Why did PRE's Q3 actual fall short of forecast?

Prenetics Global Limited (PRE) experienced a significant surge in revenue in Q4 2024, with a reported 93.5% increase to $10.5 million. However, the Q3 results did not meet the forecast, which can be attributed to several factors:

1. **Revenue Surge in Q4**: The most notable factor is the substantial revenue growth in Q4 2024, which was driven by the strong launch of the IM8 Health premium supplements brand. This product has achieved rapid traction, with an average order value (AOV) of $106 and an 83% subscription rate. This success indicates a strong market acceptance and customer loyalty, which has significantly boosted revenue in the quarter.
2. **Strategic Acquisitions**: The company's strategic acquisitions, such as Europa and CircleDNA, are bearing fruit. Europa, acquired six months ago to support IM8's growth, is on track to break even by the second half of 2025, with meaningful revenue expected by year-end. CircleDNA has nearly doubled its revenue in 2024, transitioning from losses to standalone profitability. These acquisitions have contributed to the overall growth momentum, although their impact may be more pronounced in subsequent quarters.
3. **Operational Efficiency Improvements**: Prenetics has made improvements in operational efficiency, with a 52.6% gross margin for 2024. This improvement suggests better cost management and pricing strategies, which has enhanced the company's profitability. However, the benefits of these improvements may not have been fully realized in Q3, potentially affecting the quarter's performance.
4. **Market Conditions and External Factors**: It's important to consider the broader market conditions and external factors that could have influenced Q3's performance. The biotechnology sector can be highly sensitive to market dynamics, regulatory changes, and competitive landscapes. Any adverse events or shifts in these factors could have impacted Q3's revenue, despite the company's internal initiatives.

In conclusion, Prenetics Global's Q3 performance was likely influenced by the successful launch of IM8 Health and operational improvements, despite not meeting the forecast. The company's strategic moves and market conditions also played a role in shaping the quarter's revenue outcome.