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DATE

Tuesday, Aug. 18, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Sheng Wu Yeung
• Chief Financial Officer - Brian Rosin
• Board Member - Caroline Levy
• Founding Scientific Advisory Board Member - Dawn Mussallem

TAKEAWAYS

• Total Revenue -- $46.5 million, representing 29% sequential growth and 3.9x growth versus the prior year.
• IM8 Segment Revenue -- $45.0 million, increasing 33% from the first quarter and contributing 97% of total revenue.
• IM8 Gross Margin -- 65%, an expansion of 8 percentage points versus the same period last year driven by manufacturing and shipping scale.
• July Revenue -- $21.4 million in preliminary total revenue, with the IM8 brand reaching an annualized revenue run rate of approximately $251 million.
• Customer Acquisition Cost -- $301 in the second quarter, which management noted remained relatively flat despite doubling acquisition marketing spend to $36.2 million.
• July Customer Acquisition Cost -- $239, representing a 21% reduction compared to the second-quarter average.
• New Customer Acquisition -- 118,493 new customers in the second quarter, up 98% sequentially, with a record 47,373 customers acquired in July.
• Active Subscribers -- 140,000 individuals as of July, with 50% of the subscriber base maintaining a tenure of at least three months.
• Adjusted Free Cash Flow -- Turned positive in July for the first time in history, reflecting the impact of high-retention customer cohorts and the General Catalyst financing facility.
• Non-GAAP Adjusted EBITDA -- Negative $19 million in the second quarter, a byproduct of deliberate investment in marketing to drive future revenue.
• GAAP Net Loss -- $9 million or $0.52 per share, which included a $9.9 million fair value gain adjustment.
• Full-Year 2026 Revenue Guidance -- $220 million to $230 million for total revenue, an increase from the previously projected range of $210 million to $220 million.
• Full-Year 2027 Revenue Guidance -- $400 million or more, based on current subscriber retention curves and excluding contributions from new product launches.
• Fixed Operating Expenses -- $8.8 million or 19% of sales, down from 32% of sales in the same period last year.
• Cash and Financial Assets -- $109.4 million as of June 30, 2026, following the divestment of non-core assets including ACT Genomics and Insighta.
• Capital Expenditure -- $40 million utilized for a share buyback program completed during the first half of the year.
• Subscription Mix -- 54.8% of July revenue was derived from quarterly plans, up from zero in October 2025.
• Employee Efficiency -- $3 million in revenue per employee, supported by an organization of 70 people utilizing an AI-native operational structure.
• Financing Agreement -- $1 billion commitment from General Catalyst to fund 70% of customer acquisition costs on a non-dilutive basis.
• Unit Economics -- $1.52 in gross profit generated for every $1 invested in customer acquisition since the launch of the IM8 brand.
• Retention Rate -- 14.2% at month 20 according to independent Indagari credit card data, exceeding rates from competitors such as Thorne and AG1.
• Expected Second Half Loss -- Adjusted EBITDA loss is guided to narrow to $8 million to $12 million for the second half of 2026.

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RISKS

• CFO Rosin stated, "the impact of the Customer Investment Agreement with GC Customer Value Arranger, LLC is unpredictable, and the arrangement may not function as expected, and its failure to do so could materially and adversely impact our financial condition and results of operations," regarding the company's primary growth funding mechanism.

SUMMARY

Prenetics Global Limited (PRE +5.04%) reported its sixth consecutive record quarter, driven by the expansion of its IM8 wellness brand into 46 countries. Management reported that the company reached a financial inflection point in July, as consolidated adjusted free cash flow turned positive following the implementation of a $1 billion financing partnership with General Catalyst. The company raised its full-year 2026 revenue guidance and established an initial target for 2027, focusing on a subscription-heavy model and an AI-native operational structure to scale revenue while maintaining a fixed headcount of 70 employees.

• The company plans to launch IM8 Hydration in the fourth quarter of 2026 and a premium gummy line in the first quarter of 2027, both of which represent upside to current guidance.
• Chief Executive Officer Yeung stated that the bottom of the guidance range is underwritten by the current subscriber base.
• Management noted that 87% of revenue is recurring, with 95% of transactions occurring through the company's own direct-to-consumer store.
• Board Member Levy noted the connection IM8 built with consumers in a short period is unusual and that her role involves bringing analytical rigor to the board.
• The company is currently conducting three randomized placebo-controlled clinical trials, including a study of 100 healthcare workers at the Mayo Clinic, with results expected in 2027.
• Founder Yeung noted that revenue grew 3.9x year over year with no proportional hiring due to the integration of AI across marketing, operations, and finance.
• The David Beckham brand royalty rate stepped down to 3.5% of revenue after the company crossed $100 million in cumulative IM8 revenue.

INDUSTRY GLOSSARY

• IM8: The flagship wellness brand of Prenetics Global Limited, specializing in science-backed nutritional supplements.
• NSF Certified for Sport: A certification that ensures products are free from banned substances and that ingredients match label claims.
• General Catalyst Customer Value Fund (CVF): A non-dilutive financing facility that provides capital for customer acquisition based on the performance of existing cohorts.
• Cohort Math: The analysis of specific groups of customers over time to determine long-term value, retention, and payback periods.
• AI-Native Organization: A business structure designed to use artificial intelligence in core workflows to minimize manual labor and maximize output per employee.
• Quarterly Subscription Plan: A billing model where a customer receives and pays for a three-month supply of supplements in a single transaction.

Full Conference Call Transcript

Operator: Actual results may differ materially. Please refer to the company's filings with the SEC. Certain figures for July are preliminary and 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.

Sheng Wu Yeung: Thank you, Shannon. Good morning, everyone. 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 looking -- from numbers that are joining right now, it may be the largest group of our shareholders ever gathered in one place. So whether you manage a fund, hold a single share or simply here because you drink the sachet every morning, welcome. This is for you. And here's why we're doing it this way. Our shareholders range from global institutions to people who found IM8 as customers and became shareholders.

And we believe every one of them deserves the same depth of information at the same moment. This moment, we've opened the books to everyone at once. We can do that for a simple reason. We now have 20 months of data, every cohort, every month, every market measured end-to-end. Enough history that numbers no longer need my adjectives. And I will say this plainly, I do not know of another company publicly traded or private that has shown its business in this level of detail in which we are showing you today.

I just released a 40-page shareholder letter written to be read, not skimmed, an additional 80-page investor deck that shows you this business the way I see it internally, every single cohort, every vintage, our full acquisition cost month by month and even independent card data measuring our retention against every single brand in our category. In this stream, you hear from us directly and feel free to ask us anything at the end of this call. And the business compounding this fast deserves to be examined, not summarized. When the numbers are this good, transparency is a weapon. And today, and day that number softens, someday you'll read it from us first in that letter.

