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 of Prenetics. Mr. Yeung and Mr. Lo will present results of operations for the first quarter ending March 31, 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 is 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 and 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. I'm 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 and a different growth profile. The Prenetics you see today is entirely different. We are now a care-focused 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 6x year-over-year, and up 23% sequentially over an already strong Q4. IM8 gross margins expanded to 64%, roughly a 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 substantial. Our average order value stepped up from approximately $110 for full year 2025 to a new customer average order value of $157 in Q4 2025 to $240 in Q1 2026 — a 53% sequential increase and more than 2x our full year 2025 baseline. Our payback period compresses, cash flow improves, and critically, retention appears stronger. Our new customer subscription rate is approximately 79%, essentially unchanged from Q4. People aren't being pushed into long commitments; they are 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 equal 12 orders a year ago. We are collecting cash roughly three times faster per customer than we were 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. 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 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 approximately 33% sequential quarterly growth in 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 engine behind the numbers. Three things make this engine work. Each is a moat that compounds. 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 deepened in Q1: Formula One driver Ollie Bearman joined, and more recently two-time NBA MVP Giannis Antetokounmpo. I was just with Giannis in Milwaukee last week. We captured some great content that we'll be able to show very soon. Most recently, we announced a partnership with Inter Miami CF as their 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 to our revenue base, each of these partnerships is not material 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 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 includes doctors and scientists from Mayo Clinic, Cedars-Sinai, and 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-grade clinical evidence is extremely rare in supplements. We believe it is 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, we have about 3,000 live Meta ads at any given time, a 60x increase since launch. We put out roughly 600 new ads weekly. 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 diversifying away from Meta concentration. Over 2026, our channel mix is expected to move from approximately 85% Meta to roughly 55%, deploying the same engine across TikTok, YouTube, and AppLovin to unlock new audiences at improved efficiency. Now let me spend a few minutes talking about what's ahead in terms of our 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. Starting with 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. No challenger brand can match that alignment. Next, creatine: the global creatine category is about $1.3 billion and growing 26% a year. Creatine is having a cultural moment, 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. 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. Third, kids' gummies: the global kids supplement category is roughly $3.6 billion, growing 8% a year, and is ripe for disruption. Incumbents like Flintstones, Centrum Kids, and L'il Critters are legacy brands often loaded with sugar and artificial ingredients, with little earned parental trust. Our advantage is simple: parents who trust IM8 for themselves will trust IM8 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 meaningful uplift layered on top of the cohort economics I walked through earlier. They extend the brand into the home, 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 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 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, 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 roughly $200 million revenue guidance for 2026. A $1 billion brand at just 0.5% global market share is well within reach — 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 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. 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 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, the breakout brands share three traits: they 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 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, and NASA, RCT-grade clinical validation, and an AI and operating model that moves at a pace I had not 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 ultimately convinced me to join is the cohort data. In my career, I've looked at hundreds of cohort curves for supplement brands, but I've never seen LTV numbers like this: 81% repeat revenue, $240 new customer AOV, and 2026 cohorts 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 will be focused on three things: first, scaling the finance organization globally to keep pace with the brand; second, sharpening capital allocation and unit economic discipline so we measure every dollar of marketing spend by payback and LTV, channel by channel, cohort by cohort; and third, working hand-in-hand 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, the 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 compounded factors: 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 a 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 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, an investment that, as Danny walked through, is already showing in our cohort economics. I will also cite that the EBITDA range we 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 P&L, which represents our 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 investments in funds 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 and bought 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 raising our full year 2026 IM8 revenue guidance to $190 million–$210 million, up from our prior $180 million–$200 million range. For Q2 specifically, we expect total revenue of $46 million–$48 million, with IM8 contributing $44 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.
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. Looking forward to getting to know you better. To kick things off, how have you seen customer acquisition efficiency trend, especially as you mentioned diversifying the channels in which you are marketing? How would that make things more efficient as well?
Hi, Ryan. In terms of customer acquisition: roughly 85% of our current spend is on Meta and 15% on Google. We believe there's a bigger global audience, which is why we've already started diversifying acquisition channels into TikTok, AppLovin, and YouTube. We've been testing spend on those platforms at about $3,000–$5,000 daily to start. When we're spending a few thousand dollars, it's about testing, learning, and iterating before scaling. By the end of the year, we expect to unlock new growth and new audiences, which will improve acquisition efficiency.
Got it. That's helpful. Lastly for me, total customer orders were down about 4% quarter-over-quarter. You mentioned product mix drove that. Anything to read into there, and have you seen a rebound in the second quarter?
