue run rate, a trajectory that we believe is one of the fastest ever recorded in the global supplement industry. We also completed a decisive strategic pivot, divesting our noncore assets to become a pure-play consumer health leader. This has sharpened our focus, improved our margin profile and solidified our balance sheet, which now stands at approximately $171 million in total liquidity with 0 debt. Most importantly, we now have a clear road map to adjusted EBITDA profitability by Q4 of 2027, supported by strong unit economics and significant operating leverage. Today, I'll walk you through our strategic transformation and the incredible growth story of IM8. Stephen will then provide a detailed overview of our financial results, and I'll conclude with our outlook for 2026 before we open it up for Q&A. Let me begin first with the transformation that occurred in 2025 and early '26. Our goal was to streamline the company and focus all of our resources on the highest growth, highest margin opportunities. We executed this by divesting 3 noncore assets. In June 2025, we sold ACT Genomics for $72 million with $46 million in cash back to Prenetics. In January of '26, we exited the low-margin Europa business and had an all-stock $30 million deal with that. And just yesterday, we announced we sold our 35% stake in Insighta to Tencent for $70 million in cash, in which we have already received $69 million in our bank accounts. These moves have unlocked significant shareholder value, amplify -- simplify our story and fortify our financial position. As a result, our balance sheet is stronger than ever. As of February 15th, 2026, we have $171.1 million in total adjusted liquid assets, including cash, financial assets and our BTC Holdings with 0 debt. This gives us ample runway to invest in IM8's global expansion. I also want to clarify our position on Bitcoin. We seized all Bitcoin purchases as of December 4th, 2025, and we will permanently not engage in any Bitcoin or Crypto purchases in the future. We currently hold 510 BTC on our balance sheet, which provides additional financial flexibility as we scale IM8. Our focus is squarely on building IM8 into a global consumer health powerhouse. In line with this strategic focus, we recently announced a change to our Board of Directors. Andy Cheung, who joined our Board in connection with our Bitcoin strategy has resigned. At the same time, we are thrilled to welcome Dr. Darshan Shah to our Board. Dr. Darshan is a leading expert in longevity, performance optimization as well as building a network of longevity clinics in the U.S. and his expertise will be invaluable as we scale IM8 globally. Now let's turn to IM8. As everyone knows, we co-founded with David Beckham. IM8 was built on the vision of making elite science-backed nutrition accessible to everyone. This powerful combination of global influence and scientific credibility allowed us to achieve $120 million annual recurring run rate in less than 12 months. This growth trajectory has been nothing but extraordinary. We went from $6 million in Q1 to $27.4 million in Q4. This isn't just a launch spike. It's a reflection of deep product market fit with IM8 on a global basis with 40% of revenues coming from the U.S. and 60% of revenues coming internationally across 30 different markets. And we achieved this growth with exceptional capital efficiency. Our blended LTV to CAC ratio is projected to be approximately 3x across all of our products, including the premium backend stack. Our payback period for the full year of '25 was just 3.4 months, allowing us to recycle marketing capital incredibly quickly. In early 2026, we made a strategic shift to prioritize quarterly subscriptions, which was a new option for our customers. This, we believe, has been a game changer. Our blended average order value for every new customer has more than doubled from $110 in 2025 to approximately $233 in early 2026. We are intentionally acquiring higher-value customers, which strengthens our cash flow and locks in long-term predictable revenue. With an 80% new customer subscription rate, our business is built on the foundation of recurring revenue. Our brand is also validated by the best. We built an amazing Scientific Advisory Board, including leading doctors and professors from the Mayo Clinic, Cedars-Sinai and many more. And our global ambassadors, including world #1 tennis champion, Aryna Sabalenka and recently announced F1 phenom, Ollie Bearman, reinforced our credibility in the world of elite performance. Before I hand it over to Steve, I want to share some exciting news on the investor research front. We are happy to announce that both ROTH Capital and Sidoti & Company have recently initiated research coverage on Prenetics, both with buy ratings and 12-month price targets, respectively, of $36 and $30. This is a strong validation of our strategy and growth trajectory. And given our momentum and increased market cap, we also expect a few more investment banks to initiate coverage in the coming quarter as well. With that, I'll turn the call over to our CFO, Stephen Lo, to walk through the financials in more detail. Stephen?

