Prepared remarks
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, Brian Rosen, Chief Financial Officer 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 is 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 New York 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 want to start 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 track 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. 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-oriented consumer health company anchored by IM8: recurring subscription revenue, expanding gross margins, global distribution across 43 countries, and 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. Regarding Q1, on a continuing operational basis, total revenue was $36 million, up approximately 333% year-over-year. IM8 contributed $33.8 million, nearly six times 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. Ninety-three percent 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 we did this quarter wasn't a new product; it was completing the international rollout 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 two times our full year 2025 baseline. Our payback period compresses, cash flow improves, and critically, retention has appeared stronger. Our new customer subscription rate is approximately 79%, essentially unchanged from Q4. People aren't being pushed into long commitments. They're choosing it because the product works. Let me give you the cohort data because this is where the story gets really interesting. In 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 three times 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 LTV of $900 to $1,100 versus the $571 we delivered on mature cohorts. Eighty-one percent 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%, Alidi 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 to $210 million, up from our prior range of $180 million to $200 million. For Q2, we expect total revenue of $46 million to $48 million, with IM8 contributing $44 million to $46 million, which marks an approximately 33% sequential quarterly growth in IM8 revenue. Importantly, this guidance excludes three Q4 product launches: hydration, creatine, and kids gummies. Those are pure upside. I want to also spend a few minutes talking about the engine behind the numbers. Three things make this engine work. Each is a moat that compounds. The first, athlete equity alignment. David Beckham co-founded IM8. Aryna Sabalenka, world number one tennis player, joined last June and is a partner. Our roster has deepened in Q1. In the weeks since, we signed Formula One driver Ollie Bearman. More recently, two-time NBA MVP Giannis Antetokounmpo. 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 announced a partnership with Inter Miami CF as their official health supplements partner, which 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 to our revenue base, each of these partnerships is 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 takes the product every single day. They tell their friends and family about it, and it spreads very fast. The second moat is our science. Our scientific advisory board spans doctors and 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. Randomized controlled trial–grade clinical evidence is extremely rare in supplements. We believe it's worth investing in. That will be a very defensible moat. Third, we have an AI-driven marketing engine. When we first started last year, we had about 50 ads running. Today, at any given time, we have about 3,000 live Meta ads, a 60-fold 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 on 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, and AppLovin to unlock new audiences at improved efficiency. Now about the product roadmap, because this is central to our growth story. In Q4 2026, we are launching three new products: hydration, creatine, and kids gummies. These are not random line extensions. Each targets a large, fast-growing category and plays to a structural advantage we already have, giving our existing community more reasons to make IM8 part of their daily lives. Hydration: the global hydration category is roughly $37 billion, growing 8% a year, dominated by names like Gatorade, Liquid I.V., DripDrop, and Optimum Nutrition. 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 and 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. Creatine: the global creatine category is about $1.3 billion and growing 26% a year, the fastest-growing of the three. Creatine is expanding beyond bodybuilding into cognition, healthy aging, and women's health. Competitors include 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 we make. Kids gummies: the global kids supplement category is roughly $3.6 billion, growing 8% a year, and is ripe for disruption. The incumbents, Flintstones, Centrum Kids, L'il Critters, are legacy brands often loaded with sugar and artificial ingredients, with little earned parental trust. 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. The critical point that ties it together: every one of these launches sells into our base of over 80,000 to 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 to $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, compound customer lifetime value, and none of this revenue is in our guidance. It is all upside. Moving to capital allocation and 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 adopted a policy that the company will not purchase Bitcoin or 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, the 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? 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 adding 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 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. 