Prenetics Global Ltd (PRE) 2025 Q4 法說會逐字稿

Greetings and welcome to the Prenetics fourth quarter in full year 2025 earnings conference call. As a reminder, this call is being recorded.

Your hosts today are Sheng Wu (Danny) Yeung, Chief Executive Officer and co-founder, and Lo Hoi Chun (Stephen), Chief Financial Officer.

Mr. Young 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.prenetic.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 US 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 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 Young. 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 IMA, our pre our premium consumer health brand co-founded with David Beckham.

In just our 1st year, I 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 non-core 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 zero debt. Most importantly, we now have a clear roadmap to adjust the 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. Steven 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 2026. 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 three non-core assets. In June 2025, we sold ACT Genomics for $72 million with $46 million in cashback to Prenetics.

In January of 26, we exited the low margin Europa business and had a 13 and had an all stock $13 million dollar deal with that. And just yesterday we announced we sold our 35% stake in Insaa to Tencent for $70 million in cash in which we have already received $69 million in our bank accounts. Yeah, these moves have unlocked significant shareholder value, simplify our story, and fortify our financial position. As a result, our balance sheet is stronger than ever.

As of February 15, 2026, we have $171.1 million in total adjusted liquid assets, including cash, financial assets, and our BTC holdings with zero debt. This gives us ample runway to invest in IMA's global exition. I also want to clarify our position on Bitcoin. We seize all Bitcoin purchases as of December 4, 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 the 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. Doctor Dashan is a leading expert in longevity, performance optimization, as well as building a network of longevity clinics in the US, and his expertise will be invaluable as we scale IMA 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 a $120 million annual recurrent run rate in less than 12 months.

This growth trajectory has been nothing but extraordinary. We went from $6 million Q1 to $27.4 million 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 US and 60% of revenues coming internationally across 30 different markets.

And we achieved this growth of exceptional capital efficiency. Our blended LTV to CAC ratio is projected to be approximately 3x across all of our products, including the premium Beckham 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 a foundation of recurring revenue.

Our brand is also validated by the best. We've 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 number one tennis champion Aryna Sabalenka and recently announced F1 phenom, Ali Bearman, reinforce 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 and Company have recently initiated research coverage on Prenetics, both with buy ratings and 12-month price targets respectively of $36 and $30 dollars.

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 a call over to our CFO, Stephen Lo, to walk through the financials in more detail.

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 to Q4. Gross profit in Q4 grew over 800% year over year to $21.7 million With a consolidated gross margin of 59%. It's just that you did a loss or 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. Four-year adjusted EBITDA loss improved by 27% to $13 million.

IM8 was the 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're confidently reaffirming our 2026 guidance. We expect IM8 revenue of approximately $180 to 200 million for four-year 2026, representing nearly 300% year over year growth.

We are targeting a gross margin of approximately 50% in full year 2026. We expect for 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.

Danny, we are unable to hear you. Is your line muted?

Sorry about that. Yes, thank you, Steven. 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 billion-dollar global brand. And even for myself in the last 20+ 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 two new products that will enter very large total adjustable 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) George Kelly, Roth Capital Partners - Analyst

Hey everyone, thanks for taking my questions. So maybe, Hi Danny, a first one just on the 90-day offering, I was wondering if you could walk through the reasoning behind, having that available and what do you expect the benefit to be to your model?

Yes, great question. So, we actually started at a quarterly subscription in the US first in, December, right? And typically how we do that is we do a lot of testing on our website optimizations on a daily basis. So we start testing in the US. 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, yeah, so the benefits from consumer-wise, they get 3 months of product at a time, yeah, consumers also save about $10 monthly as well, right?

So, from 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 basically $235 for the quarterly subscription. So we get that, payment upfront. And we also save on logistics costs because instead of shipping three monthly shipments we ship it all at once and then 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 IMA Health.com, on average every new subscriber is paying us $233. So what this does is that basically is, it shortens our payback period or the period of time that, our we recoup our customer acquisition costs.

