NASDAQ: PRE
Brad Sorensen, CFA: Hello, everyone. Thank you for joining us. I'm really thrilled to be here. I'm Brad Sorensen, CFA, Senior Analyst here with Zacks Small Cap Research, and I'm thrilled to be joined by the CEO of Prenetics Global (NASDAQ: PRE), one of the most exciting companies that I'm covering right now. Prenetics has a great story, and I wanted to bring CEO Danny Yeung on board to tell us about it. So, Danny, welcome, and let's just start with a brief history, how you transitioned from the old to the very exciting new Prenetics, and how that process worked, and how it's going so far.
Danny Yeung: Sure, thank you so much, Brad. I'm very excited to be on here to share our journey. Just a quick background of myself, I’ve always been an entrepreneur. I grew up in the US and moved to Hong Kong in 2010. My company was then acquired by Groupon. So I led East Asia as their CEO from 2010 to 2014. So, a lot of direct-to-consumer branding, marketing, and customer acquisition experience. I left that in 2014 and started Prenetics as a life sciences testing company. When COVID hit, we pivoted to doing significant PCR work to the tune of $800 million in revenue across three years. We listed the company in 2022, and of course, post-COVID, PCR testing died, and we knew we needed to do something dramatically different. Just through my business network that I've been able to forge, especially here in Asia, I had a good friend who knew David Beckham. He asked me if I wanted to meet David in London. There's no downside to meeting David Beckham, so I was like, of course, that would be my honor.
I met with David in London, and we got really excited. We got along really well. He was very intrigued by my consumer and life sciences background over the course of the last 12 or 13 years, and we were wondering how we could potentially create something together, and this is what started IM8. It started basically from his own and his and Victoria's problem, which was that they were traveling constantly, every single week, to a new location. They didn't like their supplement regimen because they were taking countless supplements every day, 10, 12, 14, 15 supplements, and many days, they weren't consistent with it, because it's just very difficult to pack, and that's where the idea came from. Given my background in life sciences and consumer, there must be a better way. So, we started IM8 in December of 2024 officially, and then David came on as the co-founder, not just as an ambassador of the brand.
For the last 30 years, everyone's been wanting to ask David to do something in this category. He's rejected it until now. If he puts his name on it, this literally has to be the best thing in the market, and that's what we've been able to create. We launched in December of 2024. Our first month, revenue was $600k USD. Last month, May 2026, in our 18th or 19th month of business, we hit $16.7 million. So, the journey's been quite crazy. It's a very crowded space, but we hit $100 million ARR within 11 months of launch, which has never ever been done before in the supplement category. This year, we will do full-year revenues, and we project up to $190 to $210 million in our second year of full operations.
BS: It's been an amazing growth rate and an amazing transformation of a company. As you said, there are a lot of supplements out there, and obviously IM8 has really taken hold. David's put his name on it, which is a big plus, and obviously a big endorsement. What makes IM8 better than the other million substances that are out there as supplements?
DY: When David and I came up with this, everyone said, " Hey, this is such a crowded space, unregulated,” etc. So, we focused really on the product. The product must be good. What we wanted to solve initially was that our product is in a powder format. It’s one sachet that replaces 16 different supplements you normally would have to take otherwise. So, all of your multivitamins, your greens, your digestive enzymes, your CoQ10, your MSM, your prebiotics, probiotics, and postbiotics. It's the replacement of 16 different supplements in a powder format that you mix every day with water, and the taste is great. So, it's very simple. It's a new category.
We created this category, and, again, starting with the product, and then we have David. Now we have Aryna Sabalenka, the world number one tennis player. She takes it every day. In fact, her story was that her performance coach gave it to her to try. She took it for three months at the beginning of last year. And every day, Sabalenka trained at World No. 1, so they're monitoring every little detail about her diet and supplementation. After three months, she felt noticeably better from a recovery, energy, and mental perspective. She had her team reach out to me, and when I got the email that day, I was like, " Wow, is this a joke?!” The world number one player wants to partner with us. On top of Aryna, we got Ollie Bearman, and a few months ago, we announced Giannis, two-time MVP, NBA champion, and they're all taking it on a daily basis. Also, Jay Shetty, Inter Miami — that was a 12-month-plus process because we needed approvals from the medical doctor, their nutritionists, and, of course, the owners to get into the team, and now we're firmly in the team as part of their daily regimen.
BS: I just want to point out to investors, a lot of athletes endorse a lot of things, but the athletes endorsing this, and then David being a co-founder, these athletes are very particular about what they put in their bodies. They make their living on it. And like Danny just said, you have the trainers and doctors and coaches test these things to make sure they're right, and they have to meet all these standards. Having these elite athletes as part of this team and using it, not just endorsing it, but using it on a daily basis, is a huge endorsement for it.
