Johnny Payps 🦡🦡🦡

$PRE Q2 2026 earnings: Hyper-Growth Secured by New Capital, But Operating Burn is Deep Prenetics is operating at two speeds. On the top line, the IM8 brand is an undeniable rocketship: Total revenue surged 288% YoY to $46.5M, driven almost entirely by IM8 ($45.0M). The company raised FY26 guidance to $220-230M and introduced a massive $400M+ target for 2027. However, buying this growth is expensive. Adjusted EBITDA loss widened dramatically to $19.0M as acquisition marketing doubled. A new $1B funding facility from General Catalyst flips the script on cash flow, moving the company to Adjusted Free Cash Flow positive in July, but the core operating profitability remains a distant, deliberate choice rather than a current reality. Full article with charts - link in bio 🐂 𝗕𝘂𝗹𝗹 𝗖𝗮𝘀𝗲 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄 𝗜𝗻𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗥𝗲𝗮𝗰𝗵𝗲𝗱: July marked the first month of positive consolidated Adjusted Free Cash Flow, fueled by a $1B non-dilutive facility from General Catalyst that covers up to 70% of marketing spend. The company is now self-funding its explosive growth. 𝗖𝗔𝗖 𝗗𝗲𝗳𝗶𝗲𝘀 𝗚𝗿𝗮𝘃𝗶𝘁𝘆: Despite doubling acquisition marketing spend to $35.7M in Q2, CAC actually decreased slightly from $305 to $301, and preliminary July data shows a further drop to $239. This implies massive organic brand momentum. 🐻 𝗕𝗲𝗮𝗿 𝗖𝗮𝘀𝗲 𝗘𝗕𝗜𝗧𝗗𝗔 𝗕𝘂𝗿𝗻 𝗶𝘀 𝗔𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗶𝗻𝗴: Adjusted EBITDA loss collapsed to $19.0M from $5.6M in Q1. The $9.0M net loss looks artificially better due to $10M in non-operating fair value gains on digital assets and warrants, masking the heavy cost of core operations. 𝗟𝗲𝗴𝗮𝗰𝘆 𝗗𝗶𝗮𝗴𝗻𝗼𝘀𝘁𝗶𝗰𝘀 𝗔𝗿𝗲 𝗗𝘆𝗶𝗻𝗴: The CircleDNA segment is in terminal decline, shrinking 33% YoY to just $1.48M. It is now a negligible and fading part of the business. ⚖️ 𝗩𝗲𝗿𝗱𝗶𝗰𝘁 🟢 Bullish. The widening EBITDA loss is a feature, not a bug, of their current strategy. By securing $1B in non-dilutive financing to cover CAC, Prenetics has removed the cash-burn constraint that typically kills hyper-growth DTC brands, allowing them to capture market share aggressively while cohorts pay themselves back. — • — • — 𝗧𝗵𝗲𝗺𝗲𝘀 New: 🟢 𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗖𝗮𝘁𝗮𝗹𝘆𝘀𝘁 𝗙𝗮𝗰𝗶𝗹𝗶𝘁𝘆 𝗖𝗵𝗮𝗻𝗴𝗲𝘀 𝘁𝗵𝗲 𝗠𝗮𝘁𝗵 The $1B Customer Value Fund facility from General Catalyst fundamentally alters the company's risk profile. By financing up to 70% of monthly marketing spend against cohort returns (which are currently returning $1.52 on the dollar), Prenetics shifted from burning its own equity cash to utilizing structured growth capital. This specific mechanic is the sole reason Adjusted FCF turned positive in July. 