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 notable 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 to be a significant enhancement to our overall business.

Okay, that's helpful. Thank you. and then a second question, Danny, in your concluding remarks you talked about two new skews 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 its monthly or might you expand into categories where it's a sort of there's whole different characteristics to the products. Quick question.

Yeah, so right now our plan is to release two new skills by the end of Q4 of this year. Now, I'm, due to competitive reasons, I think, we don't want to release too soon what these two skills are, but it will be in the health and performance space.

And it will definitely be, in the health supplements categories, right? And also these will be very two large total addressable markets which, competitors already doing easily, anywhere from, yeah, 500 million to a billion annually just in terms of these skis. So we do believe it's going to be, 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 22 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 your momentum hasn't stopped, basically on a, month over month basis, right, in terms of the two new products in terms of the revenue guidance, those are not baked in into the 180 to 200 million number.

Okay.

Excellent thank you very much.

(Operator Instructions) Thomas Forte, Maxim Group - Analyst

Great. So first off, Danny, congratulations on a wonderful 4th quarter and year and the breakout performances 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.

Yeah, so the customer acquisition costs, right, we actually lay this out in our investor deck, so we actually have investor deck that we published on our website also 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 at spend. So, if let's say our blended average order last year over 2025 was $110 our cap was $130 right?

And then the key thing about this is that the payback pair is roughly 3.4 months. So basically we factored 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 I think in the DTC space. If you're at 3 months it's excellent. At 6 months it's good. So that means we have a loss of runaway, right?

And your other question in terms of how that has trended, our CAC has, of course, as 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 till now, we have not seen significant increases of cap even as. 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, app loving, TikTok. So, we believe we're also going to be 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, a great question. Yeah, so I'm a big component, I'm a big proponent. Of the whole entire company, using the latest AI tools and systems in place, for us, not just from 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 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 in terms of digital marketing effort on a weekly basis we'll roll out anywhere from, yeah, 800 anywhere from about 800 to 1,000 new ads, and we just let the algorithm decide, what ads 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.

Yeah, 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 that you also see, we launched an AI video last September with Aryna Sabalenka right before the US Open. And this one AI video, it basically, yeah, 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 retarget new other customers that have seen that video, right? So I think these are, yeah, specific examples of how we're leveraging it but you know we use AI in all parts of our business.

Wonderful. And then last one for me, he's 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, Clark, yes, I'm in, I think 2025 was an extremely busy year, right? You can see, you see like a, not only had 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 three of our non-core 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, yeah, 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's 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, we're always open for new opportunities, if that makes sense.

Great. Thanks, Danny.

Thank you.

(Operator Instructions) Alex Hantman, Sidoti & Company - Analyst

Thank you and hi Danny and Steven, congrats on the quarter and thanks for taking questions. 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 the majority, so the growth is just basically going to 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 fully revenue in our 1st year, and that's still a very new brand. So this year wise 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 you look at our breakdown in terms of our top five markets with the US, being number 1, 40% of revenue. So last year, US only represented $23 million out of $60 million right? So I think realistically the US market can easily support or absorb, yeah, $300 to $400 million on this one product, right? So there's still a lot of. Headways, or a runway to go, right? Number 2 markets Canada. Number 3 is UK. Number 4 is Australia. Number 5, Singapore, right? So we're truly global diversified brand, so we believe there's significant opportunities to just by acquiring new customers onto the platform.

Great context, thanks, and two more from us, Danny, 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?

Yeah, great question. Right, so this is 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. Yeah, by Q2, likely by the end of this quarter actually.

Perfect, thank you. And last one from us, you know 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?

Yeah, 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, 250million to 300 million in revenue and because we have, our manufacturers, our suppliers, our logistic arm, so I, 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 profit we believe by profitability by end of Q4 2027. It's just kind of mainly continue doing what we're doing now, yeah, by a much greater scale and of course all the costs get absorbed back, right.

Understood, thank you very much.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Danny Young 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, yeah, 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.