Prenetics(PRE) - 2025 Q1 - Quarterly Report

Executive Summary & Highlights Prenetics reported strong Q1 2025 financial performance, exceeding expectations, driven by consumer business growth and strategic realignment, with a raised full-year revenue outlook First Quarter 2025 Financial Highlights Prenetics reported an exceptionally strong first quarter of 2025, with revenue from continuing operations increasing significantly and a raised full-year revenue outlook, as the consumer business, particularly IM8, demonstrated robust growth | Metric | Q1 2025 (USD) | Q1 2024 (USD) | YoY Change | | :-------------------------------------- | :------------ | :------------ | :--------- | | Revenue (continuing operations) | $17.3 million | $6.4 million | +169.9% | | Consumer Business Revenue (excl. ACT Genomics) | $14.4 million | $3.3 million | +336.5% | | Gross Profit (continuing operations) | $7.3 million | $3.8 million | +94.1% | | Adjusted EBITDA Loss (continuing operations) | $(6.5) million | $(4.1) million | +59.4% (less negative) | - Raised full-year 2025 revenue outlook to $80 - $100 million, up from $73 - $85 million[5][7] - IM8 contributed $5.7 million in Q1 2025, with Q2 revenue projected to reach approximately $8.5 million, representing a 50% quarter-over-quarter increase[5][7] - Cash and other short-term assets totaled $78.0 million as of March 31, 2025, and the Company remained debt-free[7] Management Commentary CEO Danny Yeung highlighted the strong Q1 performance, exceeding expectations, and the successful strategic realignment towards global consumer healthcare, emphasizing the company's robust financial foundation and pioneering crypto strategy for treasury management and capital allocation - The first quarter of 2025 marked an exceptionally strong start for Prenetics, with financial performance that significantly surpassed expectations and strategic advancements that position us for accelerated growth[4] - The strategic realignment towards the global consumer healthcare market is gaining tremendous traction[5] - The company is actively pioneering innovative approaches to treasury management and capital allocation, strategically embracing a crypto strategy and Bitcoin adoption to optimize shareholder value and revolutionize patient care[9] Business Updates and Strategic Initiatives This section details Prenetics' strong IM8 business momentum, strategic crypto advisory initiatives, increased full-year revenue outlook, and the ongoing strategic review of ACT Genomics IM8 Business Momentum IM8 has achieved remarkable success in its first six months since launch, attracting over 55,000 customers and expanding its global footprint to 31 countries, demonstrating strong customer loyalty and market potential - IM8 has attracted over 55,000 customers and delivered more than 4.9 million servings of its flagship Daily Ultimate Essentials[10] - Achieved an industry-leading 91% subscription rate and an impressive average order value of US$109[10] - Shipping now extended to 31 countries worldwide, rapidly expanding its global footprint[10] Strategic Crypto Advisory Initiatives Prenetics is actively developing an innovative treasury management approach by evaluating strategic crypto initiatives and Bitcoin adoption, engaging with leading crypto industry veterans for expert guidance to optimize capital allocation and enhance shareholder value - Management is actively advancing an innovative treasury management approach by evaluating strategic crypto initiatives and Bitcoin adoption[11] - Engaging in active discussions with leading crypto industry veterans and thought leaders to provide expert guidance[11] - This forward-thinking approach aims to optimize capital allocation and drive long-term shareholder value creation[11] Outlook The company has increased its full-year 2025 revenue guidance to $80-$100 million, driven by the exceptional growth of IM8, which is projected to reach $8.5 million in Q2 revenue - Increased full-year 2025 revenue guidance to $80 to $100 million from the previously projected $73 to $85 million[12] - IM8's second quarter revenue is expected to reach approximately $8.5 million, representing 50% quarter-over-quarter growth[12] ACT Genomics Strategic Review Prenetics is nearing the conclusion of its strategic review of ACT Genomics and expects to announce a decision regarding its ownership stake shortly - Significant progress has been made in the previously announced strategic review of ACT Genomics[8] - An announcement regarding the strategic decision on the ownership stake in ACT Genomics will be forthcoming[8] Company Information This section provides an overview of Prenetics as a health sciences company and details about its premium core nutrition brand, IM8, co-founded by David Beckham About Prenetics Prenetics is a leading health sciences company focused on advancing consumer and clinical health, with key consumer initiatives including IM8 and Europa, aiming to enhance life through science - Prenetics (NASDAQ:PRE) is a leading health sciences company dedicated to advancing consumer and clinical health[13] - Consumer initiatives are led by IM8, a health and wellness brand, and Europa, one of the largest sports distribution companies in the USA[13] - The company's commitment is to 'enhancing life through science'[13] About IM8 IM8 is a premium core nutrition brand, co-founded by David Beckham, offering science-backed health solutions, with its flagship product, Daily Ultimate Essentials, being an all-in-one powder supplement certified for sport and free from common allergens - IM8 is a premium core nutrition brand, born from a collaboration with David Beckham as a co-founding partner and an elite team of scientists[14] - Its flagship product, Daily Ultimate Essentials, is an all-in-one powder supplement engineered to replace 16 different supplements[14] - The product is NSF Certified for Sport, non-GMO, vegan, free from common allergens, and