Q2 2026 Prenetics Global Ltd Earnings Call

Speaker #1: Unaudited. The full Q2 2026 shareholder letter and this investor presentation were published this morning and are available at ir.prenetics.com. With that, it is my pleasure to hand the call over to Prenetics CEO, Danny.

Speaker #1: Yeah, I mean, that was a highlight for the last 20 months, and it was quite amazing what we've been able to achieve, right? So, Brian, if we could get to the next slide.

Speaker #1: In December 24, we launched IM8, our first month, you know, on our first mar- on our first month on the market, we did about 400,000 USD.

Speaker #2: Thank you, Shannon. Good morning, everyone. You know, before anything else, thank you so much for being here. This is actually the first live earnings video webcast we've done in our company's history, and from the numbers— from the numbers.

Speaker #1: And I want to tell you what we believed back then, because it's written down. It was in our founding moment, you know, before we even shipped a single sachet.

Speaker #1: We believed if we built the best product in the category—clinically studied, certified—customers wouldn't just buy it; they would stay. And if they stayed, every dollar we spent funding them would come back with profit on top.

Speaker #1: And if that held, then one day the whole machine would cross the line—the point where growth stops consuming cash and starts producing it.

Speaker #1: We marked that line in the model on day one. Every decision we've made has pointed to it. Last month, we crossed it. In July, our consolidated adjusted free cash flow...

Speaker #1: And I want to be precise here, because precision is the whole point of today: that measure includes the funding under our general catalyst facility.

Speaker #1: Turned positive for the first time in our history. It is, I believe, the single most important fact in the letter, in the deck, and in this stream.

Speaker #1: Now, I'll be quite honest with you: I did not believe we would get here this fast. Twenty months—most consumer brands take years.

Speaker #1: Many never arrive at all. Two things that made it possible—and they are connected. Firstly, our cohorts came first: customers who stayed, who spent more, who paid back their acquisition costs in months.

Speaker #1: And these cohorts earned a second thing: $1.1 billion of a commitment from General Catalyst, committed after they spent months in our data—capital that now funds our growth.

Speaker #1: So our cash no longer—

Speaker #2: Firstly, our cohorts came first.

Speaker #1: We expect Q3 to be our first positive quarter, and we expect to stay positive from there. And now, the quarter itself. Just to highlight in terms of what we've been able to do in Q2.

Speaker #1: And I want to frame this only the way results should ever be framed: against what we told you and what we said we would do earlier.

Speaker #1: So in May, we got a publicly $46 to $48 million total revenue, and $44 to $46 million for IM8. We reaffirmed those numbers in June.

Speaker #1: This morning, we reported $46.5 million in total, up 29% from Q1, and roughly 3.9x from a year ago. With IM8 at $45 million, up 33% sequentially, at 65% gross margins.

Speaker #1: Both numbers are inside both ranges. Our sixth consecutive record quarter. We say what we’ll do, and then when we do it, I want to own that pattern in front of you.

Speaker #1: And for the record, because this is the standard you should hold us to every quarter from here. And then July happened. As you can see from this chart-wise, this shows you our path from basically December of '24 to July, last month.

Speaker #1: You know, starting at $400,000, I talked to you, and look where it ends. Last month, we achieved $20.9 million of revenue in one month.

Speaker #1: And just, strongest month in our history—4.3x of last July, at an annualized running rate of roughly $251 million. In July, it just wasn't big.

Speaker #1: It was our largest single-month customer cohort ever. We acquired 47,037 customers. And here's the part that I'm most proud of: we acquired that record cohort at a customer acquisition cost of about $290—$239.

Speaker #1: Down roughly 21% from our Q2. So, we had record customers, falling to CAC. Scaling brands never get both. You know, Brian, in a few minutes, will take the whole P&L apart and share all of the details on that.

Speaker #1: And the quarter delivered inside our own guidance, with a July like that behind it. Changes—while I can't promise ahead. So today, for the first time, we're also raising—today we are also raising our full-year total revenue guidance to $220 to $230 million.

Speaker #1: With IM8 contributing $215 to $222 million, understand the nature of that number—the floor of that range is not hope. It's actually underwritten by the subscribers we already have.

Speaker #1: And we— we’re also initiating something else today: the 2027 figures. As we get close to the end of '26, '27, we're initiating $400 million or more.

Speaker #1: And there's three numbers that you should be thinking about now, because they hold the whole story of this company. Last year, in our first full year of IM8, we achieved $60 million.

Speaker #1: In that second year—this year—we will achieve $220 million. $400 million-plus is expected in this third year. In the letter, we put it in one way, and we'll say to you straight: we don't treat that trajectory as ambition.

Speaker #1: We treat it as arithmetic. We'll exit this year above a $300 million run rate, before a single 27 customer walks in the door. Note: roughly 87% of our revenue is recurring.

Speaker #1: Subscribers we already have. How on retention curves measured across 20 consecutive cohorts, everyone behaving the same way. And nothing—nothing from the new products you will hear about today is in any of those numbers.

Speaker #1: So every launch is pure upside to every figure I just gave you, and that's the promise. Now, let me show you the machine underneath it.

Speaker #1: And I want to talk to you for a few minutes about the brand that we are building. Because, again, in my experience as an entrepreneur and as an investor, I haven't seen anything like this.

Speaker #1: And I'm so grateful I'm able to live this every single day. You know, this is something that numbers cannot— it's something you can only see with your own eyes.

Speaker #1: And as you may know, I spend much of the year traveling, you know, throughout the whole world for IM8. And in every country I land in, the same thing always happens.

Speaker #1: People come up to me about IM8 and—and get so happy. It's not because they recognize me. It's—it's because they recognize their cliché.

Speaker #1: I have athletes, surgeons, founders, CEOs—you know, high performers who could buy anything—telling me unprompted what this product has done for them. In the time we've been around, we've now launched more.

Speaker #1: That already believes in us is waiting for whatever we make next. You know, the pipeline as it stands—and again, that's—and the brand that we've been able to build, and where we're headed next, right?

Speaker #1: Because everything you have seen is essentially a one-product family and one category. Next quarter, in Q4, we're going to launch IM8 Hydration into a $37 billion market.

Speaker #1: In the first quarter of next year, our premium line of gummies will enter a $25 billion category. And nothing launches without IM8-level clinical validation.

Speaker #1: And everything we make carries NSF Certified for Sport. And on the science behind that, we have three randomized, placebo-controlled clinical trials ongoing as we speak right now, including— including one at the Mayo Clinic. And Dr. Don Waselan will take you inside them shortly.

Speaker #1: And I'll say only this: in a category built on marketing claims, we are building one on evidence. And next—while everyone else is kind of, you know, thinking Hydration Gummies are coming next, it's not the whole story.

Speaker #1: You know, because I think what we've been able to build—this brand—is going to be able to do so much more. And look at this slide here.

Speaker #1: We're talking about, you know, again, sleep, cognition, recovery, women's health, men's health, sports performance. When a customer hands out Cliché to someone they love, they're telling us they will trust us in any category.

Speaker #1: Where science and quality decide the winner. And that map is most of our cons— is most of consumer health. Now, let me be also equally clear about what this slide is not.

Speaker #1: It's not a roadmap. I'm not announcing anything today. But the honest way to think about IM8 is not just as a supplement company. It is a tru— it's a trusted global premium health brand.

Speaker #1: Twenty months old, with most of its categories still ahead of it. And here's the question every operator in this audience is already asking: entering a new category normally takes armies.

Speaker #1: New teams, new overhead, margin walking out the door. And so, let me show you why that math doesn't apply to us. So, this is a chart of our AI-native organization.

Speaker #1: And it may be my favorite slide in the deck, next to the adjusted cash flow slide. AI—IM8 is an AI-native organization from day one.

Speaker #1: We are roughly 70 people delivering this year's guided $220 to $230 million in revenue—more revenue per employee than any scaled brand in this category.

Speaker #1: And the gap widens as we grow. Revenue grew 3.9 times year over year, with no proportional hiring. Fixed operating expenses have actually fallen 21% quarter over quarter.

Speaker #1: We doubled acquisition spend from Q1 to Q2, with the same number of team members. You know, that's not discipline for its own sake; it's what a company looks like when AI runs through creative, marketing, operations, and finance from day one.

Speaker #1: Instead of being bolted on later, most companies our size are hiring their way to scale. We are compounding our way there. And the biggest partnership of this year is the one funding everything I just described.

Speaker #1: You know, one month ago, General Catalyst committed $1 billion against our cohorts. It was the deepest diligence I've been through as a founder—every single monthly cohort examined at a transaction level.

Speaker #1: Now, to walk you through where that number stands today, I'm going to hand it over to Brian, our CFO. Brian just joined us three months ago, after that diligence process began.