And one promise I want to make in the next half hour is not -- I'm not going to be standing here and just reading you that letter. However, hopefully, everyone here listening in can read it later today. What I owe you is a part of the document that cannot do the story of what actually happened, how a brand that did not exist two Decembers ago crossed last month, the most -- crossed last month a line most consumer companies never reach. But before I talk about single number, I want to see what -- I want to show everyone what we're building first. We made this video 2 minutes. Please enjoy. [Presentation]

Sheng Wu Yeung: Yes. I mean that was a highlight for the last 20 months, and it's quite amazing what we've been able to achieve, right? So Brian, if we get to the next slide. In December '24, we launched IM8, our first month -- on our first month on the market, we did about USD 400,000. And I want to tell you what we believe back then because it's written down. It was in our founding moment before we even ship the single sachet. We believe that we built the best product in the category, clinical studied certified, customer 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. And if that helped, then one day, the whole machine would cross the line, the point where growth stops consuming cash and starts producing it. We marked that line in the model on day 1. Every decision we've made has pointed to it. Last month, we crossed it. In July, our consolidated adjusted free cash flow, and I want to be precise here because precision is the whole point of today, that measure includes the funding under our general Countless facility 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. And I'll be quite honest with you, I did not believe we could get it here so fast. 20 months, most consumer brands take years. Many never arrived at all, 2 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 cost in months. And these cohorts earned the second thing, $1 billion of commitment from General Catalyst, committed after they spent months in our data, capital that now funds our growth.

So our cash no longer -- we expect Q3 to be our first positive quarter, and we expect to stay positive from there. And now the quarter itself. I just highlight in terms of what we've been able achieve in Q2, I want to frame this only way results should ever frame against what we told you and what we would do earlier. So in May, we guided publicly $46 million to $48 million in total revenue, $44 million to $46 million for IM8. We reaffirmed those numbers in June.

This morning, we reported $46.5 million in total, up 29% from Q1, roughly 3.9x from a year ago, with IM8 at $45 million, up 33% sequentially at a 65% gross margins. Both numbers 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. And for the record, because it 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. Starting at the $400,000 I talked to you and look where it ends.

Last month, we achieved $20.9 million of revenue in 1 month and just strongest month in our history, 4.3x of last July at an annualized run rate of roughly $251 million. And July just wasn't big. It was our largest single month customer cohort ever. We acquired 47,373 customers. And here's the part that I'm most proud of. We acquired that record cohort at a customer acquisition cost of about $239, down roughly 21% from our Q2. So we have record customers falling CAC, scaling brands never get both. Brian, in a few minutes will take the whole P&L apart in a few minutes and share all the details on that.

And the quarter delivered inside our own guidance with a July like that behind it, changes why can promise ahead. So today, the first time, we are also -- today, we are also raising our full year total revenue guidance to $220 million to $230 million, with IM8 contributing $215 million 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. And 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.

And there's 3 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. In the second year, this year, we will achieve $220 million, $400 million plus expected in its third year. In the letter, we put it in one way, and we'll say it to you straight. We don't treat that trajectory as ambition. We treat it as arithmetic. We'll exit the year above $300 million run rate before a single '27 customer walks into the door.

Note, roughly 87% of our revenue is recurring subscribers we already have our retention curves measured across 20 consecutive cohorts, everyone behaving the same way. And nothing from the new products you will hear about today is in any of those numbers. So every launch is pure upside to every figure I just gave you, and that's the promise. And now let me show you the machine underneath it. And want to talk to you a few minutes about the brand that we are building because, again, in my experience as an entrepreneur, as an investors, I haven't seen anything like this. And I'm so grateful I am able to live this every single day.

It's something that numbers cannot and something you can only see with your own eyes. And as you may know, I spent much of the year traveling throughout the whole world for IM8. And in every country I land in, the same thing always happens. People come up to me about IM8 and get so happy. It's not because they recognize me. It's because they recognize the sachet. I have athlete surgeons, founders, CEOs, 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 watched more than 100 brand events around the world, and the room keeps getting fuller.

Dave and I talk about this all the time because it's the thing that we are proud of most of. Somewhere in the last 20 months, this stopped being a product people buy and became something people care with them and ask each other about and hand it to the people they care about the most. And I can tell you just on an earnings call for a hard commercial reason, a brand people trust travels. It travels into new countries ahead of our marketing is why our acquisition cost is falling while our spend has doubled in Q2. And it travels into new products where an audience that already believes in us is waiting for whatever we make next.

And the pipeline, as it stands, again, that's -- and the brand that we've been able to build and where we're headed next, right? Because everything you have seen is essentially a one product family in one category. Next quarter in Q4, we're going to launch IM8 hydration into a $37 billion market. In the first quarter of next year, our premium line of gummies into a $25 billion category. And nothing launches without IM8 level clinical validation. And everything we make carries NSF certified for sport. And on the science behind that, we have 3 randomized placebo-controlled clinical trials ongoing as we speak right now, including one at the Mayo Clinic, and Dr.

Dawn Mussallem will take you inside them shortly. And I'll say only that in a category built on marketing claims, we are building one on evidence. And next -- and everyone also kind of understand that while hydration gummies are coming next, it's not the whole story 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, we're talking about, again, sleep, condition, recovery, women's health, men's health sports performance. When a customer hands our sachet to someone they love, they are telling us they will trust us in any category where science and quality decide the winner.

And that map is most of consumer health. Now let me be also equally clear about what this slide is not. It's not a road map. I'm not announcing anything today. But the honest way to think about IM8 is not just as a supplement company. It is a trusted global premium health brand, 20 months old with most of its category still ahead of it. And here's a question every operator in this audience is already asking, entering new categories normally takes army, new teams, new overhead, margin walking out the door. So let me show you why that math doesn't apply to us. So this is a chart of our AI native organization.

And it may be my favorite slide in the deck next to the adjusted cash flow slide. IM8 is an AI native organization from day 1. We are roughly 70 people delivering this year's guided $220 million to $230 million revenue, more revenue per employee than any scaled brand in this category and the gap widens as we grow. Revenue grew 3.9x year-over-year with no proportional hiring. Fixed operating expenses actually fell 21% quarter-over-quarter. We doubled acquisition spend from Q1 to Q2 with the same number of team members. And that's not discipline for its own sake. It's what a company looks like when AI runs through creative marketing, operations, finance from day 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. One month ago, General Catalyst committed $1 billion against our cohorts. The deepest diligence I've been through as a founder, every single monthly cohort examined at the transaction level. Now to walk you through where that number stands today, I'm going to hand it over to Brian, our CFO. And Brian just joined us 3 months ago after that diligence process began. And I'll say this plainly, bringing Brian on board is one of the best decisions we made this year.