contains no artificial flavors, colors or sweeteners[14] Financial Information This section outlines the basis of financial presentation, provides unaudited consolidated financial statements, reconciliations of non-IFRS measures, and notes to the financial statements Basis of Presentation & Non-IFRS Financial Measures Explanation This section explains the basis of presentation for financial statements, including the use and definition of non-IFRS financial measures like Adjusted EBITDA, clarifying that these measures supplement IFRS, are not standardized, and have limitations, encouraging investors to review reconciliations - Non-IFRS measures provided include adjusted EBITDA loss from continuing operations, total revenue from continuing operations (normalized to exclude ACT Genomics), and total adjusted EBITDA from continuing operations (normalized to exclude ACT Genomics)[17] - These non-IFRS measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies[17] - Adjusted EBITDA is derived from loss for the period by excluding various non-cash and/or non-recurring items such as depreciation, amortization, interest income, income tax credit, share-based payment expenses, and fair value adjustments[6][18] Unaudited Consolidated Statements of Financial Position (Balance Sheet) The unaudited consolidated balance sheet as of March 31, 2025, shows a slight decrease in total assets and total equity compared to December 31, 2024, while total liabilities increased marginally | Metric | March 31, 2025 (USD thousands) | December 31, 2024 (USD thousands) | Change | | :-------------------------------- | :----------------------------- | :------------------------------ | :----- | | Total Assets | 204,015 | 213,575 | (9,560) | | Current Assets | 78,024 | 86,148 | (8,124) | | Cash and Cash Equivalents | 47,966 | 52,251 | (4,285) | | Total Liabilities | 42,899 | 42,229 | 670 | | Total Equity | 161,116 | 171,346 | (10,230) | Unaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income (Income Statement) For Q1 2025, Prenetics reported a significant increase in revenue from continuing operations and gross profit compared to Q1 2024, but also an increased operating loss and net loss for the period | Metric | Q1 2025 (USD thousands) | Q1 2024 (USD thousands) | YoY Change | | :-------------------------------------- | :---------------------- | :---------------------- | :--------- | | Revenue (Continuing Operations) | 17,312 | 6,413 | +169.9% | | Direct Costs | (9,970) | (2,631) | +279.0% | | Gross Profit | 7,342 | 3,782 | +94.1% | | Operating Loss (Continuing Operations) | (10,632) | (9,160) | +16.1% (larger loss) | | Loss for the Period | (11,016) | (9,052) | +21.7% (larger loss) | | Basic Loss per Share | (0.80) | (0.70) | +14.3% (larger loss) | Unaudited Non-IFRS Financial Measures Reconciliation This section provides reconciliations for non-IFRS measures, showing an adjusted EBITDA loss from continuing operations of $(6.5) million for Q1 2025, and a normalized revenue (excluding ACT Genomics) of $14.4 million, with a corresponding normalized adjusted EBITDA loss of $(4.8) million | Metric | Q1 2025 (USD thousands) | Q4 2024 (USD thousands) | Q1 2024 (USD thousands) | | :---------------------------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Adjusted EBITDA from continuing operations (Non-IFRS) | (6,545) | (9,414) | (4,106) | | Revenue normalized to exclude ACT Genomics (non-GAAP) | 14,411 | 6,563 | 3,301 | | Adjusted EBITDA normalized to exclude ACT Genomics (non-GAAP) | (4,763) | (7,448) | (2,129) | Notes to Financial Statements This section provides additional context for specific financial line items, including the nature of liabilities for puttable financial instruments related to ACT Genomics acquisition and the classification of COVID-19 testing and EMEA DNA testing operations as discontinued - Liabilities for puttable financial instrument arise from put options granted to remaining shareholders of ACT Genomics, valued at the present value of the exercise price[23] - The COVID-19 testing business (ceased Q2 2023) and other DNA testing operations in the EMEA regions (ceased Q4 2023) are reported as discontinued operations under IFRS 5[23] Employee Equity-Settled Share-Based Payment Expenses | Expense Category | Q1 2025 (USD) | Q4 2024 (USD) | Q1 2024 (USD) | | :------------------------------- | :---------- | :---------- | :---------- | | Direct costs | — | 39 | 1 | | Selling and distribution expenses | 1 | 153 | 1 | | Research and development expenses | 467 | 511 | 758 | | Administrative and other operating expenses | 390 | 2,049 | 1,156 | | Total | 858 | 2,752 | 1,916 | Legal & Disclosure This section includes cautionary forward-looking statements and provides contact information for investor relations inquiries Forward-Looking Statements This section contains standard cautionary language regarding forward-looking statements, noting they are based on estimates and forecasts, involve inherent risks and uncertainties, and actual results may differ materially, with the company not undertaking to update this information - Statements are forward-looking, made under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995, covering goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, and growth opportunities[15] - Forward-looking statements are based upon estimates and forecasts, reflecting views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties[15] - A number of factors could cause actual results to differ materially, including the Company's ability to develop and grow its business, execute new strategies, results of studies/trials, and M&A opportunities[15] Investor Relations Contact Provides contact information for investor relations inquiries - Investor Relations contact emails: investors@prenetics.com, PRE@mzgroup.us, angela.hm.cheung@prenetics.com[15] - Contact person: Angela Cheung, Investor Relations / Corporate Finance, Prenetics Global Limited[15]