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 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 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, co-founded 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 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 $0 debt. Most importantly, we now have a clear roadmap 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 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 cash back to Prenetics. In January 2026, we exited the low-margin Europa business, and had an all-stock $13 million deal with that. J ust 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, ample runway to invest in IM8's global expansion. I also want to clarify our position on Bitcoin. We ceased 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 it 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 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 U.S. and 60% of revenues coming internationally across 30 different markets. 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 Beckham Stack. Our payback period for the full year of 2025 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. O ur global ambassadors, including World No. 1 tennis champion Aryna Sabalenka, and recently announced F1 phenom, Ollie 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 Partners 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 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 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 are confidently reaffirming our 2026 guidance. We expect IM8 revenue of approximately $180 million-$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-$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?
Ah, sorry about that. Yes, thank you, Stephen. 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 my 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 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.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, 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 would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from George Kelly with Roth Capital Partners.
Hey, everyone. Thanks for taking my questions.
Hi, George.
Hi, Danny. Our 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. Yeah, so we actually started quarterly subscriptions in the U.S. first in December, right? And typically how we do things, 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. Yeah, so the benefits from consumer-wise, they get three 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 one-month subscription for $89 monthly, and since the introduction of the quarterly subscription, it becomes $78 × 3. Right? So basically $235 for a quarterly subscription.
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. What that has done is actually has significantly increased our average order value from approximately $130 from end of Q4 to $233. Basically, if you think about every single new customer that's coming into im8health.com, on average, every new subscriber is paying us $233. What this does is that basically it shortens our payback period or the period of time that we recoup our customer acquisition cost. We believe this is a significant benefit. At the same time, now for consumers, they now have three months of product to try the product, all right?
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 noticeable 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 this to be a significant enhancement to our overall business.
Okay. Okay. That's helpful. Thank you. Then a second question, Danny, in your concluding remarks, you talked about two new SKUs coming this year.
Yes.
I understand if you don't want to tell us what they are at this point, but maybe, if you could provide a little more information just about, timing of those launches. 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?
So great question. Yeah. So right now, our plan is to release two new SKUs by the end of Q4 of this year. Now, due to competitive reasons, yeah, I think, you know, we, we don't want to release too soon what these two SKUs are, but it will be in the health and performance space. I t will definitely be, yeah, in, in the health supplements categories, right? And also, these will be very two large total addressable markets, which, you know, competitors are already doing easily, you know, anywhere from $500 million to $1 billion annually, just in terms of these SKUs. 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-$200 million for the year, I guess two 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. Then secondly, are the new products baked into that guide?
Yes, great question, right? So I think we are still seeing continued momentum. So, yeah, momentum hasn't stopped, you know, 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 million-$200 million number.
Okay. Okay, excellent. Thank you very much.
Again, that is star one if you would like to ask a question. 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 performances, IM8. So I have three questions. I'll go one at a time.
Sure.
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. We actually have an Investor Deck that we publish on our website, and also there's a link to it on the press release. You should think about it as it's roughly about 0.8x in terms of return ad spend. If, let's say, our blended average order last year over 2025 was $110, our CAC was $130, right? The key thing about this is that the payback period is roughly 3.4 months. Basically, we factor that in when we're making decisions in terms of increasing spending or not increasing spending, right?
But, you know, given the short time period of 3.4 months, we believe we actually have significant flexibility to go from three to six months, right? Because in the DTC space, if you're at three months, it's excellent. At six months, it's good. So that means we have a lot of runway, 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 CAC even as we scale, right?
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, you know, AppLovin, TikTok. So we believe we're also going to 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 are 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, you know, great question. So I'm a big component, I'm a big proponent of the whole entire company, yeah, using the latest AI tools and systems in place, you know, 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? So for example, how we leverage AI in terms of our digital marketing efforts, on a weekly basis, we'll roll out anywhere from, yeah, about 800- 1,000 new ads.
We just let the algorithm decide, you know, what ads works, and then only about 10% of these ads will actually work, and we call these a winning ad a nd 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. But that gives you one example of, yeah, basically how we use AI and of course, and then if you look in the investor deck, you also see, we launched an AI video last September with Aryna Sabalenka right before the US Open. 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 AI, but, you know, we, 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, CAC. Yes, I mean, I think, yeah, 2025 was an extremely busy year, right? You can see, you see, like, not only had we, you know, built a very strong business, which was, you know, from, from scratch, right? We, we built that organically, the whole brand, the playbook, you know, 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, hey, 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 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, you know, 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 it makes sense.
Great. Thanks, Danny.
Thank you.
Our next question comes from Alex Hantman with Sidoti & Company.
Thank you, and hi, Danny and Stephen. Congrats on the quarter, and thanks for taking questions.
Alex, yeah.
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 going to come from the majority of that growth is going to come from making 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, 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 these 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.
If you look at our breakdown in terms of our top five markets, with the U.S., being number one, 40% of revenue. So last year, U.S. only represented $23 million, now $60 million, right? So I think realistically, the U.S. market can easily support or absorb, yeah, $300 million-$400 million on this one product, right? So there's still lots of headway, a runway to go, right? Number two market is Canada, number three is U.K., number four is Australia, number five, Singapore, right? So we're a truly global, diversified brand, so we believe there's significant opportunity to, in just by acquiring new customers onto the platform.
Great context. Thanks. T wo more from us. Dan, I know you just spoke about some of the international, you know, revenue opportunities. I'm curious, as you've started localizing websites, you know, what kind of revenue uplift have you seen? And, you know, what international markets then are you sort of most excited about, given that?
Yeah, 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 you know, by Q2 of this year, we will be localizing in at least five different markets, in terms of our whole website, our ads, our campaigns, you know, for example, in Germany, right? So a lot of the ads, you know, Germany is now I think number eight or number nine in terms of global top markets. You know, so these markets, we believe the localization of our entire website will be at least a 10%-15% increase in local markets, right? And then, so again, that's something that we're gonna be launching by, yeah, by Q2, likely by the end of this quarter, actually.
Perfect. Thank you and last one from us. I know you mentioned the Q4 2027 EBITDA profitability target. Could you talk a little bit about, you know, some of the key factors to achieving that? You know, marketing leverage, scale, product mix, and do you have an accompanying, you know, EPS target?
Yeah. So I think, again, as we, as we scale, and given our gross margin is at 60%, you know, profit will come with that, right? So we're gonna be able to have so much more leverage, you know, once we get to, you know, $250 million-$300 million in revenue, because we have, you know, our manufacturers, our suppliers, our logistic on. So we do believe that, you know, we can even slowly increase our margins, you know, from 60% to, you know, 62%-63%, you know, within the next, you know, 12-18 months as well, right? So that, coupled with the scale, will then get us to profitability, 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.
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. You know, I know I've been an entrepreneur, as mentioned, for 20+ years, but this is, yeah, something I'm incredibly passionate about, building a global brand that's making impact to, you know, 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.