He came to see the machine and he stayed to run the numbers on it. Brian, the floor is yours.

Brian Rosin: Before we get into the quarter here, just a quick word on me since this is probably the first time that some of you are hearing from me or seeing me. 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 category or adjacent categories. 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. 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 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, 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 the financial statement, it's almost always looking backwards. When you look at then 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, 3 to 6 quarters. It's pretty good line of sight as to how much the business is looking to grow. And then it also tells you at the unit economic level where the business can scale and the opportunities that it can do so. And so those are always the areas that I look at next. Third, when you look out into the future, that's more around expansion opportunities, brand equity, brand strength and where are the opportunities in the form of product, market, channel, where can the brand extend and where can it play.

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 quite strong. And then the future, obviously, with Danny's vision, the sky is limit for this business. And so today, I'm going to take us through that same sort of arc around where are we today on the financial statements. 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 will give us good line of sight into the future in the form of our near-term guidance.

And then I'll let Danny talk more about the future, but I'll touch briefly on how that future is funded by strong balance sheet and the general catalyst financing partnership today. And so with that, let's get to the quarter. So 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. For the quarter, in the Q2, so there's about the middle column of this chart, our revenue was $46.5 million. That's 29% quarter-over-quarter and 3.9x bigger than a year ago. That leads us down to gross profit.

We did $30.2 million gross profit at 65% gross margin, which is about 3 full points better than same period of a year ago. Our fixed operating costs are $8.8 million, which is 19% of sales. Note that this is 14% up versus prior quarter, but 2.3x greater than a year ago. A lot of additional leverage from this line, as you would expect, Danny mentioned the AI nativeness of this business. You would expect this as the business grows where your operating costs as a percent of sales will continue to decline. 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. 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. These costs are to drive the fixed base of current customer, current ad spend, current marketing team and just the day-to-day operation of today. And so when I think about contribution profit, it's really a gross profit minus your operating costs, then what's left in contribution profit and contribution margin as a percent of revenue before you make your choiceful investments into demand creation and customer acquisition.

And so you'll notice that below contribution profit, which was $21.4 million on the quarter, 46% of sales, that's 16 points -- 16% better margin than we saw 1 year ago. 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. 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 3 lines. For a brand like ours, I think a lot of people present marketing as one full number.

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 are -- isn't just a paid acquisition marketing spend bucket. This acquisition marketing expense of $36.2 million on the quarter is 78% of sales. This is the numerator in what we would consider our CAC equation. So whenever we're talking about CAC, that is the numerator. Our brand royalty is typically going to be 3.5% of revenue. That's our contracted royalty against the business.

Our ambassador contracts, you'll notice were $2.1 million in the quarter, which is down to 4% of revenue versus in prior year, we were at $1.1 million in the ambassador line at 9% of revenue. 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. And so when you look at all marketing, this is really a dial for us as to how much we want to throw profit today versus how much we want to grow for tomorrow. Every acquisition dollar that we've spent has generated $1.52 of gross profit in our life cycle of our business.

And that includes several cohorts that are not yet very mature. But for every dollar we spent, we've gotten back $1.52 of gross profit. That straight return, we're going to go into the unit economics in a little bit. 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 that, as Danny mentioned, we spent double versus prior quarter, but our CACs have actually gone down. Below adjusted EBITDA, we have adjustments for fair value gains 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 or $0.52 a share. That's down 45% from the same period of a year ago when our loss per share was $0.94. So in a lot of ways, a terrific quarter. 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's been material strengthening of this business in a way that is quite exciting as we head into Q3 and the rest of this year.

Revenue was $21.4 million for total Prenetics, a little bit under that prIM8te, we'll see in a second. Gross margin, 64% on that. Our operating costs have dropped to 15% of revenue from 19% just last quarter, so some good expansion there. So your contribution profit $10.4 million in just a month, 49% contribution margin. Our spend, you'll notice versus the Q2 average actually went down. That wasn't necessarily choiceful.

We drove a lot more new customers in the quarter, that our CAC improved by so much that our marketing line or acquisition marketing line rather as a percent of sales dropped to 54%, which puts our adjusted EBITDA for July at $2.4 million loss or just negative 11% adjusted EBITDA margin. 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. We'll briefly then look at the IM8 specific segment or business unit rather. And so the same view of the P&L. IM8 is effectively all of Prenetics today.

And so as we start to report into the future, we not -- we won't necessarily be breaking out IM8 specifically versus total Prenetics as there's really not too much of a need to do so. But same view of the P&L of Q2 on IM8, $45 million of revenue, almost all of it, all the way down to the EBITDA line, which is a negative $18.6 million loss in the period. The marketing was almost all IM8. And so you're looking at a P&L that's very similar to Prenetics. But then look at the bottom chart. 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. It's 98% better than prior quarter. So like let that so, 98% better on the quarter, and our CACs were flat to slightly down at negative 1% you don't typically see a business able to double its spend 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, go all the way down to the bottom right, and you'll see that we did 47,000 new customers in July, as Danny mentioned, at a CAC of 239. That's 21% less CAC on an average Q2 number versus July that improved by 20%.

So more than 20% customer growth, 21% CAC improvement. Those 2 things are moving in a way that we have not yet modeled into the future. We model the business on a CAC more in line with what we saw in the first half. Of course, we would hope that our CAC efficiency will continue. Everything is looking strong, but we haven't necessarily remodeled any of our guidance to assume any of that type of CAC improvement in July. It's just the business scaling. 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. Looking at the cash flow view next.

The first half is really a story of 2 major investments. The loss for the period, as we saw, entirely driven by the customer acquisition spend for future growth is the first major investment in the first half. So you see the operating loss of $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. And so you see both of those lines take you to about $27 million on the operating loss side and then $36 million on the buyback net of proceeds.

And what's going to change going forward is that 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, net of our repayments to them, we'll still end up generating quite a bit of adjusted free cash flow positive momentum into future quarters. I started with the month of July. If you take a quick look at the balance sheet next, we have a really strong balance sheet to 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. 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. It gets us ready for our new products. And so we put a lot of cash back into the form of inventories to fuel our growth.

If you move down to the liability section, the warrant liabilities here is the fair market valuation against the warrants that are currently on the cap table that we'll look at in a second. We have $18 strike price on 2.36 million warrants. Then we have about $300,000 at some higher strike prices as well. But if the stock goes above $21.60 per share for 10 consecutive days, we have a call option to bring in those warrants, which would generate us another $42.5 million of additional cash should that happen. And so this is kind of the fair market value of the warrant liabilities on the books. The other liabilities are mostly trade payables.