Speaker #1: And I'll say this plainly: You know, bringing Brian on board is one of the best decisions we made this year. You know, he came to see the machine, and he stayed to run the numbers on it.

Speaker #1: Brian, the floor is yours.

Speaker #2: Yeah, thanks, Danny. Thanks for that. Before we get into the quarter here, just a quick word on me, since it's probably the first time that some of you are hearing from me or seeing me.

Speaker #2: I've been a CFO in the CPG space for quite a long time. IM8 is actually the eighth brand that I've been a part of in this—this category or adjacent categories.

Speaker #2: And so, when I was first presented with the opportunity to join this business, I did what any good CFO would do: I diligenced it and evaluated it from roughly the same criteria that we're going to look at today.

Speaker #2: You kind of take a look at the past, the present, and the future. You start by looking at financial statements. Those will give a good sense as to how the business has performed in the past.

Speaker #2: Kind of near-term trends that have led to where it presents at that point in time. And then really, any given last reported quarter is inherently a little bit in the past anyway.

Speaker #2: But those quarters are also a byproduct of a lot of the executional effort that's gone into the prior few quarters. And so, when you look at a financial statement, it's almost always like looking backwards.

Speaker #2: When you look at the present, I think about this as cohort math and unit economics. When you look at those things, you can pretty predictably see where a brand will be in the coming, let’s say, three to six quarters.

Speaker #2: It's pretty good line of sight as to how much the business is looking to grow, and then it also tells you what the unit economic level is where the business can scale, and the opportunities that it can do so.

Speaker #2: And so those are always the areas that I was at. Next, third, when you look out into the future, that's more around expansion opportunities, brand equity, brand strength, and where the opportunities are in the form of product, markets, channel—you know, where can the brand extend and where can it play.

Speaker #2: And so, when I did this assessment of IM8, each part of that got more bullish than the last. The financials were strong. The unit economics and the cohort math were quite strong.

Speaker #2: And then the future, obviously, with Danny's vision—you know, the sky's the limit for this business. So today, I'm going to take us through that same sort of arc around, you know, where we are today on the financial statements.

Speaker #2: You know, we'll look at Q2 results. Then we'll look at the unit economics and the cohort math that's gone into the last few quarters. That'll give us good line of sight into the future in the form of our near-term guidance.

Speaker #2: And then I'll let Danny talk more about the future, but I'll touch briefly on how that future is funded by a strong balance sheet and the General Catalyst financing partnership today.

Speaker #2: And so with that, let's get to the quarter. I'm going to spend a decent amount of time here walking down the P&L, because it's really important for everyone to level set on the presentation of this view, and what we are going to hold ourselves to in the future.

Speaker #2: for the quarter in the Q2, so the— about the middle column of this chart, our revenue was 46.5 million dollars. That's 29% quarter over quarter and 3.9 times bigger than a year ago.

Speaker #2: That leads us down to gross profit. We did $30.2 million in gross profit, at a 65% gross margin, which is about three full points better than the same period a year ago.

Speaker #2: Our fixed operating costs are $8.8 million, which is 19% of sales. Note that this is 14% up versus the prior quarter, but 2.3 times greater than a year ago—a lot of additional leverage from this line, as you would expect.

Speaker #2: Danny mentioned the AI nativeness of this business. You would expect this as a business grows, where your operating costs as a percent of sales will continue to decline.

Speaker #2: And that takes us down to contribution profit. Now, there's a lot of brands that do contribution a little bit differently. I've seen many brands present contribution profit before G&A, before operating expenses.

Speaker #2: And I've never found that to be a very productive thing to do, because when you really think about it, the operating costs are really what's there to drive the business currently.

Speaker #2: You know, these costs are to drive the fixed base of current customers, current ad spend, current marketing team, and just the day-to-day operation of today.

Speaker #2: And so, when I think about contribution profit, it’s really a gross profit minus your operating costs. Then, what’s left is contribution profit and contribution margin as a percent of revenue, before you make your choiceful investments into demand creation and customer acquisition.

Speaker #2: And so you'll notice then, below contribution profit, which was $21.4 million in the quarter—46% of sales. That's 16 percentage points, 16% better margin than we saw one year ago.

Speaker #2: So, a great amount of leverage has happened at the contribution profit line, which, again, is going to be a really important metric to look at in the future.

Speaker #2: But then, below that, you're looking at what is our demand creation bucket, and really our all-in marketing. We've split this into three lines. For a brand like ours, I think a lot of people just present marketing as one full number.

Speaker #2: We've gone into a little bit more depth here to show how much our brand royalty is, how much our ambassador partnerships are, and then how much isn't just a paid acquisition marketing spend bucket.

Speaker #2: This acquisition marketing spend of $36.2 million in the quarter is 78% of sales. This is the numerator in what we would consider our CAC equation.

Speaker #2: So whenever we're talking about cap, that is the numerator. Our brand royalty is typically going to be 3.5% of revenue. That's our contracted royalty against the business.

Speaker #2: Our ambassador contracts, you'll notice, were $2.1 million in the quarter, which is down to 4% of revenue, versus in the prior year where we were at $1.1 million in the ambassador line at 9% of revenue.

Speaker #2: So this includes all of our ambassador partnerships with our equity athletes and lifestyle ambassadors, as well as our scientific advisory board. So that's what that line is.

Speaker #2: And so, when you look at all marketing, this is really a dial for us as to how much we want to throw toward profit today versus how much we want to grow for tomorrow.

Speaker #2: Every acquisition dollar that we've spent has generated $1.52 of gross profit in the life cycle of our business. That includes several cohorts that are not yet very mature.

Speaker #2: But for every dollar we've spent, we've gotten back $1.52 of gross profit. That's straight return. We're going to go into the unit economics in a little bit.

Speaker #2: But this spend here is really our choice as to whether or not to drive profit today versus growth for tomorrow. And so our adjusted EBITDA for the quarter, of negative $19 million, is really just a byproduct of our marketing spend.

Speaker #2: As Danny mentioned, we spent double versus the prior quarter, but our caps have actually gone down. Below adjusted EBITDA, we have adjustments for fair value gains.

Speaker #2: In the quarter, of $9.9 million, you have depreciation and amortization add-back that puts you to a net loss of $9 million for the quarter.

Speaker #2: Or $0.52 a share. That's down 45% from the same period a year ago, when our loss per share was $0.94. So, in a lot of ways, a terrific quarter.

Speaker #2: Last, on this slide you see the July column. Danny showed revenue in July—it was a terrific month for us. And so we wanted to prudently show what July's preliminary results look like, because there has been material strengthening of this business in a way that is quite exciting as we head into Q3 and the rest of this year.

Speaker #2: Revenue is $21.4 million for total Prenetics, a little bit under that probably—we'll see in a second. Gross margin is 64% on that. Our operating costs have dropped to 15% of revenue, from 19% just last quarter.

Speaker #2: So, some good expansion there. So your contribution profit: $10.4 million in just the month, with a 49% contribution margin. Our spend, you'll notice, versus the Q2 average, actually went down.

Speaker #2: That wasn't necessarily a choice. We drove a lot more new customers in the quarter, which meant our CACs improved by so much that our marketing line—our acquisition marketing line, rather—as a percent of sales dropped to 54%, which puts our adjusted EBITDA for July at a $2.4 million loss, or just negative 11% adjusted EBITDA margin.

Speaker #2: You take it down to net loss, of a $3.6 million loss in just July. But you can see that July is setting the stage for a really strong Q3.

Speaker #2: We'll briefly then look at the IMA-specific segment—our business unit, rather. And so, the same view of the P&L: IMA is effectively all of Prenetics today.

Speaker #2: And so, as we start to report into the future, we will not—we won’t necessarily be breaking out IMA specifically versus total Prenetics, as there’s really not too much of a need to do so.

Speaker #2: But same view of the P&L of Q2 on IMA: $45 million of revenue, so almost all of it all the way down to the EBITDA line, which is a negative $18.6 million loss.

Speaker #2: In the period, the marketing was almost all IMA spend. So you're looking at a P&L that's very similar to Prenetics. But then, look at the bottom chart.

Speaker #2: This is what we were speaking to with the customer acquisition metrics. And so, you see 118,000 new customers were acquired in the quarter. That’s 98% better than the prior quarter.

Speaker #2: So, like, let that soak in. We're 98% better on the quarter, and our caps were flat to slightly down at -1%. You don't typically see a business able to double its spend.

Speaker #2: And for your customer acquisition efficiency to improve slightly or even hold flat. Take it one step further, and you look at the July column.

Speaker #2: Go all the way down to the bottom right, and you'll see that we did 47,000 new customers in July, which Danny mentioned, at a cap of 239.

