PRE

Strategic Transparency & Core Value Proposition

• This is the company's first live public earnings webcast, paired with a 40-page shareholder letter and 80-page investor deck sharing full granular data including monthly cohort performance, full customer acquisition cost history, and third-party independent retention benchmarking. Management's core promise is full transparency for all shareholders regardless of size.
• The company's core strategy is to build a science-backed, trusted premium consumer health brand: all products undergo rigorous third-party testing, carry NSF Sport certification, and the company is conducting three randomized placebo-controlled clinical trials (one at the Mayo Clinic) to validate product efficacy.

Key Operational Milestones

• 20 months after launch, consolidated adjusted free cash flow turned positive in July 2026 for the first time in company history. Management expects Q3 2026 to be the first positive cash flow quarter, with positive cash flow expected to continue permanently after that.
• The company secured a $1 billion growth commitment from General Catalyst following deep due diligence of the company's full cohort transaction-level data, which will fund 70% of future customer acquisition spending, removing cash constraints for growth. As of Q2, the company holds $109.4 million in cash and current financial assets, with a strong balance sheet.
• Prenetics is an AI-native organization with only ~70 total employees, delivering projected 2026 revenue of $220-230 million, resulting in industry-leading revenue per employee. Fixed operating expenses declined 21% QoQ despite doubling customer acquisition spend from Q1 to Q2, leveraging AI across creative, marketing, operations, and finance.
• As of Q2, the company has 140,000 active subscribers, with ~87% of total revenue recurring. Third-party credit card panel data shows IM8's 20-month customer retention is higher than established competing supplement brands in the category. Lifetime gross profit return on every acquisition dollar spent to date is $1.52, and this figure continues to rise as cohorts mature.
• New product pipeline: IMA Hydration (targeting the $37 billion global hydration category) will launch in Q4 2026, followed by a line of premium NSF-certified gummies (targeting the $25 billion global gummy supplement category) in Q1 2027. Management is evaluating future expansion into additional consumer health categories including sleep, cognition, recovery, women's health, men's health, and sports performance, with no new products announced beyond hydration and gummies at this time. All new product launches are pure upside to current guidance, as they are not included in existing forecasts.

Governance Updates

• Caroline Levy, a veteran consumer industry analyst with 30+ years of experience, joined the company's board of directors, the audit committee, and the governance and nominating committee yesterday.

• Full-year 2026 total revenue guidance was raised to $220-$230 million, with IM8 revenue expected to be $215-$222 million. The lower bound of this range is underwritten by existing recurring subscription revenue, not just projected new growth.
• Q3 2026 guidance: Total Prenetics revenue of $63-$64 million, with IM8 revenue of $61.5-$62.5 million, representing 38% sequential revenue growth over Q2 2026. Adjusted free cash flow is expected to remain positive in Q3, as it was in July.
• Q4 2026 implied revenue (to hit the top end of full-year 2026 guidance) is ~$81.2 million, representing 31% sequential growth over Q3 and 3x revenue growth over Q4 2025. The new Q4 2026 hydration product launch is not included in this guidance, so it will add full upside to these figures.
• Adjusted EBITDA loss guidance for the second half of 2026 is negative $8 million to negative $12 million, a substantial improvement from the negative $24.6 million adjusted EBIT loss in the first half of 2026. This improvement is driven by operating leverage across fixed costs, ambassador costs, and customer acquisition efficiency.
• Management expects the company to exit 2026 with a $300 million annualized revenue run rate, and has initiated 2027 full-year revenue guidance of at least $400 million.

Prenetics reports two primary business segments, with IM8 (its core daily supplement line) representing nearly all of the company's revenue. For Q2 2026:

• Total Prenetics revenue: $46.5 million, up 29% quarter-over-quarter (QoQ) and 3.9x year-over-year (YoY). IM8 revenue was $45 million, up 33% QoQ, accounting for ~96.8% of total revenue.
• Gross profit for Prenetics was $30.2 million, with a 65% gross margin (up 300 basis points YoY). Contribution profit was $21.4 million, representing a 46% contribution margin (up 16 percentage points YoY).
• Adjusted EBITDA for Q2 was negative $19 million, with a net loss of $9 million (or $0.52 per share), representing a 45% reduction in loss per share from the year-ago period.
• In July 2026 (the first month of Q3), Prenetics generated $20.9 million in total revenue (annualized run rate of ~$251 million), with a 64% gross margin and 49% contribution margin. IM8 acquired 47,373 new customers in July, the largest single monthly cohort in company history, at a 21% lower customer acquisition cost (CAC) of $239 vs. Q2 2026.

No explicit material risks or operational failures were discussed by management during the call. Management noted that it has not baked the improved July 2026 CAC into its guidance, as it is too early to confirm this efficiency is sustainable, and guidance is based on the higher first-half 2026 CAC baseline. Additionally, management emphasized that it does not know what the results of its ongoing clinical trials will be, though it is confident in its product formulation and ingredients.

Q: With General Catalyst removing cash constraints on marketing, how should second-half marketing spend and adjusted EBITDA losses be expected to trend? / A: Management expects marketing spend as a percentage of revenue to stay roughly in line with Q2 levels, only slightly more favorable than Q2. It does not assume the very favorable July CAC improvement will continue, so marketing spend will not be meaningfully lower as a percentage of revenue than in Q2, resulting in the guided EBITDA loss range for the second half.

Q: What is the timeline from deciding to enter a new category to launching a product, and what is your build vs. buy strategy for new categories? / A: Management deliberately takes 12-18+ months from category selection to launch, prioritizing quality and product superiority over speed of expansion, which is why only two new products are launching in 20 months. The current primary strategy is organic build of new products; while management will evaluate strategic acquisition opportunities if they arise, it is not a near-term focus.

Q: What drove July's revenue acceleration and improved CAC, and has August CAC normalized from July's levels? / A: The improvement was driven by spillover from higher Q2 marketing spend, growing organic word-of-mouth as the brand strengthens, and momentum from offline events and ambassador partnerships. It is too early to report full August CAC figures, but momentum continues, and management did not bake July's improved CAC into guidance to begin with.

Q: What is the company's view on retail distribution and international expansion, and what is your moat against competitors copying your strategy? / A: Management sees no need for retail distribution for at least the next 24-36 months, as the 100% DTC online model continues to deliver strong unit economics and rapid growth with simple operations. The company currently operates in 46 countries, with China and India as the largest markets not yet entered; China entry is targeted 18-24 months out, while India has not yet been explored. Management notes that while individual elements of its strategy can be copied, the combination of science, brand loyalty, recurring subscription scale, AI-driven operating efficiency, and 20 months of proven compounding performance creates a rare moat that cannot be easily replicated.