So if we move then to the cap table. So I think there's been a lot of uncertainty around our cap table, what is fully diluted look like. And so we've done the job of laying this out for everybody 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 and about 1.6 million Class Bs. 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 -- you'll see that, that jumped to $14.5 million fully diluted.

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. These would generate quite a bit of additional cash for us. And the total fully diluted cap table would then be 19.2 million shares. That includes everything that's been able to be granted today to all of our partners and should be looked at that as kind of what the fully diluted burden would be. 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 outstanding down to $13.6 million from $15.3 million at the end of the '25 calendar year. And so we've returned a bunch of money to shareholders in that line. And then we have the warrant roll-downs that are down below. And so this is a flow of the shares since the end of the year. 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 as we talk about the financial statements.

Moving next to the unit economics and the cohort map, which is really important because what is that investment in acquisition spend in Q2 get us. 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. 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 ever had at a cap that has gone down to 239. And I also should mention that there's been no mix shift within any of that July number.

That's the same mix of quarterly versus monthly as we have seen in the past in terms of subscription duration and all that. No change. So really a true apples-to-apples 21% decrease in July versus Q2. So a tremendous amount of momentum heading into Q3. And then we'll look at the return next on the investments. So this is a good view of our quarterly vintages. For some of you, you might have seen the same chart when the General Catalyst news dropped, we presented this as the collective charts that General Catalyst and us have worked through to kind of underwrite our book of cohort vintages.

At that time, if you look at the pink line, that through Q1, -- our gross profit to cap and the dollars that we have returned was $1.44. 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 month. We've gained $0.08 on this return just in 1 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. So every dollar we've ever spent into this business through Q1 cohorts has generated 1.52x the dollar that we put in. And that number will obviously continue to go up over time.

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. 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 Indagari. They do credit card panel data within the U.S. And so they represent anywhere from 6% to 8% of all U.S. card transactions online. And so effectively, this is the direct-to-consumer business on brands with -- in the U.S. specifically an 8% to 10% -- sorry, 6% to 8% of the population.

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. By month 20, our retention is still at 14.2%, much higher than Thorne, AG1 and Gruns on this chart. We have a lot of work to do as a business. 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. 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, 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 tenure.

If you have some of those percentages, you'll see that 50% of our subscribers have been with the business at least for 3 months, 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. But half of our subscribers are already past the 3-month tenure. And that number obviously is going to continue to compound into Q3 and the rest of this year. So really strong subscriber base that fuels this business as we head towards the next phases. So moving on to the next view.

This is where the cohort economics in the unit -- sorry, the unit economics in the cohort math that we just talked about will help guide us really predictably into the next 3 to 6 quarters. 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.

And so when you look at our Q3 guidance, we are guiding at $61.5 million to $62.5 million on the IM8 revenue or $63 million to $64 million on the Prenetics parent, which would then imply based on Danny's guidance metrics of $220 million to $230 million for full business, an $81.2 million Q4, which would put us to the top of our guidance. 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 million to negative $12 million.

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. We expect to see the fixed operating costs show nice leverage gains. We expect to see some potential further gains on gross margin as we continue to move into the subscription duration of longer quarterlies and the like, which are more favorable margin. And we also expect to see further leverage, especially on our ambassador costs as a percent of sales as well as the acquisition 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. I would also say that into the future, we will very likely, as we get to be a more mature business to show better versions of guidance figures at the different lines of the P&L so that we can really break this down. But we feel very confident about our guidance here and a great improvement on the adjusted EBITDA line, which, as you can see on the revenue side, is not sacrificing growth at all.

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. So this is the Q3 specifically. As mentioned, our guidance is $61.5 million to $62.5 million on IM8 specifically or $63 million to $64 million on the parents. We are seeing great momentum in Q3. So we're excited about this quarter on not only on the acquisition front, but also on the adjusted free cash flow front. With the General Catalyst financing in place, we have seen July be a strong adjusted free cash flow positive period, 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. This will be 3x better than fourth quarter of 2025. which, if you'll note, was our strongest quarter in 2025. It's a holiday quarter. 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 quite deliverable in terms of a number. 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. Lastly, so Danny touched on this slide briefly.

We expect to exit the '26 calendar year at a $300 million annualized revenue run rate, 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 point of December 2025 of just over $100 million, we've now delivered a year of $220 million to $230 million. 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, that ratio is quite achievable relative to what we just saw in this period.

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 forms of our financial statements, the present in the form of our unit economics and cohorts are driving the growth of the future. And then the future itself is being dictated by our expansion into additional markets, channels and geographies. So we like to see that the past is printed. Our presence is guided and measured and our future with General Catalyst $1 billion financing and a strong balance sheet is now funded. So with that, I'll turn it back to Danny and let him go into more of the future.

Sheng Wu Yeung: Great. Thank you, Brian, for that detailed walk-through of the P&L wise, right? Before we turn to science, I want to really give a big welcome to Caroline Levy. Caroline, she's on 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 here. In Caroline, I've actually met Caroline for over 2 years. I met Caroline in March of '24. And Los Angeles, I remember the first meeting I've had.

I actually really wanted Caroline to join the Board at that time, and this is pre-IM8, but she respectfully denied me or rejected me at that time, which she was like, hey, I need to watch a little bit more what you guys up to, see if you can actually deliver on everything you say we would. And then I would say maybe about 3, 4 months, we got reconnected again. And so I'm very, very happy and honored to officially welcome Caroline. Yesterday, she joined the Prenetics Board as well as the Auditing Committee and the Governance and Nominating Committee. And since we just missed Caroline, that would be great for her to spend a few minutes on Caroline.

You have so many options when it comes to joining Board and you've been in Wall Street for the last 30 years as an amazing consumer analyst. Maybe in your own words, maybe just share with us why you decided to join us.

Caroline Levy: Thank you, Danny. Good morning, everybody. I'm so excited to be part of the IM8 team. For more than 30 years, my job was professional skepticism. As an analyst, 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. So there are 3 things that impressed me about Prenetics and IM8. First, as Danny said, I met him more than 2 years ago. And what has stood up to me is his ability to execute.

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. I place enormous value on that combination of ambition, focus and follow-through. Second, the brand. I spent my career studying consumer brands, including some of the fastest-growing brands over the past decade. And the connection IM8 built with consumers in a relatively short period is unusual. Strong consumer affinity is difficult to create. It's difficult to sustain. 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.

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 ask difficult questions that I have brought to companies throughout my career as an analyst, 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. I'm so delighted to be here. Danny, back to you.