Speaker #2: That's 21% less cap on an average Q2 number versus July, which improved by 20%. So, more than 20% customer growth, 21% cap improvement—those two things are moving in a way that we have not yet modeled into the future.

Speaker #2: We model the business on a cap more in line with what we saw in the first half. Of course, we would hope that our cap efficiency will continue—everything is looking strong.

Speaker #2: But we haven't necessarily remodeled any of our guidance to assume any of that type of CAP improvement in July. It's just the business scaling.

Speaker #2: If—and then we'll move to the rest of the financial statements as kind of the round-out of the past, as we'll call it, for the financial statements.

Speaker #2: Looking at the cash flow view next, the first half is really a story of two major investments. The loss for the period, as we saw, was entirely driven by the customer acquisition spend for future growth, which is the first major investment in the first half.

Speaker #2: So you see the operating loss was $27 million. We also then executed a share buyback of $40 million, which reflected a $36.1 million cash investment by us, net of proceeds, as your second major investment.

Speaker #2: And so you see both of those lines take you to about $27 million on the net operating loss side, and then $36 million on the buyback, net of proceeds.

Speaker #2: And what's going to change going forward is that the General Catalyst funding will fund 70% of that acquisition marketing line. So our biggest line in our P&L is now funded at 70% of it on the way in.

Speaker #2: Net of our repayments to them, we'll still end up generating quite a bit of adjusted free cash flow, with positive momentum into future quarters.

Speaker #2: That started with the month of July. If we take a quick look at the balance sheet next, we have a really strong balance sheet.

Speaker #2: We have consistently, which allows for us to make the types of investments into the Q2 quarter that we saw. We can really invest for the future in a way that not a lot of brands have the ability to do, and further, they don't have the economics to then support that into the future and actually get the return on that.

Speaker #2: But taking a quick look at the balance sheet, we have $109.4 million of cash and current financial assets. Our inventory levels have risen. Within the other asset section, we also have prepayments on inventory that get us ready for the back half of the year.

Speaker #2: It gets us ready for our new products. And so, we've put a lot of cash back into the form of inventories to fuel our growth.

Speaker #2: As you move down into the liability section, the warrant liabilities here—this is the fair market valuation against the warrants that are currently on the cap table, which we'll look at in a second.

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Speaker #2: Very clearly. And so, what you see is an outstanding share burden today of 15.2 million shares. That's 13.6 million Class A's and about 1.6 million Class B's.

Speaker #2: If you look at the fully diluted nature of that—so that includes grants not yet issued, but able to be issued, in the Class A's—you'll see that that jumps to 14.5 million fully diluted.

Speaker #2: And then down below, as you see the warrants, as I mentioned, you see that 2.36 million warrants at $18. And then you see the additional 362,000 at strike prices of $24 and $32.

Speaker #2: These would generate quite a bit of additional cash for us, and in total, the fully diluted cap table would then be 19.2 million shares.

Speaker #2: That includes everything that's been able to be granted today to all of our partners, and should be looked at as what the fully diluted burden would be.

Speaker #2: This is the change since December. And you can see that, per our share buyback, we've actually been able to reduce the amount of Class A's outstanding.

Speaker #2: Down to 13.6 million, from 15.3 million at the end of the 2025 calendar year. And so, we've returned a bunch of money to shareholders in that line.

Speaker #2: And then we have the warrant roll-downs there down below. And so this is a flow of the shares since the end of the year.

Speaker #2: So we've been really pleased to have delivered some capital back to shareholders in that form. And that will round out kind of the past.

Speaker #2: As we talk about the financial statements, moving next to the unit economics and the cohort math, which is really important, because what does that investment in acquisition spending in Q2 get us?

Speaker #2: And so, first, we're looking at the cap chart that we've talked a little bit about. This helps put into perspective what we were talking about with the spend levels, effectively doubling from Q1 to Q2.

Speaker #2: Yet you see us doubling the amount of average new customers that we're bringing in. And then you see the July month there—the largest cohort we've ever had—at a CAC that has gone down to $239.

Speaker #2: And I also should mention that there's been no mix shift within any of that July number. That's the same mix of quarterlies versus monthlies as we have seen in the past, in terms of subscription duration and all that.

Speaker #2: No, no change. So really, a true apples-to-apples 21% increase in July versus Q2. So, tremendous amount of momentum heading into Q3. And then we'll look at the return next on the investments.

Speaker #2: So, this is a good view of our quarterly vintages. For some of you, you might have seen this same chart when the General Catalyst news dropped.

Speaker #2: We presented this as the collective chart that General Catalyst and us had worked through to kind of underwrite our book of cohort vintages. At that time, if you look at the pink line, through Q1, our gross profit to cap in the dollars that we had returned was $1.44.

Speaker #2: Fast forward to today, we've updated just through that pink Q1 vintage group. It's gone up from $1.44 to $1.52, which is effectively the model.

Speaker #2: We've, we've gained 8 cents on this return, just in one month of return, against existing cohort business. And so this is what the engine would expect is that you would see that to continue to rise.

Speaker #2: So, every dollar we've ever spent on this business, through Q1 cohorts, has generated 1.52 times the dollar that we put in. And that number will obviously continue to go up over time.

Speaker #2: You'll see that the Q1 cohort is quite large. The Q4 cohort is quite large, and you're talking about cohorts that have not had very much time to mature.

Speaker #2: So that $1.52 is just the beginning of where this business will end up in the coming quarters. All right, this is a great chart that shows some panel data from a partner of ours, Indigari—they do credit card panel data.

Speaker #2: Within the US. And so they represent anywhere from, 6 to 8 percent of all US card transactions online. And so effectively this is the direct-to-consumer business on brands, with, in the US specifically, an 8 to 10 8 to 10 per sorry, 6 to 8 percent of the population.

Speaker #2: And so we stack ourselves pretty well as a brand that's only 20 months old against some other big names in the space that we obviously consider as fairly direct competitors.

Speaker #2: By month 20, our retention is still at 14.2%—much higher than Thorne, AG1, and Groons on this chart. We have a lot of work to do as a business.

Speaker #2: We're still quite young. We've got a lot of room to run. But this number, on the surface of it, is really powerful. I mean, a brand that has done what we've done this early on, and to have a month-20 retention number at that stage higher than some great businesses in this space, is no small feat, to be sure.

Speaker #2: And then last, moving on to our subscriber base. This is 140,000 active subscribers. You'll see that we've grown fairly steadily throughout this whole period.

Speaker #2: But we've really started to accelerate during the '26 period, and have now reached 140,000. So this is active subscribers. And then towards the bottom, you'll see the current base by 10-year.

Speaker #2: If you add up some of those percentages, you'll see that 50% of our subscribers have been with the business for at least three months.

Speaker #2: which is meaningful given that a lot of our subscribers, especially from a number of cohorts coming into the business standpoint, are still relatively immature and have not been with the business for that long.

Speaker #2: But half of our subscribers are already past the three-month, 10-year, and this number obviously is going to continue to compound into Q3 and the rest of this year.

Speaker #2: So, really strong subscriber base that fuels this business as we head towards the next phases. Moving on to the next view, this is where the cohort economics and the unit—sorry, the unit economics and the cohort math that we just talked about will help guide us really predictably into the next three to six quarters.

Speaker #2: By just running out the existing repeat revenue of this business—which is how we guide—we can pretty easily see where the next several quarters are going to land.

Speaker #2: And so, when you look at our Q3 guidance, we are guiding at $61.5 to $62.5 million on the IMH revenue, or $63 million to $64 million on the Prenetics parent.

Speaker #2: Which would then imply, based on Danny’s guidance, metrics of $220 to $230 million for the full business, and an $81.2 million Q4, which would put us at the top of our guidance.

Speaker #2: We are also guiding on EBITDA to improve quite substantially. Whereas in the first half, we saw a negative $24.6 million EBITDA loss, in the second half, we expect that adjusted EBITDA loss to drop to negative $8 to $12 million.

Speaker #2: We expect that to take the form of a couple of different things. On our P&L, we expect to see additional leverage in most areas.

Speaker #2: We expect to see the fixed operating costs show nice leverage gains. We also expect to see some potential further gains on gross margin as we continue to move into the subscription duration.

Speaker #2: ...of longer quarterlies and the like, which are at more favorable margins. And we also expect to see further leverage, especially on our ambassador costs as a percent of sales.

Speaker #2: As well as the acquisitions spend line, we expect that to also get more efficient as a percentage of sales. And so, you have a lot of different areas of the P&L that are driving towards this adjusted EBITDA improvement in the second half expected versus the first half.