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 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 on my first day. Before Stephen walks through the Q1 numbers in detail, I'll take just two 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 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 Ramp Inc. All of these were successfully acquired. I've sat in the operator seat through scale, capital raises, and exits, and I know what separates the brands that break through from the ones that stall. Why I joined IM8 is simple. Across every transaction I've worked on, breakout brands share three traits: 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, a scientific advisory board spanning Mayo Clinic, Cedars-Sinai, NASA, RCT-grade clinical validation, and an AI-driven 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. I was on The Beckham Stack long before I met Danny or any of the team. I know the product works because I use it. The thing that convinced me to join is the cohort data. 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 tracking to $900 to $1,100 in 12-month revenue per customer. This isn't a marketing story. It's disciplined unit economics when a brand hits product-market fit at scale. My role here is 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; second, sharpening capital allocation and unit economic discipline, measuring every dollar of marketing spend against payback and LTV, channel by channel, cohort by cohort; and third, working with Danny and the team to ensure our financial and operational foundation supports the trajectory ahead. I look 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 Sports Partners 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 $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, gross margin was 64.3%, up from 16.3% in Q4 2025 and 59.6% a year ago — a 400 basis point sequential improvement. The margin expansion was driven by five factors combined: scale-driven manufacturing efficiencies as production volumes grew across our flagship lines; negotiated unit economics with key contract manufacturers and ingredient suppliers; favorable product mix and shift toward high-margin SKUs and subscriptions; packaging optimization; and improved fulfillment and freight efficiencies as order density grew across our 43 international markets. We expect to sustain these efficiencies through the balance of 2026 as volume scales 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, an investment that, as Danny walked through, is already showing in our cohort economics. I will also cite that the EBITDA range disclosed in the press release is driven entirely by the non-cash and non-operating value movements on borrowing liabilities and consideration shares as part of the Europa Sports Partners 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 were $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 profit and loss, representing our investments in funds. Subsequent to 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 investments and at-scale cash, we have financial resources of about $147 million. Under our $40 million cash repurchase program, we have deployed approximately $19 million, buying approximately 968,000 shares. Management personally invested an additional $2.75 million in open market purchases in previous trading windows. Looking ahead, based on Q1 results and April IM8 monthly revenue of $14 million, up 18.6% month-over-month, we are reaffirming our full year 2026 IM8 revenue guidance to $190 million to $210 million, up from our prior $180 million to $200 million range. For Q2 specifically, we expect total revenue of $36 million to $48 million, with IM8 contributing $34 million to $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.
Questions and answers
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 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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. Ryan Meyers, great to meet you and welcome to the story. To kick things off, how have you seen customer acquisition efficiency trend, especially as you look to diversify the channels in which you're marketing? How would that make things more efficient as well?
Hey, Ryan. In terms of our customer acquisition, roughly 85% of our current spend is on Meta and 15% on Google. We've already started diversifying our customer acquisition channels into TikTok, AppLovin, and YouTube. Right now, we've experimented with spending $3,000 to $5,000 daily on these other platforms. When we're spending a few thousand dollars, it's primarily testing, learning, and iterating before we scale these up. By the end of the year, we expect to unlock new growth and channels, which will help customer acquisition efficiency.
Got it. That's helpful. Lastly for me, you gave KPIs showing total customer orders were down about 4% quarter-over-quarter. You alluded to changes in product mix that drove that. Anything to read into there with customer orders, and have you seen that rebound in the second quarter?
The customer orders decline was deliberate. In Q1, we shifted many orders into quarterly subscriptions. Servings per quarter is the key figure — that actually increased. When customers buy three months at a time, customer orders will decrease while servings increase. Our servings increased more than 20% quarter-over-quarter. It's not an apples-to-apples comparison because last quarter we didn't have quarterly subscriptions contributing to the orders metric.
No, that makes sense. Thanks for taking my question.
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. Can you detail what drove that?
We're constantly iterating and testing. One key focus in Q1 was increasing creative diversity on Meta and the number of quality ads. We've built a creative output engine: roughly 3,000 ads on Meta now, and 600 to 800 new ads weekly. Increasing spend on Meta requires that creative diversity engine. Also, announcements and partnerships — Giannis, Ollie Bearman, Inter Miami CF — have halo effects on brand reputation, contributing to momentum in April and May while maintaining acquisition caps. Additionally, our January cohorts became eligible to renew in April, and we've seen stronger retention from quarterly subscribers. In the first four months, quarterly subscribers show about a 10% higher retention rate than monthly subscribers.
