Full Year 2025 Prenetics Global Ltd Earnings Call

<unk> 25 earnings conference call.

Operator: Greetings, welcome to the Prenetics Q4 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 Q4 and full year ended 31 December 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.

As a reminder, this call is being recorded.

Your hosts today are Danny Young Chief Executive Officer, and cofounder and Stephen Lowe Chief Financial Officer Mr.

Mr Young and Mr. Law will present results of operations for the fourth quarter and full year ended December 31 2025.

And provide a corporate update.

Press release detailing these results was released today and is available on the Investor Relations section of our company's website www dot pre Netflix dot 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 U S. Private Securities Litigation Reform Act of 1995.

Operator: 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 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.

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.

Operator: 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.

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 Dot FCC Dot Gov.

At this time I'll turn the call over to kinetics, 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.

Danny Yeung: Great. Thank you. Thank you. Good morning, everyone. Welcome to our Q4 and full year 2025 earnings call. For those who have been following our story, thank you very much for your continued support. 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.

Are those new to printer you.

You are joining us at a pivotal inflection moment.

<unk> was the most transform me tip year in our company's history, we achieved record revenue of $92 4, million% to 480% increase year over year.

Driven by the explosive launch behind me.

Our premium consumer health brand Cofounded with David Beckham and.

In just our first year.

A $120 million annualized revenue run rate.

<unk> that we believe is one of the fastest ever recorded in the global supplement industry.

We also completed a decisive decisive strategic dive.

Danny Yeung: 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.

Vesting, our noncore assets do become repair play consumer health leader. This has sharpened our focus and improve our margin profile and solidified our balance sheet, which now stands at approximately $171 million and total liquidity was zero debt.

Most importantly, we now have a clear roadmap to adjusted EBITDA profitability by Q4 of 2027.

<unk> by strong unit economics, and significant operating leverage.

Today, I'll walk you through our strategic transformation and the incredible growth story of it Steve.

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 of all the transformation that occurred in 2020 fine early 'twenty six 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.

Danny Yeung: 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. Just 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, simplify our story, and fortify our financial position. As a result, our balance sheet is stronger than ever.

In June 2025, we sold <unk> genomics were $72 million with $46 million in cash back to pre nellix.

In January of 2006, we exited the low margin <unk> business.

And having darcie and kind of all stock 13 million dollar deal with that and.

And just yesterday, we announced we sold our 35% stake and insider to tencent or $70 million in cash.

In which we have already received $69 million in their bank accounts.

These moves have unlock 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 million 1 million and total adjusted liquid assets, including cash financial assets and they are often TCE holdings with zero debt.

Danny Yeung: As of 15 February 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 IM8's global expansion. I also want to clarify our position on Bitcoin. We ceased all Bitcoin purchases as of 4 December 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.

This gives us ramble ample runway to invest in <unk> global expansion.

I also wanted to clarify our position on Bitcoin, we ceased all big corn purchases as of December four 2025, and we will permanently not engaged in any big coin a crypto purchases in the future.

Currently 510, BTC on our balance sheet, which provides additional financial flexibility as we scale. Our focus is squarely on building <unk> into a global consumer health powerhouse.

In line with the strategic focus we recently announced a change to our board of directors and.

And in Germany, who joined our board in connection with our Big cost strategy has resigned.

At the same time, we are thrilled to welcome Dr. Sean Shaw to our board.

Danny Yeung: 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 US. 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 a $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.

Sean 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 globally.

Now, let's turn to item eight as everyone knows we cofounded with David Beckham, Amy was built on the vision of making elite science backed nutrition assessable to Eric.

This powerful combination of global influence and scientific credibility allowed us to achieve a $120 million annual recurring run rate in less than 12 months.

<unk> growth trajectory has been nothing but extraordinarily January we went from 6 million in Q1 to $27 4 million in Q4.

This isn't just a launched spike is a reflection of the product market fit with <unk> on a global basis, we're 40% of revenues coming from the U S and 60% of revenues coming internationally across 30 different markets.

Danny Yeung: 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. 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.

And we achieved this growth exceptional capital efficiency, all blended LTV to CAC ratio is projected to be approximately three X across all of our products, including the premium back in stock.