Speaker #2: I would also say that, in the future, we will very likely, as we become a more mature business, show better versions of guidance figures across the different lines of the P&L, so that we can really break this down.

Speaker #2: But we feel very confident about our guidance here and see a great improvement on the adjusted EBITDA line. As you can see on the revenue side, we are not sacrificing growth at all.

Speaker #2: We expect a 38% revenue increase in Q3 versus Q2, and another sequential 31% increase in Q4. And then, moving on to the next slide.

Speaker #2: So this is for Q3 specifically. As mentioned, our guidance is $61.5 to $62.5 million on IMH specifically, or $63 million to $64 million on the parent. We are seeing great momentum in Q3.

Speaker #2: So we're excited about this quarter not only on the acquisition front, but also on the adjusted free cash flow front. With the general KLS financing in place, we have seen July be a strong adjusted free cash flow positive period.

Speaker #2: And that will continue into the future. So we are quite excited about this quarter. Moving into Q4, this is the 81.2% implied revenue guidance for the year, should we hit the top end of our range.

Speaker #2: This would be three times better than the fourth quarter of 2025, which, if you'll note, was our strongest quarter in 2025. It's a holiday quarter.

Speaker #2: It's typically very strong seasonally. We did 59% sequential growth last year. We're only guiding right now to 31% sequential, and so we think that's quite deliverable in terms of a number.

Speaker #2: And then also, as Danny mentioned, these numbers do not include the hydration launch within Q4. So that would all be upside to these figures.

Speaker #2: Lastly, so Danny had touched on this slide briefly. We expect to exit the 2026 calendar year at a $300 million annualized revenue run rate.

Speaker #2: Which would put us at $25 million per month. And then we are guiding to at least $400 million in 2027. I would say that if you look at the exit points of December 2025 of just over $100 million, we've now, you know, delivered a year of $220 to $230 million.

Speaker #2: And so, for us to say we're going to exit '26 with a $300 million annualized revenue run rate and deliver at least $400 million next year, you know, that ratio is quite achievable relative to what we just saw in this period.

Speaker #2: And so we're quite excited about the business. Kind of to round it back to our past, present, future discussion, the past is really strong in the form of our financial statements.

Speaker #2: The present, in the form of our unit economics and cohorts, is driving the growth of the future. And then the future itself is being dictated by our expansion into additional markets, channels, and geographies.

Speaker #2: So, we like to see that the past is printed, our present is guided and measured, and our future, with General KLS $1 billion financing and a strong balance sheet, is now funded.

Speaker #2: So with that, I'll turn it back to Danny and let him go into more of the future.

Speaker #1: Great. Thank you, Brian, for that detailed walkthrough of the P&L-wise, right? Before we turn into science, yeah, I want to really give a big welcome to Caroline Levy.

Speaker #1: You know, Caroline, she's on the screen right now. I see the Golden Gate Bridge in the background there. That's where I grew up, spent a lot of my early years there.

Speaker #1: And Caroline—you know, I've actually known Caroline for over two years. I met Caroline in March of '24 in Los Angeles. I remember the first meeting we had.

Speaker #1: I actually really wanted, you know, Caroline to join the board at that time. And this is pre-IMH. Yeah. But, you know, she respectfully denied me, or rejected me at that time, which, you know, she was like, "Hey, I need to watch a little bit more, see what you guys are up to, see if you can actually deliver on everything you say you would." And then I would say maybe about three, four months later, we got reconnected again.

Speaker #1: And I'm so very, very happy and honored to officially welcome Caroline. Yesterday, she joined the Prenetics board, as well as the Audit Committee and the Governance and Nominating Committee.

Speaker #1: and just, you know, since we, we just announced Caroline, that would be a great, you know, for her to spend a few minutes on, on Caroline.

Speaker #1: You know, you have, you have so many options when it comes to, you know, joining boards and you've been in Wall Street for the last 30 years as, as a amazing consumer analyst, maybe in your own words, maybe just kind of, you know, share with us why, why you decided to join us.

Speaker #3: Thank you, Danny. Good morning, everybody. I'm so excited to be part of the IMH team. For more than 30 years, my job was professional skepticism as an analyst.

Speaker #3: I was paid to look beyond the story, test the numbers, the strength of the brand, the discipline behind the growth. And after doing that across hundreds of consumer companies, big and small, you develop a fairly high bar for what genuinely impresses you.

Speaker #3: So there are three things that impressed me about Prenetics and IMH. First, as Danny said, I met him more than two years ago, and what has stood out to me is his ability to execute.

Speaker #3: Over my career, I've heard hundreds of CEOs describe what they intend to build. What matters, of course, is what actually gets done. And Danny laid out a clear ambition, and step by step, he has delivered it.

Speaker #3: I place enormous value on that combination of ambition, focus, and follow-through. Second, the brand. I've spent my career studying consumer brands, including some of the fastest-growing brands of the past decade.

Speaker #3: And the connection IMH built with consumers in a relatively short period is unusual. Strong consumer affinity is difficult to create. It's difficult to sustain.

Speaker #3: And when it's genuine, it's enormously valuable. And I believe there's something quite special here. And third, the role Danny has asked me to play.

Speaker #3: He didn't ask me to join the board, simply to agree with him. He asked me to bring the same rigor and willingness to our difficult questions that I have brought to companies throughout my career as an analyst.

Speaker #3: And that is important to me. I'm joining the board with real enthusiasm for what Prenetics is building, and a clear sense of my responsibility to shareholders and to the long-term success of the company.

Speaker #3: I'm so delighted to be here, Danny. Back to you.

Speaker #1: Thank you, Caroline. Again, really, really glad to welcome you to the board. And also, I'm very excited to also welcome Dr. Don Lucilum, who is actually going to be talking to everyone about the science.

Speaker #1: And again, that's the one thing that we're really proud of. When I go around the world, people are telling us, "Hey, basically, we love the science."

Speaker #1: We love everything that you guys stand for, from day one. And Dr. Don, you know, she, again, she's been with us before we launched the brand, you know?

Speaker #1: So she was a founding—she's our founding Scientific Advisory Board member. And, you know, again, the amazing thing about Don—I mean, when you meet her in person, she's just so full of hope, full of life.

Speaker #1: And she also has a very interesting story, in that, you know, when she went to medical school, you know, she actually was diagnosed with stage 4 cancer.

Speaker #1: Even three months to survive—she survived that. And about, I think in 2021, about five years ago, she actually underwent a heart transplant.

Speaker #1: Due to her cancer from, you know, twenty-plus years ago. And one year to the anniversary of her heart transplant, she became the first woman in the world, I believe, to run a full marathon.

Speaker #1: And while at the same time, she was a founder at the Mayo Clinic for the Breast Oncology Center. So, you know, Dr. Don, thank you so much for being here with us from day one.

Speaker #1: And yeah, Don's going to talk to us about, you know, the science, the background, and what makes IMH so special.

Speaker #2: Thank you so much, Danny.

Speaker #1: Done.

Speaker #2: I'm so excited to be alive to celebrate this time with IMH and, as you said, 20 years as a physician at Mayo Clinic. Everything you do is rooted in the deepest of science.

Speaker #2: And, you know, I had frequently been approached by other supplement brands, and truly, I would just delete each email because it was never something that Mayo Clinic would allow me to participate in.

Speaker #2: Until I received that email and that call from Danny. And, you know, I remember that in that first call, there was nothing about marketing.

Speaker #2: The only thing we talked about is how we could create the best, scientifically backed nutraceutical solution in the world. And that's exactly what we have done.

Speaker #2: So, you know, this is a conversation I had been waiting for, truly. Second, help to enhance an individual's overall healthspan. So, for two decades, at Mayo Clinic, I was just immersed in the sick care environment.

Speaker #2: I watched patients try to assemble their nutrition from shelves, bottles. It would take 16 to 18 supplements, and they were all inconsistent in quality.

Speaker #2: And some would do harm. Some patients would actually come in, be admitted to the hospital, because these supplements would actually hurt them in their effort to be healthy.

Speaker #2: So the Daily Ultimate Essentials, it's basically replacing everything in those 16 or 18 bottles that people would take, with over 90 ingredients, in that tasty little daily sachet.

Speaker #2: So, if any of you on this call haven't tried it, this is my invitation to go out there and make sure you try it.

Speaker #2: Because the biggest investment you can make is actually in your health. So let's start with that IMH daily sachet, and it's at a clinical dose.

Speaker #2: Over 74% of Americans have nutrient gaps. And that's exactly what the Daily Ultimate Essentials is setting out to do — to close those nutrient gaps in more.

Speaker #2: And what I was sharing with you about having safety at the cornerstone of every single thing we do is that it's not just one hero product that's doing it.