Sheng Wu Yeung: Thank you, Caroline. Again, really, really glad to welcome you to the Board. And Also, I'm very excited to also welcome Dr. Dawn Mussallem, where she's actually going to be talking to everyone about the science. And again, that's the one thing that we're really proud of is when I go around the world, people are telling us, hey, basically, we love the science. We love everything that you stand from day 1. And Dr. Dawn, again, she's been with us before we launched the brand. So she was a founding -- she's our founding Scientific Advisory Board member. And again, the amazing thing about Dawn, I mean, when you meet her in person, just full of life.

And she also has a very interesting story is that when she went to medical school, she actually was diagnosed with Stage IV cancer, given 3 months to survive. She survived that. And about -- I think in 2021, about 5 years ago, she actually underwent a heart transplant. -- due to her cancer from 20-plus years ago. And 1 year to the anniversary of our heart transplant, she became the first woman in the world, I believe, to run a full marathon. And while at the same time, she was the founder at Mayo Clinic for the Breast Oncology Center. So Dr. Dawn, thank you so much for being here with us from day 1.

And yes, Dawn is going to talk to us about the science, the background and what makes IM8 so special.

Dawn Mussallem: Thank you so much. I'm so excited to be alive to celebrate this time with IM8. And as you said, 20 years as a physician at Mayo Clinic, everything you do is rooted in the deepest of science. And I had frequently been approached by other supplement brands. And truly, I would just delete each e-mail because it was never something that Mayo Clinic would allow me to participate in until I received that e-mail and that call from Danny. And I remember that in that first call, there was nothing about marketing. The only thing we talked about is how could we create the best scientifically backed nutraceutical solution in the world. And that's exactly what we have done.

So this is a conversation I have been waiting for, for truly my entire career because I was an exercise physiologist actually before I went to medical school with a special interest in ergogenic aids or nutraceuticals that can help to enhance an individual's overall health span. So for 2 decades, though, at Mayo Clinic, I was just emerged in the sick care environment. I watched patients try to assemble their nutrition from shelves, bottles. They would take 16 to 18 supplements, and they were all inconsistent with quality. 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.

So the daily UltIM8te Essentials is basically replacing everything in those 16, 18 bottles that people would take with over 90 ingredients and that tasty little daily sachet. 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 because the biggest investment you can make is actually in your health. So let's start with that IM8 daily sachet. It is at a clinical dose, over 74% of Americans have nutrient gaps. And that's exactly what the daily UltIM8te Essentials is setting out to do is to close this nutrient gaps and more.

And what I was sharing with you about having safety at the cornerstone of every single thing we do, it's just not one hero product that's doing it. It's every single SKU that IM8 sets forward is NSF certified for sport, meaning that there's no ban substances in it. And then it's third-party batch tested, meaning that every single ingredient on that label in the dose is exactly what you're getting. And when you go to that IM8 website, there's transparency, so you can see that actual certificate of what each batch has for you, very, very important. 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 IM8 Daily Essentials. 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. It's not just me, I'm the voice of those other faces you saw up there, and we're a great team. And in truth, we literally talk every single day among the Scientific Advisory Board of how we can do things better. Now I want to talk to you about how we prove this because it sounds great. It sounds like I'm selling something, but it's because I have such belief in it.

And we saw this in our first 12-week randomized controlled study, where 95% of participants reported improved energy, improved vitality. That's the #1 thing we want to set out to do. There was other reports. We saw 85% improvement in gut health. We saw 80% improvement in the ability for people to sleep and people felt sharper. 75% of individuals felt that they had more clarity of thought, they felt a difference. This is why people keep on coming back for more, 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 can take all the mater because essentially, I did all my training at Mayo Clinic. And we have an ongoing randomized controlled study right now at Mayo Clinic among health care workers. And there's 100 individuals that are being enrolled into this study. And the study is designed, one that is really rooted in rigorous science. And basically, what we're doing with the IM8 study at Mayo Clinic that is being run by a former colleague of mine, Dr. George Pujalte, he is looking at these 100 health care workers. These are health care workers at the world's #1 research hospital.

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 IM8 and the other half will have a matched placebo, and it's matched for taste. And in fact, we even stepped out onto a ledge a little bit because the placebo still has some beetroot extracts.. So even within the placebo, people may feel better. As part of the study, every single study participant has to have a 4-week washout, meaning if they're taking any other supplement, they have to hold that supplement and they will start IM8 from day 1 when the study starts.

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, inflammatory markers, cardiometabolic markers as well as doing functional tests, like a 6-minute walk test with an equivalent to VO2 calculation, body composition with an InBody, grip strength as well as, of course, as you can IM8gine, health-related quality of life surveys. Research like this is not inexpensive. Studies like this cost on par to what they cost for pharmaceutical companies.

And this is a huge shout out to Danny and why that first conversation with Danny 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, and that matters. So we expect to have results from that Mayo Clinic study by quarter 2 of 2027, if not sooner. Next, I want to share with you about the longevity randomized controlled study. This is a large study with 180 participants, and it is randomized among 4 different arms. So there's going to be a placebo arm where they're not getting anything.

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 sachet of the daily essentials. And what we're going to look at is inflammatory markers as well as metabolic markers. These are one of the 2 most important markers when it comes to the hallmarks of aging. And we know that about 88% to 92% of Americans have metabolic disease basically. And so this is a really critical study that can help to inform us how we can help Americans basically be healthier.

So I'm really, really excited to see what these results show us, and we're expecting results from this study quarter 1 of 2027. Next to the gut health study. I mean, it's estIM8ted that 66% of Americans struggle with GI issues and over 70 million Americans actually have diagnosed digestive diseases. So this study has 135 participants, and there's 3 arms that we're going to be testing with a different dose response. But what's unique in this study for many studies for supplement companies, they just look at quality of life surveys. That indeed is what we did with our first study that I shared with you those results. But this one is going a step deeper.

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. So really exciting with Suzanne Devkota and the team to see what these results show us. So we're not going to just stop there. As Danny shared with you come the end of this year into quarter 1, quarter 2, 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 going to go into detail, but 2 forms of hydration.

So we can help people who are athletes as well as people who are more just home who need hydration solutions, thinking of patients and people with complex health issues. 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, no sugar, no artificial coloring. But we're also going to have this product NSF Certified and third label tested. So this means that there's not going to be any of those heavy metals 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, I've owed my life to the world's best medicine, and now we have a nutraceutical solution that is done with the same rigorous methodology. So I can tell you this, IM8 is doing it right. And again, remember, the biggest investment is when you make in your health. So Danny, back over to you.

Sheng Wu Yeung: Great. Thank you so much, Dawn. Yes, just let me wrap it up here, 1 more minute here. Again, let me bring everything that you heard this morning onto 1 page. So Brian showed you all the numbers. Dr. Dawn showed you the science. Here is what all adds up. We have 8 advantages, each one making the other better and stronger. The science, 3 trials underway, including the Mayo Clinic, the brand and the one people on hand to other people. We also have General Catalyst, again, underwrote $1 billion after month inside our cohorts, a subscription engine across 140,000 active subscribers. And again, growing very, very fast. July, we had our best month ever.