Thank you, Danny, and good morning, everyone. I'll begin with our fourth quarter results. Total revenue in the fourth quarter surged 457% year-over-year to $36.6 million and increased 55% sequentially from Q3. This was driven by IM8, which contributed $27.4 million in Q4. Gross profit in Q4 grew over 800% year-over-year (sic) [ 804% ] to $21.7 million with a consolidated gross margin of 59%. Adjusted EBITDA loss for the fourth quarter was $2.3 million, a 70.4% improvement from the same period in the prior year, demonstrating the significant operating leverage in our model as we scale. For the full year 2025, total revenue was $92.4 million, up approximately 480% from 2024. Gross profit was $48.9 million, an approximately 428% increase. Full year adjusted EBITDA loss improved by 27% to $13 million. IM8 was a clear driver, generating $60.1 million in revenue for the full year 2025 at a healthy 63% gross margin. The divestiture of low-margin Europa business will further enhance our consolidated margin profile in 2026. Looking ahead, we are confidently reaffirming our 2026 guidance. We expect IM8 revenue of approximately $180 million to $200 million for full year 2026, representing nearly 300% year-over-year growth. We are targeting a gross margin of approximately 60% in full year 2026. We expect full year 2026 adjusted EBITDA loss of approximately $16 million to $20 million as we continue to invest in marketing to drive growth with a clear path to achieving adjusted EBITDA profitability by Q4 2027. With that, I'll turn it back to Danny for closing remarks. Danny? [Audio Gap]

Danny, We are unable to hear you, is your line muted?

Sorry about that. Yes. Thank you, Stephen. Yes, to summarize, we have successfully transformed Prenetics into a high-growth, well-capitalized consumer health leader. IM8 is on a clear path to becoming a $1 billion global brand. And even for myself in my last 20-plus years of entrepreneurial career as both an operator and investor, I have never seen such strong momentum in one brand. We have the team, the strategy and the financial strength to execute on this massive opportunity, and I'm particularly excited about what's ahead. In Q4 of this year, we plan to announce 2 new products that will enter very large total addressable markets. These launches will further diversify our portfolio and accelerate our growth trajectory. I am more confident than ever in the future of Prenetics and IM8. Thank you for joining us today. I will now turn it over to the operator for Q&A.

[Operator Instructions] And our first question will come from George Kelly with ROTH Capital Partners.

First one just on the 90-day offering. I was wondering if you could walk through the reasoning behind having that available? And when do you expect the benefit to be to your model?

Yes. Great question. So we actually started quarterly subscriptions in the U.S. first in December, right? And typically, how we do this is we do a lot of testing on our website optimizations on a daily basis. So we start testing in the U.S. It was clear basically after a month of testing that consumers, number one, they really like this option. And number two, it provides benefits for both sides. So the benefits from consumer-wise, they get 3 months of product at a time. Consumers also save about $10 monthly as well, right? So from a comparison perspective, typically, a normal customer previously, they would buy a 1-month subscription for $89 monthly. And since the introduction of the quarterly subscription, it becomes $78 times 3, right? So there's basically $235 for quarterly subscription. So we get that payment upfront. And we also save on logistics cost because instead of shipping 3 monthly shipments, we ship it all at once. And so what that has done is actually has significantly increased our average order value from approximately $130 from end of Q4 to $233. So basically, if you think about every single new customer that's coming into im8health.com, on average, every new subscriber is paying us $233. So what this does is that basically it shortens our payback period or the period of time that we recoup our customer acquisition cost. So we believe this is a significant benefit. And at the same time, now for consumers, they now have 3 months of product to try the product, right? And based upon our clinical trial results after 90 days, individuals will then significantly feel the difference. For example, 95% of individuals after 90 days have felt a notably difference in higher energy levels, better sleep quality, better recovery, greater sleep, right? So we do believe the 90 days will also increase retention rates as well. So overall wise, we believe it's going to be a significant enhancement to our overall business.