Speaker #2: Every single SKU that IMH puts forward is NSF-certified for sport, meaning that there are no banned substances in it. Then it's third-party batch tested, meaning that every single ingredient on that label, in the stated dose, is exactly what you're getting.

Speaker #2: And when you go to that IMH website, there’s transparency. So you can see the actual certificate of what each batch has for you. Very, very important.

Speaker #2: And then it's also checking for things that can harm people, like heavy metals and microplastics. So there was not a shortcut made when it came to IMH Daily Essentials.

Speaker #2: And I knew that was going to be the product. I wanted to be at the foundation of helping to create, right alongside that awesome scientific advisory board.

Speaker #2: It's not just me. I'm the voice of those other faces you saw up there, and we're a great team. In truth, we literally talk every single day among the Scientific Advisory Board about how we can do things better.

Speaker #2: Now, I want to talk to you about how do we prove this? Because, you know, it sounds great. It sounds like I'm selling something, but it's because I have such belief in it.

Speaker #2: And we saw this in our first 12-week randomized controlled study, where 95% of participants reported improved energy—you know, improved vitality. That's the number one thing we set out to do.

Speaker #2: There were other reports where we saw 85% improvement in gut health. We saw 80% improvement in the ability for people to sleep. And people felt sharper.

Speaker #2: Seventy-five percent of individuals felt that they had more clarity of thought. They felt a difference. This is why people keep on coming back for more.

Speaker #2: And we have that high retention rate, so we're going to continue to hold ourselves to this high bar. And that's why we're continuing research right at my, we could say, alma mater, because essentially, I did all my training at Mayo Clinic.

Speaker #2: We have an ongoing randomized controlled study right now at Mayo Clinic among healthcare workers. There are 100 individuals being enrolled in this study.

Speaker #2: And the study is designed—one that is really rooted in rigorous science. And basically, what we're doing with the IMH study at Mayo Clinic, which is being run by a former colleague of mine, Dr. George Feholte, is looking at these 100 healthcare workers. These are healthcare workers at the world's number one research hospital.

Speaker #2: So they are definitely critical when it comes to taking supplements. But it's being randomized, so half of the 100 individuals, unknowingly, will get IMH.

Speaker #2: And the other half will have a matched placebo, and it's matched for taste. In fact, we even stepped out onto a ledge a little bit, because the placebo still has some beetroot extract.

Speaker #2: So even within the placebo group, people may feel better. As part of the study, every single participant has to have a four-week washout. That means, if they're taking any other supplement, they have to stop that supplement, and then they will start IMH from day one when the study starts.

Speaker #2: They have baseline laboratory studies, and those laboratory studies will be completed at the completion of the study. We're going to be checking different vitamin levels, mineral levels, and inflammatory markers.

Speaker #2: Cardiometabolic markers, as well as doing functional tests like a six-minute walk test with an equivalent VO2 calculation, body composition with an InBody, grip strength, as well as, of course, as you can imagine, health-related quality of life surveys.

Speaker #2: Research like this is not inexpensive. Studies like this cost on par with what they cost for pharmaceutical companies. And this is a huge shout-out to Dani.

Speaker #2: And why that first conversation with Dani was so meaningful to me, as a clinician who is a research scientist as well as a physician, is because he wanted to invest in the research, in the science, that matters.

Speaker #2: So, we expect to have results from that Mayo Clinic study by Q2 2027, if not sooner. Next, I want to share with you about the longevity randomized controlled study.

Speaker #2: This is a large study with 180 participants, and it is randomized among four different arms. So there's going to be a placebo arm, where they're not getting anything.

Speaker #2: There's going to be a single dose of the Longevity, a double dose of the Longevity, and then the full Beckham Stack, which is going to be a sachet of the Longevity and a sachet of the Daily Essentials.

Speaker #2: And what we're going to look at is inflammatory markers, as well as metabolic markers. These are two of the most important markers when it comes to the hallmarks of aging.

Speaker #2: And we even know that about 88% to 92% of Americans have metabolic disease, basically. So this is a really critical study that can help to inform us how we can help Americans, basically, be healthier.

Speaker #2: So, I'm really, really excited to see what these results show us. And we're expecting results from this study in Q1 2027. Next, for the gut health study.

Speaker #2: I mean, it's estimated that 66% of Americans struggle with GI issues, and over 70 million Americans actually have diagnosed digestive diseases. So, this study has 135 participants.

Speaker #2: And there are three arms that we're going to be testing with the different dose responses. But what's unique in this study, where many studies, you know, for supplement companies, they just look at quality of life surveys.

Speaker #2: That is indeed what we did with our first study, which I shared with you—the results. But this one is going a step deeper.

Speaker #2: We are actually sequencing the gut microbiome with shotgun metagenomics. This is huge, and this is super exciting because when we look at the gut microbiome, this is actually our window for bioindividualized optimization of pretty much every bodily function.

Speaker #2: So, really exciting with Suzanne Devacota and the team to see what these results show us. So we're not going to just stop there. As Dani shared with you, come the end of this year, into Q1, Q2, we have some new exciting products on the market, starting with the hydration—which is going to have, well, I don't know if I'm allowed to go into detail, but two forms of hydration.

Speaker #2: So, we can help people who are athletes, as well as people who are more just at home and need hydration solutions—thinking of patients and people with complex health issues.

Speaker #2: And then the gummy—this is so exciting because we can help children to be healthier, making sure that they have a tasty gummy that has favorable fibers, also for their gut microbiome.

Speaker #2: No sugar, no artificial colorings. But we're also going to have this product NSF certified and third-party label tested. So this means that there's not going to be any of those heavy metals.

Speaker #2: And that what's on the label is actually the dose that that child is getting. So as a physician, and as a patient myself, you know, I've owed my life to the world's best medicine.

Speaker #2: And now we have a nutraceutical solution that is done with the same rigorous methodology. So I can tell you this: IMH is doing it right.

Speaker #2: And again, remember, the biggest investment is when you make it in your health. So, Dani, back over to you.

Speaker #1: Great. Thank you so much, Don. Yeah, just let me wrap it up here. You know, one more minute here. And again, you know, let me bring everything that you heard this morning onto one page.

Speaker #1: So Brian showed you all the numbers. Dr. John showed you the science. Here’s what it all adds up to: we have eight advantages, each one making the other better and stronger.

Speaker #1: The science: three trials underway, including at the Mayo Clinic. The brand—you know, the one people, you know, the one people hand to other people.

Speaker #1: We also have, you know, General Catalyst. You know, again, underwrote $1 billion after months in serial cohorts—a subscription engine across 140,000 active subscribers.

Speaker #1: And again, growing very, very fast. July, we had our best month ever. And AI-native organizations—70 people delivering over $3 million of revenue each.

Speaker #1: A footprint of 46 countries. And again, we started with 31 countries from day one. Our largest market is only 0.15% penetrated. And you know, founders who own the outcome—you know, my own capital, our athletes' equity, all of it in the stock that you hold.

Speaker #1: And now, any one of those—a competitor can copy, right? Money can buy their certifications. Money can even buy the trials. But the eight together, compounding through the same subscribers, the same data, the same brand, month after month for 20 months—that is something really, really rare that nobody has been able to copy.

Speaker #1: And that's why we call ourselves IMH. And here's what I want you to sit with as you go into your questions. Everything you saw today is just from two products.

Speaker #1: Okay? The flywheel is just beginning to turn. And you know, the flywheel is just beginning to turn. That's why I'm so excited every day to wake up to.

Speaker #1: And I'm so grateful for the opportunity and what we're able to do because, again, we have tens of thousands of positive reviews around the world.

Speaker #1: And with that, we're right on time—one hour. I know we've done a lot of talking. I think everyone on this stream has learned a lot.

Speaker #1: But we're not done yet. So I think the point of this format is that it allows everyone, especially our research analysts, to ask those questions. So please feel free to ask, you know, Brian, myself, or Dr. Don any questions.

Speaker #2: Thank you, Dani. We'll now open the line to our research analysts to ask questions. If you'd like to ask a question, please raise your hand.

Speaker #2: And you will be moved into the call as a panelist, or you can also drop your question in the chat function of this call.

Speaker #2: It looks like we'll take our first question from Ryan Myers of Lake Street.

Speaker #3: Hey, guys. Thanks for taking my questions. I appreciate the really extensive overview here. First question for me: with the General Catalyst sort of removing the cash constraint on marketing...

Speaker #3: You know, how should we be thinking about spend in the second half of the year, especially as we bridge that gap to the updated adjusted EBITDA loss?

Speaker #1: Yeah, Brian, do you want to take that?

Speaker #4: Yeah, Ryan, thanks for the question. So, what we're looking at for the second half is a percentage of revenue that's likely more in line with the second quarter, in terms of percentages.