🟢 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗦𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀 𝗗𝗿𝗶𝘃𝗶𝗻𝗴 𝗟𝗧𝗩 Accelerating. The shift to quarterly subscriptions is paying off immensely. Quarterly plans crossed monthly plans in March and represented 54.8% of July revenue. This drives first-month billings per new customer to roughly $212 (July cohort) versus the 2025 average of $142, compressing the payback period and locking in recurring revenue. 🔴🔴 𝗖𝗶𝗿𝗰𝗹𝗲𝗗𝗡𝗔 𝗶𝘀 𝗮 𝗟𝗮𝗴𝗴𝗮𝗿𝗱 𝗦𝗲𝗴𝗺𝗲𝗻𝘁 Decelerating. While IM8 acts as a rocketship, the legacy CircleDNA business continues to erode. Revenue fell to $1.48M in Q2 2026 from $2.17M in Q1 and $2.21M a year ago. It now represents barely 3% of total revenues. Management's focus is entirely on IM8, making CircleDNA an irrelevant asset that continues to drag slightly on overall metrics. New: 🔴 𝗘𝗕𝗜𝗧𝗗𝗔 𝗟𝗼𝘀𝘀 𝗖𝗼𝗻𝘁𝗿𝗮𝗱𝗶𝗰𝘁𝘀 𝘁𝗵𝗲 '𝗣𝗼𝘀𝗶𝘁𝗶𝘃𝗲 𝗙𝗖𝗙' 𝗛𝗲𝗮𝗱𝗹𝗶𝗻𝗲 While management proudly touts positive Adjusted FCF in July, core operations are bleeding heavily. Q2 Adjusted EBITDA loss was $19.0M, drastically worse than the GAAP net loss of $9.0M. The GAAP number was artificially inflated by $10.0M in net fair value gains (digital assets and warrants). The underlying reality is that selling and marketing expenses hit $41.3M against $46.5M in total revenue. If cohort retention drops or the GC facility caps out, this burn rate is structurally dangerous. New: 🟢 𝗠𝗮𝗰𝗿𝗼 𝗥𝗲𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗼𝗳 𝘁𝗵𝗲 𝗦𝘂𝗽𝗽𝗹𝗲𝗺𝗲𝗻𝘁 𝗖𝗮𝘁𝗲𝗴𝗼𝗿𝘆 Management explicitly tied their trajectory to recent massive macro M&A activity in the space: Unilever acquiring Grüns ($1.2B), Danone buying Huel ($1.1B), and P&G acquiring Thorne ($3.8B at 5.8x revenue). Prenetics is positioning IM8's subscription base and clinical evidence as matching the exact profile these strategics are paying multi-billion dollar premiums to acquire. 🟢 𝗖𝗹𝗶𝗻𝗶𝗰𝗮𝗹 𝗧𝗿𝗶𝗮𝗹𝘀 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗮 𝗗𝗲𝗳𝗲𝗻𝘀𝗶𝗯𝗹𝗲 𝗠𝗼𝗮𝘁 Prenetics is leaning heavily into scientific validation to separate IM8 from commodity supplements. They have three randomized, placebo-controlled trials underway, including a Mayo Clinic study on healthcare workers and a 180-person longevity study tracking hsCRP and HOMA-IR biomarkers. Results are expected in Q1 2027, which could provide a massive marketing catalyst. — • — • — 𝗢𝘁𝗵𝗲𝗿 𝗞𝗣𝗜𝘀 𝗚𝗿𝗼𝘀𝘀 𝗠𝗮𝗿𝗴𝗶𝗻 (𝗖𝗼𝗻𝘀𝗼𝗹𝗶𝗱𝗮𝘁𝗲𝗱): 𝟲𝟱% Accelerating. Up from 64% in Q1 and 62% in Q2 2025. IM8 specifically hit 65% (up from 57% a year ago). This 800 bps expansion was achieved despite scaling revenue 4.6x, driven by manufacturing volumes, shipping density, and favorable product mix. 𝗕𝗮𝗹𝗮𝗻𝗰𝗲 𝗦𝗵𝗲𝗲𝘁 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆: $𝟭𝟬𝟵.