Our payback period for the full year of 2005 with just three four months.

<unk> us to recycle marketing capital incredibly quickly.

In early 2026, we made a strategic shift to prioritize orderly subscriptions, which was which was a new option for our customers.

This we believe has been a game changer.

Blended average order value for every new customer has more than doubled.

Danny Yeung: 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. Our global ambassadors, including world number one 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 Stephen, I want to share some exciting news on the investor research front.

From a $110 in 2020 are fine 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 right. Our business is built on a foundation of recurring revenue.

Our brand is also validated by the best we Bill and the Amazing Scientific Advisory board, including leading doctors and professors from the Mayo clinic, Cedars Sinai and many more and our global ambassadors, including well number one tennis champion Arena Linker, and recently announced F. One Phenom Ali Behrman.

To reinforce our credibility in the world Elite performance.

Before I hand, it over to Steve I want to share some exciting news on Investor Research front, we are happy to announce that both Roth capital and Sidoti and company have recently initiated research coverage on <unk>.

Danny Yeung: We are happy to announce that both Roth Capital 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. 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.

Both of them by ratings in 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 loan to walk through the financials in more detail.

David.

Thank you Danny and good morning, everyone.

I'll begin with our fourth quarter results.

Stephen Lo: Thank you, Danny, and good morning, everyone. I'll begin with our Q4 results. Total revenue in Q4 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 Q4 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.

Revenue in the fourth quarter, Thats, 457% year over year to $36 6 million.

And increased 55% sequentially from Q3.

It was driven by an eight week contributed $27 4 million Q4.

Gross profit in Q4 grew over 800% year over year to $21 $7 million.

With a consolidated gross margin of 39%.

Adjusted EBITDA loss for the fourth quarter was $2 3 million.

A 17, 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.

Revenue was $92 4 million up approximately 480% from 2024.

Gross profit was $48 9 million.

And approximately 428% increase.

Stephen Lo: 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 to 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.

Full year, adjusted EBITDA loss improved by 27% to $13 million.

<unk> was the clear driver.

Generating $61 million in revenue for the full year 2025.

A healthy 63% gross margin.

The divestiture of low margin drove up business with Florida and has our consolidated margin profile in 2026.

Looking ahead, we are confidently reaffirming our 2026 items.

We expect <unk> revenue of approximately 180 to 200 million for full year 2026.

We're presenting nearly 300% year over year growth.

We are targeting a gross margin of approximately 60% in full year 2026.

We expect full year 2020, adjusted EBITDA loss of approximately $15 million to $20 million as.

Stephen Lo: We expect full year 2026 adjusted EBITDA loss of approximately $16 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.

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.

<unk>.

Danny Yeung: With that, I'll turn it back to Danny for closing remarks. Danny?

Yes.

Danny we are unable to hear you is your line muted.

Oh, sorry about that yes, thank you Steven.

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

To summarize we have successfully transformed <unk> into a high growth well capitalized consumer health leader.

Danny Yeung: 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. Even for myself in my last 20-plus 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 2 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.

IME is on a clear path to becoming a 1 billion dollar global brand anywhere for myself in the last 20 plus years of entrepreneur career as both an operator and investor I have never seen such strong momentum in one brand.

We have the team the strategy and our 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 a 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 pre Nellix and <unk> eight.

Thank you for joining us today I'll now turn it over to the operator for Q&A.

Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad.

Operator: 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.

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.

And our first question will come from George Kelly with Roth Capital Partners.

Everyone. Thanks for taking my questions.

Hi, Robert.

George Kelly: Hey, everyone. Thanks for taking my questions.

Hi, Danny.

First one just on the 90 day offering.

Danny Yeung: Hi, George.

George Kelly: Maybe a 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?

I was wondering if you could walk through the reasoning behind it.

Having that available and when do you expect that benefit to be to your model.

Yes, great question, So we actually started.

Quarterly subscriptions in the U S for us in December.