Okay. Okay. That's helpful. And then a second question, Danny, in your concluding remarks, you talked about 2 new SKUs coming this year. I understand if you don't tell us what they are at this point, but maybe if you could provide a little more information just about timing of those launches? And how should we broadly think about sort of new product opportunity? Do you expect any kind of new product, at least in the near term to be similar to what you offer now where it's a subscription and it's monthly? Or might you expand into categories where it's a sort of whole different -- there's whole different characteristics to the products?

Great question. Yes. So right now, our plan is to release 2 new SKUs by the end of Q4 of this year. Now due to competitive reasons, I think we don't want to release too soon what these 2 SKUs are, but it will be in the health and performance space. And it will definitely be in the health supplement categories, right? And also, these will be very 2 large total addressable markets, which competitors already doing easily anywhere from $500 million to $1 billion annually just in terms of these SKUs. So we do believe it's going to -- it could be a significant growth driver for us.

Okay. That's helpful. And then last question for me. With respect to the guidance you put out for IM8, the $180 million to $200 million for the year, I guess 2 questions on that. First, we're now through January and into February. I was wondering if you could help at all just the trends you've seen so far. I think January is a pretty important month for the year. So any sort of commentary there would be great. And then secondly, are the new products baked into that guide?

Yes, great question, right? So I think we are still seeing continued momentum. So momentum hasn't stopped basically on a month-over-month basis, right? In terms of the 2 new products in terms of the revenue guidance, those are not baked into that $180 million to $200 million number.

[Operator Instructions] And we will go next to Thomas Forte with Maxim Group.

Great. So first off, Danny, congratulations on a wonderful fourth quarter and year and the breakout performance of IM8. So I have 3 questions. I'll go one at a time. So the first one is, can you talk about your customer acquisition costs and lifetime values for IM8 and how that's trended over time?

Yes. So the customer acquisition cost, right, we actually laid this out in our investor deck. So we actually have an investor deck that we published on our website. A there's a link to it on the press release. So you should think about it as it's roughly about 0.8x in terms of return on ad spend. So if let's say, our blended average order last year for 2025 was $110, our CAC was $130, right? And then the key thing about this is that the payback period is roughly 3.4 months. So basically, we factor that in when we're making decisions in terms of increasing spending or not increasing spending, right? But given the short time period of 3.4 months, we believe we actually have significant flexibility to go from 3 to 6 months, right? Because in the DTC space, if you're at 3 months, it's excellent at 6 months is good. So that means we have a lots of runway, right? And your other question in terms of how that has trended. Our CAC has, of course, our average order value has increased significantly from $110 basically to $233. Equally, our CAC has increased with that at the same ratio. So we -- even from last January until now, we have not seen significant increases of CAC even as we scale, right? And also just to share is that we've been primarily focusing our marketing efforts, digital marketing efforts just on Meta and Google, roughly 85% on Meta, 15% on Google by the end of this quarter and into Q2, we're going to be diversifying our marketing channels to include YouTube, podcasts, AppLovin, TikTok. So we believe we're also getting able to diversify our marketing channels even much more in greater detail.

Excellent. And then for my second question, so one of the many things you're doing that's impressed me is capitalizing on artificial intelligence. Can you talk about how you're using AI, including from a digital marketing standpoint?

Yes. Great question. So I'm a big component -- I mean a big proponent of the whole entire company using the latest AI tools and systems in place for us, not just from a digital marketing perspective, but across the organization, every function, every single employee doesn't matter whatever department it is, right? So my team knows this very, very well, right? Any free time I have personally, I'm looking -- I'm studying AI like crazy, right? So for example, how we leverage AI in terms of digital marketing efforts on a weekly basis, we'll roll out anywhere from about 800 to 1,000 new ads. And we just look to algorithm decide what that works. And then only about 10% of these ads will actually work. And we call these a winning ad. And then every single week, we'll replicate basically, we'll take 10% of those that work, and we replicate another 800 ads on a weekly basis. So that gives you one example of basically how we use AI. And of course, I think if you look in the investor deck, you'll also see we launched an AI video last September with Aryna Sabalenka right before the U.S. open. And this one AI video, it basically -- it was the highest number of views of any brand on Instagram. It reached 233 million views with one AI video featuring Aryna Sabalenka. So when you get 233 million views in one video at top of funnel, you can then significantly much easier we target new other customers that have seen that video, right? So I think these are specific examples of how we're leveraging ad. We use AI in all parts of our business.