𝟰 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 Stable. The company ended Q2 with $59.1M in cash and equivalents plus $50.3M in current financial assets, with zero debt. This is impressive considering they executed a $40M share repurchase program while funding the heaviest acquisition quarter in their history. 𝗔𝗰𝘁𝗶𝘃𝗲 𝗦𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀: ~𝟭𝟰𝟬,𝟬𝟬𝟬 Accelerating. Up from ~82,000 active subscribers reported in Q1. Roughly 87% of all revenue is now recurring, providing high visibility into future quarters and validating the LTV models underpinning the General Catalyst debt facility. — • — • — 𝗚𝘂𝗶𝗱𝗮𝗻𝗰𝗲 𝗤𝟯 𝟮𝟬𝟮𝟲 𝗧𝗼𝘁𝗮𝗹 𝗥𝗲𝘃𝗲𝗻𝘂𝗲: $𝟲𝟯 - $𝟲𝟰 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 Accelerating. The $63.5M midpoint implies +36.5% sequential growth over Q2 2026, and a staggering +170% YoY growth compared to Q3 2025 ($23.5M). IM8 is expected to contribute $61.5-$62.5M of this total. 𝗙𝗬 𝟮𝟬𝟮𝟲 𝗧𝗼𝘁𝗮𝗹 𝗥𝗲𝘃𝗲𝗻𝘂𝗲: $𝟮𝟮𝟬 - $𝟮𝟯𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 Accelerating. Raised from previous guidance. The IM8 component was raised to $215-$222M (up from $190-$210M). The top end implies a Q4 2026 run-rate of ~$81M, which would be 3x the size of Q4 2025. 𝗙𝗬 𝟮𝟬𝟮𝟳 𝗜𝗠𝟴 𝗥𝗲𝘃𝗲𝗻𝘂𝗲: $𝟰𝟬𝟬+ 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 Accelerating. Initiated early guidance signaling massive confidence. Management notes that because 87% of revenue is recurring and cohorts retain consistently, a substantial portion of this $400M is already 'on the books' from current subscribers. 𝟮𝗛 𝟮𝟬𝟮𝟲 𝗔𝗱𝗷𝘂𝘀𝘁𝗲𝗱 𝗘𝗕𝗜𝗧𝗗𝗔: $(𝟴) - $(𝟭𝟮) 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 Reversing. A significant improvement from the $(24.6)M Adjusted EBITDA loss in 1H 2026. This halving of the burn rate reflects the maturing of early cohorts starting to throw off cash, balancing out the heavy upfront CAC investments. — • — • — 𝗞𝗲𝘆 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗖𝗮𝘁𝗮𝗹𝘆𝘀𝘁 𝗙𝗮𝗰𝗶𝗹𝗶𝘁𝘆 𝗖𝗮𝗽𝘀 The CVF facility finances up to 70% of marketing spend and takes a 'capped share of income.' What exactly is the multiple on that cap, and how does it impact gross margin recognition on mature cohorts? 𝗖𝗶𝗿𝗰𝗹𝗲𝗗𝗡𝗔 𝗪𝗶𝗻𝗱 𝗗𝗼𝘄𝗻 With CircleDNA revenue continuing to shrink and management's focus 100% on IM8, is there a plan to formally divest or wind down the legacy genetics business to eliminate administrative drag? 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗗𝗶𝘃𝗲𝗿𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗨𝗽𝗱𝗮𝘁𝗲𝘀 In Q1, you discussed testing TikTok, YouTube, and AppLovin to reduce the 85% dependency on Meta. Did these new channels contribute to the falling CAC observed in July, or is Meta simply performing better? 𝗪𝗮𝗿𝗿𝗮𝗻𝘁 𝗢𝘃𝗲𝗿𝗵𝗮𝗻𝗴 You noted 2.36M Class C Warrants at an $18 strike price and a forced-exercise right if shares trade above $21.60. How does management plan to message this potential near-term dilution event to retail shareholders?