Danny Yeung: Yes, great question. We actually started quarterly subscriptions in the US first in December, right? Typically how we do things, we do a lot of testing on our website optimizations on a daily basis. Also, we start testing in the US. It was clear, basically after a month of testing, that consumers, number one, they really like this option. Number two, it provides benefits for both sides. The benefits from consumer-wise, they get 3 months of product at a time. Consumers also save about $10 monthly as well, right? From comparison perspective, typically a normal customer previously, they would buy a 1-month subscription for $89 monthly. Since the introduction of the quarterly subscription, it becomes $78 times 3. Basically $235 for a quarterly subscription.

And typically how we do things we'd do a lot of testing on our web site optimizations on daily basis also we start testing in the U S. It was clear basically after months of testing that consumers number one they really liked this option.

And number two.

Provides benefits for both sides and I saw the benefits from a consumer wise they get three months of product at a time yeah.

<unk> also save about $10 monthly as well right. So.

From a comparison perspective, typically a normal customer previously deal with by a one month subscription for $89 monthly analysts.

Since the introduction of the quarterly subscription it becomes $78 times, three so basically $235 for the quarterly subscriptions. So we get that.

Payment upfront and we also save on logistics cost because instead of shipping three monthly shipments with ship. It all at once and so what that has done is actually has significantly increased our average order value from a proximally 100 Doherty from end of Q4 two $233.

Danny Yeung: We get that payment upfront, and we also save on logistics costs because instead of shipping 3 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. 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 3 months of product to try the product, right?

So basically if you think about every single new customer that's coming into IME health Dot com on average every new subscriber is paying us $233.

What this does is that basically shortens, our payback period or the <unk>.

Carrier of time that.

Our company recoup our customer acquisition costs and we believe this is a significant benefits and at the same time.

Now when consumers. They now have three months of product to try the product and.

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 fell a notably different in our energy level better sleep quality better recovery.

Danny Yeung: 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. We do believe the 90 days will also increase retention rates as well. Overall wise, we believe this to be a significant enhancement to our overall business.

Greater sleep right. So we do believe the 90 days will also increase retention rates as well.

<unk>, we believe it to be significant.

Enhancement to our overall business.

Okay. Okay. That's helpful. Thank you and then a second question Dan in your concluding remarks, you talked about two new Skus coming this year I understand you don't make.

George Kelly: Okay. Okay, that's helpful. Thank you. A second question, Danny. In your co-concluding remarks, you talked about 2 new SKUs coming this year.

Tell us what they are at this point, but maybe if you could provide a little more information just about.

Danny Yeung: Yeah.

George Kelly: I understand if you don't wanna 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? Might you expand into categories where it's a sort of whole different, there's whole different characteristics to the products?

Timing of those launches and how should we broadly think about sort of new product opportunity and do you expect any kind of new product at least in the near term to be similar to what you offer now we're just subscription and it's monthly or might you expand into categories, where it's sort of whole different there.

Whole different characteristics to the products.

So right now our plan is to release two new Skus by the end of Q4 of this year.

Danny Yeung: Great question. Yeah. Right now, our plan is to release 2 new SKUs by the end of Q4 of this year. Now, you know, due to competitive reasons, you know, I think, you know, we don't want to release too soon what these 2 SKUs are, but it will be in the health and performance space. It will definitely be, yeah, in the health supplements categories, right? Also, these will be very 2 large total addressable markets, which, you know, competitors are already doing easily, you know, anywhere from, yeah, $500 million to $1 billion annually, just in terms of these SKUs. So we do believe It could be a significant growth driver for us.

Due to competitive reasons.

We don't want to release too soon while these two skus are but it will be in the health and performance space.

And it will definitely be in the.

Health supplements categories ranks and also these will be very two large total addressable markets, which competitors already doing easily anywhere from <unk>.

500 million to a $1 billion annually, Jeff in terms of the Skus. So we do believe it's going to be a significant.

Significant growth driver for us.

Okay. That's helpful. And then last question for me.

With respect to the guidance you put out for I mean, the one $180 million to $200 million for the year.

George Kelly: Okay, that's helpful. Last question from me. With respect to the guidance you put out for IM8.

I guess two questions on that first.

George Kelly: $180 to 200 million for the year. I guess 2 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, any sort of commentary there would be great. Secondly, are the new products baked into that guide?

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 months for the year. So any sort of commentary there would be great and then secondly are the new products.

Baked into that guide.

Okay.