An AI-native organization, 70 people delivering over $3 million of revenue each. A footprint of 46 countries. And again, we started with 31 countries from day 1. Our largest market, only 0.15% penetrated and founders who own the outcome in my own capital, our athletes equity, all of it in the stock that you hold. And now any one of those a competitor can copy, right? Money can buy their certifications, money can even buy their trials. But the 8 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.

And that's why we call ourselves IM8 and here's what I want to sit with you as you go into your questions. Everything you saw today is just from 2 products, okay? The flywheel is just beginning to turn. And we're not -- the flywheel is just beginning to turn that's what -- I'm so excited every day to wake up to, and I'm so grateful for the opportunity and what we're able to do because again, we have tens and thousands of positive reviews around the world. And then with that, we're right on time, 1 hour. I know we've done a lot of talking.

I think if everyone on the stream have learned a lot, but we're not done yet. So I think the point of this format that allows everyone, especially our research analysts to ask this question. So please feel free to ask Brian, myself or Dr. Dawn any questions.

Operator: [Operator Instructions] It looks like we'll take our first question from Ryan Meyers of Lake Street.

Ryan Meyers: Appreciate the really extensive overview here. First question for me with the General Catalyst sort of removing the cash constraint on marketing, how should we be thinking about the spend in the second half of the year, especially as we sort of bridge that gap to the updated adjusted EBITDA loss?

Sheng Wu Yeung: Yes. Brian, do you want to take that?

Brian Rosin: Yes, 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, 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. Probably not as low as July had come in, but that's also -- 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 gain on the marketing line, but not too much versus Q2.

Ryan Meyers: Okay. Got it. And then as the quarterly subscriptions become a larger share of the business and the volumes continue to increase, where do you see the sustainable gross margins going forward from here? Obviously, 2 -- sort of consecutive quarters of 65% gross margins. Just how we should think about that going forward as the mix changes a little bit?

Brian Rosin: Yes, 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 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 and 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, working with our manufacturers to get cost down with the ability to buy into more ingredients and get some economies of scale that way. So I would expect that to continue into 2027 as further expansion at the gross margin level. And so you kind of have 2 parallel things happening, each of which should be margin accretive for us.

Ryan Meyers: Okay. Got it. And then lastly, maybe one for Dawn because I don't know if I've ever spoken with you and really appreciate hearing the sort of science background of this stuff. But 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, that brings to the brand, let's say, you have successful outcomes for each of those 3? I mean what sort of benefit do you think that provides you guys with?

Dawn Mussallem: Well, our consumers nowadays are becoming much smarter. Thank you for this question, Ryan. And more importantly, we're seeing that physician. This is becoming the trusted product for physicians. It's in full scripts. I'm now Chief Medical Officer at Fountain Life, which is the world's #1 longevity program. And essentially, all of our physicians are now switching over our members who were taking 16, 18 plus bottles. I had a patient once come into Mayo Clinic really with a suitcase of supplements. And so it's so nice to have 1 trusted supplement in the solution that is able to check the box in all of these areas.

And then you continue that pipeline down through knowing where the ask is with different products in the pipeline. In fact, we are actually -- Mayo Clinic even has us in their pharmacy. They have it in the Mayo Clinic online store even to sell to patients. So if you have it in the world's #1 hospital, that speaks volumes.

Sheng Wu Yeung: And just to add to that, that's one thing that we're really proud. We have so many physicians recommending this product to their patients, which is really rare in the supplement space, right? I mean we know, for example, the New York Yankee physician is recommending to all the team players, right? I mean Jay Shetty found about this through his physician. Aryna Sabalenka found out this through her nutrition coach. And then so it's really rare that happens. And again, every time the doctors are recommending this, they're going through the labels. They're going to do the NSF certifications. They're going everything before they're recommending this. So I think that's something we're really proud of.

Operator: We'll go next to Tom Forte of Maxim.

Thomas Forte: Great. 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. And then Dr. Dawn and Caroline, thanks for joining the call. I have 3 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?

Sheng Wu Yeung: 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. And so as you've seen earlier when I showed you those 2 slides, again, right now, we've only honed in on basically 2 new categories, hydration and gummies. And because part of the reason we chose hydration is we see a lot of gaps in the current market, there are either with too much sugar, like liquid IV, right, or too much sodium. And so we saw that say, why can't we make something much better.

And then again, through discussions with Dawn as well as some of our SAB then we have to look at all the clinical evidence to create a very comprehensive product therefore, it even goes into the manufacturing test, et cetera. And then we also have to spend time on the NSF certification on the clinical part, right? So I would say, going back to your original question, when we first thought about hydration, it was already end of last year, I would say. And so it easily will be 12 to -- I would say, 12 to 18 months, if not longer, when we bring a product into market.

I think the good news that we're not -- we don't rush into any new products. And that's why, again, in 20 months, you've only seen that sort of 2 SKUs, right? 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? So I think for us, it's not the number of SKUs, but every SKU that we do launch and always challenge everyone, put into Claude, put into ChatGPT, is this the best compared to whatever is out there. And so I would be very confident to know, again, I tested like 50 different hydration products.

I tested like 30-plus gummies. I know for a fact that when we will out with it, we'll have the best ingredients and we'll also have the best certifications around those.

Thomas Forte: Excellent. And then my second question is, how should we think about your build versus buy strategy when entering a new category?

Sheng Wu Yeung: I think right now, our strategy right now is just building, right? 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. 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.

Thomas Forte: Excellent. And then lastly, so Dr. Dawn and Caroline, while we have you, I'd appreciate your thoughts on consumers' increasing interest in health and wellness. And if you think this is a multi-generational interest versus just baby boomers.

Dawn Mussallem: It's definitely a multi -- Caroline, do you want me to go and take this one first? You are on mute.

Caroline Levy: Danny, I've been on your Board 1 day, do you want me to take a stab at that?

Sheng Wu Yeung: Yes, feel free to. I mean, this is a general question. I think on health-wise product.

Caroline Levy: It's a general question, 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 in the American diet and the risk to the stock valuations on Coke and Pepsi and stuff like that. So I've been thinking about health and wellness for years and years and years. 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 adopter and then they just enter an acceleration curve that is incredible.

And 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. I think that it's literally going to change the sizing of American clothing and furniture and all sorts of repercussions because people feel so much better and the health outcomes are so much better. 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, 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 nights.