Speaker #4: Maybe a slightly more favorable number than that, but not materially different. And so we would expect to continue to invest in the business at roughly the same percentage of revenue.

Speaker #4: Probably not as low as July had come in, but that's also because we're not necessarily expecting that July customer acquisition efficiency to continue. And so, I would expect you to see a little bit more leverage gained on the marketing line, but not too much versus Q2.

Speaker #3: Okay. Got it. And then, you know, as the quarterly subscriptions become a larger share of the business and the volumes continue to increase, where do you see the sustainable growth margins going forward from here?

Speaker #3: Obviously, two sort of consecutive quarters of 65% gross margins. Just, you know, how should we think about that going forward as the mix changes a little bit?

Speaker #4: Yeah, it's a good question. So, on the gross margin side, the quarterly duration definitely is more favorable. And so, if mix continues to shift even more heavily towards quarterly—which you would expect as those cohorts continue to grow and to build in—I would expect to see at least a few points of additional margin just come from that portion of the mix.

Speaker #4: Improvement. And then there's also then economies of scale to come, which we have not yet modeled or forecasted or guided to. But as we continue to scale this business, there's definite efficiency to be gained on economies of scale on not just the supply chain piece of the people and production side of it, but also on the third-party logistics side, postage, freight, rates, and then also on the cost of product, you know, working with our manufacturers via cost down with the ability to buy into more ingredients and get some economies of scale that way.

Speaker #4: So, I would expect that to continue into 2027, as further expansion at the gross margin level. And so you kind of have two parallel things happening, each of which should be margin-accretive for us.

Speaker #3: Okay, got it. And then, lastly, maybe one for Don, because I don't know if I've ever, you know, spoken with you, and I really appreciate hearing the sort of science background of this stuff.

Speaker #3: But, you know, as you guys go through some of these more clinical trials, which are obviously super extensive, and to my knowledge there's no one else in the supplement space doing that, I mean, what do you think that brings to the brand? Let's say you have successful outcomes for each of those three.

Speaker #3: I mean, what sort of benefit do you think that provides you guys with?

Speaker #2: Well, you know, our consumers nowadays are becoming much smarter. Thank you for this question, Ryan. And more importantly, we're seeing that physicians—this is becoming the trusted product for physicians.

Speaker #2: It's in full scripts. I'm now Chief Medical Officer at Fountain Life, which is the world's number one longevity program. Essentially, all of our physicians are now switching over our members who were taking 16, 18-plus bottles. You know, I had a patient once come into Mayo Clinic literally with a suitcase of supplements.

Speaker #2: And so it's so nice to have one trusted supplement and a solution that is able to check the box on all of these areas.

Speaker #2: And then it continued that pipeline down through knowing where the ask is with different products on the pipeline.

Speaker #3: Okay, got it. That's helpful. Thank you, guys.

Speaker #2: In fact, you know, Mayo Clinic even has this in their pharmacy. They also have it in the Mayo Clinic online store to sell to patients.

Speaker #2: So, you know, if you have it in the world's number one hospital, that speaks volumes.

Speaker #1: And just to add to that, that's one thing that we're really proud of. We have so many physicians recommending this product to their patients, which is really rare in the supplement space, right?

Speaker #1: I mean, we know, for example, the New York Yankees physician is recommending this to all their team players, right? I mean, Jay Shetty found out about this through his physician.

Speaker #1: You know, Arina Sabalenka found out about this through her nutrition coach, and so it's really rare that this happens. And again, every time the doctors are recommending this, they're going through the labels, they're going through the NSF certifications, they're going through everything before they're recommending this.

Speaker #1: So, I think that's something we're really proud of.

Speaker #3: No, that's great to hear. Thank you, guys.

Speaker #2: We'll go next to Tom Forte of Maxim.

Speaker #1: Great.

Speaker #3: So, first off, Danny and Brian, congrats on the quarter, the General Catalyst deal, and thanks for taking the time this morning to tell the story so well and thoughtfully.

Speaker #3: And then, Dr. Don and Carolyn, thanks for joining the call. I have three questions—I'll go one at a time. So, Danny, in general, how long does it take you from deciding to enter a new category to having a product available for consumers?

Speaker #1: Oh, you know, to be fair, we're very deliberate and strategic about when we have a new product. Again, because we want to understand if we can create the best product in that category as well.

Speaker #1: And so, as you've seen earlier when I showed, you know, those two slides, right? Again, right now we've only honed in on basically two new categories: hydration and gummies.

Speaker #1: And because part of the reason we chose hydration is we see a lot of gaps in the current market. They're either with too much sugar—you know, like Liquid I.V., right?

Speaker #1: Or too much sodium. And then so we saw that, say, you know, why can't we make something, you know, much better? And then again, you know, through discussions with Don as well as some of our SAB, then we have to look at all the clinical evidence to create a very comprehensive product.

Speaker #1: Before it even goes into the manufacturing and tests, et cetera. And then we also have to spend time on the NSF certification, on the clinical part, right?

Speaker #1: So I would say, going back to your original question, you know, when we first thought about hydration, it was already the end of last year, I would say.

Speaker #1: And so it easily will be 12 to, I would say, 12 to 18 months, if not longer, when we bring a product to market.

Speaker #1: I think the good thing is that we don't rush into any new products. And that's why, again, after 20 months, you've only seen us with two SKUs, right?

Speaker #1: And to be fair, if we wanted to, we could have launched a dozen new SKUs. I can tell you though, we won't have a dozen good SKUs, right?

Speaker #1: So, I think for us, it's not the number of SKUs, but with every SKU that we do launch, I always challenge everyone: hey, put it into cloud, put it into ChatGPT.

Speaker #1: It's just the best compared to whatever's out there. And so I would be very confident to know, again, I tested—I think right now, you know, our strategy right now is just building, right?

Speaker #1: Again, we've been able to build a very, very strong brand, and we're very strategic with the categories that we're looking into. However, with that being said, if there is always a strategic opportunity and we have the capital to do so, we will take a look at it.

Speaker #1: But I think our primary focus right now, and all of my focus right now, is actually on product development and working with the teams for clinical validation, as well as continuing to discuss with our SAB in terms of what that pipeline could look like.

Speaker #3: Excellent. And then, lastly, Dr. Don and Carolyn, while we have you, I'd appreciate your thoughts on consumers' increasing interest in health and wellness.

Speaker #3: And if you think this is a multi-generational interest, versus just baby boomers.

Speaker #2: It's definitely a multi-gen—oh, Carolyn, do you want me to go and take this one first? Oh, you're on mute.

Speaker #3: Danny, I've been

Speaker #1: On your board one day. Do you want me to take a stab at that?

Speaker #3: Yeah, feel free to. I mean, this is a general question, I think.

Speaker #1: Yeah, it's a general question.

Speaker #2: Yes, I'll just say that 25 years ago, I think I wrote a report called "The Absolute Risk of Obesity" and talked about the problem with sugar.

Speaker #2: In the American diet, and the risk to the stock valuations of Coke and Pepsi and stuff like that—so I've been thinking about health and wellness for years and years and years.

Speaker #2: It was identified as a trend many years ago. We wrote a Futures report on it, and it felt like stating the obvious. But what I've noticed about trends is that they sort of hop along slowly, being picked up by early adopters.

Speaker #2: And then they just enter an acceleration curve that is incredible. I feel we're at that point, and I think we haven't even touched on what GLP-1s are going to do to people's health.

Speaker #2: I think that it's literally going to change the sizing of American clothing and furniture, and there will be all sorts of repercussions, because people feel so much better and the health outcomes are so much better.

Speaker #2: But it also means we have to think more about bone health and other aspects of our health. And people don't just want to live long lives.

Speaker #2: They want to live great lives. And we've got a very powerful cohort in us older people. There are a lot of us. And we're not going quietly into the dark night.

Speaker #2: We are finding new careers and want to contribute greatly to society. I think we are at the cusp of something really enormous in health and wellness.

Speaker #2: I agree, Carolyn. And, you know, the baby boomer population is one, but the biggest rise actually in wellness prioritization and spending is among millennials and Gen Z.

Speaker #2: And these younger cohorts are actually driving over 41% of total wellness spending. It is incredible, and this is the first generation that is not actually drinking alcohol.

Speaker #2: They want to drink their mocktails. So, whenever we have our events and we're really focusing a lot on connection, and a sense of belonging and community, you'll see that in all the ads—which, that gives me chills to say.

Speaker #2: But this is more than just a product. This is really a relationship, as you said, Carolyn, with health, wellness, and vitality. And sending forward that message of just being fully alive.

Speaker #2: So, no, it's a lot of fun to be in this space for pretty much people of all ages, and now including stepping into the children and keeping children safe.