Yes, great question right. So I think we are still seeing continued momentum solid momentum hasn't stopped.

Danny Yeung: Yes, great question, right? I think we are still seeing continued momentum. The yeah, momentum hasn't stopped, you know, basically on a month-over-month basis, right? In terms of the 2 new products, in terms of the revenue guidance, those are not baked in into the $180 to 200 million number.

Basically on them.

Month over month basis in terms of the two new products in terms of the revenue guidance those are not baked in to now 180 to 200 million number.

Okay. Okay excellent. Thank you very much.

And again that is star one if he would like to ask a question and we will go next to Thomas Forte with Maxim Group.

George Kelly: Okay. Okay, excellent. Thank you very much.

Operator: Again, that is star one if you would like to ask a question. We will go next to Tom Forte with Maxim Group.

Great. So first off Danny congratulations on a wonderful fourth quarter and year in the breakout performance of <unk>.

Tom Forte: Great. First off, Danny, congratulations on a wonderful Q4 and year, and the breakout performance of IM8. I have three questions. I'll go one at a time.

So I have three 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 <unk> and how that's trended over time.

Danny Yeung: Sure.

Tom Forte: 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.

Yeah, so the customer acquisition costs right, we actually lay this out in our investor deck.

Danny Yeung: Yeah, the customer acquisition cost, right? We actually lay this out in our investor deck. We actually have an investor deck that we publish on our website. 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? Then the key main 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?

So we actually have an investor deck that we published on our website also has a link to on our press release.

You should think about it as is roughly about 0.8 apps in terms of return on AD spend so if less airplane to average order last year for $2025 $110 hour CAC was $130 Alright, and then a key isn't anything about this is that the payback pairs roughly three four months and.

So basically we factor that in when we're making decisions in terms of increasing spending are not increasing spending right, but given.

The short time periods three four months.

Yes, we believe we actually have significant flexibility to go from three to six months right because I think in the DTC space if you're at three months. It's excellent at six months is good so that means we have a lot of runway.

Danny Yeung: You know, 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 in the DTC space, if you're at 3 months, it's excellent. At 6 months is good. That means we have a lot of runway, right? 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. We, even from last January till now, we have not seen significant increases of CAC even as we scale, right?

And your other question in terms of how that has trended.

Our CAC as of course as our average order value has increased significantly from 110 basically two $233 equally our CAC has increase was that at the same ratio. So we even from last January till now we have not seen significant increases of cat, even as we scale alright and you also.

That's for sure is that we have been primarily.

Focusing our marketing efforts digital marketing efforts just on that time, Google roughly 85% on met up 15% on Google.

Danny Yeung: Also just to share is that we've been primarily focusing our marketing efforts, digital marketing efforts, just on Meta and Google, roughly about 85% on Meta, 15% on Google. By the end of this quarter and into Q2, we're gonna be diversifying our marketing channels to include YouTube, podcasts, you know, AppLovin, TikTok. We believe we're also getting able to diversify our marketing channels even much more in greater detail.

By the end of this quarter and into Q2, we're going to be diversifying our marketing channels to include Youtube podcast says App loving take time. So we believe our so let me get any 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 Youre doing. This impressed me is capitalizing on artificial intelligence can you talk about how you're using AI, including from a digital marketing standpoint.

Tom Forte: Excellent. For my second question, 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.

Yeah, Greg touched on there so I'm, a big component I mean, a big component of the whole entire company using the latest.

Danny Yeung: Yes. You know, great question. I'm a big proponent of the whole entire company, you know, using the latest AI tools and systems in place, you know, 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? My team knows this very, very well, right? Any free time I have personally, I'm looking, I'm studying AI like crazy, right? For example, how we leverage AI in terms of digital marketing efforts, you know, on a weekly basis, we'll roll out anywhere from about 800 to 1,000 new ads. We just let the algorithm decide, you know, what ads work.

<unk> and systems in place now for us not just from a digital marketing perspective.

Across the organization every function every single employee doesn't matter whatever department into this right. So.

And my team knows this very very well right.

Free time, I have personally I'm looking I'm studying a island crazy right. So.

So for example, how we leverage AI in terms of our digital marketing operating on a weekly basis, we will rollout anywhere from eight.