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

Dawn Mussallem: I agree, Caroline. And the baby boomer population is one, but the biggest rise actually in wellness prioritization is spending among millennials and Gen Z. And these younger cohorts are actually driving over 41% of total wellness spending. It is incredible. And this is the first generation that they're not actually drinking alcohol. They want to drink their mocktails. So whenever we have our events, and we're really focusing a lot on connection and sense of belonging community, you'll see that in all of the ads, which that gives me chills to say, but this is more than just a product.

This is really a relationship, as you said, Caroline, with health and wellness and vitality and sending forward that message of just being fully alive. 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. And again, it's that safety first, which a lot -- the majority of companies just aren't putting that into perspective. So really proud to be behind this product.

Operator: Our next question will be from Patrick Budicini from UBS.

Patrick Budicini: First of all, Danny and Brian, congrats on the great quarter. It's awesome to see the continued momentum. I've kind of 2 questions around competitive landscape. 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 is when you guys are acquiring new customers, are customers typically coming from a competing product or kind of new entrants into the category?

Sheng Wu Yeung: Yes. So I think, Patrick, I can answer that, right? So we actually published some interesting stats from a competitor perspective in the investor deck, where again, this is third-party independent data. And then so if you look at even the last 20 months of when we launched the brand, basically December '24, et cetera, right? So if you look at the landscape we grew, of course, we're near to 2,500%. In the same period of time, H1 went down 36%, right? I think [ Gruns ] went down about 50%. Thorne went up 50% in this period of time, right? So we have been taking quite significant market share from the top players.

And rightfully so, we believe we have the best product in the market. And so again, at a premium price point, right now, also, I think that's key, and we also published this data, too. The Indagari data is that on average wise, at least in the whole supplement category, we have the highest average order value of any supplement brand. So on average wise, is USD 180. So if you look at H1 Thorne, I think, they were about $80 to $100 and then Gruns is like $50.

And so what this means is that our clientele or 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 USD 150,000 or more, right? So if you think about that for a second, I think that's why one of the reasons why after month 20 customers stay with us. And again, the product works, and we have really engaged customers. Yes. So I think -- I hope that answers your question about the competitive landscape. 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% of new customers are from another customer and then other ones, they -- again a lot of our customers like Dr. Dawn mentioned, they may be taking 5, 6, 7 different types of supplements. And for us wise, we've been able to condense and make it easy where, again, you don't have to spend $200 or $300 on a monthly basis. You're spending on essentials $9 a month or in the Beckham Stack, $180, right? So I think we've been able to help people save money, in fact.

Operator: We'll go next to Alex Hantman of Sidoti.

Alex Hantman: Congrats on the quarter. The customer acquisition cost improvements throughout spend growth have been very impressive from my perspective. 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 versus off-store as you scale those efforts?

Sheng Wu Yeung: Yes. So I think great from day 1 wise, we've been able to build IM8 against direct-to-consumer and majority of transactions are transacted on our own website. It's roughly about 95% of another 5% from Amazon, right? And that was by design because, again, when individuals transact on our own website across 40-plus countries, we get to create a much greater experience for them. We also get their e-mail information. And so when we launch new products, we can easily offer to our existing customer base. Again, so we are now experimenting now or doing more testing on TikTok, AppLovin, but majority 90-plus percent of our customers are transacting on our own website.

And again, we're still seeing significant growth opportunities on a DTC perspective. So I think we'll continue to scale that way.

Alex Hantman: And 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?

Sheng Wu Yeung: Yes. So I think, again, day 1 wise, science has been the core to our foundation, right? Even when me and David Beckham met like 3 years ago, we're like, hey, we need to make this a science-backed brand. And this is where -- again, even earlier question, this is not a new trend. I think at the end of the day, consumers they want to understand what ingredients we have, right? They want to see the results. They want to see the third-party testing. Again, for us wise, we publish [ Eurofins ] on our website. We also published 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. So I think with the 2 trials that are underway for the longevity as well as gut, we expect to have results of those by Q1. And Mayo Clinic just given its academic institutions will likely take a little bit longer. But we expect those, I would say, by Q2 of Q3. Again, that's something that -- these trials like Dawn said, are expensive, but these are multimillion-dollar trials that were undertaken.

But we do believe -- yes, 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, but we're confident just based upon how many customers we have, our Scientific Advisory Board, the level of quality ingredients that we have in our product, that we'll be able to get some good results from it.

Alex Hantman: Great. I appreciate that. And beyond the long history of science with Caroline's addition to the Board, I know she has a background in beverages. So I was curious if there's any thoughts around form factor expansions and potential retail sales, particularly for the upcoming hydration product?

Sheng Wu Yeung: Yes. So great question. That's definitely -- I would say, a possibility. But I think right now, we're focused on the stick powder, stick packs first for hydration. But again, I think everything is possible in the future. I think -- but again, we want to be very deliberate and we don't want to rush into anything. Right now, our main focus is launching our 2 new categories in the stick powders for hydration as well as gummies, and then we'll see after that.

Operator: And we'll go next to George Kelly at ROTH.

George Kelly: Can you all hear me?

Sheng Wu Yeung: Yes, George.

George Kelly: So I had a few questions for you. First, I wanted to start with your July performance. 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? 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?

Sheng Wu Yeung: Got it. I would say the first question in terms of July, and obviously July-wise, I mean our CAC went down by about 20% over Q2, right? So in Q2 we made a big investment in terms of overall spending nearly double from Q1. So I think we had some spillover from that aspect. And then to be fair, I mean, the brand, as I mentioned, again, I written in my shareholder letter and where I talked about earlier, I mean, it's getting very strong, right, across international, right? When I'm in U.S., when I'm in Europe, when I'm in Hong Kong, I think there's a lot more word of mouth. So we're not just depending on paid.

And so we're getting a lot of organic word-of-mouth sharing. I think that's been very strong, right? So I think we're also seeing like a halo effect of a lot of our ambassadors. Again, it's not just like we have one. We have like an elite roster. Again, in Q2, we signed up Giannis right? Then we had Inter Miami. And then again, we had lots of off-line events as well, which is very rare in the supplement category because everyone is online, while we're 100% DTC online, but we've also have 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 created a lot of word of mouth in the past few months. And I think that same thing for Q2. Q2 -- our CAC in Q1 was $301, our CAC in Q2 was -- I mean, sorry, our CAC in Q1 was $305. CAC in Q2 was $301. So it went down by $4, even though we raised -- I mean, we doubled our spend. So that rarely happens. And again, you know my background is in e-commerce with Groupon, right? I haven't seen that. That only happens when the brand is getting stronger, right? And that is where I think we're seeing that.