Speaker #2: And again, it's that safety first, which a lot—the majority—of companies just aren't putting into perspective. I'm really proud to be behind this product.

Speaker #3: Great. Thank you, everyone, for taking my questions. I appreciate it.

Speaker #1: Thank you.

Speaker #2: Thank you, Tom. Our next question will be from Patrick Budestini from UBS. Patrick, please go ahead.

Speaker #4: Hey, thanks for taking the question. First of all, Danny and Brian, congrats on the great quarter. It's awesome to see the continued momentum. I have kind of two questions around the competitive landscape.

Speaker #4: If you could just start by speaking a bit on how the competitive landscape has evolved over the last few months. And related to that, when you are acquiring new customers, are they typically coming from a competing product or are they new entrants into the category?

Speaker #1: Yeah, so I think—I think, Patrick, I can answer that, right? So we've actually published some interesting stats from a competitive perspective in the investor deck, where, again, this is third-party independent data.

Speaker #1: And then, so if you look at even the last 20 months of when we launched the brand, you know, basically December 2024, et cetera, right?

Speaker #1: So, if you look at the landscape, we grew—of course, we're new—by 2,500%. In the same period of time, you know, AG1 went down 36%.

Speaker #1: Right? I think, you know, Groons went down about 50%. Dorn went up 50% in this period of time, right? So we have been taking quite significant market share from the top players.

Speaker #1: And, you know, rightfully so, we believe we have the best product in the market. And so again, at the premium price point right now also, I think that's key.

Speaker #1: And we also published this data too. The inventory data is that, on average, at least in the whole supplement category, we have the highest average order value.

Speaker #1: Of any supplement brand. So, on average, that's $180. If you look at AG1, Dorn, I think they're about $80 to $100.

Speaker #1: And then, you know, Groons is like $50. And then, so what this means is that our clientele—our customer clientele—and again, it's also published in this third-party data, is that more than 50% of our current customers have a household income above $150,000 or more.

Speaker #1: Right? So if you think about that for a second, I think that's one of the reasons why, after month 20, customers stay with us.

Speaker #1: Yeah, again, the product works, and we have really engaged customers. So I hope that answers your question about the competitive landscape.

Speaker #1: And we're growing every month, right? So last month, in July, we added 47,000 new customers. From our data, I believe 20 to 30 percent of new customers are from another customer. And once again, a lot of our customers, like Dr. Don mentions, may be taking five, six, seven different types of supplements.

Speaker #1: And for us-wise, we've been able to condense and make it easy, where again, you don't have to spend two, three hundred dollars on a monthly basis.

Speaker #1: You're spending an essentials $9 a month, or on the Beckham stack $180, right? So I think we've been able to help people save money, in fact.

Speaker #4: Super helpful. Thank you, Danny.

Speaker #2: Thank you, Patrick. We'll go next to Alex Hampman of Sadoti. Please go ahead, Alex.

Speaker #5: Thanks for taking questions, and congrats on the quarter. The customer acquisition cost improvements throughout spend growth have been very impressive from my perspective.

Speaker #5: Could you talk a little bit more about TikTok Shop and some of the social commerce efforts you have, and how you're thinking about their effects on CAC and AOV, and sort of prioritizing revenue through your store?

Speaker #5: You know, versus off-store, as you scale those efforts.

Speaker #1: Yeah, so I think, great from day one-wise, you know, we've been able to build IMA against direct-to-consumer, and the majority of transactions are transacted on our own website.

Speaker #1: You know, it's roughly about 95% and another 5% from Amazon, right? And that was by design. Yeah, because again, when individuals transact on our own website across 40-plus countries, we get to create a much greater experience for them.

Speaker #1: We also get their email information, and so when we launch new products, we can easily offer them to our existing customer base. Yeah, again, so we are now experimenting or doing more testing on TikTok.

Speaker #1: AppLovin, but the majority—over 90%—of our customers are transacted on our website. And again, we're still seeing significant growth opportunities on the DDC perspective.

Speaker #1: So, I think we'll continue to scale that way.

Speaker #5: Very helpful. Thanks, Danny. I was also excited to hear about the science and the ongoing research. So, beyond getting on physician radars, which we just talked about, can you also talk about your plans to leverage the science to develop future products or partnerships, and also share when we might expect readouts from those studies?

Speaker #1: Yeah, so I think, again, from day one, science has been the core of our foundation, right? Even when David Beckham and I met like three years ago, we were like, hey, we need to make this a science-backed brand.

Speaker #1: And this is where, again, even with the earlier question, this is not a trend. I think, at the end of the day, consumers want to understand what ingredients we have, right?

Speaker #1: They want to see the results. They want to see the third-party testing. And again, for us-wise, you know, we publish Eurofins on our website.

Speaker #1: We also publish NSF contents—we're certified NSF for Sport. So we're going well beyond the norm in terms of what you expect from a supplements brand.

Speaker #1: So I think with the two trials that are underway for the longevity as well as gut, yeah, we expect to have results of those by Q1.

Speaker #1: And Mayo Clinic just gave us that. Academic institutions, you know, will likely take a little bit longer, but we expect those, I would say, by Q2 or Q3.

Speaker #1: Again, that's something that, as Don said, these trials are expensive, right? These are multi-million dollar trials that we're undertaking. But we do believe this is going to be part of our moat in terms of the science, where the reality is we don't know what the results are going to garner.

Speaker #1: But we're confident, just based upon how many customers we have, our scientific advisory board, and the level of quality ingredients that we have in our product, that we'll be able to get some good results from it.

Speaker #5: Great, I appreciate that. And, you know, beyond the long history of science, with Carolyn's addition to the board, I know she has a background in beverages.

Speaker #5: So, I was curious if there are any thoughts around, you know, form factor expansions and potential retail sales, particularly for the upcoming hydration product?

Speaker #1: Yeah, so great question. You know, that's definitely, I would say, a possibility, yeah? But I think right now we're focused on the stick powders, stick packs first.

Speaker #1: For hydration, but again, I think, you know, everything is possible in the future, right? But again, we want to be very deliberate, and we don't want to rush into anything right now.

Speaker #1: Our main focus is launching our two new categories in the stick powders for hydration, as well as gummies. And then we'll see after that.

Speaker #5: Understood. Thanks for all the context.

Speaker #2: And we'll go next to George Kelly of Roth. George, please go ahead.

Speaker #6: Thank you. Can you all hear me?

Speaker #1: Yes. Hey, George.

Speaker #6: Okay. Hey, Danny. Thanks for taking my questions and for doing this presentation today. So, I had a few questions for you. First, I wanted to start with your July performance.

Speaker #6: Curious if you could give us more detail about what drove the acceleration to revenue and the improved CAC. I don't know if it was a certain marketing channel or partner, or anything worth flagging.

Speaker #6: And then secondly, I know your second-half EBITDA guide does not bake in a continuation of the CAC that you saw in July. So I was wondering if you’ve seen some kind of normalization in August or just, I guess, comment on what you’ve seen so far in August with respect to CAC.

Speaker #1: God, I would say the first question, in terms of July—and obviously, you know, July-wise, right? I mean, our CAC went down by about 20% over Q2.

Speaker #1: Right? So in Q2, we made a big investment in terms of, you know, we made a big investment in terms of overall spending, nearly double from Q1.

Speaker #1: So I think we've had some, you know, spillover from that aspect. And then, to be fair, I mean, the brand, as I mentioned—again, I've written in my shareholder letter and where I talked about earlier—I mean, it's getting very strong.

Speaker #1: Right? Across international, right? When I'm in the US, when I'm in Europe, when I'm in Hong Kong, I think there's a lot more word of mouth.

Speaker #1: So we're not just depending on paid, and we're getting a lot of organic word-of-mouth sharing. I think that's been very strong, right?

Speaker #1: So I think we're also seeing a halo effect from a lot of our ambassadors. Again, it's not just that we have one—we have an elite roster again in Q2.

Speaker #1: We signed up Yannis, right? Then we had Inter Miami. And then again, we had lots of offline events as well, which is very rare in the supplement category because everyone’s online.

Speaker #1: While we're 100% DDC online, we've also had 100-plus events that we've been a part of in the last 20 months. So, I think the combination of all of these little things added together really creates a lot of word of mouth, especially in the past few months.

Speaker #1: And I think that's the same thing for Q2. Q2, you know, our CAC in Q1 was $301. Our CAC in Q2 was $30—I mean, sorry, our CAC in Q1 was $305.

Speaker #1: CAC in Q2 was $301, so it went down by $4, even though we raised—I mean, we doubled—our spend. That rarely happens.