Anywhere from about 800 to a 1000 new ads.

And we just love to our desire one that of course, and then only about 10% of these ads will actually work and we call. These are winning at in every single week will replicate yes.

Danny Yeung: Only about 10% of these ads will actually work, and we call these a winning ad. Every single week, we'll replicate, you know, basically we'll take 10% of those that work, and we replicate another 800 ads on a weekly basis. That gives you one example of, you know, basically how we use AI. Of course, I think if you look in the investor deck, you'll also see, we launched an AI video last September with Aryna Sabalenka right before the US Open. This one AI video, it basically was the highest number of views of any brand on Instagram. It reached 233 million views with one AI video, featuring Aryna Sabalenka.

Basically it will take 10% of those that work and we replicate another 800 ads on a weekly basis, but that gives you. One example, based on how we use AI.

And of course it.

I think if you look in an investor deck, you'll also see.

We launched an AI video last September with Arena pharma linker right before the U S open and this one AI video basically.

Yes.

The highest number of views of any brand on Instagram. It reached 233 million views with one AI video.

Featuring arena Saba linker, so when you get 232 million views one video and top of funnel. You can then significantly much easier retarget, new other customers that have seen that video. So I think these are specific examples of how we're leveraging our but we use AI in all parts of our business.

Danny Yeung: 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? I think these are, yeah, specific examples of how we're leveraging AI. You know, 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.

Tom Forte: Wonderful. Last one from 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?

Unbelievable balance sheet as a result can you talk about your strategic M&A strategy, including your decision process in one to build versus wanting to buy.

Yes, that's correct.

Yes, I think the timeline <unk> was an extremely busy year right. You can see you see like a not only have we built a very strong business.

Danny Yeung: Yes, Clark. Yes, I mean, I think, yeah, 2025 was an extremely busy year, right? You can see like a, not only had we, you know, built a very strong business, which was, you know, from scratch, right? We built out 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, A, we knew we needed to double down on that, right? Now with a very strong balance sheet, I mean, the reality is we have so many options available to us, yeah.

So I'm just curious from scratch right, we've built out organically the old brand playbook, yes, although doctors all the scientists all the brand ambassadors and of course at the same time.

We executed it.

Selling of three of our noncore assets because the growth of <unk> was so unbelievable that we knew we needed to double down on that right.

And then so now we'll have a restaurant balance sheet I mean, the reality is we have so many options.

Available to US now, but I will say my first our first focus is going to be built organically.

Danny Yeung: I would say our first focus is going to be build 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. Again, that's something that we can control very well. Again, we always open for new opportunities, if it makes sense.

Again, we believe we already have this.

Performance marketing flywheel behind us.

Unless there is a.

Yes.

A very strategic.

M&A potential right now our main focus is on building organically because again, that's something that we can control very well.

But again, we always open for new opportunities if it makes sense.

Great. Thanks, Danny.

Thank you.

Tom Forte: Great. Thanks, Danny.

Our next question comes from Alex Hantman with Sidoti <unk> Company.

Danny Yeung: Thank you.

Operator: Our next question comes from Alex Hantman with Sidoti & Company.

Thank you and hi, Daniel <unk> and congrats on the quarter and thanks for taking questions.

Alex Yes.

Alex Hantman: Thank you, and hi, Danny and Stephen. Congrats on the quarter, and thanks for taking questions.

Maybe we can just start on the revenue growth for this year I know you mentioned that new products are not baked into that.

Danny Yeung: Alex, yeah.

Alex Hantman: 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?

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.

Mhm.

So it's all within the majority of the growth.

Danny Yeung: I would say the majority of that growth is gonna come from basically new customers, right? 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. 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? Once these people try the product, they use the product. Again, the product is effective, they'll stick on. A significant part of that growth is gonna come from new customers.

And Thats based upon come form a drawback over the long term for making new customers.

So if you think about it I mean, we achieved $60 million of full year revenue in our first year and that's still a very new brand. So all of this year wise and while there's a lot of people have earned about <unk>. There is still a significant population around the world that hasn't heard about IME or hasnt tried or used our products.

You people try the product they use the product again, the product is effective but they will 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 U S being number 140% of revenue. So last year, you asked only represents a $23 million down $60 million.