The decline in customer orders was deliberate. In Q1 we shifted many orders into quarterly subscriptions. The key metric is servings per quarter, and that actually increased. Because people are buying three months at a time, customer orders can decrease while total servings increase. Our servings increased more than 20% quarter-over-quarter. That's the important figure to track given the quarterly subscription rollout.
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.
Hey, everyone. Hi, Danny. Thanks for taking the questions. A few for you. First, what happened in April and May with the big acceleration? Could you detail what drove that?
George, we are constantly iterating and testing. One key thing in Q1 was increasing creative diversity on Meta and raising the number of quality ads. We now have roughly 3,000 ads on Meta and produce 600–800 new ads weekly. Creative output has increased substantially over the past few months. Scaling spend on Meta requires this creative diversity engine; you cannot just increase spend without it. Also, announcements around Giannis, Ollie Bearman, and Inter Miami have halo effects on brand credibility, contributing to momentum in April and May while we maintained prior cap levels. We also saw improved retention from our January cohorts: when January customers were available to renew in April, renewal rates helped accelerate revenue. We have seen quarterly subscribers deliver about 10% higher retention than monthly subscribers in the first four-month period.
Understood. Second, a follow-up on TikTok: how early are you there? Have you done much through TikTok? Talk about building an affiliate network and timing for ramping TikTok spend.
TikTok is a key priority this quarter. We currently have roughly 500 affiliates on TikTok and are testing at $3,000–$5,000 daily. We expect to reach 1,000 affiliates by the end of the month and continue growing. We recently had a call with TikTok senior management; they are excited for us to be on the platform. Over the next three to six months, you should see significant progress on TikTok. Given our success on Meta, I am convinced we can replicate that performance on TikTok, which is a platform where many consumers are now shopping.
Thanks. One last multi-part question: I didn't see IM8 marketing spend in the press release. Could you give us quarterly marketing spend? Second, any update to prior adjusted EBITDA guidance?
Yes. Stephen, what was our total marketing spend for Q1?
The marketing spend for Q1 was $22 million.
Regarding adjusted EBITDA guidance: we previously guided adjusted EBITDA in a range around negative $15 million to negative $20 million. Given our growth trajectory, going from roughly $60 million last year to $190 million–$210 million this year, we've been able to keep the adjusted EBITDA loss very similar to last year. We are growing rapidly while maintaining capital efficiency. The adjusted EBITDA guide is unchanged.
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 welcome to the team, Brian. First, on the guidance raise, you mentioned conservatism baked in and that the new SKUs are not included. Is there anything else that could drive upside beyond the upper end of guidance?
There are several sources of upside. New channels like TikTok, YouTube, and AppLovin are not yet quantified and could add significant upside. Scaling further on Meta also offers upside. The three new SKUs are not included in guidance because they'll launch in Q4. Based on our track record — for example, the successful launch of Daily Ultimate Longevity last October — we believe we will successfully introduce new products. Additionally, we are truly a global brand shipping to 43 countries. Opportunities in 2027 and beyond include potential launches in China and India. There is significant upside in the future. For 2026, we are comfortable with our current projections.
Thanks. One more: you talked about randomized controlled trials covering gut health and longevity. Could you discuss trial design, what type of data you plan to get, and how you will use it compared to previous studies?
These will be robust twin studies. We have detailed one slide in the investor deck: the gut health trial will have approximately 120 participants and the longevity trial about 180 participants. We'll test biomarkers before and after individuals are on the product for eight and twelve weeks. We plan to start recruitment within 30 to 45 days. What gives us confidence is the volume of customer feedback and reviews — we now have a 4.6 rating on Trustpilot across 1,300 reviews and over 16,000 five-star reviews overall. It is rare for a supplement brand to run RCTs on finished products. Many companies test individual ingredients; we are testing finished products to build rigorous clinical evidence.
Thanks, Danny. One last question: any early read on engagement for the Superpower partnership and a test-supplement-retest framework showing up yet?
We've launched the Superpower partnership in the U.S. Early results are positive. There is about a 10%–15% uptake rate of individuals purchasing the product along with a blood test. Over time, individuals can quantify IM8's effect based on baseline blood markers and retesting after 90 days, which aligns with our RCT design.
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 has been a lot of discussion about whether our growth can be maintained. Q1 shows that it can not only be sustained but continue growing. We are seeing continued momentum in Q2, which gives me strong conviction as we progress through 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 for following our journey; 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.