Wonderful. And then last one for me. You've done a great job of divesting multiple successful businesses. You have an unbelievable balance sheet. As a result, can you talk about your strategic M&A strategy, including your decision process and when to build versus when to buy?

Yes, [ Kirk ] Yes, I think 2025 was an extremely busy year, right? You can see like not only have we built a very strong business, which was from scratch, right? We built that organically, the whole brand, the playbook, all the doctors, all the scientists, all the brand ambassadors and of course, the product, right? At the same time, we executed the selling of 3 of our noncore assets because the growth of IM8 was just so unbelievable that we knew we needed to double down on that, right? And then so now we have a very strong balance sheet. I mean, the reality is we have so many options available to us. But I would say my first -- our first focus is going to be built organically because, again, we believe we already have this performance marketing flywheel behind us, unless there is a very strategic M&A potential. Right now, our main focus is just building organically because, again, that's something that we can control very well. But again, we're always open for new opportunities if it makes sense.

Our next question comes from Alex Hantman with Sidoti & Company.

Congrats on the quarter. Maybe we could just start on the revenue growth for this year. I know you mentioned that new products are not baked into that. Could you share a little bit more about how much of the growth is expected from customer base expansion versus like average revenue per user uplift from quarterly plans?

So I would say -- so the growth is just based on come from -- majority of that growth is going to come from basically new customers. right? So if you think about it, I mean, we achieved $60 million full year revenue in our first year, and that's still a very new brand. So this year -- and while there's a lot of people that have heard about IM8, there's still a significant population around the world that hasn't heard about IM8 or hasn't tried or used the product, right? And once people try the product, they use the product, again, the product is effective, they'll stick on. So a significant part of that growth is going to come from new customers. And if you look at our breakdown in terms of our top 5 markets with the U.S. being #1, 40% of revenue. So last year, U.S. only represented $23 million of $60 million, right? So I think realistically, the U.S. market can easily support or absorb yes, $300 million to $400 million on this one product, right? So there's still lots of headways of runway to go, right? #2 market is Canada, #3 is U.K. #4 is Australia, #5, Singapore, right? So we're a truly global diversified brand. So we believe there's significant opportunity to just by acquiring new customers onto the platform.

Great context. And 2 more from us. Dan, I know you just spoke about some of the international revenue opportunities. I'm curious, as you started localizing websites, what kind of revenue uplift have you seen? And what international market then are you sort of most excited about given that?

Yes. Great question, right? So this is again another example of how we're in the process of leveraging AI tools specifically for international localization efforts. So by Q2 of this year, we will be localizing in at least 5 different markets in terms of our whole website, our ads, our campaigns, for example, in Germany, right? So a lot of the ads -- Germany is now, I think, #8 or #9 in terms of global top markets. So these markets, we believe the localization of our entire website will be at least a 10% to 15% increase in local markets, right? And then so again, that's something that we're going to be launching by Q2, likely by the end of this quarter, actually.

Perfect. And last one from us. I know you mentioned the Q4 2027 EBITDA profitability target. Could you talk a little bit about some of the key factors to achieving that, marketing leverage, scale, product mix? And do you have an accompanying EPS target?

Yes. So I think, again, as we scale and given our gross margin is at 60%, profit will come with that, right? So we're going to be able to have so much more leverage once we get to $250 million, $300 million in revenue because we have our manufacturers, our suppliers, our logistics on. So we do believe that we can even slowly increase our margins from 60% to 62%, 63% within the next 12 to 18 months as well, right? So that, coupled with the scale, will then get us to -- we believe by profitability by end of Q4 2027. It just kind of continue doing what we're doing now by a much greater scale. And of course, all the costs get absorbed, okay?

And this now concludes our question-and-answer session. I would like to turn the floor back over to Danny Yeung for closing comments.

Great. Thank you, everyone, for joining us this morning. Again, I can't be more excited about what the future holds. I know I've been an entrepreneur, as mentioned for 20-plus years, but this is something I'm incredibly passionate about building a global brand that's making impact to millions of people around the world. We have a lot of great support from around the world as well from highly influential athletes, doctors, professors that makes it so much fun to be able to go on this journey. So again, thank you, everyone, for being with us today.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.