Danny Yeung: If you look at our breakdown in terms of our top 5 markets with the US, being number 1, 40% of revenue. Last year, US only represented $23 million, now it's $60 million. I think realistically, the US market can easily support or absorb $300 to 400 million on this 1 product. There's still lots of headways or a runway to go. Number 2 market is Canada, number 3 is UK, number 4 is Australia, number 5, Singapore. We're a truly global diversified brand, we believe there's significant opportunities to in just like acquiring new customers onto the platform.

Alright.

Realistically the U S market.

Ken easily support our absorb.

Yeah $3 million to $400 million on this one product alright, so there's still a lot some headway.

<unk> a runway to go right number two markets, Canada number threes UK number forest, Australia number of Phi Singapore, ISO we're truly a global diversified brand. So we believe there are significant opportunities to invest by acquiring new customers onto the platform.

Great context, thanks, and two more from US Dan I know you just spoke about some of the international revenue opportunities I'm curious as you started localizing websites.

Alex Hantman: Great context. Thanks. Two more from us. Danny, I know you just spoke about some of the international, you know, revenue opportunities. I'm curious, as you started localizing websites, you know, what kind of revenue uplift have you seen? You know, what international market then are you sort of most excited about given that?

What kind of revenue uplift.

Are you seeing and what it.

International market, then or are you sort of most excited about doing that.

Yes, Great question right. So this is another example of how we're in the process of leveraging AI to those specifically for international wireless localization efforts.

Danny Yeung: Yeah. Great question, right? This is again, another example of how we're in the process of leveraging AI tools specifically for international localization efforts. You know, 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, you know, for example, in Germany, right? A lot of the ads. You know, Germany is now I think number 8 or number 9 in terms of global top markets. You know, these markets, we believe the localization of our entire website will be at least a 10% to 15% increase in local markets, right? Again, that's something that we're going to be launching by, yeah, by Q2, likely by the end of this quarter, actually.

So by Q2 of this year, we won't be localizing and at least five different markets now in terms of our whole website. Our AD campaigns for example in Germany, right. So a lot of that.

Germany is now adding them or ADR number nine tons of global.

Tom I'll get canceled these markets, we believe the localization of our entire website will be at least a 10% to 15% increase in local market alright.

Alright, and then so again, that's not something that we are.

Going to be launching buy.

Yes by Q2 likely by the end of this quarter actually.

Perfect. Thank you and last one from us.

I know you mentioned.

Alex Hantman: Perfect. Thank you. 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, do you have an accompanying, you know, EPS target?

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.

Yes, so I think.

As we as we scale and given our gross margin is at 50%.

Danny Yeung: Yeah. I think, again, as we scale, and given our gross margin is at 60%, you know, profit will come with that, right? We're gonna be able to have so much more leverage, you know, once we get to, you know, $250, 300 million in revenue, you know, because we have, you know, our manufacturers, our suppliers, our logistic on. 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 to 18 months as well, right? That coupled with the scale will then get us to we believe by profitability by end of Q4 2027.

It will come with that right. So we're going to be able to have so much more leverage now once we get to $250 million to $100 million in revenue and because we have yes.

A manufacturers or suppliers or logistical I'm, sorry, we do believe that.

We can even slowly increase our margins from 60% to 60.

62, 63%.

Within the next 12 to 18 months SaaS well right. So.

That coupled with the scale.

<unk> got off to a profitable we believe by profitability by end of Q4 and $2 27.

Just kind of mainly continuing doing what we're doing now by a much greater scale and of course on the cost is get absorbed.

Danny Yeung: It's just kind of continuing doing what we're doing now, you know, by a much greater scale, and of course, all the costs get absorbed back, right?

Understood. Thank you very much.

Alex Hantman: 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.

Operator: 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.

I can't be more excited about what the future holds.

Danny Yeung: 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, you know, for 20-plus years, but this is 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. Again, thank you everyone for being with us today.

I know I've been an entrepreneur has asthma for 20 plus years by vessels, yes, something on that.

Credibly passionate about building.

A global brand as making impact to millions of people around the world.

Have a loss base apart from around the world as well from highly influential.

Our fleet's 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.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.