DY: Yeah, and it's very public as well. If you look at Aryna, when she plays, her team of coaches all have the white IM8 caps on. From day one, we've also separated from the crowd because we ran clinical trials from the San Francisco Research Institute. 95% of individuals had noticeably better energy, 85% had better gut health, and 80% slept better. Also, it's NSF certified for sport, so that means if you are a professional athlete, it's free from any contaminated substances. We have all these certificates and quality assurances made in the USA, so people are freely able to take this product.
BS: Initially, that's what gets people to use it, and I think that's great, but I want you to talk a little bit about the subscriptions, because that's the sustainable revenue. That's what's really grown, and once people subscribe and they keep re-upping their subscriptions, that attests to how great they think this product is.
DY: A hundred percent. I can say this with full transparency: it doesn't matter who we have; we can have Beckham, all the top athletes in the world, but if the product doesn't work, people are not going to continue to subscribe to the product, especially at our price points, which are at the premium level. It has to work; it has to perform. 80% of new customers that come in today are subscription customers, which is also an industry benchmark high. Our average order value today is $240, so on average, any new customer coming in, they're paying $240, typically for a three-month subscription to the product, and we have seen retention rates being very, very high, especially for the quarterly cohort.
BS: That's great. You mentioned the quality earlier. I think one thing investors would be wondering is, this growth is great, but do you have the quality manufacturing capacity to be able to sustain this growth?
DY: Yes, a hundred percent. From day one, we knew this would be successful, but we didn't know to what extent, so we wanted to select a manufacturer that had scaling capacity. Everything's made in a USA FDA-registered, NSF-registered facility, so they have significant scale to help scale with us. We have no worries in terms of that. We actually added another manufacturer. Currently, it's manufactured in New Jersey. We also added another manufacturer in Dallas just to give us optimal coverage in case anything happens.
BS: Excellent. I also, in covering your company, know that you’re using AI to advance products. Explain to investors how you use AI to enhance your operations and your business.
DY: Starting with myself, I'm very AI optimized, and that sets the stage for the rest of the team members through operations, supply chain, finance, and, of course, what a consumer sees through our marketing efforts. One thing that I think goes slightly underappreciated is that if you look at Meta, we have about 3,000 ads running at any given time. That allows us massive distribution on a global basis, because we ship to 43 countries right now, and we're testing 600 to 800 ads on a weekly basis. This involves consistent testing and a lot of diversity, so it's not just the same type of ad. The more creative diversity that you have, the higher the likelihood that the Meta AI algorithm will be able to show it to individuals who are most likely to purchase. Now we're able to do this at scale, utilizing AI content, AI statics, and of course, a combination of real individuals, real people, for the video pieces, but it's all together in terms of how the organization utilizes this.
BS: It's amazing the scale you can get with AI and the targeted advertising you can get now, and if companies like yours use it strategically and don't just throw it against a wall and see what works, that's a huge advantage. IM8: incredible growth, but investors are always wondering, how does that growth continue, and are there going to be new products? It sounds like this is kind of an all-in-one product. Are there new products that you guys are looking at that Prenetics is going to come out with in the future?
DY: Yes. With that being said, we've been able to, in 18, 19 months, build a very strong international brand, just because of the level of people that use our product. We've also heard from some of our existing customers – for example, 30% of our customers are parents – so naturally, we're looking to develop a kids' gummy, which, again, would be a best-in-class kids’ gummy. We're looking into the hydration category as well, so electrolytes, because again, we have lots of athletes on board, so they're also looking for additional support when they're training. And there are a lot of individuals out there who don't like to drink water, so we can give them a healthy option as an alternative. So that's where the hydration/electrolytes come into play. We're also looking at the creatine category because creatine has a lot of significant benefits, greater than just for muscle. These are all new SKUs that we're going to be launching in the Q4, Q1 time frame. I'm very excited about that. We launched a longevity SKU last October, and with the combination of that, we've already seen the uplift in AOV, which now equals Essentials for Longevity, equals The Beckham Stack, which right now, 35-40% of customers opt for.
BS: Investors that haven't, you should look at the growth rate, the IM8 growth rate, the subscription growth rate; it's all out there. It's amazing and then they're adding these new products to it. We're winding down here, Danny, and I can say I'm really excited about it. There's IM8 and all the celebrity endorsers, but at the core, it's a great, great product, and customers have responded very enthusiastically to it. I wanted to give you a chance to leave investors with a message, the way they should look at Prenetics and the growth rate going forward, and why they should invest in Prenetics.
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