Speaker #1: Again, you know, my background's in e-commerce and Groupon, right? I haven't seen that. That only happens when the brand is getting stronger, right? And this is where I think we're seeing that.

Speaker #1: And then, so again, we have—and the great thing is that we're going to be, you know, doing more stuff on streaming, podcasts, YouTube, and then, so these are all going to be incremental new channels.

Speaker #1: So I think for August-wise, it's still a bit too early, yeah, but we are still seeing, you know, continued momentum. But I don't have—I don't want—it's too early to comment on the CAC because I don't even have a full month yet of August figures.

Speaker #6: Okay, fair enough. That's helpful. Can you still hear me? I wasn't sure if my...

Speaker #1: Yes, I can.

Speaker #6: Okay, great. And then, second question from me, on your new products. I understand you didn’t bake them into your targets for this year or next year.

Speaker #1: Mm-hmm.

Speaker #6: And I understand they're huge categories and, you know, seem to make sense with your subscriber base. But do you have any—I'm just trying to sort of dig into what the attach could be with your current subscriber base.

Speaker #6: Do you have any kind of survey data that shows X amount of our subs already use hydration, or just anything to help me as I've, you know, tried to layer in what these new products could?

Speaker #1: Yeah, so we've we've done we actually have a great question, George. We've actually done surveys for my existing customer base, post-purchase survey questions in terms of what are the key products that you would like IMA to come out with.

Speaker #1: And then when we did that survey, you know, hydration and gummies were the actual answers, at least from our customer base, right? So that's why we feel very strongly that we'll be successful in these two categories, even though it's highly competitive, because at the end of the day, we also believe we've been able to build a much better product than what's in the market.

Speaker #1: That's available, right? So in terms of attach rates, again, the reason why we haven't been given we haven't provided a guidance is because, again, for our new skill, it's just very difficult to have very difficult to provide good forecasts.

Speaker #1: And we don't want to provide anything that we don't have a good database of already, but I can tell you from at least our customers, for both the hydration and gummies, more than 20% of our existing customers have asked for this.

Speaker #6: Okay. And maybe a follow-up to that question. Are you thinking, are these more attach products, or are they sort of lower customer acquisition cost, lower-priced products that then, hopefully, you can— they're both.

Speaker #6: Okay.

Speaker #1: So, there was not—it wouldn't come... Oh, go ahead. Sorry.

Speaker #6: Nope, nope. I cut you off.

Speaker #1: Okay. Yeah, so I would say it's twofold, right? I mean, it doesn't compete with our existing products, for sure. Right? Correct?

Speaker #1: So I think it's going to be only complementary. There will be some individuals, again, who will want to have a hydration product because, again, they are already taking a separate brand's hydration right now.

Speaker #1: Right? And then, so we believe they would be able to switch to ours. And then there is a big subset around the world that are just drinking hydration, which we believe we'd be able to have them onboard.

Speaker #1: And then we can also cross-sell and upsell them the standard IMA essentials and Longevity. So I think that'll work to our advantage. And it's the same thing, same way, for the gummies.

Speaker #1: Also, again, we're looking at kids' gummies, and it doesn't compete with our current product, right? And, you know, 20–30 percent of our current customers are already parents.

Speaker #1: So, it's natural that, you know, this could be a really great product for the kids and, again, that we can identify.

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Speaker #7: From General Catalyst, would that impact EBITDA at all, except for below—it'd be interest, effectively, as interest expense in terms of the repayment rate?

Speaker #7: But it wouldn't impact the actual EBITDA guidance; it would just impact cash flow.

Speaker #6: Okay. Okay. Thank you.

Speaker #7: Yeah, thanks, George.

Speaker #1: Thank you. And now we have a written submitted question, our last from the analyst community. From Susan Anderson of Canaccord: I'm curious how they are thinking about the distribution channels.

Speaker #1: Right now, they are all DTC. So, do they think that retail will be a part of the strategy at some point? And where is the opportunity internationally?

Speaker #1: What countries are they not in and looking to be in? And finally, how do they think about the competitive landscape and the moat IMA has?

Speaker #1: Why would another brand copy what you are doing?

Speaker #3: I don't think I'll take that. So I think the first question was the retail and DTC model, right? So, as you can see, we just had our best quarter ever, continued momentum in July, and we're 100 percent direct to consumer.

Speaker #3: And then we're not seeing any slowdowns—yeah, at all—in terms of our growth online. And again, as the division, I want to always keep the business operations simplified, simple as much as we like.

Speaker #3: And then, if you get into retail, it's a completely different business model, right? And so we believe we are able to scale—and scale well—at least for the next 24 to 36 months without the need for a retail presence.

Speaker #3: And we've been able to build a very strong online presence. Again, even in the last 20 months, you know, we have 350,000 followers on Instagram.

Speaker #3: Last year, we had one social ad that generated 233 million views on Instagram. And there's just no way you can generate that type of figure on a retail basis.

Speaker #3: So again, if we're able to still have such strong unit economics and such short payback periods, you know, there's no reason for us to get into retail.

Speaker #1: I mean, they're very—I mean, I do—there would—only reason why we were not going to retail now, I would say, and I said this before, is that we wanted to sell the brand.

Speaker #1: Right? But yeah, we have zero interest in selling the brand, so there's no reason for us to get into retail right now.

Speaker #7: And then in terms of countries, yeah, in terms of countries that we're in today, I mean, we're in 46 countries today. We're not in China.

Speaker #7: We're not in India; it's kind of the two larger countries. China, obviously—we have a good way into China, and that'll be a different business model with a different team. I would say, you know, 18 to 24 months out.

Speaker #7: We have not explored India at this time, and so those are kind of the only countries that we're not yet covering today.

Speaker #1: And I would like to take a question from our retail community. Danny, P&G just paid nearly six times revenue for Thorne. You trade well below that.

Speaker #1: Would the board entertain an offer? And if not, how do you close the gap?

Speaker #3: Now, great question. Again, I think the sector has been, you know, very hot. I would say the last six months, right? You know, the known acquired Heal, you know, Unilever acquired Grooms, and then, of course, you know, P&G acquired Thorne.

Speaker #3: I think in total, it was about $6 billion worth of acquisitions over the course of the last six months. Yeah, so as I just mentioned, I mean, we're building IMA not to get acquired, right?

Speaker #3: I mean, that's not the goal of building this company. And when David and I started this company, this brand, it wasn't like, "Hey, how do we exit in the next three to four years?" Or like, "How do we build a generational health company over the course of the next 5, 10, 15 years?" That's why we're investing in clinical trials.

Speaker #3: Because these things take a long time. So we're trying to, you know, tell the company that we wouldn't do this from day one, right?

Speaker #3: You know, with that being said, we are a public company. We have an independent board as well. Yeah, so there are offers that come in.

Speaker #3: We have to entertain it. But again, my focus has always been about building this into a generational health company. And, you know, regardless of what's happening out there, our role—my role and Brian's role—is to continue to deliver quarter over quarter. As long as we do that, and the more data that we have—and now, the reason why we've done this live stream and shared the investor deck, the shareholder deck—is because now I have 20 months of data.

Speaker #3: Yeah, six months ago, nine months ago, I didn't have that data, so there wasn't much for us to show. But now we are able to do that.

Speaker #3: So I think, again, we'll continue to deliver. Yeah, I think people that have followed our journey—again, I was just looking at it yesterday.

Speaker #3: It's quite crazy. We've, you know, we're a, you know, $350 million to $400 million company approximately today. But one year ago, you know, we were about, yeah, a $100 million company.

Speaker #3: And, you know, we were trading like 5,000 shares on a daily basis. Now, yesterday, we got, you know, $3 to $4 million of trading volume.

Speaker #3: So, just in the last 12 months, for people that have been following us, we've already made significant leapways, and we're going to continue to deliver quarter over quarter.

Speaker #3: And that's—and again, again, you know, a lot of people—I'm having so much fun. I think everyone that knows me knows this, right?

Speaker #3: It's a lot of work, but I don't—I don't call it work because it's so fun. And we have a very unique opportunity, given how much momentum we have with this brand.

Speaker #3: Right? Yeah, so I think to answer your question, we'll just deliver quarter over quarter, and I think that will close the gap in time.

Speaker #1: I think that's it for our Q&A session today. Daniel, I'll turn this off after you.

Speaker #3: Awesome. Great. So, thank you, everyone. We're well over time, so I think that's a good sign, as always, right? We earmarked 60 minutes.

Speaker #3: So now we're in, yeah, 92 minutes. So again, thank you, everyone, for joining today, and for following us. I think it's a very, very exciting time.

Speaker #3: Yeah, thank you. Yeah, Dawn, Caroline, for coming on board. Yeah, follow our journey. I think you guys will all be surprised.

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