And then so again, we have -- the great thing is that we're going to be doing more stuff on streaming, podcasts, YouTube. And so these are all going to be incremental new channels. So I think for August wise, it's still a bit too early, but we are still seeing continued momentum. I don't have -- I don't -- it's too early to comment on the CAC because I don't have a full month yet of August figures.

George Kelly: Okay. Fair enough. That's helpful. Can you still hear me? Am I still -- I wasn't sure if...

Sheng Wu Yeung: Yes, I can.

George Kelly: 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. And I understand there are huge categories and 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? 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 try to layer in what these new products could?

Sheng Wu Yeung: Yes. So we've done -- actually -- a great question, George. We've actually done surveys from our existing customer base, post-purchase survey questions in terms of what are the key products that you would like IM8 to come out with. And then when we did a survey, hydration and gummies was the actual answer, at least from our customer base, right? So that's why we feel very strongly that we'll be successful in these 2 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 into the market 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 because, again, for our new SKU, it's just very difficult to have -- very difficult to provide good forecast, and we don't want to provide anything that we are -- we don't have a good database already. But I can tell you from at least our customers for both of the hydration and gummies more than 20% of our existing customers have asked for this.

George Kelly: Okay. And maybe a follow-up to that question. Are you thinking the -- are these more attached products? Or are they sort of lower customer acquisition cost, lower-priced products then hopefully, you can -- they're both right?

Sheng Wu Yeung: So it wouldn't come -- go ahead, sorry.

George Kelly: No, I cut you off.

Sheng Wu Yeung: Okay. Yes. So I would say there was -- it's twofold, right? So I mean it doesn't compete with our existing products for sure, right, correct? So I think it's going to be only complementary. So there will be some individuals again that will want to have a hydration product because, again, they are already taking a separate brand hydration today, right? And so we believe they will 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'll be able to have them on board. And then we can also cross and upsell them the standard IM8 Essentials and Longevity.

So I think we'll work to our advantage. And the same way for the gummies. Also, again, we're looking at kids gummies, and then it doesn't compete with our current product, right? And 20%, 30% of our current customers are already parents. So naturally, that -- this could be a really great product for the kids and again, that we can identify new customers coming in from the kids segment that ultimately will come into our hero products of Essentials and longevity.

George Kelly: Okay. And then last one for me. Your guided adjusted free cash flow and adjusted EBITDA, do they both add back to General Catalyst funding?

Brian Rosin: They do. Yes, George.

George Kelly: Okay. Okay. And I imagine...

Brian Rosin: Just to clarify that on the cash flow statement, it will be presented as cash from financing. But since it's real cash into the business and funding a largest part of our P&L, we'll present a view that is adjusted free cash flow that assumes that the operating cash flow plus the proceeds from General Catalyst's net of the repayment there.

George Kelly: And your second half adjusted EBITDA guide handles it similarly?

Brian Rosin: So the cash flow from General Catalyst wouldn't impact EBITDA at all, except for below. It will interest effectively as interest expense in terms of the repayment rate, but it wouldn't impact the actual EBITDA guidance, it would just impact cash flow.

Operator: 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. Right now, they are all DTC. So do they think that retail will be a part of the strategy at some point? Then where is the opportunity internationally? What countries are they not in and looking to be in? And finally, how do they think about the competitive landscape and the moat IM8 has? Why would another brand copy what you are doing?

Sheng Wu Yeung: 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% direct-to-consumer. And then we're not seeing any slowdowns at all in terms of our growth online. And as again, the vision, I want to always keep the business operations simplified -- simple as much as we like. 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 or 36 months without the need for a retail presence.

And we've been able to build a very strong online presence. And again, even in the last 2 months, we have 350,000 followers on Instagram. Last year, we had 1 social ad that generated 233 million views on Instagram. And there's no way you can generate that type of figures on a retail basis. So again, if we're able to still have such strong unit economics and so short payback periods, there's no reason for us to get into retail. I mean, I do -- the only reason why we will not go into retail now, I would say, and I said this before, is that we wanted to sell the brand, right?

But we have 0 interest in selling the brand. So there's no reason for us to get into retail right now.

Brian Rosin: And then in terms of countries -- yes, in terms of countries that we're in today, we're in 46 countries today. We're not in China. We're not in India, as kind of the 2 larger countries. China, obviously, we have a good way in to China, and that will be a different business model with likely a different team, I would say, 18, 24 months out. We have not explored India at this time. And so those are kind of the only countries that we're not yet covering today.

Operator: And I'll take a question from our retail community. Danny, P&G just paid nearly 6x revenue for Thorne. You trade well below that. Would the Board entertain an offer? And if not, how do you close the gap?

Sheng Wu Yeung: No, great question. Again, I think the sector has been very hot, I would say, the last 6 months, right? Danone acquired Huel. Yes, Unilever acquired Gruns and then, of course, P&G acquired Thorne. I think, in total, it was about $6 billion worth of acquisitions over the course of the last 6 months. So as I just mentioned, I mean, we're building IM8 not to get acquired, right? I mean that's not the goal of building this company. And when me and David started this company, this brand, it wasn't like, a, well, how do we exit the next 3 to 4 years.

So 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 because these things take a long time. So we're trying to sell the company that we wouldn't do this from day 1, right? Yes. With that being said, we are a public company. We have an independent board as well. And so there are offers that come in, we have to entertain it. But again, my focus has always been about building this into a generational health company. And regardless of what's happening out there, our role -- my role and Brian's role is to continue to deliver quarter-over-quarter.

And 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 assuring the investor deck, the shareholders because now I have 2 months of data. Yes, 6 months ago, 9 months ago, I didn't have that data. So there's not much for us to show, but now we are able to do that. So I think, again, we'll continue to deliver. I think people that have followed our journey, again, I was just looking at it yesterday. It's quite crazy. We've -- we're a $350 million, $400 million company approximately today.

But 1 year ago, we were about $100 million company, and we were trading like 5,000 shares on a daily basis. Now yesterday, we got $3 million, $4 million of trading bonds. So just alone in the last 12 months for people that have been following us, we've already made significant leap ways, and we're going to continue to deliver quarter-over-quarter. And that's -- and again, I'm having so much fun. I think everyone that knows me knows this, right? It's a lot of work, but 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, right? Yes, so yes.

So I think to answer your question, we'll just deliver quarter-over-quarter and I think that will close the gap in time.

Operator: I think that's it for our Q&A session today. Danny, I'll turn the call back over to you.

Sheng Wu Yeung: Awesome. Great. So thank you, everyone. We're well over time. So I think that's a good sign as always, right? So we earmarked 60 minutes. So now we're in 92 minutes. So again, thanking everyone for joining today and for following us. I think it's a very, very exciting time. Thank you Dawn, Caroline for coming on board. Yes, stay -- follow our journey, I think you guys will be all surprised. Great. Thank you.