Understood. Second, can you speak specifically to TikTok? How early days is it there? Have you done much on TikTok? Talk about building an affiliate network and plans and timing for ramping TikTok spend.
TikTok is a key priority this quarter. We have roughly 500 affiliates on TikTok and are testing with $3,000 to $5,000 daily. We expect to reach about 1,000 affiliates by the end of the month and continue growing from there. We recently engaged with TikTok senior management; they are supportive of a larger presence. In the next three to six months, you should see significant progress on TikTok. Given what we've done on Meta, I'm confident we can replicate success on TikTok, which is now an important commerce platform.
Last one for me: I didn't see IM8 marketing spend anywhere in the press release. Could you give us quarterly marketing spend? Second, is there any update to your prior adjusted EBITDA guide for the year?
Stephen, what was our total marketing spend for Q1?
The marketing spend was $22 million.
In terms of adjusted EBITDA guidance, we previously guided adjusted EBITDA in the range of roughly $15 million to $20 million. Given our growth trajectory — moving from about $60 million revenue last year to a projected $190 million to $210 million this year — we've kept adjusted EBITDA loss similar to last year while investing in growth. The adjusted EBITDA guide remains unchanged.
Okay. The adjusted EBITDA guide is unchanged. 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. Welcome to the team, Brian. First question: on the guidance raise, you talked about conservatism baked into that and that the new SKUs are not included. Is there anything else that could drive upside beyond the upper end of guidance?
Thanks, Alex.
Yes. New channels such as TikTok, YouTube, and AppLovin present incremental upside, though we don't yet have quantified data to include them in guidance. We also expect upside from further scaling on Meta as creative and channel mix improve. The three new SKUs are not factored into guidance because they launch in Q4; it's early to quantify revenue. Our track record shows we can successfully launch new products — for example, Daily Ultimate Longevity last October. Additionally, we are a truly global brand shipping to 43 countries. Longer-term upside exists in markets we haven't yet launched at scale, such as China and India, which could be material in 2027 and 2028.
Thanks. One more: you referenced randomized controlled trials for gut health and longevity. Can you talk about trial design, what biomarkers you'll measure, and how you'll use the data compared to the study you did previously?
These will be two robust trials. We detailed one slide in the investor deck. The gut health trial will include about 120 participants and the longevity trial about 180. We'll test biomarkers before and after intervention periods of eight and twelve weeks, respectively. We expect to start recruitment within the next 30 to 45 days. What gives us confidence is the volume of positive customer feedback and reviews: a 4.6 Trustpilot rating across 1,300 reviews and more than 16,000 five-star reviews overall. It's rare for a supplement brand to perform RCTs on finished products. Most companies test ingredients rather than finished formulations. We believe RCT data will be a defensible differentiator.
Thanks. Speaking of biomarkers, the Superpower partnership has been live for a bit. Any early read on engagement or on testing-supplement-retest adoption so far?
We launched the Superpower partnership in the U.S. Early results are positive. There's been about a 10% to 15% uptake rate for customers purchasing product along with a blood test. Over time, individuals can quantify the effect of IM8 based on a baseline blood marker test and a retest after 90 days, which aligns with our RCT protocols.
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.
Thank you, everyone. There's been a lot of discussion around whether our growth can be sustained. Q1 demonstrated that growth can be maintained and accelerated. In Q2 we're seeing continued momentum, which gives me strong conviction as we move further into 2026. We believe we are building a once-in-a-lifetime generational health supplements brand that in the next three to four years could be one of the world's biggest supplement brands. Thank you everyone for following our journey. It's an exciting time here.
Thank you. That concludes 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.